I am pleased to share the following from Christian Aid in association with the Fair Tax Mark, of which I am a director:
Multinationals with a record of tax dodging will find it harder to win multi-million pound contracts in future, as a growing number of councils ask more detailed questions about potential suppliers' tax practices.
Manchester, Salford, Oxford and Southwark in London are among the local governments that have decided to probe the tax histories of firms seeking contracts, many of which are worth large sums of taxpayers' money.
Northumberland, Gateshead and Birmingham City Council have also formally agreed to consider adopting the questions.
Their moves are a result of the ‘Sourced' campaign launched by Christian Aid in England and Northern Ireland and supported by the Fair Tax Mark.
Sourced has also created a domino-effect across Northern Ireland, with Belfast City Council deciding to adopt the more detailed questions and four other councils plus the Northern Ireland Assembly then following suit.
Christian Aid supporters have also asked at least 60 other councils to consider similar moves, including those in Cambridge, Derbyshire, Bradford, Newcastle, Wakefield, York, Leeds, Somerset, Sheffield, Hertfordshire, Essex and Camden and Lambeth in London.
Multinationals make many millions every year from local government contracts for everything from road maintenance, health care and building work to gas, electricity and insurance. Council contracts in England alone are worth a total of around £45 billion a year.
In Manchester alone, the council routinely awards contracts for tens of thousands of pounds and more rarely does deals involving millions of pounds of taxpayers' money, as can be seen in this contracts database. For instance, earlier this year the council renewed its Microsoft software licence for three years, at an estimated cost of £4.2 million.
“We are delighted to see a growing number of councils across England and Northern Ireland holding multinationals to account,” said Helen Collinson.
“Companies' failure to pay their fair share of tax is harming people in the UK and around the world, because it drains funding for the services we all need: care for the old, the young and the vulnerable, as well as hospitals, education, policing and ambulances, to name a few.
“At a time when public services are squeezed and evidence keeps emerging of certain multinationals not paying tax, it makes total sense for councils to ensure valuable council contracts go to firms that have played fair.”
The law already requires local councils to ask potential suppliers whether they have been prosecuted for tax evasion, which is illegal. The Sourced campaign encourages councils to ask potential suppliers further, more detailed questions about their tax affairs.
These further questions were issued by the government's Cabinet Office in 2014 (PPN 03/14). Companies bidding for central government contracts over £5 million have to answer them. But other public bodies, including local councils, can choose whether to ask them.
The optional questions concern whether companies bidding for contracts have been involved in aggressive tax avoidance that a tax authority has ruled against, in the UK or other countries, including the poorest.
As a result of the more detailed tax questions that some councils have now decided to ask potential suppliers, hundreds of millions of pounds' worth of contracts will now be awarded partly on the basis of whether bidding firms have avoided tax.
Ms Collinson added: “In addition to its impact on councils' procurement, Christian Aid's Sourced campaign has got councillors thinking about how they can influence multinationals' tax practices and about how those practices affect people in poor as well as rich countries.”
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It is a great Pity that Shepway District Council have not elected to ask the Reuben Brothers, about their tax affairs, as they have recently climbed into bed with them on an initial collaboration agreement.
Councils could also deny planning permission as well.
Could Christian Aid please also send them to all NHS Trusts.
@Leigh Bowden re planning permission – I’m all in favour. But I fear councils would risk legal challenge as most of them (and also sometimes NHS trusts) have fewer resources than their challengers.
I’m sure the intention is good and I sort of agree with the main thrust of the argument. But I’m concerned about the extension of this policy to, for example, penalising companies that employ people on zero-hours contracts, or penalising companies using the likes of Uber etc. It’s a slippery slope, as we all have our views about which companies are squeaky clean or not. And we look to public procurement to get the best value for money rather than to follow the private agenda of the purchasing committee members.
I would be happy to extend the criteria as you suggest
We want companies that work in communities, not ones that exploit them
So what about a contract for the supply of police radios, for example, where the most competitive quote comes from a company that also supplies the Saudi Arabian police force, a country known for the suppression of freedom of speech and the sometimes brutal suppression of peaceful demonstrations? Or a prison contract where the potential supplier has designed a prison in a country known to practise torture? Or do we not, for example, place orders for the town hall heating oil to BP because it has done a deal with the Nigerian government which might pollute the lands of tribesmen in the oil fields. The problem is that everyone has a view on what is unacceptable and what tends to happen is that an inordinate time is spent in committee meetings with people arguing. I’ve seen it in investment committees, where people argue about whether or not the pension fund should invest in oil companies, or companies like Monsanto or Syngenta because of their involvement in GMOs etc etc.
This is why we have democratically elected officials
It is their job to decide on such criteria
In the light of recent “democratically elected” officials, such as Trump, I have no further comment
So you have abandoned faith in democracy?