Cat Smith MP

Working for Lancaster and Fleetwood

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Tax Havens Play No Positive Role

Tax_Havens.jpgLooking through recent pages of the local paper you can read all about local campaigns to save libraries, the museum, keep the ferry to Knott End running, cuts to policing budgets and bus services etc. One thing all these issues have in common is a root cause stemming from government cuts to public services and local councils. Why should I say this? Because if everyone and every company in this country paid the tax they were meant to we wouldn’t be talking about which service to cut.

The Government has a long record of rhetoric on anti-avoidance, yet the Panama Papers show that despite the rhetoric tax avoidance is still rife. It should be a matter of shame to the Government that, despite all their rhetoric, more than half the companies recently named in the ‘Panama Papers’ were registered in UK- governed tax havens. The Prime Minister has previously described tax dodging as “morally wrong” but the truth is his record on tackling tax-avoidance is woeful and it is time the Government starts taking this issue seriously.

The ‘tax gap’ is the gap between how much tax should be paid and how much tax is paid. The latest figures from HMRC put the tax gap at £34 billion – up from £33 billion in 2009-10. The problem is getting worse and a time local councils are having to make cuts to our local services, forced upon them by a national government which is not collecting all the tax it is owed.

Sadly, the Government have watered down their commitments on tax havens. In 2014 the Prime Minister said he was committed to ensuring that information about who benefited from UK tax havens was publicly available. But since the General Election he has rowed back on that commitment. So the reality is the UK’s crown dependencies and overseas territories are stalling on meeting the Prime Minister’s demands.

There must be far greater transparency and enforcement of those who try to hide their wealth and profits in tax havens — many in Crown dependencies Jersey, Guernsey and the Isle of Man, plus UK overseas territories like the British Virgin Islands, the Bahamas and Bermuda.

So next time you read an article in your local paper, or hear about a local service being lost, look to our government to do more to collect the taxes from the super-rich who are laughing all the way to the bank.