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Tax Avoidance and Evasion

I very much welcome the attention that the G20 is giving tax havens and tax avoidance, which is long overdue. No one can pretend that ruling out the immoral and devious practices that companies use to avoid playing fair and to wriggle out of paying their dues—in short, to cheat—will be easy. Those involved defraud the exchequers of the world of billions of pounds, and we all pay for that because we are defrauded as consumers and taxpayers. When we as consumers buy something from a company, we expect a certain amount to go towards legitimate taxation, not towards lining the pockets of millionaires. Similarly, we as taxpayers will pay more or enjoy fewer services if others do not pay their dues. The Government are a big consumer, and procurement can be a powerful tool. My hon. Friend the Minister will be aware that I introduced a ten-minute Bill—the Public Contracts (UK Tax Requirements) Bill—last year. Its purpose was to place certain requirements relating to the payment of UK tax on companies bidding for public contracts, to prohibit the transfer of such contracts overseas and to require such companies to provide certain information about tax payments. My hon. Friend the Member for Great Grimsby (Mr. Mitchell) introduced an early-day motion in a similar vein. The problem is that some companies that have won Government contracts, including private finance initiative contracts, can transfer ownership of the company to a tax haven. In that way, they can avoid paying UK tax on their income and profits. I find it particularly outrageous—and so, I think, do the electorate—that those untaxed profits come from the public purse and from taxpayers' hard-earned money. The real difficulty is that there is a lack of transparency and that those who award public-private partnerships or PFI contracts are not required to request sufficient explanation and detail about the tax arrangements of the companies that bid for them. We all understand that large companies have projects and businesses in many different countries, but the British public want to be sure that the money that they pay in taxes does not go into schemes that pay companies that do not pay their full UK tax dues. It would be nice to think that we will see the end of tax havens and that we will no longer need a Bill such as mine, but there is still a long way to go and much international negotiation to do. I therefore ask my hon. Friend the Minister to do everything possible to demand much greater transparency from companies that bid for public contracts. In that way, we can ensure that we do not aid and abet some of the practices we have heard about today and that British taxpayers do not pay companies that use tax havens to avoid paying their dues.