Brighton MP thwarted in attempt to tackle tax-dodging businesses

Posted On 12 Jun 2011 at 9:14 pm

Brighton Pavilion Green MP Caroline Lucas endured a frustrating Friday (10 June) when she failed to make progress with two private member’s bills.

She had hoped that her Tax and Financial Transparency Bill would be debated and pass the “second reading” stage on its way to becoming law.

Likewise her Illegally Logged Timber (Prohibition of Import, Sale or Distribution) Bill.

There were several bills on the House of Commons order paper and MPs did not reach the bills being sponsored by Dr Lucas.

She said that her Tax and Financial Transparency Bill could save £16 billion of taxpayers’ money every year.

The bill aims to ensure that multinational companies report more clearly where they earn their revenues and profits so that they find it harder to dodge paying tax.

Dr Lucas said: “The first aim of this bill is to tackle the scandalous reality that around 500,000 companies every year appear not to be paying tax in the UK.

Struck off

“Tax Research UK estimate that regulatory failures by HM Revenue and Customs and Companies House mean that around 500,000 companies a year fail to pay their tax or file their accounts.

“A great many are simply struck off the Register of Companies as a result, never to be heard of again.

“It is thought that up to £16 billion of tax a year might be lost to the country as a result.

“This bill would ensure that banks have to provide details on all accounts they maintain for companies operating in the UK so that HM Revenue and Customs and Companies House can chase those companies who do not file the returns they’re obliged to make for the missing information – and the tax they owe.

“Secondly, the bill would force companies to ‘publish what tax they pay’, requiring all companies filing accounts in the UK to include a statement on the turnover, pre-tax profit, tax charge and actual tax paid for each country in which they operate, without exception.

“If they only trade in the UK, this has no impact on them.

“This information would, however, mean that the answers to the questions asked of Barclays Bank earlier this year about where it earned its profits, how much profit was recorded in tax havens, and where it paid its taxes could be answered for all companies trading internationally.


“This information is vital if we are to ensure that multinational corporations make a fair and proper contribution to our society.

“Companies cannot opt out of corporate social responsibility – and paying tax to the country that provides them with their opportunities to trade is an essential part of it.

“You can’t be socially responsible and accountable unless you say where you are and what you do in each place that you trade.”

Dr Lucas said that her Illegally Logged Timber Bill was intended to close a loophole in the law.

She said: “I’ve brought forward this bill because, after more than a year in power, there’s been no attempt on the part of government to usher in the robust legislation we need to take illegally logged timber off the market for good.

“There is a significant loophole in the current EU legislation, which means that only those who first place illegally logged timber onto the EU market can be prosecuted – and not those further down the supply chain.


“The coalition agreement specifically committed to ‘measures to make the import or possession of illegal timber a criminal offence’.

“We were promised action but instead ministers are dragging their feet and making excuses.

“If the government is serious about protecting rainforests, preventing deforestation and addressing climate change, it must not allow this bill to be kicked into the long grass yet again.

“The US made it an offence to trade in illegal timber in 2009 and the timber industry in the UK and Europe has shown support for efforts to tackle the issue.

“What is the government waiting for?

“Any further delay undermines the actions of developing nations like Brazil, who have made significant efforts to crack down on illegal logging at the supply end.

“Those efforts are in vain if Europe and the UK refuse to do anything to choke off the demand for illegal timber products.”

Both bills will next have a chance to be debated on Friday 25 November although their chances of becoming law are slim.

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