Caroline Flint

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Caroline Flint led the charge, as MPs from nine parties pressed the Government to pass an amendment to the Finance SMTM_CF_palm_tree.JPGBill to publish where large multinationals record their employment, revenues and pay their taxes.

 

Click HERE to see my speech.

 

After the debate the vote was lost by 22 votes (273 For, 295 against)

 

You can read my speech below 

I rise to support amendment 1, in my name and those of my hon. Friends the Members for Hackney South and Shoreditch (Meg Hillier) and for Houghton and Sunderland South (Bridget Phillipson) and the hon. Members for Amber Valley (Nigel Mills), for Southport (John Pugh) and for Edinburgh North and Leith (Deidre Brock). I am grateful for the support of six other members of the Public Accounts Committee who signed this amendment: my hon. Friends the Members for Islwyn (Chris Evans) and for Bristol South (Karin Smyth) and the hon. Members for Berwick-upon-Tweed (Mrs Trevelyan), for South Norfolk (Mr Bacon), for Peterborough (Mr Jackson) and for Warrington South (David Mowat). In total, 77 right hon. and hon. Members have signed the amendment, and it is a pleasure to follow the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin).

Apart from the Labour party’s support, for which I am extremely grateful—particularly that of my hon. Friend the Member for Wolverhampton South West (Rob Marris), who has been fantastic in his liaison and advice—Scottish National party, Liberal Democrat, Ulster Unionist party, Social Democratic and Labour party, Plaid Cymru, Green party and UK Independence party Members, alongside a number of Conservative Members, and the independent hon. Member for North Down (Lady Hermon) support amendment 1. There is truly cross-party support, and I am therefore grateful to all those right hon. and hon. Members.

Amendment 1 also has the welcome support of the business-led Fair Tax Mark and the Tax Justice Network and that of development charities such as Christian Aid, the Catholic Agency for Overseas Development, Oxfam, Action Aid, the One Campaign and Save the Children.

 

It is understandable, given the momentous events of recent days that are creating ripples that reach all corners of our nations and across parties, if Members are a little distracted from the business that we are debating today, so let me be clear about what is at stake. If amendment 1 is agreed to, the Government’s requirement that companies publish their group tax strategy on their websites will include, for large multinational enterprises with bases in the UK, the headline details required on their revenues and taxes paid, in accordance with the OECD requirements for country-by-country reporting. In lay terms, this is Parliament’s Google moment.

 

I should like to clarify something: the amendment would require companies to publish everything that the Government already require them to report to HMRC. Yes, I agree with the Minister that it would not achieve worldwide reporting for any multinational enterprise, but it would catch not only those parts of a multinational enterprise that are in the UK but those that are over a certain size and have a turnover of more than £600 million.

I hope that the companies that we are talking about would be big enough to have a website; if not, we might get an opportunity to discuss that later. My goodness, in terms of their reputation, if they do not have a website, they are on a hiding to nothing.

 

The Minister tried to suggest that the amendment would relate only to UK companies, but it is in line with HMRC guidance that already affects the reporting strategies that the whole House has supported and includes multinational enterprises over a certain turnover. In that sense, we are working with the grain of how the Government have proceeded in these important areas.

 

There is widespread concern in the House, across all parties, that multinationals operate by different rules from the majority of hard-working, tax-paying businesses, large and small, in the UK. The greatest weapon of multinational enterprises is that their tax arrangements are shrouded in secrecy. The problem is that, in today’s world, as leaks emerge and information comes out, it is death by 1,000 cuts, whereas the amendment is about getting businesses and their reputations back on track. Not only would this be good for business, but it would ensure that those businesses that are playing fair have a chance to set out their claim and what they are doing in a very public way.

 

Governments across the world face a particular problem with multinationals. The common factor is that revenues are shifted to countries with poor governance, poor monitoring and low or no corporate tax rates. Why in 2010 did Bermuda have total reported corporate profits that were the equivalent of 1,643% of its actual GDP? Could that be because that country has a zero rate of corporation tax? Is there not something odd about a company—let us say, Google—that has huge numbers of sale staff in one country, but all the revenues reportedly received in another? It would surprise no one to find that the revenues are recorded in a country that has a corporate tax rate of 12.5%, as opposed to the UK’s 20%.

 

The House can take a stand against this entirely lawful but—I think we would all agree—unethical manipulation of different countries’ tax rules. As the OECD has rightly pointed out in its work on base erosion and profit shifting, the impact is to create unfair competition. Multinational enterprises that transfer profits to low-tax dominions gain a competitive advantage over, say, a UK rival, which pays 20% tax on its profits. We can seek to level that playing field today.

 

The whole House supported the Chancellor’s legislation to require financial reporting to HMRC from UK-based multinationals with revenues in excess of approximately £600 million and UK units of such companies where the parent company is based in a country that does not yet agree to country-by-country reporting. That reporting, in accordance with the guidelines that I have mentioned, would include showing for each tax jurisdiction in which they do business the amount of revenue, profit before income tax and income tax paid and accrued, and their total employment, capital, retained earnings and tangible assets. They would be required to identify each entity within the group doing business in a tax jurisdiction and to provide an indication of business activities within a selection of broad areas in which each entity engages. That information must already be provided to HMRC. We are saying, “Let’s go public.” I want the HMRC to be armed with all the necessary information to secure fair tax contributions from these companies, based on their UK activity, but we need more than the HMRC to have a confidential look; we all deserve to see the bigger picture, and by publishing, we will see that.

 

Publishing is one way to persuade some of these companies to restore their corporate reputations. Was it because of the extraordinary focus on Google that Facebook announced a welcome change to the recording of its profits in the UK? I believe so. If a company is reporting profits in tax havens where they have only a PO box and a name plate but no apparent staff or activity, do we not want to know that? Let us follow our convictions; let us do what we know to be right. Let us shine a light on the activities of these large multinationals which—let us be honest—run rings around revenue and customs authorities around the world. Let us not flinch, play for time, and hope that some international agreement will eventually be reached by the EU or the OECD.

 

I remind Members that so often during the referendum on the UK’s EU membership, we heard a lot from both sides about our Parliament’s sovereignty and our power to make laws and to tackle issues big and small. Well, this is the test. Is Britain still a leader or are we followers? This amendment is a pro-business measure. If we adopted it, Parliament would be saying that every business big and small must play by the same set of rules. The tide of opinion is changing in the business world. I am delighted that this week I have received support from SSE for the principle of public country-by-country reporting. I am delighted when major firms such as the cosmetics company Lush, which operates in 49 countries, sign up to the Fair Tax Mark and pledge never to use tax havens. I welcome the fact that since 2014, a quarter of the FTSE 100 companies have published information about their tax arrangements, with long-standing British firms such as Barclays foremost among them.

 

I commend the Minister for the steps that have been taken in the past six years to improve the level of transparency and for the clampdown on the secretive tax deals that have thwarted fair taxation for so long. In our hearts, do we not all know what the Googles of this world will be hoping? They will hope that we sidestep this issue and duck the opportunity for Britain to set a standard, to lead and to demand more openness. This House knows what those who want fair taxes from large and small businesses alike will want. Every right hon. and hon. Member knows what their constituents would say about these firms shifting their profits to low-tax and no-tax dominions. Let us spare a thought, importantly, for the developing countries, which reportedly lose as much in lost tax revenues as they receive in aid each year. That cannot be right.

 

Finally, in February, the Chancellor told an international meeting of Finance Ministers:

 

“I think we should be moving to more public country-by-country reporting. This is something which the UK will seek to promote internationally.”

 

I hear what the Minister says, but there comes a point when we have to show leadership. Much of our tax rules and other rules affecting companies are not applied worldwide. They are British home-grown rules that seek to provide fairness as well as competition.

 

I welcome the EU’s activities in this area, although I am not sure where we will fit in. We might have to accept whatever the EU says if we are part of the single market. That is a debate for another day. Unfortunately, the present state of the EU’s negotiations does not tackle the problems of those developing countries that lose out. As I understand it, some of the European discussions have not included the publishing of information on the activities of EU-based companies in developing countries. That does not go as far as what we require from companies reporting to our own tax authority, which we are asking to be put in the public domain.

 

The change that I am calling for would be part of the Minister’s and the Chancellor’s legacy—a chance to lead where other countries are sure to follow. Let us ensure that the age of secrecy is gone. Let us force the multinationals into the light. I humbly request a Division on this amendment, and I urge the Minister and Conservative Members to join right hon. and hon. Members from nine parties in the Lobby with me today to make a historic change. In years to come, we will ask ourselves why we did not do this earlier. Today is the day. Let us stand up for fairness. Today is a day for lions, not lambs. Let us see the British Parliament roar. I urge the Committee to support this amendment.

 

Flint demands that Parliament leads over multinationals

Caroline Flint led the charge, as MPs from nine parties pressed the Government to pass an amendment to the Finance Bill to publish where large multinationals record their employment, revenues...

PM_statement_close.JPGClick the image to watch my question during the Prime Minister's Statement on 27th June 2016

 

 

 

My Question during Prime Minister's EU Referendum Statement

Click the image to watch my question during the Prime Minister's Statement on 27th June 2016      


Showmethemoney_-_pic.jpgAmid the political turmoil of the Brexit vote, Parliament this week will face a Google moment. 

A majority of the members of the powerful Commons Public Accounts Committee, led by Caroline Flint, have tabled an amendment to the Government’s Finance Bill to force multinationals with a base in the UK to publish the headline figures of their revenues and taxes paid.

The motion already has the support of eight parties in Parliament and the backing of a number of Conservative MPs.

Caroline Flint will tell the Commons:  “This is Parliament’s Google moment.  Do we follow our convictions? Do what we know to be right and shine a light on the activities of these large multinationals who run rings round our revenue and customs?  Or do we flinch, play for time, hope that some international agreement will be reached, eventually by the EU or OECD?

“This House knows what the Googles of this world will be hoping.  This House knows what those who want fair taxes from large and small businesses alike will want.  Every Hon and Rt Hon Member knows what their constituents would say about these firms shifting their profits to low and no tax dominions.

“During the referendum we heard a lot from both sides about our Parliament’s sovereignty.  Our power to make laws.  To tackle issues big and small.  Well this is the test.  Is Britain still a leader?  Or are we followers?

“I say to Parliament, make a stand for fair taxes.  I say to the Chancellor – this change would be part of your legacy.  A chance to lead, where other countries are sure to follow.”

 The vote will take place on Tuesday 28 June.

Is Britain Still a Leader? Or Are We Followers?

Amid the political turmoil of the Brexit vote, Parliament this week will face a Google moment.  A majority of the members of the powerful Commons Public Accounts Committee, led by...


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