Tax Havens: Developing Countries

Oral Answers to Questions — International Development – in the House of Commons at 12:00 am on 17th January 2018.

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Photo of Karen Lee Karen Lee Shadow Minister (Home Office) (Fire) 12:00 am, 17th January 2018

What steps her Department is taking to mitigate the effect of tax havens on the tax receipts of developing countries.

Photo of Penny Mordaunt Penny Mordaunt The Secretary of State for International Development

Mr Speaker, I start by paying tribute to Rebecca Dykes, the DFID staff member killed in such tragic circumstances last month in Beirut. Becky was passionate about helping others, and through her work has improved the lives of some of the most marginalised people in the world. Becky’s family have set up a charitable fund in her name to advance some of the causes Becky cared about so deeply, and my Department is providing support; we will also hold a commemoration next month to celebrate her life. I am sure I speak for the whole House when I say that our thoughts and prayers are with her family and friends during this difficult time.

The UK continues to lead efforts to strengthen international tax transparency. DFID supports developing countries to benefit from and influence new international standards which help them to tackle tax avoidance and evasion.

Photo of Karen Lee Karen Lee Shadow Minister (Home Office) (Fire)

Lesotho has severely underfunded public services, in part due to high rates of HIV and AIDS, yet our Government have just concluded a tax treaty with Lesotho that severely constrains its ability to levy taxes. Does the Secretary of State believe that that is consistent with promoting international development?

Photo of Penny Mordaunt Penny Mordaunt The Secretary of State for International Development

One of my first actions, which I set out this week, is to establish a new team to help countries that we are seeking to develop and that are transitioning out of poverty to improve tax collection systems and set up public services. We need to focus on that as well as on alleviating crises and immense poverty. I will be happy to discuss the matter further with the hon. Lady, and it will be one of my priorities.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Does my right hon. Friend agree that aggressive tax avoidance involving tax havens can be tackled effectively only by collective global action? Will her Department therefore keep the issue high on the agenda at future G8 meetings and will she do all she can to ensure that the UK continues to take a lead?

Photo of Penny Mordaunt Penny Mordaunt The Secretary of State for International Development

Absolutely. The UK is leading on this matter, having put it on the G8 agenda in 2013.

Photo of Nick Thomas-Symonds Nick Thomas-Symonds Shadow Solicitor General, Shadow Minister (Home Office) (Security)

It is vital that developing countries have an effective tax collection system. What bilateral action are the Government taking to support countries to achieve that goal?

Photo of Penny Mordaunt Penny Mordaunt The Secretary of State for International Development

As I just said, I think we need to do something more hands-on and more practical, so I am dedicating some resource and a team within my Department to focus on that for every nation we work with.

Photo of Pauline Latham Pauline Latham Conservative, Mid Derbyshire

Will my right hon. Friend commend the work of Conservatives in government to crack down on tax havens, including the leadership shown by David Cameron in making that a centrepiece of the UK’s G8 summit in 2013?

Photo of Penny Mordaunt Penny Mordaunt The Secretary of State for International Development

We have made considerable progress—for example, all our overseas territories that have a financial centre are now committed to global standards on tax transparency.