On behalf of the third party, I congratulate the people whose efforts have secured this timely debate. I also look forward to having debates in the main Chamber next week as we prepare for the summit.
Many people are mesmerised and bewildered when they consider the scale of what is happening and what we are talking about. It is estimated that $2 trillion of tax goes unpaid in the world economy. To put that in perspective, £1 in every £20 in circulation in the world is subject to some form of dubious practice and somebody trying not to do what they should do with it.
As my hon. Friend Patrick Grady stated, in developing countries, the amount of money that goes uncollected and is therefore unavailable to Governments in Africa is greater than the amount of international aid that that continent receives. Here in our own country, the amount of tax that is evaded or avoided by those who should be paying it is estimated to be in excess of £7 billion. If the Government were so minded and were able to collect that money, it would be enough to do away with all the proposed cuts to welfare and social security that we have spent many hours debating over the past couple of years. We really need to get a grip on this.
Something that has concerned me over the past few months is that there are those who will try not to justify what is happening, but to provide a smokescreen for some of it. They suggest that an awful lot of what is going on is perfectly legal, saying, “Ah, well, this is tax avoidance, which is lawful. This is not tax evasion.” A lot of members of the public get very confused about that, so we need to be clear about what is happening. For instance, people might decide to donate to a charity and to use the gift aid regulations to maximise their donations, or they might save for an ISA and get tax benefits out of that. That is not tax avoidance. That is using a legislative procedure for what it was meant to be used for. Tax avoidance is when companies use procedures for things that they were not designed to be used for in order to avoid their liabilities—something that most people in this country never even get the chance to contemplate.
With regard to doing something about the problem, I echo the comments of others. The most important thing is that we need to be able to follow the money and see where it is, so transparency is vital. I welcome the fact that, from next month, we will have a public register of beneficial interests in this country. We will be able to see what companies in this country own in this country. However, large parts of the land in the Scottish highlands are owned by companies that are registered in the Bahamas and elsewhere, so the register will not assist me or anyone else in understanding the transparency of property and land ownership in the areas we represent.
The most important thing in this whole debate is that our dependent territories and overseas areas be compelled in some way to be transparent. After all, as Dame Margaret Hodge observed, the people that live in those areas are British citizens who also enjoy the protection and all the benefits of the Crown. Therefore, it is inconceivable that a situation can exist whereby the overseas territories and Crown dependencies are allowed to deprive Her Majesty’s Revenue and Customs of monies that it should, rightfully, hope to get. It is vital that action be taken. My question for the Minister, above all others, is: what leverage or sanction will be applied to the Administrations in those areas to ensure that they do not frustrate the objectives that this Parliament has set itself? There have been times in the past when we have not been shy about taking action to compel, and we need to know that those areas will be discussed at the summit.
Many people have talked about this country getting its house in order. I agree that we should not be too complacent about the situation here. There are some aspects that have not yet been mentioned and that we might want to revisit, including HMRC’s arrangements with large multinational companies regarding their tax liability—for example, the deal that was done with Google. If we are talking about transparency, we still need to know the details of that. In the absence of the facts and figures, we have to assume that a deal has been done to allow a very rich multinational company to pay an effective corporation tax rate of 3%. Many people who run businesses in this country will look at that and wonder how it can be that one of the world’s richest companies is charged 3% on its profits in the UK when they are paying many times that rate.
My hon. Friend also observed that we need to consider the general anti-avoidance rules. He is right that the Scottish GAAR has been lauded by many independent commentators as a stricter and more effective set of regulations than exist in the UK as a whole. The irony is that the Scotland Act 2016 will still cover only a minority of taxation and regulation in that country, but the UK Government could learn much from Scotland’s GAAR about toughening up the regulations.
Perhaps the Brexit debate is the elephant in the room. Much has been achieved in recent years at European level, through the EU, on anti-laundering legislation. I accept that, in theory, if we were to leave the EU, it would be possible to make bilateral or multilateral arrangements with other countries to try to do something about tax avoidance, but in the short term, and for an undefined period, the holes in the regulatory net would be widened if Brexit were achieved, so we need to consider the implications. Finally on putting our own house in order, there is still much more to be done on deploying resources and specialists to investigate malpractice, so I would like the Minister to talk about beefing up our capacity.
My final point is on leadership. As others have said, the Prime Minister has done a lot, but there is still more to do. For example, I would like a little more transparency on whether he has had any benefit from his father-in-law’s company that owns large parts of Jura, where the Prime Minister decided to holiday in 2015. More information on that would be welcome.
There has been a distraction in recent months. We debated this subject a couple of months ago, when everyone was having a feeding frenzy to get Ministers and MPs to publish their tax returns. Of course, it became apparent that, if anyone was up to no good, the last place we would find evidence of it is on a tax return. What we really need to know is the information that does not appear on tax returns. As Members of Parliament, we are in a position of trust as legislators. We are the custodians of the arrangements that our citizens have to follow, and we need to be beyond reproach. We need to register our interests in the Register of Members’ Financial Interests, and we need to consider whether Members should register any interests in offshore countries where they may be benefiting from the loopholes that we are trying to close.
The anti-corruption summit offers an opportunity for the Government to demonstrate global leadership. There are many decent people in this country who pay their taxes and who have never thought about doing anything else, and they are looking to the Government to do something about this massive international problem.