Barking MP Margaret Hodge urges tax avoidance clamp down in Budget
- Credit: Parliamentlive.tv
Next week’s Budget needs to tackle the tax avoidance “scourge” revealed in the Paradise Papers, the MP for Barking has said.
Labour MP Dame Margaret Hodge called tax avoidance “a national and international disgrace” during yesterday’s emergency debate on the files.
“It is clearly taking place on an industrial scale,” the former chair of the Commons public accounts watchdog told ministers.
Details of more than 13 million financial documents, mostly from law firm Appleby, were made public earlier this month.
The files, dubbed the Paradise Papers, shine a light on how the world’s wealthy stash away their money offshore to avoid tax.
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Popular tax havens included UK Crown dependencies and overseas territories, such as Jersey and the Isle of Man.
Speaking in the Commons, Dame Margaret said tax avoidance had become “widely accepted behaviour” among the rich and powerful.
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Financial secretary to the Treasury Mel Stride, however, said the government had already acted to tackle tax avoidance action to tackle avoidance, collecting £160 billion since 2010.
How did this “excellent record” compare to the last Labour government’s, asked former Conservative minister Anna Soubry.
Dame Margaret admitted it was “not as good as I would have wanted”, but said actions by the current government had been “inadequate and somewhat hypocritical”.
“Their rhetoric is mostly fine,” she added, “but the reality is badly wanting.”
Dame Margaret warned that leaks would continue unless urgent action was taken and called for new rules to force multinational companies to report their profits “on a country-by-country basis”.
More funding to taxman HM Revenue & Customs (HMRC) was a “complete no-brainer”, she said.
“Every £1 invested in HMRC enforcement yields £97 in additional tax revenues.”
A vocal critic of tax avoidance, Dame Margaret was accused of hypocrisy after receiving £1.5m worth of shares in family firm Stemcor from a foundation based in Liechtenstein.
Asked about the scheme during the debate, the MP said all offshore funds were closed and put into a charity after she discovered them.