• Devon portion of avoided corporation tax could total £380m

    14th January 2016 | News | Claire
  • It is not yet clear which services will be scrapped by Devon County Council this year, but what we do know is that despite Leader, Cllr John Hart’s efforts, the most vulnerable people in society will be hit the hardest. This is because the most vulnerable people depend on council services more than any others. 

    The government is committed to a programme of austerity and we are informed that the only answer to the problem of the deficit and national debt, is to shrink the state.  As a result, the state is being shrunk to its lowest level ever – 36 per cent of GDP. Under Margaret Thatcher the state stood at 46 per cent.

    What has the Conservative government done about corporate tax avoidance?

    During the 2015 general election campaign the Conservatives pledged to clamp down on tax avoidance, but since being in government, appear to have done very little to tackle it.

    Worse, during the last government Mr Osborne invited 40 multinational companies, such as AstraZeneca, Vodafone and Tesco into the Treasury to help write tax policy, which they did – to their own advantage.  How can this be justified?

    You may be aware that AstraZeneca paid absolutely no corporation tax here in both 2013 and 2014, despite racking up global profits in those years of a whopping £2.9bn.

    The owner of Cadbury’s paid no tax in this country either. Facebook paid a desultory £4,000 and Amazon, Google and Starbucks have all come under fire for paying little or no corporation tax in this country at all, even though they have made millions or billions of pounds of profits.

    What is Devon’s share?
    Plausible research gives an estimate of tax avoidance at £19bn nationally. Proportionate to Devon’s population that would give a Devon share of avoided tax at around £380m, which would cover this year’s Devon County Council cuts almost 14 times over.

    As a Foreign Office Minister, you are responsible for economic and commercial diplomacy which includes international agreements and measures to limit the international tax avoidance.  All of the companies listed above operate in the Commonwealth and come under British influence. You are responsible for the Commonwealth and can influence the regulation of tax havens.

    In early February there will be a vote in the House of Commons on funding to councils.  I understand from the Devon County Council cabinet meeting on 13 January that all Devon MPs are concerned about the swingeing budget cuts, which is encouraging.

    I very much hope that you and your Devon colleagues will speak up for Devon (as Devon County Council leader, John Hart has previously urged you to) and vote AGAINST the proposed cuts to Devon County Council.  If enough MPs do this there is a prospect that the council settlement could be increased.

    Public Accounts Committee’s critical report on HMRC in November 2015
    You will know that the Public Accounts Committee in November produced a damning report on HMRC and its failure to act on aggressive tax avoidance (link below).


    As a Minister of State at the Foreign Office you have direct responsibility for international tax regulation and for the activities of British controlled tax havens such as the Cayman Islands and the British Virgin Islands. But there is no evidence that you or this government is acting to eliminate tax avoidance and to generate the tax revenue that hard working, tax paying people in Devon need to protect their vital public services. What have you done to respond to the outspoken criticism from your fellow MPs on the Public Accounts Committee?
    Ángel Gurría, secretary general of the rich-nations association, the OECD, is completely right when she said: “If big corporations fail to pay tax … it will undermine democracy. This is about the survival of democracy.”

    I look forward to hearing from you.

    Best wishes

    Photograph:  Austerity causes tough times for many. Seeing the work of the Sidmouth Foodbank last year.  With manager, Lois Swarbrick.