Tax justice must be on the agenda for the post-2015 development goals

Anything else would be dodging the problem.

As the 2015 deadline approaches for achieving the "Millennium Development Goals" – the global benchmarks for tackling poverty – questions are growing louder about how far we’ve come, and what we do next. David Cameron is to co-chair a UN High-Level Panel on this "post-2015" agenda. At conference tables, across the blogosphere and in an avalanche of reports, donors and development experts are starting to haggle over the future of aid and development.  

Cameron has set out his stall already, describing his vision of a "golden thread" of development through tackling corruption; securing rights; and shifting focus from aid to economic growth, led by business and private enterprise. Cameron’s co-chairs, Presidents Susilo Yudhoyono of Indonesia and Ellen Johnson Sirleaf of Liberia, also want to look beyond aid to unlock wealth through “economic growth, trade, tackling corruption, effective government and open societies”.

There’s no denying that a re-think is needed. The world has profoundly changed since the MDGs were conceived in the 1990s. With persistent crises in wealthy economies, global aid levels fell last year for the first time since 1997. The UK government is still rightly committed to reaching the UN agreed target of spending 0.7 per cent of national income on aid, and though it will remain vital for many years to come, it’s high time to also look for new resources to fight poverty.

At the same time, we’ve witnessed a seismic shift in the geography of economic growth and potential. It’s now clear that Asian and African economies will continue to grow far faster than in Europe and North America. The boom is far from universal, but nor is it confined to the new "big beasts" of the global economy. In the last decade some sub-Saharan African countries have experienced growth rates higher than Brazil and China – but with health, education and incomes lagging far behind in many places. 

Cameron and his co-chairs rightly acclaim the world-changing potential of this economic transformation – but the poorest citizens are yet to see its impact.  Certainly efforts to tackle poverty must draw more from developing countries’ own growth and resources, far more reliable than volatile aid flows. But the global development challenge is now neither simply to increase aid, nor just to help developing countries to attract private investment and promote growth. It is to convert the rewards of investment and growth into jobs, incomes, health and education for citizens. 

This can only happen if developing countries are able to raise their own revenue fairly, and spend it equitably. Financing the fight against poverty requires companies, investors and wealthy individuals to pay their taxes due. Yet the OECD has estimated that developing countries lose more to tax havens than they receive in aid. ActionAid estimates that just one multinational company we investigated, the FTSE100 drinks giant SABMiller, has avoided £20m a year in taxes across Africa and Asia – enough to put an extra 250,000 children in school – helped by shifting profits through a network of companies in Switzerland, Mauritius and the Netherlands. 

Most developed countries collect between 30 and 50 per cent of their GDP in tax revenue. In sub-Saharan Africa the average is just 17 per cent. How can we help bridge the gap? Aid can help. Assistance to revenue authorities in developing countries to combat tax dodging is some of the most cost-effective aid imaginable. The Rwanda Revenue Authority was set up in 1998 with the help of a £20m grant from the UK – the same amount it now collects in revenues every four weeks. Equally vital is funding to help citizens hold government spending to account, scrutinising budgets and social programmes and ensuring that they’re meeting the needs of the poorest. 

Closer to home, the IMF, UN, World Bank and OECD have all urged developed countries to make sure changes to their own tax regimes don’t damage those of developing countries. Yet the Finance Bill currently going through Parliament threatens to open up a major new loophole in the UK’s 'Controlled Foreign Companies’ rules, making it easier for multinational companies to shift profits into tax havens. ActionAid estimates this rule change is likely to cost poor countries £4bn a year, on top of nearly £1bn to the UK’s public finances annually. This flies in the face of the need to support developing countries’ efforts to become dependent of aid.

And at a global level, the fight against international tax avoidance has slipped steadily down the agenda of the G8 and the G20 over the last 18 months, despite its potential to stabilise public finances in the developing and the developed world alike. The "post-2015" re-think is an opportunity to put it back on the agenda. At stake is the future of the fight against poverty. 

High life - but at what cost? SABMiller has avoided tax across Africa. Photograph: Getty Images

Mike Lewis is a tax justice campaigner at ActionAid

Photo: Getty Images/AFP
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Is Yvette Cooper surging?

The bookmakers and Westminster are in a flurry. Is Yvette Cooper going to win after all? I'm not convinced. 

Is Yvette Cooper surging? The bookmakers have cut her odds, making her the second favourite after Jeremy Corbyn, and Westminster – and Labour more generally – is abuzz with chatter that it will be her, not Corbyn, who becomes leader on September 12. Are they right? A couple of thoughts:

I wouldn’t trust the bookmakers’ odds as far as I could throw them

When Jeremy Corbyn first entered the race his odds were at 100 to 1. When he secured the endorsement of Unite, Britain’s trade union, his odds were tied with Liz Kendall, who nobody – not even her closest allies – now believes will win the Labour leadership. When I first tipped the Islington North MP for the top job, his odds were still at 3 to 1.

Remember bookmakers aren’t trying to predict the future, they’re trying to turn a profit. (As are experienced betters – when Cooper’s odds were long, it was good sense to chuck some money on there, just to secure a win-win scenario. I wouldn’t be surprised if Burnham’s odds improve a bit as some people hedge for a surprise win for the shadow health secretary, too.)

I still don’t think that there is a plausible path to victory for Yvette Cooper

There is a lively debate playing out – much of it in on The Staggers – about which one of Cooper or Burnham is best-placed to stop Corbyn. Team Cooper say that their data shows that their candidate is the one to stop Corbyn. Team Burnham, unsurprisingly, say the reverse. But Team Kendall, the mayoral campaigns, and the Corbyn team also believe that it is Burnham, not Cooper, who can stop Corbyn.

They think that the shadow health secretary is a “bad bank”: full of second preferences for Corbyn. One senior Blairite, who loathes Burnham with a passion, told me that “only Andy can stop Corbyn, it’s as simple as that”.

I haven’t seen a complete breakdown of every CLP nomination – but I have seen around 40, and they support that argument. Luke Akehurst, a cheerleader for Cooper, published figures that support the “bad bank” theory as well.   Both YouGov polls show a larger pool of Corbyn second preferences among Burnham’s votes than Cooper’s.

But it doesn’t matter, because Andy Burnham can’t make the final round anyway

The “bad bank” row, while souring relations between Burnhamettes and Cooperinos even further, is interesting but academic.  Either Jeremy Corbyn will win outright or he will face Cooper in the final round. If Liz Kendall is eliminated, her second preferences will go to Cooper by an overwhelming margin.

Yes, large numbers of Kendall-supporting MPs are throwing their weight behind Burnham. But Kendall’s supporters are overwhelmingly giving their second preferences to Cooper regardless. My estimate, from both looking at CLP nominations and speaking to party members, is that around 80 to 90 per cent of Kendall’s second preferences will go to Cooper. Burnham’s gaffes – his “when it’s time” remark about Labour having a woman leader, that he appears to have a clapometer instead of a moral compass – have discredited him in him the eyes of many. While Burnham has shrunk, Cooper has grown. And for others, who can’t distinguish between Burnham and Cooper, they’d prefer to have “a crap woman rather than another crap man” in the words of one.

This holds even for Kendall backers who believe that Burnham is a bad bank. A repeated refrain from her supporters is that they simply couldn’t bring themselves to give Burnham their 2nd preference over Cooper. One senior insider, who has been telling his friends that they have to opt for Burnham over Cooper, told me that “faced with my own paper, I can’t vote for that man”.

Interventions from past leaders fall on deaf ears

A lot has happened to change the Labour party in recent years, but one often neglected aspect is this: the Labour right has lost two elections on the bounce. Yes, Ed Miliband may have rejected most of New Labour’s legacy and approach, but he was still a protégé of Gordon Brown and included figures like Rachel Reeves, Ed Balls and Jim Murphy in his shadow cabinet.  Yvette Cooper and Andy Burnham were senior figures during both defeats. And the same MPs who are now warning that Corbyn will doom the Labour Party to defeat were, just months ago, saying that Miliband was destined for Downing Street and only five years ago were saying that Gordon Brown was going to stay there.

Labour members don’t trust the press

A sizeable number of Labour party activists believe that the media is against them and will always have it in for them. They are not listening to articles about Jeremy Corbyn’s past associations or reading analyses of why Labour lost. Those big, gamechanging moments in the last month? Didn’t change anything.

100,000 people didn’t join the Labour party on deadline day to vote against Jeremy Corbyn

On the last day of registration, so many people tried to register to vote in the Labour leadership election that they broke the website. They weren’t doing so on the off-chance that the day after, Yvette Cooper would deliver the speech of her life. Yes, some of those sign-ups were duplicates, and 3,000 of them have been “purged”.  That still leaves an overwhelmingly large number of sign-ups who are going to go for Corbyn.

It doesn’t look as if anyone is turning off Corbyn

Yes, Sky News’ self-selecting poll is not representative of anything other than enthusiasm. But, equally, if Yvette Cooper is really going to beat Jeremy Corbyn, surely, surely, she wouldn’t be in third place behind Liz Kendall according to Sky’s post-debate poll. Surely she wouldn’t have been the winner according to just 6.1 per cent of viewers against Corbyn’s 80.7 per cent. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.