Now that Cameron supports tax justice, what must he do about it?

We can’t just rely on companies cleaning up their tax affairs. We need international, intergovernmental action on tax justice, and the UK should deliver it.

When the Prime Minister stands in front of television cameras and uses your campaign slogan, you know something is happening.

On Tuesday in County Armagh, setting out his priorities for the G8 summit that the UK will host next June, David Cameron put the fight against tax dodging at the top of his international agenda:

“I want to us to achieve tax justice in our world, so that big companies pay their taxes”.

The focus on tax is not entirely a surprise. This year’s mountain of news stories about big companies accused of not paying their fair share is reaching a breaking point. But tax justice is bigger than Starbucks, Amazon or Google. The clever accounting that allows some companies to opt out of the tax system – both in the UK and in some of the poorest countries in the world – is made possible by two features of the international system itself.

This is why Cameron putting tax justice on the international agenda marks a new, important and hopeful shift in the government’s previously underpowered response to the global haemorrhage of public revenues.

First, international tax rules are desperately ill-equipped to meet the challenges of globalised business. They are powerless to stop profits being shifted into tax havens, and out of the countries where real sales are made, real people employed, real goods produced. Last week’s public scrutiny of UK high-street companies has lifted the lid on a bizarre world of goods bought via Swiss subsidiaries, and management services purportedly provided by firms operating from a post-box in the Cayman Islands. This world is dishearteningly familiar to ActionAid researchers, who have traced how multinational companies have used exactly the same strategies (pdf) to shrink their tax bills across Africa and Asia. The tax avoided by just one UK-headed multinational we investigated could, we estimate (pdf), pay to put a quarter of a million children in school in the developing countries where that company operates.

Second, this profit-shifting is possible and profitable thanks to the abusive offshore tax regimes of tax havens (pdf), whose secrecy rules also confound tax inspectors’ attempts to unpick clever accounting tricks, or to locate wealth simply stashed illegally in shell companies and anonymous trusts. Tax havens are not just a drain on scarce public finances. They are an affront to democracy, a deliberate block on legitimate governments’ efforts to raise their own revenues and prevent the corrupt theft of public funds.

On both counts – rebalancing the rules and shutting the tax havens – international agreement and concerted diplomatic muscle is needed. The G8 has come under criticism in recent years. But it remains unusually well-placed to push real international tax reform and prise open the tax havens – 40 per cent (pdf) of which are closely linked to the G8 countries themselves.

How could this be done? First, the G8 could use its weight to make tax havens disclose the wealth and assets that foreign companies and individuals funnel into their jurisdictions. The agreements to do this already exist. Tax havens should sign them, or face serious financial countermeasures. Second, we need to unlock the corporate "black boxes" into which tax haven-held assets are currently stuffed. To tear down the veil of offshore secrecy we need a legally-binding global standard, simply requiring the real, human owners of anonymous companies and trusts – their "beneficial ownership" – to be put on public record. A transparency convention with this standard at its heart, launched and signed by the G8, would be a game-changer not just for tax revenues, but for the fight against corruption, money-laundering and international crime – making us better-off, and keeping us safer.

And finally, Cameron has stressed that the G8’s approach to global injustice cannot be about "rich countries doing things to poor countries". It must be about "us putting our own house in order and helping developing countries to prosper". The spring clean must start at home. Before we get to Lough Erne in June, the UK’s own tax avoidance regime needs to be made fit for purpose: capable of protecting UK revenues, and closing the UK tax loopholes (pdf) that leach money out of developing countries too. The budget next spring is the place to do it.

This is a fight that could transform the UK’s public finances, ensure that scarce UK aid is not undermined by the haemorrhage of developing countries’ revenues, and ultimately allow those countries to fight poverty and hunger with their own resources. In Fermanagh next year we must seize the opportunity with both hands.

Image: ActionAid

Mike Lewis is a tax justice campaigner at ActionAid

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Is there such a thing as responsible betting?

Punters are encouraged to bet responsibly. What a laugh that is. It’s like encouraging drunks to get drunk responsibly, to crash our cars responsibly, murder each other responsibly.

I try not to watch the commercials between matches, or the studio discussions, or anything really, before or after, except for the match itself. And yet there is one person I never manage to escape properly – Ray Winstone. His cracked face, his mesmerising voice, his endlessly repeated spiel follow me across the room as I escape for the lav, the kitchen, the drinks cupboard.

I’m not sure which betting company he is shouting about, there are just so many of them, offering incredible odds and supposedly free bets. In the past six years, since the laws changed, TV betting adverts have increased by 600 per cent, all offering amazingly simple ways to lose money with just one tap on a smartphone.

The one I hate is the ad for BetVictor. The man who has been fronting it, appearing at windows or on roofs, who I assume is Victor, is just so slimy and horrible.

Betting firms are the ultimate football parasites, second in wealth only to kit manufacturers. They have perfected the capitalist’s art of using OPM (Other People’s Money). They’re not directly involved in football – say, in training or managing – yet they make millions off the back of its popularity. Many of the firms are based offshore in Gibraltar.

Football betting is not new. In the Fifties, my job every week at five o’clock was to sit beside my father’s bed, where he lay paralysed with MS, and write down the football results as they were read out on Sports Report. I had not to breathe, make silly remarks or guess the score. By the inflection in the announcer’s voice you could tell if it was an away win.

Earlier in the week I had filled in his Treble Chance on the Littlewoods pools. The “treble” part was because you had three chances: three points if the game you picked was a score draw, two for a goalless draw and one point for a home or away win. You chose eight games and had to reach 24 points, or as near as possible, then you were in the money.

“Not a damn sausage,” my father would say every week, once I’d marked and handed him back his predictions. He never did win a sausage.

Football pools began in the 1920s, the main ones being Littlewoods and Vernons, both based in Liverpool. They gave employment to thousands of bright young women who checked the results and sang in company choirs in their spare time. Each firm spent millions on advertising. In 1935, Littlewoods flew an aeroplane over London with a banner saying: Littlewoods Above All!

Postwar, they blossomed again, taking in £50m a year. The nation stopped at five on a Saturday to hear the scores, whether they were interested in football or not, hoping to get rich. BBC Sports Report began in 1948 with John Webster reading the results. James Alexander Gordon took over in 1974 – a voice soon familiar throughout the land.

These past few decades, football pools have been left behind, old-fashioned, low-tech, replaced by online betting using smartphones. The betting industry has totally rebooted itself. You can bet while the match is still on, trying to predict who will get the next goal, the next corner, the next throw-in. I made the last one up, but in theory you can bet instantly, on anything, at any time.

The soft sell is interesting. With the old football pools, we knew it was a remote flutter, hoping to make some money. Today the ads imply that betting on football somehow enhances the experience, adds to the enjoyment, involves you in the game itself, hence they show lads all together, drinking and laughing and putting on bets.

At the same time, punters are encouraged to do it responsibly. What a laugh that is. It’s like encouraging drunks to get drunk responsibly, to crash our cars responsibly, murder each other responsibly. Responsibly and respect are now two of the most meaningless words in the football language. People have been gambling, in some form, since the beginning, watching two raindrops drip down inside the cave, lying around in Roman bathhouses playing games. All they’ve done is to change the technology. You have to respect that.

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war