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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Emmanuel Macron: a populist eruption from the liberal centre

The French presidential candidate has been compared with a young Tony Blair.

The French presidential candidate Emmanuel Macron came to town this week to meet Theresa May and address the London French community, whose votes he was chasing. In our age of extremes, Macron, who is 39, is that rare thing – a populist eruption from the liberal centre. A former merchant banker and economy minister in the failing Hollande Socialiste administration, he represents En Marche! (“Forward!”), which is less a party than a movement. His sudden rise would not have been possible in Britain, which is part of the stability and attraction of the parliamentary system but also its frustration.

Don’t be shy

I met Macron on Tuesday afternoon when he took questions from a small group of journalists at Central Hall Westminster. He is small and dapper, with short hair and a strong, straight nose. Because of the collapse of the Socialistes and the struggles of the discredited conservative contender François Fillon, Macron has emerged as the great hope of liberals and perhaps as the candidate to stop Marine Le Pen seizing the presidency. Unlike the Front National leader, Macron is an unashamed liberal globaliser in the model of Nick Clegg or a younger, less tormented Tony Blair. He is a passionate advocate of the EU and of the eurozone and, as a result, is under attack from the Russian media. He has been accused of leading a double life – his wife, whom he met when she was his schoolteacher, is 20 years older than Macron – and of being unwilling to admit that he is gay, or at least bisexual. His response to the Russian attacks was, he said, “to disclose the manipulation and kill the rumours”.

The far right in France has caricatured Macron as being “globalisation personified”, about which he is relaxed. In conversation, he criticised David Cameron’s referendum campaign. “His message was ‘Yes but . . .’ That is not the answer to ‘No’. I defend Europe and the four freedoms of the EU. If you are shy, you are dead.”

Not all relative

On Sunday, I received a text from one of my cousins. “The Lincoln City manager and his brother, the assistant, are called Cowley,” he wrote. “His father looks a bit like your father. Any relation? They are from Essex.” I am also from Essex, born and brought up in Harlow new town, which turned 70 this year. But I had to disappoint my cousin. My father was an only child, as was his father, so it’s highly unlikely that these Cowley brothers are even distant relations of mine.

Toast of the county

I already knew about the brothers, having been alerted to them by my seven-year-old son, who is a sports data enthusiast. Last season, Danny Cowley and his younger brother, Nicky, were working as teachers in Essex while coaching Braintree Town at weekends. This season, they have led Lincoln to an FA Cup quarter-final against Arsenal, making them the first non-League team to reach the last eight in more than a century. Lincoln are also at the top of the National League (English football’s semi-professional fifth division) and in the quarter-final of the FA Trophy, the premier non-League cup competition. The Cowleys are reported to be subsisting on a diet of toast and Marmite as they rise early each morning obsessively to study videos and analytics and prepare for the next match. They have introduced a new spirit of openness at the previously moribund club: fans watch training sessions and attend press conferences.

It’s nonsense to believe, as some do, that only those who have performed at the highest level have the authority to coach the best. Wenger, Mourinho, Sven-Göran Eriksson, Roy Hodgson, André Villas-Boas: none of them were even remotely successful players. Asked once to explain his accomplishments, Mourinho said: “I’ve had more time to study.” More English coaches – so few of whom are working in the Premier League – would do well to follow his example.

It will be fascinating to see how far the Cowley brothers progress in the game. Whatever happens next, they have reanimated interest in the FA Cup and given the resilient yeomen of Essex a small boost.

Ignore the huckster

Boris Johnson accused Tony Blair of “bare-faced effrontery” for having the temerity last week to deliver an anti-Brexit speech, which itself was an act of bare-faced effrontery. Johnson is a huckster and narcissist whose vanities have been grotesquely indulged for far too long by his cheerleaders and paymasters in the media. (A standard question to Johnson when he was mayor of London: “You do want to be prime minister, don’t you?”) No one should take anything Johnson says remotely seriously. Should the same be said of Blair?

Yes, of course he is the author of his own misfortunes and many will never forgive the former Labour prime minister for the Iraq catastrophe. Yet of all the politicians I have spoken to in recent times, Blair was the most intellectually nimble and the most alert to the defining complexities of the present moment. As he demonstrated in his speech, he also understands better than most why, in an age of intensifying ethnic nationalism, the parties of the left are failing across Europe, none more so than the British Labour Party, which looks as far away from power as it did after the 1931 election.

Journey to the centre

As an energetic and charismatic liberal, Macron has been likened to the young Tony Blair. Can he seize the progressive centre, as Blair did, and destabilise the old binary divisions of left and right? “The anti-European and anti-globalisation extremes are winning elections,” he said, in a veiled reference to Donald Trump and the vote for Brexit. “But we don’t have the same political cycles as the others. It’s time for France to do the opposite.” With that said, he thanked his interlocutors and was hurried off for a meeting with another Essex man, Philip Hammond, pursued not by a bear but by the journalist Robert Peston. 

Jason Cowley is editor of the New Statesman. He has been the editor of Granta, a senior editor at the Observer and a staff writer at the Times.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit