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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An unlikely alliance of Hollywood and British builders are exposing the impact of blacklisting

When a secret operation of blacklisting UK construction workers was uncovered six years ago, the prospect of a film like Trumbo making blacklists a talking point was laughable.

“Scores of people lost their homes, their families disintegrated . . . some even lost their lives.” So says Bryan Cranston in the title role of Trumbo, the new film about the blacklist of communist sympathisers that gripped Hollywood for over a decade from the late 1940s.

The screenwriter Dalton Trumbo, a Communist party member, won two Oscars for his work under wraps during the blacklist era. But he spent almost a year in prison for his defiance of the US Congress’s inquisition into “un-American activities”.

Fifty-six years after the effective end of the blacklist and 5,500 miles from Hollywood, Cranston’s words are too close to home for a group of workers from a rather different demographic. In 2009, a government raid on a shady outfit called the Consulting Association discovered a database of over 3,000 builders in an unassuming office in the West Midlands.

With the sponsorship and co-operation of the likes of Balfour Beatty, Skanska, Carillion and Sir Robert McAlpine, the company worked to systematically deny employment to political activists and workplace safety reps who had raised grievances with bosses. Some files contained information that activists believe could only have been supplied by the police.

This week, 71 blacklistees were paid £5.6m by the firms. Hundreds more are fighting on to face the company chiefs in a High Court trial in May.

Some lost their homes, their families, their lives, as Dave Smith and Phil Chamberlain chronicle in their book Blacklisted. In 1995, Roy Bentham, a joiner from Merseyside, was added to the list after taking part in a strike, and soon could not find work anywhere in the northwest. “Being apart from my long-term girlfriend also put a strain on me and her emotionally,” he says. “We have subsequently split up. It does impact on your home life – and it’s still impacting now.”

In Trumbo, the title character clashes repeatedly over resistance tactics with fellow blacklisted writer Arlen Hird, a composite character played by Louis CK. After both men are released from jail, Hird first proposes to sue production companies for lost earnings, but later slams Trumbo for seeing revenge purely in financial terms – and forgetting the politics.

Blacklisted builders face similar dilemmas. Initially unions entered into talks with construction firms over compensation – but these broke down after the firms unilaterally launched their own scheme, branded “cut-price” by reps.

Some of the legal claims now due for the High Court were served as long ago as 2013. But in the past few weeks the litigants have come under immense pressure to withdraw. If they refuse to accept bosses’ offers and the courts subsequently award them less, workers will be forced to cover the firms’ legal fees.

Campaigners say the companies have already spent £20m fighting the claims, and are using this threat to “buy themselves out” of the embarrassing spectacle of having to testify in court.

Trumbo, however, offers a ray of hope. When the secret operation was uncovered six years ago, the prospect of Hollywood making a talking point of blacklisting was laughable. Activists are annoyed their own cases have been met by a “radio silence”. But the Blacklist Support Group wants to take advantage of the buzz around the film, and is encouraging its members to write to their local papers and speak up at public events about the impact of the Consulting Association database.

They will be helped by the fact that Trumbo, in spite of its Hollywood razzmatazz, is a fundamentally political film. Pride, the acclaimed 2014 picture about Lesbians and Gays Support the Miners, did not mention the Communist affiliation of key character Mark Ashton – reportedly to avoid alienating American audiences. Not so in Trumbo. The film even makes a compelling case that the relative comfort of Hollywood is no reason to withdraw our sympathy – and reminds us that scores of poorer and less powerful communists suffered too. “It shows that blacklisting is not a one-off aberration – it’s part and parcel of how capitalism works,” Smith, himself on the construction database, tells me.

It’s hard to imagine blacklists in Britain have been confined to the building trade. It shouldn’t take a blockbuster to make such flagrant human rights abuses a hot topic – but it’s unsurprising it has, given the decline of industrial journalism and the bias of our legal system. Three cheers for Hollywood.

 Conrad Landin is the Morning Star's industrial correspondent. Follow him on Twitter @conradlandin.