View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Politics
20 June 2013

How Cameron failed developing countries at the G8

From the beginning, the Prime Minister repeatedly failed to show the leadership on tax avoidance and transparency this summit needed.

By Ivan Lewis

The G8 meeting was heralded as a unique opportunity to address some of the structural causes of poverty and hunger. It was a chance to both put our own house in order and focus on making a difference to the lives of those in the developing world. Progress was made towards tackling hunger and malnutrition, with substantive funding commitments made by the UK and EU. We also saw a welcome commitment to supporting the UN’s humanitarian appeal for the horrendous crisis in Syria,  which remains staggeringly underfunded. 

David Cameron rightly made tackling tax avoidance and improving transparency a priority. The flawed system of global taxation has a profound impact on not only our revenues but also on the poor in developing countries. The Africa Progress Panel revealed just this week that African countries lose $50bn a year to illicit tax flows. But despite the Prime Minister’s rhetoric, his efforts fell desperately short in achieving the fundamental changes which are necessary.

It was imperative from the beginning that any G8 agreement should not “lock out” developing countries. However, it is unclear how developing countries will benefit from announcements on sharing tax information and whether they will be involved from the start in the Prime Minister’s new deal. This runs the risk of creating a “two-tier” system which allows advanced economies to benefit from transparency but excludes developing nations.

The Prime Minister also said: “Personally, I want to see the whole world moving towards public registries of beneficial ownership.” This would allow all countries to benefit from knowing who owns companies and assets and take a step towards to tackling tax avoidance. It was, then, extremely disappointing and a significant U-turn that the agreements only commit the UK to a private registry of British companies and that no G8 country agreed to create a public register. We need far more than secretive lists in the UK of companies’ true owners and vague promises of future action if we are to truly make progress towards ending tax secrecy.

The G8 Communique also includes lots of fine words, particularly on introducing country-by-country reporting for multinational companies and reform to rules which allow companies to shift profits out of developing countries, but no concrete action. Labour has repeatedly called for action on these issues which would enable developing countries to collect the taxes they are due and complement measures to build tax revenue collection capacity in these countries.

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

The Prime Minister could have used the window of opportunity presented by the G8 summit to deliver real action to tackle tax avoidance, not just for the UK, but for countries around the world.

Instead, from the beginning, he repeatedly failed to show the leadership this summit needed. On putting our own house in order, the government has consistently refused to review UK tax rules relating to controlled foreign companies which the evidence show costs developing countries £4bn a year in lost tax revenue. This is unacceptable.  

He has also been repeatedly criticised, as recently as recently as yesterday by the US, for failing to put in the necessary diplomatic and political work in the weeks and months leading up to the summit to secure meaningful deals on tax transparency. In 2005, the UK used the G8 chairmanship at Gleneagles to achieve the historic promise to increase aid by $50bn by 2010 as well as crucial steps on debt relief and climate change. This shows the magnitude of what can be achieved through ambitious hosting of the G8. But this took significant diplomatic effort and political will.

Sadly, this scale of commitment was largely lacking from the Prime Minister’s approach this time around. This G8 could have done for tax and transparency what the 2005 G8 did for aid and debt relief. Instead, away from the hype and spin, when history is written, this summit will be seen as a missed opportunity in the fight against global poverty.

Labour wants to see an end to extreme poverty, a reduction in inequality and an end to aid dependency by 2030. A prerequisite to achieving these objectives will be developing countries having access to fair taxes from their citizens, domestic businesses and multinational companies. David Cameron chose the right priorities for the G8 summit but, as on so many other issues, his fine rhetoric and big promises were not matched by the  conviction or hard work necessary to deliver the radical change that we need. It is to be hoped that the G20 later this year will turn rhetoric and the promise of future action into the commitments we had expected to see. 

Ivan Lewis is the shadow international development secretary

Content from our partners
The promise of prevention
How Labour hopes to make the UK a leader in green energy
Is now the time to rethink health and care for older people? With Age UK

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU