Eight years ago, at a G20 summit in London, I tried to end the unfairness of global tax havens. But as the Paradise Papers leak shows, trillions of dollars are still being siphoned off through new loopholes to dodge tax in the most shadowy places in the global economy.
It is one of today’s greatest injustices – allowing the richest to stand aside while the rest of us pay for health, education and protecting the most vulnerable.
But now we have a chance to stop it – through an international agreement that outlaws tax havens and imposes sanctions, fines and prison sentences on those that run them.
That is why today I have launched a global petition, by the online campaigning platform Avaaz, urging immediate international action on the scandal of tax havens.
If a million people sign my open letter to Argentine President Mauricio Macri, chair of the G20, I will personally deliver it to him – asking President Macri and other G20 leaders to finish the job we began in 2009.
Companies will always strive to minimise their tax bill. Governments, in turn, must show equal ingenuity and perseverance to keep pace. Economic activity should be taxed where it takes place. With an estimated $7 trillion held in tax havens, tackling tax avoidance – and its criminal cousin, evasion – is central to tackling inequality.
In the wake of the financial crisis we did make some inroads on tax avoidance when we agreed a blacklist of tax havens that were not complying with international rules for the exchange of tax information, and proposed new global standards for automatic exchange of tax information, including greater transparency about who really owned companies and trusts. This advance was finally endorsed in 2013 at the G8 in Lough Erne, Northern Ireland.
While most countries have complied and the UK will have country-by- country reporting by multinationals, America remains happy to demand tax information from other countries yet is immovable in its refusal to reciprocate. The state of Nevada, we discovered, was the eighth most mentioned tax haven in the Panama Papers.
Tax havens abound, and as Britain prepares to exit the EU some on the right have suggested the country should now become one. This would exacerbate tensions with our nearest neighbours, widen the gap between the top one per cent and the rest of Britain, and deprive us in future of the resources we undoubtedly need – and which Labour raised in government – for our public services, including the NHS.
Without coordinated intergovernmental action to reform the supply chain – and to set labour, environmental and taxation rules and standards – the price of our open global economy will inevitably be economic and social insecurity for millions.
The rise of the far right in countries all over the world shows why we cannot afford to ignore the defining injustices of today’s global economy – and this scandal gives us the chance to tackle one of the biggest head-on.
Let’s not waste it.