Anneliese Dodds MEP

The South East's Voice in Europe

Real action not political posturing

1.png

One of the most high profile and contentious moments this week was the moment voting on whether or not to censure Jean-Claude Juncker.

Some people wanted to censure Mr Juncker because he had previously been the Prime Minister of Luxembourg, a country embroiled in scandal at the moment thanks to the 'Lux Leaks' revelations of a few weeks ago, which showed that hundreds of companies had benefited from incredibly low tax rates arranged for them by the state. These companies - including Pepsi, Ikea and Burberry - had been paying almost zero tax thanks to these 'tax rulings', made by the Luxembourg government when Mr Juncker was its Prime Minister.

I am completely opposed not only to illegal tax evasion, but also the legal but immoral practice of aggressive tax avoidance. I have made the fight against this kind of behaviour a priority in my first few months in the European Parliament, and it will remain a priority for me until we see some real action taken to prevent it.

In the vote this Thursday, though, I voted against censuring President Juncker - and I want to explain why.

Firstly, because the censure itself smacked of naked political opportunism. It was brought to the Parliament by a pretty unsavoury coalition that included UKIP and the French National Front. Neither of these parties have a strong track record on tackling tax evasion and aggressive tax avoidance. In fact, UKIP have a long history of behaving as if they were in favour of these practices.

Last year, and the year before, the European Parliament called for strong action to be taken against these unethical tax evasion and avoidance practices. On both occasions, UKIP voted against the resolutions! Nigel Farage is on record as saying that most legal forms of tax avoidance are "OK". He clearly thinks so, as in the past he has planned to channel funds through a private trust on the Isle of Man, and he continues to use a private company to make sure that the money he makes from his many media appearances is charged at 20% corporation tax instead of the 40% income tax he should be paying.

That's rather odd behaviour for the leader of a party that suddenly seems to have found the moral high ground when it comes to tackling tax avoidance.

Of course, the fact is that UKIP and the Front National haven't taken an ethical stand on this issue; they've just seen an opportunity to give the European Commission, and President Juncker in particular, a mindless kicking and taken it.

Which brings me to the second and most important reason that I voted against the censure: because it wouldn't actually achieve anything. To make this a vendetta against one man, or one country, misses the point. Aggressive tax avoidance hasn't only been happening in Luxembourg under Jean-Claude Juncker (although he certainly has questions to answer, and I'm glad to see he's publicly apologised). It has been, and still is, happening all over Europe and the consequences are appalling.

Tax evasion and aggressive tax avoidance mean that countries don't get the taxes that are owed to them. That means that people in those countries either pay higher taxes, or get worse public services, as a result.

It also means there is less public money available for the investment that Europe crucially needs. President Juncker committed €21bn to kickstart growth in Europe. Imagine how much more he could have committed if companies and individuals across the continent had paid the taxes they rightly owed.

And these practices don't just deprive public services of essential funds. They also discriminate against those small businesses that cannot artificially spread their activities across borders, nor afford to employ accountants versed in the dark art of hiding profits. Tax evasion and aggressive tax avoidance are fundamentally anti-competitive.

Censuring Jean-Claude Juncker wouldn't have changed that. In fact, it would have diverted everyone's attention onto one individual when what we should be addressing is the whole rotten system.

Lux Leaks has thrown tax evasion and avoidance into the limelight. We should seize this moment to take real, meaningful action. That's why I want to see:

* All multinational companies compelled to report what they earn, where they earn it and how much tax they pay, broken down country by country

* A common approach taken to tackling the use of tax havens once and for all

* A blacklist of those companies that are engaging in tax fraud

We can take action on these things now, and we must. We owe it to people across Europe to stop political posturing, to stop a race to the bottom between tax jurisdictions and to stand up to those who engage in tax evasion and tax avoidance and say: enough is enough.

The Labour Party will place cookies on your computer to help us make this website better.

Please read this to review the updates about which cookies we use and what information we collect on our site.

To find out more about these cookies, see our privacy notice. Use of this site confirms your acceptance of these cookies.