Today marked the next stage of the European Parliament’s fight for tax justice: the first meeting of a new Inquiry Committee which will investigate the ‘Panama Papers’, those 11.5 million documents leaked earlier this year which showed tax avoidance taking place on a staggering scale. I was pleased to take my seat as a member of that Committee today.
The scale of the work we are about to undertake is hard to comprehend. We are going to be investigating the largest data leak in history - a scandal that showed just how much some multinational companies and private individuals have been able to take advantage of secrecy in order to avoid paying their fair share of tax.
But I am ready for the challenge, and I know my socialist colleagues in the Parliament are too. Fighting tax avoidance and evasion has been at the heart of our agenda for years now, and our pressure is beginning to bear fruit. Just today, European Finance Ministers adopted a new “Anti-Tax Avoidance Directive” in order to crack down on large companies taking advantage of loopholes so as to reduce their tax liability. The Ministers also discussed the possibility of creating a public list of “beneficial ownership” - who really owns what - when it comes to both companies and trust arrangements. Finally, they took the first steps towards creating an EU-wide blacklist of tax havens.
These are all measures which I called for in a report I co-authored last year, and I am delighted to see progress being made and the EU leading the way in the global fight for tax justice. This progress simply would not have happened without a call to action from NGOs and civil society organisations, followed up by pressure from politicians within the European Parliament.
But the fight isn’t over. The new Panama Papers Committee’s work will begin in earnest in September, when we will get to the bottom of just how those companies and individuals got away with their tax fiddling. We still have a long way to go before we have a proper list of tax havens and are able to impose tough sanctions on those countries and the companies which use them. Above all, we need to change the way the tax system operates, by introducing something called a “Common Consolidated Corporate Tax Base” to make sure that tax is paid in the country where it is earned, and not shipped off to tax havens for the cheapest deal.
Obviously the result of the referendum, and the UK’s decision to withdraw from the European Union, will have enormous repercussions for everything out here in Brussels and back at home. There will need to be a new relationship forged between the UK and the EU. Such a relationship must not involve a race to the bottom and the unravelling of all the hard-won gains we have made in the fight against tax avoidance and tax evasion. I will not stand by and watch the Tory government turn the UK into an offshore tax haven for the rest of Europe.
That is why out here in Brussels I will play an active part in the new Panama Papers Committee and make sure that we continue the European work on tax which has already started. And it is why back in the UK I have demanded that the government establish a body that includes NGOs, academics, business and trade unions to discuss the negotiating terms for Britain’s withdrawal from the EU. We need a new deal that works for everyone in Britain, and not just the privileged few who have the ear of Tory grandees. That means carrying on the fight for tax justice, in Westminster and in Brussels.