George Osborne has written an article for the Observer committing to multilateral action against tax evasion and claiming to be leading G20 finance ministers in a new initiative. Along with reiterating his pledge to meet the UN target for overseas aid in the coming tax year, he opposes multinational corporations dodging their UK taxes by shifting profits overseas, and also opposes the way they do the same – with even worse impacts – against developing countries.
It may seem churlish not to welcome the repentance of such a serial sinner (he’s still cutting the UK’s corporate tax rate, and has refused to u-turn on the decision to cut the top rate of income tax, remember.) But is this really the same politician who has refused to join – and tried unsuccessfully to scupper – the European Robin Hood Tax on financial transactions? It surely is.
There’s a possibility that Osborne really is fed up with the way Amazon, Google, Starbucks and the rest have tried to avoid paying UK tax. And it’s also possible that Osborne is trying to claim credit in the UK for a move portrayed in other countries as an EU initiative led by the finance ministers of France and Germany, as well as the UK: the leg-work for this initiative was done by the Paris-based Organisation for Economic Co-operation and Development (OECD).
It would be easy for Osborne to dodge the argument that he might start out by addressing the problem caused by the tax havens the UK oversees: he will simply claim that the only way to defeat tax arbitrage is by a global agreement rather than unilateral action.
Although if he’s such a committed multilateralist all of a sudden, that refusal to endorse multinational action on transaction taxes (to defend the City of London, he says) looks harder to explain.
And his lacklustre crack-down on giving public contracts to tax avoiders (he’s so committed to this that he’s letting them carry on securing contracts in the health service, education, local government; and all they have to do is swear they never, ever did anything naughty to escape the crack-down…) does not inspire confidence either. Nor does the omission of tax dodging from DFID Secretary of State Justine Greening’s recent panegyric to the private sector….
So, all in all, underwhelmed is how Osborne’s startling conversion to global tax justice leaves me. But let’s look on the bright side, and wait to be impressed. We will watch the space where action against tax havens and tax avoiders should appear.