Journal Column – 19th October

Ahead of the G20 summit next month pressure is growing on the financial leaders of the World’s richest countries to take meaningful action to combat the use of tax havens. Whilst action was promised in the 2009 summit, no apparent outcomes have been achieved. With the World’s financial markets in turmoil, George Osborne must take the opportunity to deliver on his rhetoric and see leaders clamp down on those avoiding legitimate taxation.

A report by the charity ActionAid indicates that FTSE 100 companies between them have more than 34,000 subsidiaries; a quarter of which are registered in tax havens. Based on the definition of tax havens compiled by the US Congress, a staggering 98 of the FTSE 100 companies use tax havens in their subsidiaries. It may come as no surprise to learn that the banking sector has the largest number of tax havens despite being recipients of well over a trillion pounds in loans, grants and guarantees from the public purse since 2009 to keep the sector afloat. Plaid Cymru believes the economic elite should be paying more than their fair share for restoring the public finances instead of governments grinding the axe against the most vulnerable and low paid workers in the country.

So far the message coming from the UK Government doesn’t look promising. George Osborne has already stated he will not support a transaction tax – also known as a Tobin Tax or Robin Hood tax – on the banks, which is being proposed by the European Commission and could generate around €57billion.

Europe is showing it is ready to take on the banks and see fairness in taxation. The Conservative and Lib Dem government must break away from traditional Labour position as stalwart supporters of the City’s square mile and stop defending the interests of the privileged few.

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