Labour calls on Government to stop letting the biggest multinationals off £131 million per week
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Labour have today [Wednesday] penned an open letter to Chancellor
of the Exchequer, Rishi Sunak, ahead of the G7 Finance Ministers
meeting on Friday. Reeves has urged the Government to show global
leadership on tax avoidance and secure a pact to get the likes of
Amazon, Google and other big multinational companies to pay their
fair share. The Party are calling on the Chancellor to back the 21
per cent rate on a global minimum corporate tax rate originally set
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Labour have today [Wednesday] penned an open letter to Chancellor of the Exchequer, Rishi Sunak, ahead of the G7 Finance Ministers meeting on Friday. Reeves has urged the Government to show global leadership on tax avoidance and secure a pact to get the likes of Amazon, Google and other big multinational companies to pay their fair share. The Party are calling on the Chancellor to back the 21 per cent rate on a global minimum corporate tax rate originally set out by President Biden, rather than risk a weaker agreement of 15 per cent - saying the Government are letting big multinationals off £131 million per week which could be used to fund the NHS and other public services instead. Labour are calling for the Chancellor to provide an update this weekend on an agreement on a 21 per cent global minimum rate of corporate tax, and an outline of how all countries - including the UK - will be able to collect taxes that are currently being avoided. Failure to reach an agreement risks stopping billions coming back to Britain from undertaxed multinationals and online giants like Amazon and Facebook who aren't paying their fair share. The IPPR has this week highlighted that a 21 per cent global minimum rate of corporate tax would raise £14.7 billion for Britain every year - more than would be required to fix the NHS funding shortfall. Labour’s Shadow Chancellor of the Exchequer, Rachel Reeves MP, marked the pact as “a once in a generation opportunity to stop huge multinationals avoiding British tax and undercutting British businesses, as well as arresting the global race to the bottom on corporate taxation.” But Britain is still the only country to not back the plan, with Germany, France, Canada, Italy and Japan backing Biden’s proposal. Shadow Chancellor of the Exchequer, Rachel Reeves MP, said: “This week is a chance for the Government to back British business and help our public services rebuild out of the pandemic. “Boris Johnson is gifting the biggest multinationals £131 million a week. Labour says let’s fund our NHS instead.” “Now that we’re out of the EU we have even more reason to show global leadership in cracking down on tax avoidance. “Yet this government seems set on weakening a deal that would bring billions back to Britain and stop our high streets being undercut by the likes of Amazon, Google and other big multinationals. “If the Government is serious about seeing our high streets thrive, they must make sure the businesses on them – whether it’s on Armley Town Street in my constituency, or Market Square in the Chancellor’s – have a level playing field.” Ends Notes to editors: Text of the full letter from Rachel Reeves MP to Rishi Sunak MP Dear Rishi, As the G7 Finance Minister’s meeting approaches, it is crucial this government makes the scale of Britain’s ambition as a global leader known. On 21st May 2021, the Shadow Foreign Secretary, Lisa Nandy MP and I wrote to you and the Foreign Secretary asking you to publicly endorse the global minimum rate of corporation tax. We also called on the Government to show leadership on curbing tax avoidance, and tackle big multinationals like Amazon, Facebook and Google shifting their profits offshore to avoid paying tax in the UK. I am writing to you again today to reiterate the seriousness of this opportunity. As it stands, the UK is the only member of the G7 that remains lukewarm to the idea. And, since our letter, your MPs were whipped to vote against Labour’s amendment on the global minimum corporate tax rate. This is particularly concerning given that we are in the chair for June’s G7 summit in Cornwall. As we shape a new future outside of the EU we have even more reason to show global leadership in cracking down on tax avoidance. But this government are letting big multinationals off a staggering £131 million per week that could be used to fund our NHS instead. I note media reports that the government is trying to secure a different deal against tax avoidance by online giants, and this is why the government has dragged its feet on the 21 per cent rate originally put on the table by President Biden. But currently, we see little credible action from government to demonstrate this is the case. Not only that, it now appears that the slowness by this government has weakened the initial agreement, which could deprive Britain of billions in extra tax revenue from those undertaxed big multinationals and online giants. Despite Germany, France, Canada, Italy and Japan all making positive noises towards President Biden’s initial 21 per cent proposal, the UK’s hesitancy on this has led to speculation that the initial rate will be lowered to 15 per cent. The IPPR this week calculate that the original 21 per cent rate originally proposed by the US would raise £14.7 billion for Britain - more than would be required to fix the NHS funding shortfall, compared with £7.9bn from a 15 per cent rate. That means Britain could miss out on £34 billion over five years – money that could go back into our public services and our brilliant British high streets. High streets in our constituencies, like mine on Armley Town Street, and yours in Richmond’s Market Square, deserve a level playing field and to not be undercut by those not paying their fair share. I am writing to you again today to ask you to ensure that Britain stands as a leader on the global stage by:
I look forward to your reply. Kind Regards,
Rachel
Reeves MP
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