A full public inquiry should be held into the leaked Panama Papers rather than a proposed government taskforce, which is due to report to ministers, because Tory donors feature in the documents, John McDonnell has said.
After Jeremy Corbyn mocked David Cameron, by saying that he has paid more tax than companies well known to friends of the prime minister, the shadow chancellor said that the inquiry will only have any credibility if it is independent.
Speaking in a Commons debate on the Panama Papers, the shadow chancellor said: “We need an immediate and full public inquiry into the Panama leaks. The government’s proposed taskforce will report to members of the government, the chancellor and the home secretary, who are members of a party funded by donors featured in the Panama Papers. To have any credibility, the inquiry must be fully independent. We must shine a light on, and start to prise apart, the corrupt networks that operate through tax havens.”
McDonnell, who warned the leaked papers highlighted a return to the “world of the Rockefellers and the robber barons”, said that the Tories have impeded efforts to crack down on tax avoidance. The shadow chancellor accused the Treasury of encouraging Tory MEPs to vote against EU-wide measures on tax avoidance and the prime minister’s lobbying of the European commission in 2013 to remove offshore trusts from new EU regulations on tax avoidance.
“This is a test of leadership,” McDonnell told MPs. “The leadership of the Conservative party could take this opportunity to correct the series of errors that it has made. It could join us today in taking effective steps towards dealing seriously with avoidance. People want to see the Conservatives take these steps. Otherwise, they will rightly stand accused of siding with the wrong people and of being the party of the tax avoiders.”
The shadow chancellor criticised the government’s record on tackling tax avoidance after Corbyn joked that he had paid more tax than friends of the prime minister an apparent reference to the wallpaper firm established by the chancellor’s father. George Osborne’s tax return revealed that he was paid £44,647 in dividends from shares in his father’s company, Osborne & Little. The company has paid no corporation tax since 2008 after rolling over losses from previous years.
The Labour leader highlighted his tax return, which showed he declared an extra £1,350 in earnings on top of his parliamentary salary, after the prime minister taunted him for filing it late. Corbyn said: “I am grateful to the prime minister for drawing attention to my own tax return. There, warts and all – the warts being my handwriting, ‘all’ being my generous donation to HMRC. I actually paid more tax than some companies owned by people that he might know quite well.”
The prime minister had earlier said: “I’m glad he wants to get onto our responsibilities to pay our taxes. That’s very important. His tax return was a metaphor for Labour policy: it was late, it was chaotic, it was inaccurate and it was uncosted.” Corbyn filed his handwritten tax return late, incurring a £100 fine. It subsequently turned out that Corbyn had overdeclared by £270.
The Labour leader accused the government of failing to match rhetoric on tackling tax avoidance with government action as he highlighted the response of Jersey and the Cayman Islands to UK demands for details of beneficial ownership from crown dependencies. Corbyn quoted Ian Gorst, the chief minister of Jersey, who said that the Channel Island would provide information to UK agencies in the fight against terrorism, and Alden McLaughlin, the premier of the Cayman Islands, who said that information “certainly will not be available publicly or available directly by any UK or non-Cayman Islands agency”.
Corbyn said: “The prime minister is supposed to be chasing down tax evasion and tax avoidance. He is supposed to be bringing it all into the open. If he cannot even persuade the premier of the Cayman Islands or Jersey to open up their books, where is the tough talk bringing the information we need to collect the taxes that should pay for the services that people need?”
The prime minister told Corbyn: “He is misunderstanding what I have said. In terms of the UK it is an absolute first in terms of a register of a beneficial ownership that is public. The British one will be public. Further to that we are also saying to foreign companies that have dealings with Britain that they have to declare their properties and the properties they own which will remove a huge veil of secrecy over the ownership, for instance, of London property. I am not saying we have completed all this work.”
Caroline Lucas, the Green MP for Brighton Pavilion, questioned why the UK offices of the Panama-based law firm have not been searched. “The authorities in Peru, El Salvador and Panama have raided offices of Mossack Fonseca, seizing documents and computer equipment, but no one has knocked on the door of the law firm’s branch in the UK. While recognising the operational independence of our enforcement agencies, does the prime minister share my deep concern that, as we speak, documents are no doubt being shredded and databases being wiped, undermining the opportunity to bring further potential wrongdoing to light?”
The prime minister told Lucas: “[You make] an important point, which is that we need to make sure that all the evidence coming out of Panama is properly investigated. That is why we have set up a special cross-agency team – including the National Crime Agency, Her Majesty’s Revenue and Customs and other relevant bodies – to make sure we get to the bottom of what happened. But she is right to reference the fact that these organisations are operationally independent. It would be quite wrong for a minister or a prime minister to order an investigator into a particular building in a particular way.
“That is not a Rubicon we want to cross in this House. Let us empower the National Crime Agency, empower HMRC, give them the resources and let them get on with the job.”