The world needs a new figure to emerge and mobilise an international campaign against morally reprehensible tax practices, writes Andrew Hind.
In 1984 a BBC TV news report by Michael Buerk and Mohamed Amin broke the news to the world about the horror of the famine that was developing in Ethiopia: “Dawn, and as the sun breaks through the piercing chill of night on the plain outside Korem, it lights up a biblical famine. Now, in the 20th century.”
After seeing that footage, Bob Geldof of the Boomtown Rats, and Midge Ure from Ultravox, wrote Do They Know It’s Christmas? to raise money for the famine, and Geldof went on a crusade to attract other musicians to the cause.
Performing under the name Band Aid, they released the song in December 1984, just six weeks after Buerk’s report was broadcast. It was the fastest-selling single ever. The following summer Geldof organised Live Aid in Wembley stadium. TV pictures were beamed to 160 countries in the biggest charitable appeal ever known.
As a result of Geldof’s work, the problems of development and deprivation, and the work of our leading charities in combating these issues, were imprinted in the minds of the general public like never before.
The events of recent months suggest that the issue of tax evasion and aggressive tax avoidance may be about to become what international aid was in the 1980s: an issue of morality and social justice that grows into a global, citizen-led movement for reform.
From the perspective of UK civil society we are seeing the evolving campaign playing out at both a domestic and an international level.
In the sector, the big story of the past couple of months has been the increasing evidence of the number of unscrupulous people who are seeking to fraudulently exploit our generous system of charitable tax reliefs.
HMRC’s policy adviser on charities, Cathy Wilson, told the Charity Tax Group’s annual conference in April that her colleagues were battling attempted frauds on a daily basis. It is, she said, “an industry” of its own.
Meanwhile, the likes of Google, Starbucks and Amazon are rightly facing serious questions about their shameless tax avoidance practices in which transfer-pricing mechanisms enable profits from their UK-based activity to be taxed in low-tax jurisdictions.
But the UK focus on the morally reprehensible tax practices of some multinational corporates is just the tip of the iceberg.
Research by the international development NGO ActionAid last month revealed that 78 of the FTSE 100 do business in developing countries, with nearly 40 per cent of 22,000 FTSE overseas subsidiary companies located in tax havens.
Devastating for poor countries
The result, says ActionAid, is that “poor countries lose three times more money to tax havens than they receive in aid each year. Fragile public revenues in some of the world’s poorest countries are being fatally undermined through corporate profit shifting.”
The tax practices of Google et al are damaging to Western economies, but the use of tax havens by many other leading multinationals is simply devastating for developing nations.
Margaret Hodge has been valiantly shining a light on the issue as chair of the Public Accounts Committee, and David Cameron deserves credit for putting the subject on the G8 summit’s agenda in Northern Ireland this month.
But it’s a fair bet that it won’t be a politician who succeeds in igniting a global campaign to demand tax justice for ordinary people. We desperately need the emergence of another charismatic figure to do that – just like Bob Geldof 30 years ago.