At a meeting of Full Council on Wednesday 15 October, Bedford Borough Labour Councillors gained the support of the council to back ActionAid’s Towns Against Tax Dodging Campaign, which urges the government to do more to tackle multinational tax avoidance in the UK and developing countries.
Local employer Amazon's British business, which employs thousands of staff in warehousing, software design, accounting, human resources and other functions, paid just £4.2m in tax last year, despite selling goods worth £4.3bn. For tax purposes, its role is simply to provide services to the European master company in Luxembourg. Many multinational companies take similar measures. Alliance Boots has avoided over £1 billion in taxes over six years, enough to pay the starting salaries of 78,000 UK nurses for a year – that’s roughly 120 nurses per parliamentary constituency.
Labour Group Leader Councillor Sue Oliver said:
“Everyone who benefits from public spending, including large UK multinational corporations, should contribute their fair share. The UK government must listen to the strength of public feeling and act to end the injustice of tax avoidance by large multinational companies, in developing countries and the UK.”
“Over the past four years, funding to local government in this country has been cut at an unprecedented rate by the Conservative led Coalition Government, leading to redundancies and impacting on services and benefits to local people as a result. Bedford Borough Council has had over £62 million slashed from its budget. If multinational companies paid their fair share, this need not have been so severe.”
Collection and redistribution of £12bn could also go a long way to alleviating the problems faced by local authorities after recent nationally imposed cuts. Central Government funding to Local Government will have been cut by 40% by May 2015.
It has been estimated that the UK Treasury loses as much as £12 billion to tax dodging by multinational companies every year. It’s even worse for developing countries, which lose three times more to tax havens than they receive in international aid every year, according to OECD.
Tax avoidance by multinational companies is legal, however people across the UK are increasingly questioning the morality of these practices. Some forms of tax dodging, tax evasion, are illegal.
Jenny Rocks, Head of Campaigns for ActionAid said: “With the general election coming up in May, politicians will be listening closely to what the public wants. This is our chance to remind them that warm words on tackling corporate tax dodging are not enough. Communities up and down the UK demand action.”
To pledge your support for the Towns Against Tax Dodging Campaign or to find out more, please visit www.townsagainsttaxdodging.org.uk