'No more corporate tax secrecy,' promises Miliband

 

Multinational firms would no longer to be able to hide how much corporation tax they are paying in Britain under a Labour Government, Ed Miliband promised today.

He pledged to end the era of "tax secrecy" which has provoked an outcry over companies such as Amazon, Google and Starbucks accused of exploiting tax rules to reduce the tax they pay in the UK.

The Labour leader said multinationals would be forced to publish a simple, single figure for their UK corporation tax payments. Labour's policy review will propose changes to the tax system to close loopholes. It will consider stricter rules on "transfer pricing", like those introduced in Denmark.

Labour believes that greater transparency would increase public pressure on the big firms to act responsibly. The recent controversy forced Starbucks to announce that it would pay £20m in tax over the next two years, even if it did not make a profit in the UK.

Mr Miliband told the BBC's Andrew Marr Show: "Many British companies and many individuals are paying their fair share of tax and they look in horror at a system where some multinational companies from other countries can make huge profits in Britain and not pay taxes in Britain.

"This is scandalous. It's got to change; the next Labour Government will change it. We'll end the tax secrecy because we can't have a situation where we don't know how much tax people are paying against how much profit they're making. It's wrong and frankly it's an insult to hard-working taxpayers in this country."

Coalition ministers argue that international agreement is needed to change corporate taxation, and that Britain could lose out on job-creating investment if its tax system is not competitive. Labour accuses David Cameron of not acting quickly enough. He has promised to press the issue this year while the UK chairs the G8 group of leading economies.

In his interview, Mr Miliband made clear that universal benefits were "a very important principle" and part of the "bedrock" of his one-nation Labour vision, even though they are being eroded in the age of austerity. But he also suggested a future Labour Government was unlikely to reverse the cuts in child benefit for families with one earner on more than £50,000 a year which took effect a week ago.

The Labour leader denied his party had a policy vacuum, insisting it had more policies than most oppositions at this stage of the political cycle. He said that tax and spending plans would be set out before the 2015 election.

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