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Insight, debate and campaigning news from ActionAid

Hear top politicians publicly debate stopping tax dodging in poor countries

Ema Jackson's picture Posted by Ema JacksonCampaigns Assistant
 

This Tuesday, as part of the Enough Food for Everyone...IF campaign, we are co-hosting a major public debate with St Martins-in-the-Field about tax avoidance and its effect on developing countries entitled ‘Tax: Law and Morality – Which way now?’ and we want you to come along.

I will be there and I am really interested to hear what will be said as tax avoidance is currently such a hot topic that is rarely far from the front pages. And it is not only in the UK that tax avoidance is rife, of course, but also in some of the poorest countries in the world. In fact, developing countries lose three times more to tax havens than they receive in international aid! Crazy, isn’t it?

Representatives from all three of the major UK political parties will be there to debate their approaches to tax avoidance. There will be Treasury Minister David Gauke MP for the Conservatives, Catherine McKinnell MP for Labour and Stephen Williams MP for the Liberal Democrats. This is the first time the three main parties have debated the issue since the controversies surrounding companies like Starbucks and Amazon came to light.

So come along to what promises to be a very lively debate. Doors open at 7pm for a 7.30pm start on Tuesday 7th May at St Matins-in-the-Fields, Trafalgar Square. There is no need to sign up, you just need to turn up on the night. See you there!

 

MEPs hear the call for Food not Fuel

Lucy Hurn's picture Posted by Lucy HurnBiofuels Campaign Manager
 

It’s been a busy few weeks in the biofuels campaign. As well preparing for our Food not Fuel week (29th April - 3rd May), to raise awareness about how biofuels cause hunger, and the need for the G8 to act on the causes of hunger when they meet this summer, last week we took a group of ActionAid supporters over to Brussels to lobby MEPs on biofuels and present them with symbolic stalks of wheat representing those who had signed up for Food not Fuel in their constituency.

As always, I was bowled over by how great our supporters are – those on the trip quickly picked up the issues and made some great points in their meetings with MEPs.

What made even more of an impression on me was the impact they had on the MEPs they met. At the beginning of some meetings it was clear that some MEPs (who shall remain nameless!) really weren't that interested. But after realising that, rather than the stream of industry lobbyists they usually see, they were being addressed by an actual constituent who had come all the way from the UK to Brussels to see them, they visibly became more engaged, and one even offered to help get the Food not Fuel campaign out to more MEPS.

Food not Fuel campaigners outside European ParliamentFood not Fuel campaigners outside European Parliament

The trip was a real reminder on the impact we can have as individuals, and the group found the trip really inspiring and were raring to go out and lobby their MPs next.

It was also a more sobering reminder of how far we still need to go to get Europe to reform its biofuels policy to end the use of Food for Fuel.

European review of biofuels policy
A proposal introduced by the European Commission in October 2012 set out plans to reform its policies on biofuels by limiting the proportion of food crops used to meet European targets and to measure the true climate impact of biofuels. This was a great first step, but not nearly strong enough.

It’s not good enough to simply measure the climate emissions of biofuels, the EU must then rule out those with the worst emissions. And the current proposal would still allow for 5% of the 10% EU biofuels target to be met through food-based crops. Current EU biofuels use al-ready amounts to almost 5% crop-based biofuels and that means we are already burning enough food to feed 185 million people – the population of the UK, France and Italy combined. We need to completely end the use of food for fuel in the EU.

The reality of what lies behind technical language on percentage targets was brought home to us on the trip by some Activistas from Tanzania who joined us to meet MEPs. They spoke passionately and forcefully about the impact of biofuels in communities such as those in Kisaware whose lives were devastated when they lost their land, and livelihoods, to a biofuels plantation covering an area the size of 11,000 football pitches.

The proposal presents a massive opportunity – if we manage to get the proposal strengthened we could rule out the worst biofuels in Europe. It is currently being scrutinised and debated by both MEPs and European Council (made up of ministers from all European member states).

MEPs on key committees are currently setting their positions – so far we have been quite successful in getting key MEPs to agree to rule out biofuels with the worst greenhouse gas emissions, but we still have a long battle ahead on ruling out food for fuel.

Environment and Energy ministers from member states already met in February and March to begin drafting a Council response. The UK has taken a strong line on the need to rule out the worst biofuels in terms of climate change, but so far has failed to act on ruling out Food for Fuel. Energy ministers from European member states will meet again on 6 June to finalise the Council position.

After that there will be a vote by all MEPs, currently timetabled for early September, and then final negotiations, where there will be the added pressure to try and get the proposal finalised before the European elections in 2014.

In the mean time we need to keep the pressure up for the UK and other G8 leaders to act on the causes of hunger, including biofuels. Take action today. 

Rachel Cox, ActionAid UK supporter and ActivistaRachel Cox meets her MEP Giles Chichester: "The trip itself was extremely empowering; being able to have my own voice heard in such a huge bureaucracy by people who have the power to change legislation made me realise how much of a difference we can make"

Margaret's story: visiting schools in Zambia

I have been an Action Aid supporter for over 40 years and am saddened and disgusted at the way multinational companies avoid paying taxes.

Margaret OgilivieMargaret Ogilivie, ActionAid supporter,set up links with Mandevu school in Zambia and her local schools back in the UKIn 2011, for my 70th birthday present to myself, my husband, Bill, and I went to Zambia to stay with Zambian friends we met when they visited the UK. One was Headteacher of a school in Lundazi and one a Minister of Church of Central Africa Presbyterian (CCAP).

The school in Lundazi was government funded, in that teaching salaries were paid, but they had very few books or other materials and were so over subscribed with pupils that the teachers taught half of the students from 7 to 11 am and then the other half from 11am to 2pm. All the students came together for ‘cultural studies’ such as farming, dance and health education from 2 to 4pm. The teachers and children put on a wonderful display of dance and singing for us. It was the first time we had danced our way through a lunch and staff meeting!

When we met up with the CCAP Minister in Lundazi, we found that the church on the compound where we stayed ran a school for orphans and vulnerable children, which was not funded by the government. This was one of several run by CCAP. Fees were £4.50 per month and the church found the money for children whose parents and carers could not pay. This school, too, was very overcrowded and some classes were held in the church.

Despite few books and materials, the children worked very hard and this year 14 out of 15 leavers have passed to go to Secondary School. When we arrived, some of the money I had asked for in lieu of birthday presents was used to pay teachers who had gone without wages for two months - and some was used to help build a toilet block for a school which met in a church.

Children at Mandevu schoolChildren at Mandevu school, Lusaka where basicbooks and materials are scarce.In all the schools, the children were absolutely delightful, committed to education and knew what they wanted to be when they became adults: ‘I am going to be a doctor, a teacher, a lorry driver, a nurse’. How disgraceful that with such enthusiasm, they will find it difficult to afford secondary school or college fees and get the jobs they are so committed to. However, we met teenagers who were making and selling wooden objects or pottery bowls or bracelets to try to raise the fees for their further education.

I linked these schools with two in England, which exchange letters and donate books and materials. Bill and I, others in the URC and the local C of E church - and several of our friends - give money, books and materials which I send to Zambia. However, if multinational companies paid their proper taxes, Zambia itself would be able to provide education and health for its children.

Photos: Margaret Ogilivie

Hunger, horsemeat and tax havens

Mike Lewis's picture Posted by Mike LewisTax Justice Policy Adviser
 

Last week London’s venerable 'Frontline Club' – a hang-out for foreign correspondents (and, previously, Wikileaks' Julian Assange) – hosted a discussion on the global food system. Is it broken, and how should we fix it? The context is the IF Campaign – the unprecedented UK mobilisation to end hunger of which ActionAid is a part.

ActionAid was invited, alongside UNICEF UK’s David Bull, agriculture expert James McMahon, the Independent’s Paul Vallely and parliamentarian Mary Creagh.

Five different perspectives, but a surprising number of common themes:

- A shared global problem with shared global solutions: rising global food prices, for example, are making times tough for families in the world’s poorest countries, and in austerity-hit UK (for more, see ActionAid’s campaign against the insanity – for both climate change and hunger – of burning food for car fuel)

- The extraordinary possibility of ending hunger in our generation: if we can tackle the imbalances of power that lie at its heart.

One of ActionAid's major messages in the IF campaign is the need for simple but powerful measures to tackle tax dodging and tax havens. These could unlock the resources needed for poor countries to fight hunger themselves. To take just one example: ActionAid's recent investigation of food multinational Associated British Foods – owner of Silver Spoon sugar and Twinings Tea - estimates that the tax haven transactions of this single company are depriving Zambia of tax revenues equivalent to 2½ times the Zambian agriculture budget. This is enough money to pay for half of the nutritional interventions needed to tackle child malnutrition in Zambia, a country where 45% of children are malnourished to the point of stunting.

But tackling tax havens might also help correct other imbalances of power in the food system too: like exposing the identities and interests of investors behind secretive land deals that are dispossessing women farmers, or ending the tax haven advantages of the Swiss-based commodity traders that currently control 35% of the global grain trade.

If you’ve been wondering what connects horsemeat and tax havens, food traders and Swiss bank accounts - take a look at this, and let us know what you think?

Waiting for news in Bali…

Clare Coffey's picture Posted by Clare CoffeyPolicy Advisor
 

The High Level Panel on post 2015 is meeting in Bali this week. Tackling corporate tax avoidance has been a prominent theme in discussions running up to the official talks and is crucial if the new framework is to tackle big issues like women’s rights. But will the Panel members be willing to tackle this thorny issue?

A couple of months ago, I was blogging from Monrovia, the capital of Liberia, where members of the UN appointed High Level Panel on post 2015 were meeting. The panel’s task is to build a vision of what should come after the Millennium Development Goals when they expire in 2015. 

Monrovia was the panel’s second real meeting with the first in London in October last year. And this week – from 25 to 27 March – the whole procession of panel members, advisors and support staff from the UN arrived en masse in the Indonesian island of Bali for their third and last big meeting. But first, civil society groups and people’s movements from around the globe poured into Bali to prepare their views on the future they want post 2015, to feed into a formal ‘outreach’ day with the panel that took place yesterday.

ActionAid has been working consistently to ensure that human rights, and particularly women’s rights, feature centrally in any new framework. There appears to be strong agreement within the High Level Panel that development can’t happen if women are left behind, but what does that mean in practice? A‪ctionAid has set out the ‘must haves’ if post 2015 is to make a real difference‬ to women going forward, with ending violence against women and girls among the priorities. 

But this week in Bali, the discussion is less about what the global development agenda post 2015 should aim to achieve, but how it will do that. Specifically, unless governments have the resources and unless global rules are balanced in favour of developing countries, then all the commitments in the world to equality and human rights simply won’t be delivered  and sustained.

That’s why ActionAid is also calling for taxation to be part of the post 2015 talks: at present billions are lost every year as companies exploit every opportunity to pay as little tax as they can. The effect is simple; there is much less money in national budgets to pay for the public services that are needed to end poverty and secure equality.

ActionAid estimates that closing the 20% corporate tax gap in developing countries over 10 years could raise some US$520 billion additional revenue by 2022. Bringing tax into the post 2015 framework would allow the multinational corporations to contribute more fully and more legitimately in stimulating development. It would help address a major chunk of illicit capital flows.

ActionAid is not alone to focus on tax this week. The Bali CSO communiqué presented to the Panel yesterday also called for corporate tax avoidance to be tackled. And Nigeria’s Finance Minister Ngozi Okonjo-Iweala – a member of the High Level Panel – has also added her voice on the issue, saying:

“I’m really frustrated at these illicit flows. What would it take for G8 and G20 countries to put pressure on those countries acting as tax havens?”

While the UK has agreed to make taxation part of the G8 agenda in June, it remains to be seen if it will have the courage to tackle this thorny issue in the Bali talks.

Tags: policy, tax

Amazing aid result - but this wasn’t a tax justice budget

Chris Jordan's picture Posted by Chris Jordan Tax Justice Campaign Manager
 

Over the last couple of months, campaigners across the country have been piling pressure on the government to meet its historic commitment to spend 0.7% in aid and to tackle tax dodging by UK multinationals in the budget.

Aid breakthrough…

Over 50,000 people contacted their MP and the Chancellor received over 500 letters from our representatives as a result. Despite real pressure from some to cut the aid budget, the Chancellor held firm and confirmed that the UK would become the first G8 nation to spend 0.7% in international aid.

This is a huge campaigning victory and it’s been long in the making. Remember the Make Poverty History campaign back in 2005? One of its big achievements was to create cross party support for effective international aid. Although we’ve not been able to rest on our laurels, its meant that a change of government hasn’t resulted in the world’s poorest losing out.

If you’ve been involved, give yourself a huge pat on the back and watch this video.

…but why no tax justice?

Aid saves lives every day of the week – but we know it’s not enough to end poverty and hunger once and for all. Poor countries need to increase their tax revenues, but multinationals who avoid their bills make this much harder.

We’ve also been pushing the government to implement a simple solution to help prevent UK-based multinationals like Associated British Foods and SABMiller from dodging their fair share. We want all companies to disclose the information that poor countries need to identify tax avoidance tricks.

This would lift the lid on tax avoidance costing developing countries millions, and would also enable those countries to work alongside the UK, sharing experience and solutions, and helping identify dodged UK taxes too.

Despite recommendations from the UN, IMF and OECD that countries like the UK should provide this kind of information, along with support from senior UK tax professionals, the government has not agreed to it in today’s budget.

The government is currently claiming that it can’t add to the UK’s current Disclosure of Tax Avoidance Schemes (DOTAS) rules in this way, and can’t collect other countries’ taxes. Both arguments are real red herrings. The disclosure power we’re asking for could be implemented independently in tax law. And simply requiring information from UK taxpayers is not the same as gathering other countries’ taxes. The legal details of our proposal have been developed with a leading international tax law firm, and draw on existing measures in UK tax law.

There’s still a week before the fine detail of the budget is made public in the Finance Bill. Along with the rest of the If campaign, we’ll be keeping the pressure on the Chancellor to see sense and take responsibility for British business.