It’s essential for our NHS that we end the era of the British tax haven

mike kaneThis article first appeared on LabourList on Tuesday 1 November

By Mike Kane,  Shadow Minister for International Development and Labour MP for Wythenshawe and Sale East – @MikeKaneMP

Theresa May has pledged a crackdown on tax havens. She should start by cleaning up our own backyard – the secretive network of UK-linked tax havens like the British Virgin Islands, Bermuda and the Cayman Islands.

Today and tomorrow’s summit of overseas territories leaders, taking place in London, provides the perfect opportunity to kickstart that process. They are our very own treasure islands, stuffed full of booty from around the world: entire economies set up to help wealthy people and unscrupulous companies to avoid paying their fair share of tax. That is money that could be spent on public services like schools and hospitals.

Over the past few years the Tory government has talked a tough game on tax dodging, decrying bad practice and demanding alleged tax avoiders like Starbucks “wake up and smell the coffee”. Ongoing scandals like that which engulfed Apple, and a wilful blind spot when it comes to UK-linked tax havens, tell a different story.

And it is the world’s poorest countries that are the worst affected by this inaction. Corporate tax avoidance is estimated to cost developing countries an astonishing $200bn every year more than they receive in aid. Much of that is siphoned off via tax havens like Mauritius and the British Virgin Islands. Money needed to tackle poverty, cure disease and promote education disappears offshore never to be seen again. That is a gross injustice.

Back in April the Panama Papers leak blew a hole in tax haven secrecy. Those with the means to do so were bending or breaking the rules on a huge scale, benefiting at the expense of ordinary people in the UK and in the world’s poorest countries.

In response, 300 top economists including Thomas Piketty and Nobel laureate Angus Deaton, told world leaders that tax havens “serve no useful economic purpose“. They also argued that the UK is uniquely placed to lead a crackdown, because it has sovereignty over around a third of the world’s tax havens through its overseas territories and crown dependencies.

Our involvement cannot be understated: more than half of the 214,000 firms named in the Panama Papers were registered in the British Virgin Islands, a UK overseas territory. Make no mistake – the UK sits at the heart of a global web of tax havens.

David Cameron came up woefully short on his promises to fix this problem, culminating in the refusal of many overseas territories to even attend his much touted anti-corruption summit earlier this year, much less make the kind of commitments that are needed.

That’s not to say others aren’t trying.  The anti-poverty charity ActionAid has called for greater transparency from UK-linked tax havens; the tightening up of global rules; and reform of the UK’s tax treaties with poor countries – another tool big companies use to avoid paying tax.

Caroline Flint and her colleagues on the public accounts committee secured an amendment to the finance bill which could compel all UK companies to declare the tax they pay everywhere they do business – including tax havens. Ministers must now find the courage to implement the law.

The new prime minister talks a good game on tax dodging, but she can no longer ignore the glaring issue of the overseas territories: our single biggest contribution to the global tax system.

Transparency is a vital first step. We need to know who own the countless anonymous shell companies registered offshore. That’s why ActionAid and others are campaigning for registers of beneficial ownership. Only by tackling secrecy can we know who is hiding their money, and hold them to account.

All of us are expected to pay tax – we should demand no less of the wealthy and big corporations. Tax is the key building block of our public services. Without it there is no NHS, no police, no schools, no welfare state. Everyone should pay their fair share.

We are accountable for the overseas territories and they are accountable to us. And when it comes to cleaning up tax dodging, they are our greatest weakness and our greatest strength. They have a corrosive impact on the global tax system, eating it from the inside. But we have the power to change that. By acting to sort out our tax havens we could set an example to the world.

Theresa May must put the UK’s British treasure islands on notice. It’s time to end the age of the British tax haven.

Owen Smith MP – my commitment to tackling poverty at home and abroad

owen-smith-2Owen Smith MP, candidate in the 2016 Labour Leadership contest, blogs for LCID on his commitment to international development – @OwenSmith_MP

Anyone in any doubt about the right-wing agenda of this new Tory government should take a look at two of Theresa May’s lesser commented-on appointments over the summer – that of Priti Patel as International Development Secretary, and her Special Adviser Robert Oxley – formerly of the Brexit campaign and the ideological Taxpayer’s Alliance.

Both Patel and Oxley have spent years attacking the very department that they now lead, arguing for the aid budget to be redirected, cut or even scrapped – and even at one point suggesting that DFID should be abolished or reformed. Even more shockingly they appear to be willing to undermine the cross-party consensus on the 0.7% aid target to spend a small but guaranteed proportion of our income on supporting education, health and responding to disasters around the world. They must be stopped.

Establishing DFID, leading the way on both the quality and quantity of our development assistance, and while abandoning the type of policies that led to the Pergau dam scandal – was one of the proudest achievements of the last Labour government. An achievement that literally saved lives around the world, and showed the type of outward looking internationalism that Britain and Labour should represent.

It is clear that there is a moral case for international development assistance – and focusing this on those who need it the most. Who can say that we should turn by and walk on the other side when so many children remain unable to go to school, when millions face the threat of HIV/Aids, Malaria or TB, and when women and girls often bear the brunt – not least in conflict zones. And as we see the effects of climate change and disorganised war and conflict impacting on many more – we also have to prepare for the challenges of the future.

It’s why the agreement of the Sustainable Development Goals was so important – recognising that tackling poverty and injustice requires concerted action in many areas, and in the richest countries domestic policies as well as their international action – not least when it comes to sustainability, climate change, taxation and corporate behaviour overseas. I want to see a Labour government that leads the way in delivering the goals domestically and internationally.

But as well as the moral case – international development is clearly in our national interest. Whether it is the tragedy of poverty and conflict driven thousands drowning in boats in the Mediterranean – or the threat of instability and poor governance in countries across Africa and the Middle East leading providing the space for extremism to grow – we ignore these challenges at our own peril. There is no zero-sum game between our Defence, Development and Diplomatic efforts around the world. We must ensure there is coherence and collaboration to ensure a safer, fairer and more just world for all.

But I believe there is something more fundamental at stake. Many understand the need for charity – but only Labour has historically recognised the need for justice – whether for garment workers in Bangladesh, women fleeing rape in the DRC or the refugees of Syria. We need to address the immediate impacts – but also the economic and political structures that drive injustice, poverty and conflict – for example through global tax transparency or fair trade. DFID and our aid budget have been at the heart of that fight for justice since 1997, and I will fight tooth and nail as Labour’s Leader to ensure the Tories don’t take an ideological axe to its work – and pledge to put tackling poverty at home and abroad at the heart of my programme as Labour’s next Prime Minister.

 

Owen Smith

Why 2016 is the year to leap, not shuffle, towards gender equality

left to right, Katie Berrington, Karen Gould, Emily Berrington

Katie Berrington, Karen Gould & Emily Berrington

By Emily and Katie Berrington

Despite being the year that the United States may be set to welcome its first female president; the first year that Saudi Arabia’s female residents will live under municipal governments that they were able to vote in; and the year that more than 90 countries answered the UN Women’s call to “Step It Up For Gender Equality”; 2016 has not been an easy year to be a woman in many parts of the world. Far from it, in fact. Headlines of progression for women’s rights are scarce and a quick scan of the top news stories over the last two months confirms that we have a long way to go before equality is achieved – approximately 117 years according to the World Economic Forum, based on indicators of health, education, economic participation and political empowerment. Even more worrying, this estimate increased by 38 years between 2014 and 2015, due to a slowdown in the rate of progress.

But it is not just about the figures – so far this year has seen women suffering disproportionately in conflict zones around the world, with groups such as ISIS and Boko Haram using sexual violence as a weapon of war and suppressing women’s rights in areas under their control. Many fleeing war torn homes report assault, exploitation and harassment on their journey to safety (Amnesty International, 2016) with little protection or security being provided to those at risk. The battle against Female Genital Mutilation rages on, with an estimated 3 million girls at risk of undergoing it every year (WHO, 2016). Human trafficking remains an international issue – the most common form being sexual exploitation and victims predominantly being female. And, although women may have been given the vote locally (still not nationally) in Saudi Arabia, they continue to face sanctions, such as the lack of freedom to drive to the polling station, which render a historical development less of a leap and more of a shuffle in the right direction.

International Women’s Day is an opportunity to address the enormous forces working against women’s rights and preventing true gender equality. It is a chance to petition governments, to challenge, to campaign, to take action. It is also a time to celebrate, to reflect on the achievements that have been made and to salute the fantastic work that is being done, as well as to recognise how much further there is to go. The headlines are bleak, but they are not ineradicable.

This International Women’s Day we will be celebrating some of the many women who have inspired us – in the opportunities we have had and the choices we have made. Our mum, who made being a feminist the norm and led by example in encouraging us to expect and strive for parity in both our personal and professional lives. Harriet Harman, who Emily was lucky enough to see being honoured at last year’s Labour Women’s Conference for bringing what had previously been seen as “women’s issues” – childcare, for instance – to parliament. She was often mocked or ignored and we are grateful that she refused to concede. Finally, Malala Yousafzai, whose courage in the face of unspeakable adversity and dedication to advocate girls’ right to education worldwide drives progress forward, and to whom we give the closing words. “I raise up my voice – not so I can shout but so that those without a voice can be heard…we cannot succeed when half of us are held back.”

Let’s all raise up our voices, in whatever ways we can, this year.

Malala Day – youth leading a revolution in education

by Joe Walker, LCID Parliamentary Officer

Today is Malala Day. Sometimes it takes just one event, big or small, to bring about a revolution and to change the world.  Young people have often been the inspiration and power to rally in support of common social and moral causes, whether this is about civil rights, climate change or ending global poverty.  In 1976, a group of school children in Soweto, South Africa marched against the apartheid government’s sub-standard education policy for black children. Their actions re-ignited the struggle for freedom and changed the country forever.  Malala Day can be a catalyst to bring about a revolution in education. Giving children the opportunity to go to school not only enables them to fulfil their potential, but can also gives them a pathway out of poverty and the freedom to shape their own future.

Malala Yousafzai was an ordinary school girl in Pakistan who believed passionately for the rights of girls to receive an education.  Less than a year ago, as a result of speaking out, she was shot by the Taliban as she boarded a bus on her way to school. She thankfully survived and her story has inspired and mobilised thousands of young people to participate in Malala Day and to campaign for the 57 million boys and girls and 69 million youth who don’t have the opportunity to go to school and learn.

Supported by Gordon Brown, the UN Special Envoy for Global Education, Malala Day also marks Malala’s sixteen birthday. She is using this day to give her first public address dedicated to the importance of education at the United Nations in New York.  Today, in New York there will be the first ever youth take-over of the UN General Assembly. Young people from across the world are meeting there to agree a ‘Youth Call to Action’ on education for all children. What is happening in New York and around the world today will make education a reality for all children and help shape what education will look like in the future.

Nelson Mandela said: “Education is the most powerful weapon which you can use to change the world.”  Today is about listening to young people and asking them how to bring about that change. Young people are most affected by the persistent problems facing the world and access to education has become one of the leading challenges of our time. With over 85% of the world’s youth living in the developing world, children and young people should be recognised as part of the solution to achieving the global education goals.

A global movement, led by young people, to demand education for all is a powerful symbolic moment. With only 900 days left to meet the 2015 Millennium Development Goals, the harsh reality is that this needs to translate into ensuring that governments around the world recommit to meeting the goals they established in 2000.  It is only through governments, international institutions, NGOs, civil society, listening to the voices of young people tomorrow and beyond, that we can meet goals and shape a new generation of global citizens.

Young people have a unique reach through their unprecedented levels of energy and commitment to change the world. By standing in solidarity with Malala today, we can all make a real difference and bring about a revolution in education for every child.

Sign Malala’s 16th birthday card and leave her your own personal birthday message. 

Lessons from Cuba

by Jessica Toale, LCID Member
Cuban Ambulance (C) Alberto Cárdenas Almeida
No one could argue that post-Revolutionary Cuba has been an economic success story; however, an unmitigated programme of social equality despite economic hardship has ensured that the country boasts some of the highest human development indicators in the world. This strategy can provide some valuable lessons for much of the developing world, and even the UK in the face of continuing economic crisis.

 

Invest in basic healthcare and education for all

Despite recurrent economic and political crisis, Cuba has prioritised investment in healthcare and education. Both are free for all citizens and a significant amount of resource goes into research and development. As a result, literacy levels are as high as those of more developed countries, they have been able to eradicate many infectious diseases that still affect countries with similar levels of economic development, and despite being an underdeveloped country the most common causes of death are cancer and cerebral vascular disease, diseases associated with more developed and urban societies.

 

Make training professionals a priority

After the Revolution half of Cuba’s 6000 qualified doctors left the country. As a result, Cuba made training a priority, and from January 1959 to 2010 close to 109,000 doctors graduated from Cuban universities. This year Cuba has trained 11,000 doctors – 5315 Cubans and 5694 from 59 other countries (the highest numbers of students come from Bolivia, Nicaragua, Peru, Ecuador, Guatemala, Colombia.) In addition, this year a total of 32,171 health professionals will graduate from Cuban universities in over 21 specialities in medicine, dentistry, psychology, nursing and health tech. These studies are free of charge for both Cuban and overseas national students, and a result of this focus on training Cuban healthcare has become world renowned – most recently Hugo Chavez visited Cuba for cancer treatment, and South Africa has requested the help of Cuban doctors.

Commit to regional and international development

Cuba regularly trains more health professionals than it needs as part of its foreign and humanitarian policy. New doctors are required to do a two-year rotation overseas providing medical advice in other developing countries. Cuban professionals are currently training 29,000+ students in three careers (Medicine, Nursing, Health Technology) in 8 countries: Venezuela, Bolivia, Angola, Tanzania, Guinea Bissau, Equatorial Guinea, Gambia, Timor Leste. While some of this medical aid is traded for essential goods affected by the US blockade, Cuba has also become one of the world’s leading exporters of humanitarian aid professionals with one humanitarian worker overseas per 228 people in country.

Cubans have been pragmatic in the face of the many challenges affecting their country, but it still has a long way to go. Higher levels of education and life expectancy require corollary opportunities for development and growth, which currently do not exist. Low state-paid salaries are propelling qualified professionals into the tourism sector and discouraging young people from committing to higher education.

What the Cuban model does demonstrate however is that lack of economic resources is not the determining factor for improving indicators of social well-being. This is an important challenge to the Coalition Government’s focus on private sector development as the primary means of poverty reduction and delivery of essential services. Cuba has proven that indicators of social well-being can be improved with concerted state investment in health and education and that these improvements can be significant enough to provide an effective overseas development aid strategy.

 

Cuba is very much a country in transition that is experimenting with new forms of local economic development to encourage enterprise and investment. These new developments have the opportunity to provide interesting case study material for the debate around how best to support local private sector growth in tandem with public sector development.

Kevin Watkins is right – if the state education system is broken, fix the state, don’t go private

On today’s From Poverty to Power blog, senior visiting research fellow at the Brookings Institution Kevin Watkins makes the case in favour of public education. The post is in response to Justin Sandefur’s advocacy of private provision.

The article is a strong summary of the evidence and arguments in favour of a progressive to education. This is not to deny the problems that currently exist with many government funded schools in poor countries. But as Kevin says;

…when public education systems are broken they need fixing, not bypassing or franchising out to the private sector. And if we care about equity, there is no credible alternative to a public system that offers opportunity for all rather than choice for some.

Once again Brazil, governed by social democrats, shows how it can be done. The public education reform path that Brazil has followed means it is now one of the world’s fastest climbers in the international learning assessment league table.

The evidence in our favour is backed not only by the many reports Kevin cites in our article, but with the weight of history. As a comment on the blog points out, every country that has rapidly developed in history and rapidly expanded the education of their citizens has done this through expanding the public sector.

But ultimately, this is also a question of values. It’s a question about the type of society you want to build. Do we want DFID to be promoting progressive values of public service and equity, or are we content to let the state fail and let private providers determine what our children learn?

 

Pearson low cost private schools won’t reach those most in need

by Ali Louis
The UK education company Pearson has launched an initiative to start low cost private school in Africa and Asia.
On the surface it is brilliant that the private sector is getting involved with development. However it is worrying that the input may only help to increase inequality and reduce social mobility
Sixty eight million children are currently out of school. I know that figure is hard to comprehend.  The entire population of Britain is roughly that number. These children are out of school for reasons that we understand – they live in a conflict of fragile state, they are too poor and it is better for the family for them to work, their culture does not value education in a way that we do, they are girls, or they are disabled. Of course there are more reasons, but these are the most cited.
Poverty, your sex, and your state are the factors most likely to keep you out of school. 2015 fast approaches and we begin to wonder what we could have done better. In 2000 – 2005 there was an incredibly large intake of school children – indeed much of the success of MDG 2 happened during this time. This coincided with the abolition of user fees. We should therefore be wary of schemes which introduce fees.   We also know that paying for school is a barrier to entrance.
I have no doubt that these schools will be full. There will be people who can afford them. Yet they are likely to be the children who were already in schools. In these couple of years running up to 2015 we should be targeting the hardest to reach; the children who have little options and are trapped in a cycle of poverty. Although private schools may offer better quality and teaching, they are only helping those children who are more likely to succeed anyway. This is not to say that these children do not deserve quality. It means that we should be looking at quality that the state can provide, so everyone has equal access to a good education.
I understand that Pearson doesn’t need to do this initiative, and it is excellent that the private sector is getting involved with development. Yet I am worried that the scheme will exaggerate inequalities within these societies and will only benefit children already in schools instead of targeting the children who are in need.
Education is suffering worldwide. The Global Partnership for Education is experiencing ongoing reforms due to concerns over it’s effectiveness. The World Bank has dropped their funding to education and there does not seem to be the political leadership to tackle this area.
What we need at the moment is an international effort to reach those children in the depths of conflict ridden states, who could be the future pioneers of their country. We need donors to give to the GPE and we need leaders around the world to recognise the power of education.