Jim O’Neill says the only way to prevent tax avoidance by multinationals is for countries to work together.


How about this for a radical idea? Multinational businesses should pay tax on profits generated in the country where they are made.

Companies like Amazon, Google and their like pretend that their sales in the UK are actually made by their subsidiaries in low tax countries like Luxembourg and Ireland.

The big problem with my crazy idea is that a lot of countries have to come together to agree that this kind of thing can be made workable. They might even have to develop an organisation that has the power to make such an international agreement work.

Oh wait. There is such an organisation. It is called the European Union, a group of (currently) 28 nations that has already such powers. And despite being led by M. Santer, the man who created the problem when Prime Minister of Luxemburg by creating such a low tax economy for corporations that the multinationals flocked to Luxemburg City to set up their shell corporations to off-shore their profits, the EU has begun to fight back by challenging the Irish attempt to do the same.

For those not in the know, the Irish Government, led by the centre-right Fine Gael, sought to attract Amazon to relocate to the rather damaged Celtic Tiger, by offering a tax rate of 0.002%. The EU decided that this was unfair governmental support and declared it illegal. Both the Irish Government and Amazon have challenged this ruling at the ECJ, possibly the first time that a government and a multinational have been on the same side in a taxation case. We have to hope that the EU wins.

Why is this important? Britain seems hell-bent on leaving this power group of 28 countries who are now beginning to challenge the multinationals. This will leave Britain vulnerable to multinationals who have a GDP collectively much greater than that of the UK, without the debt built up by the Tories over the past seven years. Outside the EU and not covered by the power of the 27, the multinationals will put pressure on a weak Tory government to legislate to create a very low tax environment for them to exploit.

Let us be clear. None of this will create jobs in the UK, nor will it create tax revenues for the government. Experience around the world is that the multinationals will open small offices with a few accountants to pass the profits on to head office, possibly located in tax havens, many of whom are in British dependencies. More and more profit for the oligarchs who seem to own world trade these days.

If the Great Repeal Bill is to repatriate all the EU legislation into UK legislation, surely this is the time for Britain to be seeking to clip the wings of the multinationals. So, do you think this fractious Tory government will take such a radical step? Nope, neither do I. Labour must, therefore, take on the leadership of such a campaign and show that they will always be the friend of those who will be denied benefits and other support by a low tax economy and an enemy to those who are not prepared to fairly pay their way.

This time of year is often called the silly season in politics and nothing this year has shown this more than Alex Salmond’s descent from First Minister to First Comic. Having lost his seat at Westminster, much to his surprise, and having to sign on for the first time in many years, he has decided to assuage his feeling of lack of attention by doing a chat show at the Edinburgh Fringe complete with guests. I suspect that neither Jeremy Corbyn nor Kezia Dugdale, nor even “Colonel” Ruthie will be among those guests. He promises lots of stories from his time in politics, including stories about his chats with “President” Trump.

His big problem with this is that he has said he wants to return to active politics. How many politicians will want to chat with him, and even exchange private comments with him, when they know that as soon as he is unemployed once more he will spill their confidences to all and sundry to make the money he has lost on the horses? Mind you, apart from the Nat faithful, his performance in trying to sell the Daily Politics Mug for Andrew Neil would not have sold many tickets for his shows. Ah well, it’s a mugs game!

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18 thoughts on “Pay your taxes locally

  1. How this for a radical idea? Holyrood gets full control over all Scotlands taxation and revenues so the Scottish Parliament can chase up the due taxation in Scotland.

    1. I missed you, Mike……..not. How about a response to the issue I raised, not your usual kneejerk nationalism, with the emphasis on jerk

  2. Big multinationals are already moving their assets abroad. A lot more are thinking about it.
    Big business are even moving assets out of the city of London.
    At the election that did not need to be called. The PM lost her majority. The UKIP Leader resigned the Liberal Leader has resigned. The SNP lost their commons leader and Alec Salmond amongst others.
    The PM might not survive the conference season. The FM has decided to reset her party whatever that means
    The one guy still standing and who was supposed to resign was Jeremy Corbyn. During the Election he did not put a foot wrong. When he comes to Scotland and we get the Labour bad stuff .
    Remember he is the only leader who came out of the election intact

    1. He lost the election because Labour in Scotland got back into bed with the Tories against the SNP who would have supported and ensured Corbyn got into number 10.
      Scotland is the last bastion of Red Tories.

  3. More than half of global tax havens have a linkage to the UK. No government has lifted a finger to bring them into line: they are awash with money from tax avoidance, criminality and national leaders looting their own countries. Nothing will change. The “City” calls the shots in this country. It’s not a coincidence that senior politicians ( Labour as well as Tory) can retire from Westminster and walk straight into plush boardrooms of big financial conglomerates. Usually with an ermine robe as well. Nothing corrupts like money!
    As for Salmons. I have always thought politics is like the entertainment industry:a giant ego trip.
    But if Salmons had been Labour or Tory, then the BBC would have found space for him—-like Miliband, Duncan-Smith, Portillo and all the rest.
    But Salmons was head and shoulders above any other politician in Scotland, so good luck to him.

  4. i agree with your analysis of the problem, Jim. Major tax evasion by corporations is costing us dearly. The solution depends on close cooperation on a European basis. You might hsve added that the Westminster/Whitehall elite are hell bent on turning the U.K. into a low wage, low public services, low protection, low tax northern hemisphere Singapore/Hong Kong dependent on financial services that are on the way out of the country.
    If you really believe, however that the U.K. Is either interested or capable of “…. clipping the wings of the multinationals…,” then you’re in for a big disappointment; indeed, the first part of your post was based on the fact that this was a problem that could only be tackled on a Europe wide basis. The aforementioned elite are not going to allow labour radically to change anything,
    There is only one way out for Scotland, and that is to take its place in a reformed E.U.

    1. I was surprising myself that I agreed with everything you said….until the last line. My remaining hope is that Brexit will prove so difficult that it will have to be reversed. You must allow me what you would call my British delusions. Lol

      1. I believe, Jim, you’re developing the rudiments of wisdom, and I harbour some hopes of a conversion ( not a deathbed one, We need your vote). If you don’t agree with my last line, how do you see things moving forward.

  5. …… though we are no doubt ignoring the fact he actually lost badly in both Scotland (where the SNP won handsomely) and England (where the Tories beat him into a distant second) …… just not as catastrophically as expected.

  6. I fully agree with Mr O’Neill on the need for a large bloc of independent countries like the EU to come together and compel multinational tax bandits to pay the tax they owe in the countries they operate in.

    However, Mr O’Neill then reflexly blots his copybook by putting in obligatory anti-SNP and anti-independence comments …. sigh. Ireland was much less “damaged” than the UK by the “crash” and has rebounded dramatically from its low point. So much so, its growth is now several times that of the sluggish and faltering UK. At least that little dig could be seamlessly woven into the narrative of the piece Mr O’Neill was writing. The dig at Alex Salmond, however, was a complete non-sequiter from left field that had all the finesse of a thrown brick with a note tied to it that said “nah-nah-na-nah-nah”. Let it go for goodness sake.

    More of the former and less of the latter would make Mr O’Neill’s pieces much more atractive to read.

    1. Are you kidding me? Ireland was a basket case that had to be bailed out by the EU. Only by austerity matching that of the UK have the Irish begun to pull out of the bad times. The difference is they knew when to abandon austerity in favour of investment.

      1. And the UK wasn’t a “basket case”????

        Ireland may have taken an EU loan (and why shouldn’t it have?) but it also paid it off rapidly. Bottom line; Ireland’s problems were solved far quicker than the UK’s have proven to be and it (and its people) is flourishing by comparison with the UK. A condition it shares with so many of our small, independent neighbours.

        1. I recognise in my comment that Ireland is recovering better than Britain, and indeed why.

  7. A fairly decent stab at a sensible article, let down by some chronic patter at the end.

  8. Dear oh Dear James there a few things you left out of your blog. Let me see if I can help .
    Official records have been released showing that Maggie when PM was advised that the memorial service for the Piper Alpha victims was being held on July 6 1988 in Aberdeen. It is revealed she was advised to attend the service for the 167 men who lost their lives.
    The government was represented by Cecil Parkinson Malcolm Rifkind and George Younger
    Why was Maggie not there . Turns out her diary secretary in her political office wrote to her on July 11 5 days after the explosion. She suggested the PM fly to Aberdeen to pay her respects at 2pm on 20th July.
    It meant cancelling a lunch for industrialists .Her secretary wrote what would you like to do .
    The reply Ask the Lord Chancellor to go.
    Her diary shows that on the day of the memorial she attended a lunch for industrialists . Including Lord Macalpine the Tory party treasurer .
    The PM had also been advised by a special advisor that although it was a terrible disaster the unions were milking it for their own ends.
    Not in the same league but still for me not acceptable. We have the case of Ian Blackford who as an MP EARNS 75 THOUSAND A YEAR. Mr Blackford is the new SNP leader in the commons. Turns out he also earns 3thousand a month as chairman of the Golden Charter Trust a Funeral Plan provider. He also gets 1500 per day for any work beyond 8 hrs a quarter He is also as chairman of Commsworld earning 1thousand pounds a month.
    I wander when he gets time for the day job representing his constituents.
    Next up is the Brexit Secretary given 15 thousand by Assem Allam the owner of Hull City FC
    Our Brexit secretary also received 5 thousand from Lord Bamford the owner of JCB
    His Lordship has also donated to 17 other Tory MPS including. Priti Patel International Development Secretary Alun Cairns the Welsh Secretary Brandon Lewis Immigration minister Esther McVey Former Employment Minister
    Then remain Tories 3 MPS Margot James the business minister Jonathon Lord MP for Woking and Anna Soubry the business all got 5 thousand from More United the pro remain movement
    Dear oh Dear James how could you have left out that lot. Then there is this
    John Swinney Education Secretary at a cost of 60 thousand pounds at least. Brought in a team of experts from Canada Malaysia etc .
    They have so far taken over a year to produce when published yesterday contains less than 12 hundred words only contains 4 pages and includes no findings or analysis
    Then dear readers we find out on social media 1 member described MR Swinney as an extraordinary leader and Nicola Sturgeon as the awesome first minister of Scotland
    Nothing like a bit of crawling
    Let me introduce you to 1 politician who is doing his day job . Step forward and take a bow North Ayrshire Labour Councillor Robert Foster. he is saying in the local paper. that he is backing Labours plan for an independent commission into NHS staffing.
    Councillor Foster told the paper that NHS Ayrshire and Arran are spending millions each year on private agency nurses because they cannot recruit nurses.
    The health board also has long term consultant vacancies they cannot fil
    There is a recurring 13million annual deficit . This is despite 50 million in cuts over the last 2 years
    There is a serious lack of GPS .
    Practices to compensate are spending 500 pounds a day on locums
    They are being forced to replace retiring GPS with 2 junior doctors as juniors prefer a shorter week
    Councillor Foster is backing Labours workforce commission bringing together health experts independent of political influence to develop the solutions we need

  9. What is a SPAD dear readers . Is it something you eat. Is it something that swims in the sea. Is it an endangered species.
    Well dear readers it turns out our FM knows what a SPAD is she has FOURTEEN OF THEM.
    It turns out a SPAD is a special political adviser
    The latest SPAD is ex MP Callum McCaig he will advise on Finance and Local Government.
    The FMS Fourteen SPADS come at a cost . They are paid between 40 and 83 thousand a year.
    This comes at the same time as the SNP are sacking Westminster staff after losing 450 thousand pounds a year in state aid because they lost seats at the election.
    All 21 MPS who lost their seats have made their constituency staff redundant. They used to receive 1.2 million in Short money that has been reduced to 750 thousand.
    I wonder what all those people who have lost their jobs will make of the SPADS
    The SNP requires all its parliamentarians to contribute 3000 thousand pounds each to the party
    Apparently donations to the party dropped during the election. Because of the drop in MPS party HQ has seen its funding drop by 63 thousand
    So now they are going to turn to their 120 thousand members to bail them out
    Maybe the members should first ask why does the FM need 14 special advisors including 2 ex MPS
    There again do the SNP allow their members to stray of message by asking about how their money is spent

  10. Apart from the fact Ian Blackford seems to be happy Indy has been parked for years to come. And the SNP have moved the start of their conference to a Sunday so the FM can get on the SUNDAY political talk shows
    Its my view an Independent Scotland would be the prisoner of the Bank of England. I would like to see us start to plan what we could do about that we will be their biggest pals wont do.
    Alec Salmond knows London inside out. Bring him into the fold not as a special adviser we have enough of them
    Let us know what their plans are for Pensions employment NHS etc .
    We will be out of Europe a lot of subsidy money will leave because of that
    I think the farmers and the fishing industry are having a laugh at our expense asking Holyrood for money.
    They wanted out of Europe. I would like to see what all the parties will do if we did vote yes
    I think the SNP leadership have realized some deep thinking needs to be done and we might not like all the answers
    Back to Sunday talk shows . The SNP say its the only way they can get the FM on
    Funny that Alec Salmond Angus Robertson Fiona Hyslop and the other party leaders have no bother
    Me I prefer to listen to the Irvine Beat FM Sunday live Talkin. Show 12pm 2pm the community radio station where local people can phone in and speak about their own subjects
    This week I will phone in about when womens football was banned for fifty years in England 55 in Scotland
    I will tell the Story of Rose Rilley from Stewarton played for Stewarton BC aged 7 complete with short back and sides and told to say her name is Ross
    Ross scored 8 goals in 1 game . Celtic Scouts wanted Ross for Celtics bc Told you cannae shes a wee lassie
    Rose went professional at 18 .With the help of the Daily Record she joined the French Womens Proffessional Team Reims .
    The SFA banned her for life in Scotland ignoring the fact she had 10 Scotland caps
    Won the French title at Reims transferred to Italian club AC Milan won the league playing in front of crowds averaging 20 thousand.
    Over the next 20 years Rose played for 9 Italian CLUBS . Reims asked her for help so in 1 season she won an Italian league title and a French title
    The Italian President made Rose an Italian citizen so she could play for Italy
    In 1984 as Italian captain Rose scored a goal and was best player in the World Cup final which Italy won in front of 90 thousand people in China
    Rose Rilleys football record
    You can find the story just type in Rose Rilley
    I don’t know her but I think its a great story. I know its not politics and its not what the blog is about
    But Duncan I think its a story that should be told
    I hope you print it but I will understand if you dont

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