Agenda item

Please note that the list of Motions is shown under Item 18 in the agenda pack.

The Council considered the under-mentioned Motion (Agenda Item 18(a) refers) submitted in the name of Councillor David Marsh regarding fair taxation.

Councillor Carolyne Culver proposed alterations to the Motion under Procedure Rule 4.13.9. Councillor Steve Masters, seconding, agreed to the alterations. The amendments were additionally approved by Members present.

MOTION: Proposed by Councillor Carolyne Culver and seconded by Councillor Steve Masters:

“This Council notes that:

1.         Public opinion is strongly in favour of organisations paying their fair share of tax.

2.         Polling from the Institute for Business Ethics finds that corporate tax avoidance is the number one concern of the British public when it comes to business conduct.

3.         According to the Fair Tax Foundation:

Two thirds of people believe the Government and local councils should consider a company’s ethics and how they pay their tax, as well as value for money and quality of service provided, when awarding contracts to companies; around 17.5% of public contracts in the UK have been won by companies with links to tax havens;  and it has been estimated that losses from multinational profit-shifting (just one form of aggressive tax avoidance) could be costing the UK £17bn a year in lost corporation tax revenues.

4.         The Fair Tax Mark offers a means for business to demonstrate good tax conduct, and has been secured by a wide range of businesses across the UK, including FTSE-listed PLCs, co-operatives, social enterprises and large private businesses.

Council believes that:

1.         Paying tax is often presented as a burden, but taxation enables us to provide services from education, health and social care to flood defence, roads, policing and defence. It also helps to counter financial inequalities.

2.         As recipients of significant public funding, local authorities should take the lead in the promotion of exemplary tax conduct; by encouraging contractors to pay their proper share of tax, or by refusing to go along with artificial tax avoidance arrangements.

3.         Where councils hold substantive stakes in private enterprises, influence should be wielded to ensure that such businesses are exemplars of tax transparency.

4.         Procurement law significantly restricts councils’ ability to either penalise poor tax conduct (as exclusion grounds are rarely triggered) when buying goods or services.

5.         Local authorities can and should stand up for responsible tax conduct, doing what they can within existing frameworks and pledging to do more given the opportunity.

Council therefore resolves to:

1.         Support in principle the Councils for Fair Tax Declaration.

2.         Support HMRC’s General Anti-Abuse Regulations, which seek to set aside any artificial tax arrangements which are considered abusive, including where not-for-profit structures are being used inappropriately by suppliers as an artificial device to reduce the payment of tax.

3.         Celebrate the tax contribution made by responsible businesses proud to promote responsible tax conduct and pay their fair share of corporation tax.

4.         Welcome procurement law reform which would enable local authorities to better penalise abusive tax conduct through their procurement policies.

Council further resolves to request that the Executive:

1.         Lead by example and demonstrate good practice in our tax conduct, right across our activities.

2.         Ensure IR35 is implemented properly and disguised employment arrangements are not utilized.

3.         Not artificially use offshore vehicles for the purchase of land and property, especially where this leads to reduced payments of stamp duty.

4.         Promote tax transparency and good practice, especially for any business in which we may take a significant stake and where corporation tax is due.”

Councillor Culver advised that as Councillor Marsh had been unable to attend the meeting she would be reading out his statement on his behalf to introduce the Motion. It had been submitted prior to the subject becoming topical as a result of the Prime Ministerial election, and it appeared the general assumption was that tax is a bad thing. Councillor Culver opined that taxes were the price paid for a civilised and just society and commented on how the Motion did not seek to address whether taxes were ‘good’ or ‘bad’ or should be higher or lower. The Motion instead related to the principle that everyone should pay their fair share, including both individuals and large companies. Her party supported the aims of the Fair Tax Foundation, a not-for-profit social enterprise that sought to encourage and recognise companies which pay tax responsibly and transparently. In contrast, she remarked on the growth of tax havens and unethical corporate tax conduct, such as aggressive tax avoidance, which distorted national economies and undermined the ability of responsible businesses to compete fairly. Councillor Culver highlighted that approximately 40% of multi-national profits ($950b a year) were artificially shifted to tax havens and that it had been estimated that losses from multi-national profit shifting could be costing the UK £17b per year. This had an impact on local businesses in West Berkshire who had to compete with online sales whilst also paying a fair share of tax. Councillor Culver believed that local authorities should take a lead in the promotion of exemplary tax conduct, and that West Berkshire Council should demonstrate good tax practice across its activities. She also wanted to see the UK’s procurement rules strengthened so that this and other local authorities could penalise abusive tax conduct through their procurement policies. She referred to the alterations proposed to the Motion in order for it to meet various legal requirements and commended it to Council.  

Councillor Ross Mackinnon indicated his support of the altered Motion and the principles behind the ‘Councils for Fair Tax Declaration’ as some tax behaviour was clearly unacceptable and against the spirit (if not the letter) of the law. He noted that he would not have supported the Council signing up to it, however, due to the precise wording of the Declaration itself. The Declaration referred to all forms of ‘tax avoidance’, an umbrella term covering conduct which would be widely accepted as intended to be taken by companies and was in fact encouraged by the government. At the other end of the spectrum there was egregious, artificial and abusive tax practises which did not breach the law but certainly broke the spirit of it, with a large grey area in between. Councillor Mackinnon felt the wording of the Declaration sought to vilify what would be seen as generally accepted and sensible tax planning. The main reason why the Declaration overall was problematic for him was that he felt it sought to impose on Council’s the commitment to extremely onerous work in terms of due diligence, investigation of its suppliers, whilst also breaching the privacy of its employees. Councillor Mackinnon agreed with the sentiment expressed by Councillor Culver that all taxpayers, whether personal or corporate, should be paying their fair share of tax.  

Councillor Jeff Brooks indicated his support for the principles in the Motion and agreed that some tax avoidance could be legitimate but tax evasion was not. He queried whether policy implications arose from the Motion that required it to be considered by internal member bodies prior to its adoption, but noted that the Administration had obviously not thought so. Councillor Brooks referred to the request to Executive to ensure that IR35 was implemented properly and disguised employment arrangements were not utilised, and wondered how it would be possible to police this and make sure that IR35 was used properly across all of the businesses in the District. He looked forward to the Executive reporting on how these issues could be resolved.

Councillor Tony Vickers indicated his support for radical tax reform since he believed the current tax system was dysfunctional and a deadweight on the real economy. He felt it deterred enterprise in many cases and stopped people from earning more, and was so complex that tax accountants were calling for radical change. Councillor Vickers believed the current tax system was profitable for accountants, lawyers and for those who could afford to pay, whereas the average wage earner or person starting up a business could not. He referred to the Liberal Democrat policy on fairer taxes which primarily involved increasing the tax thresholds for the least well off, and indicated his support for the Motion.  

Councillor Adrian Abbs referred to the link between IR35 and the use of temporary staff, as well as people leaving the workforce early because of IR35. He hoped the Council was cognisant of these issues and would not be an organisation with disguised employment (from taking on people from large agencies) because it would ultimately cost more money. He felt the Council needed to respect it when someone advised and demonstrated they were an independent, small contractor and employ them.  

Councillor Masters thanked the Members that had spoken and for the support being expressed across the Chamber for the Motion.  

Councillor Culver echoed the sentiments expressed by Councillor Masters. 

The Motion was put to the vote and declared CARRIED.

The Council considered the under-mentioned Motion (Agenda Item 18(b) refers) submitted in the name of Councillor Steve Masters relating to the Government proposal to send asylum seekers to Rwanda.

The Chairman advised that Council would not debate the Motion and, in accordance with Procedure Rule 4.9.8, this would be referred to the Executive for consideration as the detail of the Motion falls within the remit of the Executive. A report would be considered by the Executive and the outcome of that would be reported to Council.

MOTION: Proposed by Councillor Steve Masters and seconded by Councillor Carolyne Culver:

“This Council is concerned that the Government plans to send asylum seekers to Rwanda.”

Council notes:

West Berkshire has a creditable record when it comes to welcoming refugees from across the globe – from as far back as the Ugandan expulsions and families fleeing the Balkan conflict, as well as Syrians, Hong Kong residents and Afghan nationals in recent years.

The outpouring of support and compassion from the people of West Berkshire for individuals and families displaced by the war in Ukraine.

West Berkshire draws huge strength from the contribution of migrants and refugees who make the district their home. This council works with the migrant and refugee support networks and other partners in the sector and should be proud of what is being done.

The main concerns are:

People who cross the Channel seeking refuge and asylum will be taken to an RAF base in Yorkshire before being sent 4,500 miles away to Rwanda for "processing";  and

Offshoring asylum processing for those who have fled war, violence, famine and persecution is inhumane and cruel. This plan violates the principle of the UN Refugee Convention, of which the UK was a founding signatory, which states that we must “grant people a fair hearing on UK soil”.

Council therefore resolves:

To write to the Government to request an end to the proposed offshoring of people seeking refuge and to demand an end to the deal with Rwanda.

To offer support where we can to ensure that all refugees are treated with dignity and given the opportunity to make a positive contribution to the economy and cultural life of West Berkshire.”