European politicians say they hope Paradise Papers will be tipping point as Gordon Brown joins calls for crackdown

This article is more than 2 years old

This article is more than 2 years old

Parliamentarians from across Europe have criticised the British government for failing to take action against the offshore tax industry in the wake of disclosures from the Paradise Papers leak.

In an open letter more than 30 MEPs said they hoped the latest revelations would prove a tipping point that would force governments into action.

Their intervention came as the former prime minister Gordon Brown threw his weight behind calls for the G20 group of countries to crack down on the jurisdictions that allow tax to be avoided.

“First of all they have got to outlaw these tax havens, they have got to threaten to sanction them, they have got to punish them with, potentially, arrest warrants in some cases where people are breaking the law,” said Brown.



Meanwhile, students held a “Paradise Papers” demonstration on Friday outside the Oxford University Endowment Management headquarters.

They were protesting against revelations in the Guardian that the university, and nearly half of all Oxford colleges, had investments offshore including in fossil fuels.

Some colleges had also invested – like the Queen – in BrightHouse, the retailer criticised for selling electrical goods to the vulnerable at sky-high interest rates.

“The Paradise Papers … demonstrates that the wealthiest in our society have the capability and the will to avoid sharing their wealth to fund overstretched public services, and further that the economic inequality in our society is no accident. If we as students accept the benefits of this tax evasion than we are complicit in the gross inequality we see every day,” the organisers said.

“It is a disgrace that people are sleeping on the streets of Oxford because of cuts to public services, surrounded by an opulent university that will not share its wealth to fund those services.

“This is not just about tax – it is symbolic of a system in which basic human needs and the future of our planet are cynically overlooked.”

Facebook Twitter Pinterest Oxford University buildings. Photograph: James Osmond/Alamy Stock Photo

Over the past week, the Paradise Papers leak has put the spotlight on a whole range of schemes used by companies and individuals to avoid paying tax, many involving companies and trusts set up in tax havens.

In their letter, the MEPs expressed disappointment that the UK and other governments had not acted in the wake of previous data leaks such as the Panama Papers. They demanded more transparency and greater regulation.

“We regret that some governments, not least the British government, have failed to learn the lessons from the previous ‘LuxLeaks’ and ‘Panama Papers’ scandal,” they said in the letter.

“The Paradise Papers must act as a wake-up call to deal with industrial-scale tax dodging, once and for all.”



The politicians, from 16 countries, called for all governments to renew the focus on tax transparency and fully implement the public country-by-country reporting initiative designed to show where multinational corporations pay their taxes.

“We also call for stronger regulation of intermediaries, including penalties for those proven to be involved in tax evasion, aggressive tax avoidance or money laundering,” they said.



“Failure to act against aggressive tax avoidance and evasion is depriving public services of desperately needed funding. It also enables some multinational companies to unfairly undercut many small and medium-sized businesses.”

Brown also called for tougher action on tax havens, saying new revelations about the scale of avoidance and evasion presented “this one opportunity” for change.



Facebook Twitter Pinterest Gordon Brown. Photograph: Kirsty Wigglesworth/PA

The former prime minister has signed an open letter to the current chair of the G20, the Argentinian president, Mauricio Macri, calling for a crackdown on tax evasion, and he has pledged to deliver the letter personally if it gets 1m signatures. By Friday lunchtime almost 600,000 had people put their names to the letter.

Brown told Radio 4’s Today programme that although a decision to blacklist tax havens had been made in 2009, nothing had happened since. Brown was instrumental in the decision at the time.

“We have this one opportunity that’s provided by the Panama [Papers] and these new papers that have come out this week … we know the scale of tax avoidance is probably £7tn of wealth.”

He added: “We’ve got to do something about it because you and I and others are paying taxes in Britain to pay for the National Health Service, to pay for the universal credit, the necessary money, but the money is not available in sufficient amounts because of the amount of tax avoidance and tax evasion.”

The letter calls on Macri and his fellow G20 leaders to take action. It says: “The level of global inequality is appalling – eight people own as much wealth as half the planet.



“And the gap is growing, thanks in part to the shadowy world of tax havens which lets trillions be siphoned offshore from our economies. Right now, the rich get richer, and the rest of us pay.”