Wages in Tower Hamlets are being held down by bad bosses and the tax dodgers. We need real change.
Labour Leader Jeremy Corbyn and Shadow Employment Rights Secretary Laura Pidcock have called out the “tax and wage cheat” culture of some multinationals, who “use their power and our weak laws to rip off both the taxpayer and their workers” at an event in Yorkshire Saturday.
Corbyn and Pidcock made the intervention outside an Amazon depot, as Labour launches its Fair Tax Programme to make the City, big business and tax dodgers pay more of a fair share.
Real terms pay is still lower than before the financial crisis while dividends paid to shareholders have risen 85%. 14.3 million people live in relative poverty in the UK, while the wealth of the richest 1000 people have increased their wealth by £253 billion in the last five years.
The next Labour government deliver real change by taking on the bad bosses and the tax dodgers.
Labour will act against tax dodging by introducing unitary taxation of multinationals to stop tax avoiding profit shifting. This measure is expected to bring in £6.3 billion in 2023-24.
Labour will introduce a package of further measures to deal with tax dodging through a Fair Tax Programme that will return £6.2 billion to the public purse in 2023/24 to help fund Labour’s real change manifesto by:
- Clamping down on the enablers of tax dodging
- Increasing HMRC’s targeted audits
- Establishing an inquiry into the finance sector
- Introducing a 20% Offshore Company Property Levy, on top of existing stamp duties and surcharges
- Scrapping non-dom status
- Requiring greater scrutiny of MPs’ tax affairs
Labour will deliver real change for workers and their families by:
- Ending in-work poverty in our first term
- Introducing a Real Living Wage of at least £10 per hour for all workers aged 16 and over
- Giving workers a stake in the companies they work for – and a share of the profits they help create – by requiring large companies to set up Inclusive Ownership Funds
- Giving every worker full rights from day one on the job
- Banning zero-hour contracts and strengthening the law so that those who work regular hours for more than 12 weeks will have a right to a regular contract, reflecting those hours
- Strengthening trade union rights, including rights to access for recruitment
Basic Facts
- Nine million of the 14.3 million people in relative poverty live in working households.
- A household is defined as being in relative poverty when its income is less than 60% of the average – less than £17,040 a year. For comparison, a 35 hour week paid at £10 per hour would provide £18,200.
- Read Labour’s Workplace policies in full at: https://labour.org.uk/manifesto/tackle-poverty-and-inequality/
- Read Labour’s Fair Tax Programme in full at: https://labour.org.uk/wp-content/uploads/2019/11/Fair-Tax-Programme-2019.pdf
- Read Labour’s ‘Grey Book’, Funding Real Change, at: https://labour.org.uk/wp-content/uploads/2019/11/Funding-Real-Change-2019.pdf
- Read Labour’s report into poverty in Britain under the Tories at: https://labour.org.uk/wp-content/uploads/2019/11/Poverty-Britain_Ten-ways-the-Tories-have-entrenched-poverty-across-Britain.pdf
- Currently multinationals operate with separate companies at ‘arm’s-length’: for example, Facebook Ireland or Facebook UK. Multinationals can ‘book’ or ‘bank’ profits in a way that is beneficial from a tax-planning perspective. Facebook’s advertising profits, for example, can be booked or banked in a low-tax jurisdiction such as Ireland. Labour will adopt a different approach: treating corporate groups under common ownership as unitary enterprises, so that profits are declared where economic activity occurs and where value is created. The system outlined in the independent report ‘Tax Multinationals: a New Approach’ is based on sales, assets and labour. It was endorsed by Professor Joseph Stiglitz, Nobel laureate in economics, who said: “It is time for countries to take both unilateral and multilateral actions to tax multinationals; Labour’s proposal to start taxing multinationals through formulary apportionment is the right way forward.”
- The report cites figures from a paper by Alex Cobham, Tommaso Faccio, and Valpy Fitzgerald that shows that if the UK adopted unitary taxation of US multinationals with turnover of $750 million or more alone, $3.96 billion could be gained. Based on the proportion of UK foreign direct investment made up of US multinationals, and on different assumptions about the profiles of non-US multinationals, they estimate a potential yield between £6.0bn and £13.7bn. The authors of the report, and other experts, have said that unitary taxation is consistent with existing tax treaties.
- Even this lower bound estimate is likely to under-estimate revenues, since it is based only on US multinationals with turnover of $750 million or more, when there are a number of US multinationals with less than $750 million. Adjusting for the higher rate of corporation tax under Labour, and removing 30% for uncertainty and behavioural change, gives a lower estimate of £5.8bn in 2016 (uprated with inflation).
Number of workers on a zero-hours contract
| Region/ Nation | Workers on a zero-hours contract |
| North East | 25000 |
| North West | 69000 |
| Yorkshire and The Humber | 71000 |
| East Midlands | 92000 |
| West Midlands | 73000 |
| East of England | 88000 |
| London | 106000 |
| South East | 153000 |
| South West | 83000 |
| Wales | 50000 |
| Scotland | 70000 |
| Northern Ireland | 16000 |
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