According to David Cameron, at the top of the agenda of this week's G8 meeting is how to tackle widespread corporate tax avoidance.
Cameron knows how to talk the talk on tax avoidance. But, his actions are likely to be piddling, unambitious efforts that do little to deal with the problem.
If he is serious about it, he will address one of the engines of corporate tax avoidance, the Big 4 accountancy firms, which are currently embedded in the British government.
PWC, KPMG, Deloitte and Ernst & Young have been described as at the epicentre of the tax avoidance industry. At the same time, they earn hundreds of millions of pounds a year in government business, loaning their staff to government departments and the political parties, advising on everything from tax law to privatisation programmes.
Who really runs this place? is a short report that looks at some of the relationships between the Big 4 accountancy firms and the UK government. It examines some of their lobbying activity: on their own behalf to block much-needed reforms of the industry that they dominate; at some of the lobbying they have undertaken to protect the tax avoidance industry; and at their role as lobbyists-for-hire.
Who really runs this place? reveals how:
- At least 50 employees of the Big 4 have been on loan to the government in the past three years;
- One of the Big 4, Ernst & Young, lobbies for tax breaks for its clients – a service that it describes as a ‘low risk alternative’ to tax avoidance – while at the same time advising the Treasury on reform of the tax system;
- They successfully lobbied the British government to oppose new EU rules designed to improve audit standards and challenge the monopoly of the Big 4;
- They are profiting from changes to government policy, changes that are made by government departments that they are contracted to;
- Lobbying by the Big 4 accountancy giants – either on their own behalf or for clients – is unlikely to be included in the forthcoming register of lobbyists.
Who really runs this place? aims to give an insight into the reach of the Big 4 inside government and the range of their lobbying activities. It demands that we take a closer look at their influence with our politicians.
If Cameron is serious about tackling the multi-billion pound tax avoidance industry, then he has to see the Big 4 as part of the problem. If not, his fine words on tackling tax avoidance will count for little.
Listen to the Tax Justice Network's Taxcast on the Big 4, who they call the Pin Stripe Mafia.