Lib Dem leader calls on government to stop bailing out companies based in tax havens

Lib Dem leader Ed Davey has called on the government to stop bailing out companies based in tax havens during the coronavirus outbreak. Photograph; Sky News. - Credit: Archant

The leader of the Liberal Democrats has called on the UK government to replicate schemes in EU countries including France, Poland and Denmark by preventing the bailing out of companies based in tax havens.

Ed Davey, acting leader of the party, appearing on Sophy Ridge on Sunday said that ‘the government support that they are giving to businesses should not be going to those businesses who have gone offshore’.

He said: ‘If they come back on-shore and they start paying their taxes like all the other businesses, the businesses who do pay their taxes, then of course they would be eligible for that support.’

France became the latest country to announce the move last week, after Denmark and Poland proposed such measures, to keep the funds in their respective countries.

Explaining why he wants the UK to follow their lead, Davey continued: ‘Let’s remember we’ve got to get the money to get the frontline workers, the NHS workers, the care workers, and we’ve all seen how poorly paid those care workers are.

‘If we’re going to actually build a fairer society out of this, so we get the money to those who need it in public services as Liberal Democrats believe, and a much more progressive approach than we’ve seen in recent years, then we can’t have companies going off-shore, not paying their taxes and getting taxpayers’ support. That would be totally wrong.’

Davey’s call echoed a number of voices in recent days to call on Rishi Sunak to consider the limitations on bailout support, including a Tory Brexiteer MP.

Shrewsbury MP Daniel Kawczynski tweeted: ‘France joins Denmark and Poland in banning tax haven firms from coronavirus relief. When can we see the same message from you Rishi Sunak?’

A spokesperson for the Treasury admitted its bailout scheme will involve foreign companies, but said it is designed to support British jobs.

They previously told Business Insider: ‘Obviously we’ve set up schemes at pace, and they are designed to support jobs in Britain.’

‘Sometimes that will involve foreign companies who employ people in the UK for example. But we are looking into the specific point on tax havens where as you know we have already taken considerable action.’