Cable hits out over ‘shady’ tax havens and dodgers

The Lib Dem Business Secretary was commenting a day after it emerged that telephone giant 
Vodafone had not paid corporation tax in the UK for the second year running.

“The Government is introducing this general anti-avoidance principle, which shifts the burden of proof somewhat and helps the Inland Revenue deal with these cases [of tax avoidance],” he said.

He said the coalition was also looking at introducing a Register of Beneficial Ownership, which could force individuals and companies to disclose any benefits they receive from assets registered under a different name.

However, he told Sky’s Murnaghan programme that without a collective, international response, any efforts to deal with tax avoidance were “limited”.

“These are limited necessarily, because in a very complex world companies shift their profits and payments in a way that are very, very opaque, so you have to have tough international rules and the G8 might well take us forward in that.”

Mr Cable would not, however, say which British territories he was referring to when he said: “You could say there are shady places for shady people.”

On the economy, Mr Cable was cautious about sounding too optimistic.

“It would be very foolish to talk about green shoots and recovery,” he said in the interview. “Politicians can make fools of themselves by talking like that.”

He added: “There is a lot more confidence around these last few months, that’s for sure. Businesses are more optimistic, consumers are more optimistic. There is good employment data. I think we’ve all been pleasantly surprised that unemployment hasn’t been much higher.”

The main obstacles to economic growth were a lack of exports and the banks failing to lend more.

“We have yet to see any real recovery that is sustainable – in manufacturing and exports,” he said.

He described limited lending by the banks as “massively frustrating”, saying: “It totally undermines our recovery.

“They do have a defence, but nonetheless there is a very serious problem and we are trying to find new ways of dealing with it.”

He said there would be no economic stability until the banks are restored to health and to normal lending.