Reaction to Westminster vote on Scottish Limited Partnerships

By Ryan McQuigg, Policy and Public Affairs Manager.

Last night, during a late-night sitting in the House of Commons, MPs debated the UK Government’s Finance Bill – including an amendment about Scottish Limited Partnerships (SLPs). Lodged by the Scottish MP Roger Mullin, the amendment follows concerns that SLPs may inadvertently be helping tax dodgers. 

Mr Mullin, who is the SNP’s Treasury spokesperson, amendment sought a review into the impact of SLPs in relation to tax avoidance and evasion, with the findings made public within six months. The proposal was timely given investigations by both the Herald Newspaper and the BBC suggested the existing rules governing SLPs are being abused. It appears that individuals operating outside the UK may be exploiting SLPs’ opaque ownership structures to hide who owns them. 

Oxfam has been campaigning for greater global tax transparency for years; we care about tax dodging wherever it happens because we know it is the poorest people who lose out when governments are denied vital revenue. We must ensure Scotland is in no way helping this to happen. 

A Disappointing Vote
We were highly encouraged that SLPs were debated on the floor of the Commons. However, Jane Ellison MP, the Financial Secretary to the Treasury, stated the Government would not support the amendment. In the subsequent vote, 248 MPs voted in favour, with 304 voting against. We are surprised and disappointed that the UK Government voted against this proposed review. We believe it had a great opportunity to show consensual leadership on this issue, but it failed to do so.

Power to change the law on SLPs to close any loopholes rests at Westminster. However, it is clear – now more than ever – that we need a united front in Scotland. We recently launched a campaign  urging the leaders of the political parties in the Scottish Parliament and the Secretary of State for Scotland, David Mundell, to join forces. More than 1700 people have already written to them in support of this campaign. Disappointingly, only Patrick Harvie MSP, the Co-Convenor of the Scottish Greens, has added his personal support so far*. It is therefore critical that we keep the
pressure on our elected representatives in Scotland to demand change. 

Add your voice – write to politicians today  

Despite last night’s disappointment, there is still a glimmer of hope which could place a spotlight of transparency on the murky role of SLPs. During the debate, Jane Ellison said the Government is committed to “tackling tax avoidance, evasion and aggressive tax planning, including where partnerships are involved.” She also highlighted an ongoing consultation on Partnership taxation which closes on
November 1. This consultation is currently limited in scope; however, we hope it can now be widened to encompass the issues raised in relation to SLPs. 

For example, the UK Government should consider: 
• ensuring all members and partners of Limited Partnerships are publicly registered; 
• requiring all Limited Partnerships to publish their full accounts; 
• introducing new regulations for those registering SLPs.

But better news too…

Beyond SLPs, the UK Government did support an amendment tabled by Labour’s Caroline Flint MP which will give Treasury Ministers the power to require multi-national businesses operating in the UK to publish the revenues, profits and taxes they pay across the world. Read more about this victory for transparency in a blog by Oxfam’s Head of UK Campaigns Tom Hayes.

Too often poor countries are losing out on the revenue they need to help fund things like medicines and midwives as well as textbooks and teachers. Having supported this amendment, we now urge the Government to use these new powers as soon as possible.

*Kezia Dugdale, leader of Scottish Labour, added her support to the campaign on 13 September. We look forward to hearing from other party leaders and the Secretary of State for Scotland.