Agenda item

Procurement and Corporate Tax Compliance

It was moved by Councillor Ben Curran, seconded by Councillor Steve Jones, that this Council:-

(a)       acknowledges the many letters and emails received from members of the public regarding tax evasion;

(b)       acknowledges the petition and questions asked at Full Council on 2nd July, 2014 about excluding, from contracts, companies that have committed ‘grave misconduct’;

(c)        believes that local government can be a leader in promoting ethical procurement practices, which has been demonstrated by the Administration’s work on using the procurement process to expand take-up of the Living Wage in the city;

(d)       notes the ‘Procurement policy note 03/14: promoting tax compliance’;

(e)       notes that under the Public Contracts Regulations 2006, a public body may reject a bid where the organisation has ‘committed grave misconduct in the course of their business or profession’;

(f)        notes that the UN Human Rights Council endorsed Guiding Principles on Business and Human Rights for implementing the UN “Protect, Respect and Remedy” Framework on 16 June 2011, which provides a global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity;

(g)       notes that the ‘Fair Tax Mark’ is a useful way for organisations to provide an indication that they are accountable to stakeholders as well as shareholders when it comes to tax;

(h)       directs the Chief Executive to assess the ‘Procurement policy note 03/14: promoting tax compliance’, the Public Contracts Regulations 2006, the ‘Guiding Principles on Business and Human Rights for implementing the UN “Protect, Respect and Remedy” Framework’, the Social Value Act, and other relevant legislation;

(i)         directs the Chief Executive to produce a report as the basis for a draft policy for use as part of the procurement procedures of this Council which seeks to:

(i)         limit the opportunity in the Council’s procurement process for companies who avoid paying tax;

(ii)        consider the ways in which the ‘Fair Tax Mark’ may be included in the procurement process to encourage more ethical behaviour; and

(iii)       limit the opportunity in the Council’s procurement process for companies who commit grave misconduct;

(j)         requires that those who represent this Council when making decisions regarding investments that fund the pensions payable to past and present employees of this Authority, where possible, use their influence to introduce selection criteria that includes consideration of tax avoidance when assessing the suitability of companies in the shares of which such funds might be invested; and

(k)        directs that the Chief Executive present the report to the cross-party Overview and Scrutiny Management Committee for consideration.

(Note: With the agreement of Council and at the request of Councillor Ben Curran, paragraph (j) of the Motion as printed on the Council Summons was altered by the deletion of the words “take tax abuse into consideration” and their replacement by the words: “where possible, use their influence to introduce selection criteria that includes consideration of tax avoidance”.)

Whereupon, it was moved by Councillor Simon Clement-Jones, seconded by Councillor Roger Davison, as an amendment, that the Motion now submitted be amended by:-

1.        the deletion in paragraph (i) of sub-clauses (i) and (ii), the re-lettering of sub-clause (iii) as a new sub-clause (ii), and the addition of a new sub-clause (i) as follows:-

(i)        consider the ways in which a record of, or commitment to, fair payment of taxes may be included in the procurement process to encourage more ethical behaviour; and

2.        the deletion of paragraph (j) and the addition of a new paragraph (j) as follows:-

(j)        calls for members of the pension scheme to be consulted for their views on more ethical investing.

3.        the relettering of paragraph (k) as a new paragraph (l) and the addition of a new paragraph (k) as follows:-

(k)       notes that as a result of Liberal Democrats influence in Government:-

·         33 tax loopholes have been closed;

·         1,000 new tax investigators have been employed;

·         £9 billion has been clawed back through deals with Switzerland, Liechtenstein and the Channel Islands;

·         £500 million has been clawed back from the 5,600 wealthiest individuals;

·         262 banks have signed up to the Code of Practice on Tax, stopping them from promoting tax avoidance;

·         an extra £1.4 billion has been raised by using better data to detect fraud;

·         10 times more people have been prosecuted for tax evasion than in 2010; and

·         tax avoidance schemes have been tightened and all incomes transferred from and to the UK now have to be registered with the tax authorities.

On being put to the vote, the amendment was negatived. 

The original Motion was then put to the vote and carried, as follows:-

RESOLVED:  That this Council:-

(a)       acknowledges the many letters and emails received from members of the public regarding tax evasion;

(b)       acknowledges the petition and questions asked at Full Council on 2nd July, 2014 about excluding, from contracts, companies that have committed ‘grave misconduct’;

(c)        believes that local government can be a leader in promoting ethical procurement practices, which has been demonstrated by the Administration’s work on using the procurement process to expand take-up of the Living Wage in the city;

(d)       notes the ‘Procurement policy note 03/14: promoting tax compliance’;

(e)       notes that under the Public Contracts Regulations 2006, a public body may reject a bid where the organisation has ‘committed grave misconduct in the course of their business or profession’;

(f)        notes that the UN Human Rights Council endorsed Guiding Principles on Business and Human Rights for implementing the UN “Protect, Respect and Remedy” Framework on 16 June 2011, which provides a global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity;

(g)       notes that the ‘Fair Tax Mark’ is a useful way for organisations to provide an indication that they are accountable to stakeholders as well as shareholders when it comes to tax;

(h)       directs the Chief Executive to assess the ‘Procurement policy note 03/14: promoting tax compliance’, the Public Contracts Regulations 2006, the ‘Guiding Principles on Business and Human Rights for implementing the UN “Protect, Respect and Remedy” Framework’, the Social Value Act, and other relevant legislation;

(i)         directs the Chief Executive to produce a report as the basis for a draft policy for use as part of the procurement procedures of this Council which seeks to:

(i)         limit the opportunity in the Council’s procurement process for companies who avoid paying tax;

(ii)        consider the ways in which the ‘Fair Tax Mark’ may be included in the procurement process to encourage more ethical behaviour; and

(iii)       limit the opportunity in the Council’s procurement process for companies who commit grave misconduct;

(j)         requires that those who represent this Council when making decisions regarding investments that fund the pensions payable to past and present employees of this Authority, where possible, use their influence to introduce selection criteria that includes consideration of tax avoidance when assessing the suitability of companies in the shares of which such funds might be invested; and

(k)        directs that the Chief Executive present the report to the cross-party Overview and Scrutiny Management Committee for consideration.