Welsh economic minister Ken Skates has announced that Covid-19 support will not be extended to companies based in tax havens.
The move, which he hopes will be rolled out across the rest of the UK, form part of the Welsh government’s plan to “build back better” after the coronavirus crisis – a campaign coined by Manchester mayor Andy Burnham to respond to the crisis by building a fairer economy for the future.
Speaking to the Mirror, Skates said: “I think it’s right that when you face a crisis and you spend much money in addressing the economic and health implications of that crisis, that businesses that don’t pay tax shouldn’t benefit from interventions the government is making.
“I’d like to see this sort of approach extended right across the United Kingdom. I think it makes sense. It demonstrates to the people of the United Kingdom as well that we are not going to go back to business as usual after this crisis.”
“It is obvious you cannot benefit from public support
Last month France joined Denmark and Poland in blocking firms registered in offshore tax havens from claiming aid from its government coronavirus bailout.
Finance Minister Bruno Le Maire announced today that companies either registered, or controlling subsidiaries, in tax havens are ineligible for the 110 billion euros ($108 billion) rescue package.
“It goes without saying that if a company has its tax headquarters or subsidiaries in a tax haven, I want to say with great force, it will not be able to benefit from state financial aid,” Le Maire told the France Info radio station.
“There are rules that must be followed. If you have benefited from the state treasury, you cannot pay dividends and you cannot buy back shares,” he said.
“And if your head office is located in a tax haven, it is obvious that you cannot benefit from public support.”
Build back better
Speaking at a press briefing, Mr Burnham moved to endorse the “build back better campaign”.
He said: “It’s important obviously to protect jobs, but obviously I have serious concerns about funding being given to companies registered offshore who are not paying UK tax.
“What I would like to see going forward is any use of public funding being linked to good standards when it comes to corporate governance, and particularly to employment practice.”
He added: “Yes, in the long run, I would not like to see funding routinely given to companies registered for tax offshore.”