Britain must tackle tax avoidance before EU trade deal, says Dutch deputy PM

The UK will have to step up the fight against tax avoidance before reaching any trade agreement with Europe post-Brexit, the Dutch deputy prime minister has said.

Lodewijk Asscher Lodewijk Asscher says Britain must not become an offshore haven after Brexit.

Lodewijk Asscher, who leads the Netherlands Labour party, raised the alarm about a potential “race to the bottom” if Brexit was overseen by a UK Conservative government.

In a letter to other European left-wing parties, Mr Asscher set out a series of red lines for a post-Brexit trade deal, saying it is in the interest of “all Europeans” to prevent Britain becoming an outpost for multinationals and tax avoiders.

In the letter, seen by The Observer, he said: “If you and I pay taxes, so should the large enterprises.

“Let’s fight the race to the bottom for profits taxation together which threatens to come into existence if it is up to the Conservative UK government.

“This will affect all Europeans, as it deteriorates our support for our social security system and leaves ordinary people to bear the costs.

“This is why I propose to come to a new trade agreement with Great Britain, but only if we can agree firmly upon tackling tax avoidance and stopping the fiscal race to the bottom.”

Shadow Chancellor, John McDonnell, said: “After six wasted years of the Tories opposing every Labour proposal to clamp down on tax avoidance, this reveals what our European neighbours believe is the main priority for Theresa May’s government.

“It also gives an insight into what a Tory Brexit would truly look like – a tax haven off the coast of Europe.”

Mr Asscher also appeared to endorse the principle of UK counterpart Jeremy Corbyn in being open to changes of the freedom of movement principle.

Mr Corbyn last week said his party “is not wedded” to the key EU tenet and is said to have backed the Dutch politician’s letter.

Mr Asscher said: “Wage-lowering labour migration in Europe nowadays leads to unequal competition between workers…

“Migration leads to tension within and between communities. And this lack of control cannot be diminished by making forced efforts to emphasise a European identity.”

He added: “Let’s not give populists a monopoly on the notion of national pride. If we discuss migration only in terms of economics, labour migration within the EU for example, or in terms of humanitarian obligation [the refugee crisis], we run the risk of diminishing tolerance instead of increasing it.”

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