Jane McCormick, UK Head of Tax at KPMG, Bill Dodwell, Head of Tax Policy at Deloitte LLP, Kevin Nicholson, Head of Tax at PWC and John Dixon, Head of Tax at, Ernst and Young all took questions from the MPs. The PAC committee is headed by Margaret Hodge MP.
One of the PAC's bugbears is whether firms who contribute to corporate tax avoidance should be allowed to tender for government contracts. The big firms together earn fees of over £500 million from government work. When Jane McCormick of KPMG said "our main purpose is to help our clients pay their tax", Ms Hodge dismissed her answer as "laughable", adding that "Nobody would pay your fees if they didn't think you would help them pay less tax. They come to you to minimise their tax".
There is no doubting that Ms Hodge’s views will impress the public; she said "What really depresses me is you could contribute so much to society and the public good and you all choose to focus on working in an area which reduces the available resources for us to build schools, hospitals, transport infrastructure." However, the advisers tried to point out that part of the problem was that international tax law cannot cope with globalisation: if the law is not working properly it is up to parliament to correct it.
Those who have been watching this issue for a few years may remember that it is was not so long ago that heads of the same firms were warned that there would be no government work for those selling tax schemes. That was shortlived and there was also a lot of fuss and blame about big firms and PFI contracts too. The fact is that the big accountancy firms offer specialisms that few others can match and governments need these firms.
In the continued questioning of accountants and tax advisers MPs are hoping to try and cut off the source of tax avoidance at the source. They have had some notable success in embarrassing the executives of big firms such as Starbucks, Google and Amazon and some success with Bob Diamond of Barclays in which the public did learn something more of the scale of its massive "structured capital markets" tax avoidance section and the fact that the bank has over a hundred subsidiaries based in tax havens, including those based around the UK. The PAC has also interviewed the boses of some of the most aggressive promoters.
MPs are getting better at researching their quarry, and these sessions make fascinating reading, but the real question to be asked is "does the government really knows what it wants"? On one side Prime Minister David Cameron is trying to deter the multinationals from acting irresponsibly, however they are only responsible to their shareholders and not other business based in the UK. On the other side we hear that it is important that Britain keeps its prominent position as a financial centre. The two aims do not gel well; the best hope for governments who are affected by cross border tax avoidance is to act together, the prospect of this ever happening seems remote.