The tax gap is a problem for the whole country

"Many of the challenges facing the world today transcend politics and encouraging companies to pay their fair share of tax has united people across the political spectrum. So much so that I believe I am the first Conservative member of Parliament in history to write for the Morning Star."

The surprise my sentence to the house may have generated in loyal readers of this paper may be equalled by the shock felt in the boardrooms of Britain's 100 largest companies when I launched my FTSE 100 tax transparency campaign.

The time has come for companies to accept that their customers, employees, and even shareholders believe that paying a fair share of tax is an important measure of corporate social responsibility.

Fancy corporate lawyers can eloquently describe the differences between tax avoidance and tax evasion, with the lines between them becoming increasingly blurred.

Tax evasion is clearly wrong, illegal and unfair to the rest of society, as everyone else has to pay more in taxes to make up for those who do not pay their fair share.

Just before Christmas, there was an explosion of public interest after the public accounts committee named and shamed some well-known companies that used transfer pricing to offset their tax liability here in Britain, basically to avoid paying tax.

I am aware there is a strong argument that the tax authorities in this country could do more to enforce tax payments.

The government has done work on tackling tax avoidance - but I fear the general anti-avoidance rule that will be introduced might end up penalising the sole trader and small and medium-sized enterprises instead of tackling the missing billions in tax from the larger corporates.

My campaign for tackling tax avoidance stems from a meeting I had with Christian Aid supporters in my constituency last September when the tax justice bus tour visited Stevenage.

The tax justice campaigners believe that tax-dodging by international companies costs Britain around £35 billion and developing countries an estimated £100bn a year.

Just imagine the dramatic difference such a huge sum of money would make if it were available to invest in public services.

There is growing anger at the fact that some large companies are hiding behind complex accounting rules that may be strictly legal but are considered to be unethical by the public.

The problem of the missing billions in tax is not just a problem in Britain.

It is worldwide and it does the greatest damage to poor and developing countries that cannot stand up to massive corporations.

The report into the behaviour of Associated British Foods in Zambia that Action Aid released over the weekend brings the power of large corporations and that of developing countries into stark contrast.

Action Aid commissioned some very interesting research into the use of tax havens by FTSE 100 companies in October 2011 and found that at that time:

• The 100 companies had 34,216 subsidiary companies, joint ventures and associates
• 38 per cent of their overseas companies located in tax havens
• 98 of them declared tax haven companies. Only two groups, Fresnillo and Hargreaves Lansdown, did not
• There were 623 companies registered in Jersey - compared to just 551 registered in China, despite tens of billions in transnational trade with that country.

I know that governments from all around the world will agree with the sentiment of greater tax transparency, but they will struggle to introduce it as every nation competes in the global race.

I welcome the Prime Minister's initiative to make tackling tax avoidance a priority as Britain takes over the presidency of the G8.

The PM himself made strong references about a particular company needing to wake up and smell the coffee.

However, I believe that it will be up to the companies themselves to lead the way and they will only do that if their customers - the British public - drag them kicking and screaming towards tax transparency and a fairer tax system for us all.

Last November I wrote to the chief executives of all the FTSE 100 companies asking them whether they were willing to pledge their support for corporate tax transparency and whether they would support a new international accounting standard for country-by-country reporting.

The current international accounting standards only require multinational companies to report accounts on a global consolidated basis, which makes it incredibly difficult to know where taxable economic activities are occurring and where profits are declared.

Companies move billions between jurisdictions in order to reduce their tax bills, and large companies are allegedly manipulating their centres of interest through the use of holding companies, offshore accounts and intellectual property rights.

Whether this is tax avoidance or tax evasion, it is certainly immoral and the only way of resolving the issue is to introduce greater transparency.

In the interests of transparency I'm publishing all the responses that I have received from the FTSE 100 at www.taxchallenge.co.uk.

Every one of us can then decide individually whether the biggest companies in Britain really do care about the poorest in our society.

The responses from the FTSE 100 companies have been wide-ranging but generally disappointing.

HSBC has offered to help design a tax transparency standard, BT and others have welcomed the transparency initiative - although not the new accounting standard - and Hargreaves Lansdown has questioned the value that it receives for the taxes that it pays.

On a more positive note the chief executive of Sainsbury's agreed that consumers are best placed to encourage companies to pay the tax they are supposed to, as they can vote with their wallets.

Capita stated it was both interested in and supportive of establishing a new international accounting standard.

Morrisons suggested that the government should force all companies to disclose their corporation tax payments in this country.

But the refreshingly honest response from Aggreko summed up what many other companies felt - that they were paying lots of tax and probably more than they needed to, but greater tax transparency was a "lousy idea."

I could go on, but the general thrust is pretty simple - the biggest companies in Britain believe they all honestly pay their taxes and make a huge contribution to the economy by employing people who have to pay taxes.

The majority of responses so far clearly show that they are not prepared to be proactive and will only comply with the laws as they stand.

Unfortunately lawyers can blur the lines between tax avoidance and tax evasion, but this is clearly wrong, illegal and unfair to the rest of society.

Over the weekend we heard the news that Barclays is closing down its tax advisory (avoidance) service in Britain, so we are making a difference.

Add your voice to the campaign and sign the petition calling for greater tax transparency today at www.taxchallenge.co.uk.

• Stephen McPartland is Conservative MP for Stevenage.