Meacher takes a swing at Tories' tax-evading pals

Mr Meacher made an explosive intervention in a Commons debate on multibillion-pound tax avoidance by major companies.

"The banks, which are by far the biggest tax dodgers, pay half the Tory Party funds every year," he declared amid bleats of protest from the government benches.

"The multinational companies, which are the second biggest tax dodgers, pay most of the rest."

Intervening in Monday night's key debate, Mr Meacher contemptuously dismissed the "rhetoric" from Prime Minister David Cameron and Chancellor George Osborne about the moral repugnance of tax avoidance.

"Since many, if not a majority, of the world's most used tax havens are UK-controlled overseas territories and Crown dependencies, why does the government not close them down?" he asked.

"Why are not all such countries and territories - the Cayman Islands, the British Virgin Islands, Bermuda, Jersey and so on - required automatically to hand over details of income, assets and finance structures such as trusts to the UK authorities?"

The simple answer was that the government did not want to act "because their corporate and financial backers would scream blue murder if they ever tried to do so."

Treasury Minister David Gauke attempted to hit back by accusing Mr Meacher of indulging in "wild conspiracy theories."

Mr Gauke pointed out that the previous new Labour government had reduced the number of tax inspectors from 94,000 to 65,000.

The minister admitted that a further 10,000 cut in Revenue and Customs staff was planned under his government.

But he claimed that the number of tax inspectors dealing with tax evasion would actually increase by 2,500, along with a £77 milion new investment by 2014 for tackling evasion and avoidance.

Tory MP and former tax lawyer Charlie Elphicke caused a stir during the debate by claiming that 10 technology companies made more than £3.3 billion profits in Britain, which should have resulted in a tax liability of £879m. But just £78m was actually paid.

"Oracle, Xerox, Dell, CSC and Symantec paid no corporation tax whatsoever last year, despite earning more than £474m from government contracts and having a UK turnover of £7bn," said Dover MP Mr Elphicke.