Transcripts For CSPAN Key Capitol Hill Hearings 20160412

50 or 60 . The problem is, all the other risks involved. Even if you have this one woman why are we changing the policy based on one woman . The problem is this is just about a couple of women who want to. First of all, now women are subject to involuntary assignment, because that is what repealing the combat exception means. The women who are willing and maybe able, when they succumb to their two to ten times greater risk of injury, their replacements are going to come from the pool of the unwilling, and most women in the marine corps and in the overall forces are not interested in the infantry. Right now, we dont have any who have applied of the ones who were in that integration study or who have gone through Marine Infantry Training battalions. We had a lot of trouble finding any women who want to. This is a deterrent for recruitment as well. There is a 2012 study of the marine corps, 54,000 covered, thatfound that, about 4 of women who are staying and would not stay in if involuntary assignment was on the table. Im sorry, that is if the exception was going to be repealed, the numbers are even greater, like 20 for women. If involuntary assignment. A lot of doing this, but if you could ask a question and then the woman asks. Hang on. Good. [indiscernible] [inaudible] you had a question . I was one of the first women to serve on the ship in 1994. The arguments made then was that we were told that we would degrade combat readiness. Im just curious, because we have now had many years of war to study this. Did combat readiness degrade . [indiscernible] everybody that i know from the navy refers to ships as if you like high school, you will love this. That doesnt exactly speak to your combat readiness. I cant really speak to what the navy thinks about combat readiness on ships after women were serving on them. That is a huge problem. Again, it is a huge problem that is not addressed by standards, regardless of physical standards. I would like to thank you for your service during the transition, and i think a lot of Lessons Learned during your era are lessons we dont look backwards to do that type of reflection. I would say, having served on ships, we didnt have any issues with the women in terms of how the mission was achieved. I think that the secretary of the navy would be hardpressed to say otherwise. Could anyone speak to the gentlemans question about the rangers . I think, in some ways, it is not necessarily a parallel argument, is the women who had been working on those teams had different duties than the men on those units. I served in special operations units with the women, and the women were doing different work then the man. There has been this argument that women have been in combat for a long time on convoys. It is not synonymous, because the units were talking about integrating his units where the actual purpose is close combat. I think those are interesting points to show that there was success, but to say that, because they have been doing this, they can automatically do these other jobs, isnt a onetoone, although it shows they can be out of the field, these units can exist as integrated unit. I am a reporter. When i go into interview, i tried last the interviewee, please make me smarter. I hope that despite some rancor, a lot of passion, that everybody feels a little bit smarter. If you want me to, i will ask how many people may change their minds in anyway based on the conversation tonight. Does anybody feel any differently about this issue having sat through two hours of discussion . I see one hand. I saw three hands. [applause] [captions Copyright National cable satellite corp. 2016] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] activist along with a retired general testify about violent extremism and u. S. Born assistance. Live coverage from a Senate Subcommittee hearing live tomorrow on cspan3 at 2 00 p. M. Madam secretary, we probably votes2 of our delegate to the next president of the United States. Announcer british Prime Minister David Cameron responded to criticism after it was found his late fathers name appeared Panama Papers. He says he sold his shares before he became Prime Minister. From the british house of commons, this is about 90 minutes. Order. Statements for the Prime Minister. Prime minister David Cameron i a statemento make on the Panama Papers. Yesterday i published all of the information on my tax returns for the last six years and have given Additional Information about money and heritage and given to me from my family. Salary, living in the home, the renting of our london home, the interest on savings that i have. Have not owed any shares or investment. The primeation of ministers Tax Information in this way is unprecedented but i think it is the right thing to do. I am not suggesting this should m. P. s. O all this begs the question of how far the publication of Tax Information should go. I think there is a strong case for the Prime Minister, the leader of the opposition, the chancellor and shadow chancellor, because those are people who are or who wish to be responsible for the nations finances. As for the mps we already have robust roles and i believe that continuedel we should to follow. We should think carefully before abandoning taxpayer confidentiality and this house. If this were to come in for mps people would ask for a similar approach for those who ask questions, run large Public Services, or lead local government to or who had the news programs or newspapers. I think this would be a very big step for our country. It certainly should not take place without a long, thoughtful debate and it is not the approach i recommend. Mr. Speaker, let medial specifically with the shares my wife and i held in Investment Fund held by my set up by my late father. It was a commercial Investment Fund for any invest their to purchase in. Theuding income tax on dividends every year. Mr. Speaker, there have been some deeply hurtful and profoundly untrue allegations made against my father he and i want to comment past let me, put the record straight. It was set up overseas because it was going to be trading predominantly and dollar security. Like any other commercial Investment Fund, it made sense the main up in one of centers of dollar training. There are thousands of these Investment Funds and millions of people in britain who own shares and told them through an Investment Funds or unit trust. Are included in the Pension Funds of local government, most of britains largest companies, and even some trade unions. Look shows the bbc, the mayor grew guardian newspapers, allto pick one at random have overseas investments. To give a further example, the trade Union Fund Managers based in Congress House has a portfolio of over 50 million in the trade unitrust with 3 of their net assets based in jersey. This is not to criticize, it is to make a point it is an entirely Standard Practice and not to avoid tax. One of the countrys leading tax lawyers has stated unequivocally that this was a perfectly normal type of collective Investment Fund. Which speaker, this is the man who led the Expert Study Group that developed such general antiabuse rules debated in this house which parliament finally adopted in 2013. He also chaired the tax avoidance by the committee. He has said it would be quite wrong to describe the establishment of such funding to be tax of why didnt. Further, and i quote, that it would be utterly ridiculous to suggest establishing such fines would suggest tax avoidance. That is why getting rid of such bonds listed overseas has not been part of any labor policy review, and a conservative party review or any sensible proposals for addressing tax evasion or aggressive tax avoidance. Investors in these finds benefit from those being set up and jurisdiction with low or no taxes. This is a misunderstanding. Unit trusts do not exist to be for to make profit themselves but for holders and they pay tax and their they are u. K. Citizens they pay for u. K. Taxes. It is right to tighten the law and change the culture around investment to further outlawed and avoidance but as we do so we should differentiate between schemes designed to artificially reduce tax and those that are encouraging investment. This is a government and the should be a country that believes in aspiration and Wealth Creation. We should defend it the right of every british citizen to make money lawfully. Aspiration in and Wealth Creation are not dirty words, they are the key engines of growth and prosperity and our always and we must support those who want to earn shares and make investments. Trustave asked if this was legitimate, why did you sell your shares in january 2010 four i sold all the shares in my portfolio that your because i did not want any issues about it of interest. To be ableant anyone to suggest i had other agendas or vested interest. Selling my shares was the simplest way i could do that. There are strict rules for the registration of Share Holdings and i followed them in full. Wouldbour party said they refer me for parliamentary standards and i have already given her the relevant information. If there is more should leaves i should say, i am happy to say it. Criticismll of the for not responding more quickly to these issues last week but as ive said i was angry about the way my fathers memory was being reduced. He was a hardworking man and wonderful dad and i am proud of every thing he did to provide for his family. Speaker, on the issue of inheritance tax, there is an established system is country. Her from being embarrassed by wanting to pass things to children, like keeping a family home in a family, i believe it is a family instinct and should be an card. As for parents passing money to their children while they are still alive, it is something tax rolls only wrecking dies. Many parents want to help their children when they buy the first car, get a deposit for the first song, or face the cost of starting a family. It is entirely natural parent should want to do these things and it is something we should just not defend but also probably support. Mr. Speaker, let me turn to the Panama Papers in the actions this government is taking to deal with tax evasion, aggressive tax avoidance, and International Corruption more broadly. Intothis government came office, there were foreigners not paying Capital Gains tax. Private Equity Managers paying a lower rate of tax and people claim their offices in people with homes getting away without paying their stamp duty because houses where envelope with a companies. End to this. N in the last parliament, we made 40 tax changes to close loopholes that raised 2 billion pounds. And this parliament, we will legislate for more measures to raise 16 billion pounds by 2021. No British Government labor or conservative has ever taken such robust action in this area. 23rd team, in and put tax, trade, and transparency on the global agenda and sought an agreement for a global standard over who pays taxes and where. Many said it would never happen but today 129 jurisdictions have committed to implementing the International Standard for exchange of information not written west and over 95 jurisdictions have agreed to implement on tax transparency. Fromll receive information u. K. Taxpayers and all of these jurisdictions and in june, britain will become the first to have a public registry. To everyone who can see who owns. Also consulting on acquiring Foreign Properties and bidding on contracts to provide Beneficial Ownership information. We are happy to offer assistance. As the Panama Papers have made clear, we need to go further. We are taking three additional measures to make it harder to hide proceeds of corruption offshore. To make sure those cannot get away with it and to investigate wrongdoing. To deal with crime dependencies on overseas territory. They have agreed to exchange account information automatically and will begin doing so from september. That never happened before i was Prime Minister and got around the table and said, this must happen. We need to go forward. We have finalized arrangements with all of them except in will and jersey which we believe will follow. The first time, u. K. Police and Law Enforcement will be able in controlswns every Company Incorporated in these territories. Haman islands, British Virgin islands, the lot. A result of the sustained campaign of the g8 and i welcome the governments of these territories to work with us. The house should note this will dependencies well ahead of other jurisdictions and crucially, ahead of many of our Major International partners including some states in the United States of america. Will seek to go further still on exchanging information and publishing information. Putting it into the Public Domain as we are doing here in the u. K. It is we want everyone with a stake in fighting corruption to be able to use this data and help us deter wrongdoing. Take another major step in dealing with those who facilitate corruption. It is difficult to prosecute a company that assists with tax evasion. Going to change that and will legislate for a new criminal offense for those who keep their representatives from facilitating tax evasion. Foronly, we are providing a a cross Agency Task Force to analyze information and take rapid action. Includeforce will investigators from across agencies. That is how we will tackle these issues and build a strong funding for the services we meet. Rewarding aspiration. Something that would never be thank you, mr. Speaker. May i think the Prime Minister. It is a master class in the art i am sure, mr. Speaker, the Prime Minister will join me in welcoming the outstanding journalism that has gone into exposing the scandal of tax avoidance revealed by the Panama Papers. What they have driven home is what many people have felt. There is one rule for the super rest. Nd another for the i am honestly not sure that to Prime Minister fully appreciates the anger over the this injustice. How can it be right at street cleaners, teaching assistants, and nurses work and pay taxes yet some of the top think the rules do not apply to them. What has been revealed in the past week goes beyond. There are six questions. To the house and to the public as a whole. Firstly, why he chose not to declare his offshore tax investment in the house of commons register of interest. For any no requirement interest which might reasonably be thought to influence. Mishandled the events of the past week. Does he realize how he mishandled his declaration six years ago when he decided not to register and offshore tax haven and vestment from which you certainly benefited . Can he clarify when he sold his stake in 2010, he also disclosed another offshore investment, in particular, were there any of sold2,000 pounds shares he held in offshore tax havens . The ministerial code states that ministers must and sure no conflict arises or could be ariseably be ceased to between their personal and public duties, financial and otherwise and almost provide a full list of any that might give rise to a conflict, including close family interest. Did he provide his offshore interests and of not, did he realize he had a clear obligation to do so . Inn part of it was tied up offshore tax havens and he is now making policy decisions that have a direct bearing on their operation. In 2013, the Prime Minister road to the president of the European Council opposing central Public Registers of Beneficial Ownership of offshore trusts. Does the Prime Minister now accept that transparency of Beneficial Ownership must be extended to offshore trusts . The panamabased law for registered more than 100,000 secret firms in the British Virgin islands. It is a scandal that u. K. Andseas territories, registers shell companies. The truth is the u. K. Is that the heart of the global tax avoidance industry. It is a National Scandal and it has got to end. Last year this government opposed the in you tax commissioner. Black list of 30 uncooperative tax havens. The black list included the Cayman Islands and the British Virgin islands. Will the Prime Minister now stop european plans for a blacklist of tax havens. It turns out that the former Home Office Minister was absolutely right when he wrote to the Cayman Islands government in 2014 to reassure them that our Prime Minister was making a purely political gesture about cracking down on tax havens at the g8. It was designed, he said, to be a false initiative which will divert to Member States from pursuing their agendas. Lobbiede, officials brussels not to take action taxnst reviewed upon secrecy. According to the European Unions tax transparency register, the tech giant google has no fewer they are in 10 employees at lobbying brussels. Bermuda is the tax haven favored by google to channel billions in profits. And on six occasions, since the beginning of last year, voting against action to clamp down on aggressive tax avoidance. Incapable ofty taking Serious International coordinated actions to tackle this. Across the country, and on the side of the house, there is a thirst for Decisive Action against global tax thirst for Decisive Action against global tax avoidance scams. To cut revenues out of our Public Services while ordinary taxpayers have to foot the bill. It undermines public trust in business, politics, and public life. It can and must be brought to an end. The Prime Ministers announcement today about new measures to make companies liable for employees to facilitate tax cheating is welcome, but it is also too little, too late. In fact, it was announced by the former chief secretary of the treasury a year ago. People want a government that acts on behalf of those who pay their taxes, not those who dodge their taxes in offshore tax havens. Yesterday, my friend the shadow chancellor set out a clear plan for transparency, and he is a member of this house who has spent all of his time in parliament exposing tax havens and tax avoidance. And his paper included calling for an immediate inquiry into the Panama Papers revelations to establish the harm done to our tax revenues and to bring forward serious proposals for reform. So i say gently to the Prime Minister, Tax Task Force reporting to the chancellor and the home secretaries, both members of a party funded by donors implicated in the panama leaks, will neither be independent nor credible. So will the Prime Minister back a credible and independent Public Inquiry into the abuses of the leaks . Our tax transparency plan also calls for specialized tax enforcement unit. Properly resourced, mr. Speaker, and that has to be the key. Since 2010, there have only been 11 prosecutions over offshore tax evasion, situation the Public Accounts Committee described as woefully inadequate. Having slashed resources and cut 14,000 staff since 2010, will the Prime Minister today guarantee that resourcing her majestys revenue and customs will increase in this parliament . Mr. Speaker, we support real action to end the abuses that allow the wealthy to dodge the rules that the rest of us have to follow. We need to ensure that trust and fairness are restored to our tax system and our politics. In the sense and the reality that there is one rule for the richest and another for everybody else. The Prime Minister has said tax dodging is immoral, but he clearly failed to give a full account of his own involvement in offshore tax havens until this week, or to take essential action or to take essential action to clean up the system, while at the same time blocking wider efforts to do so. There are clear steps that can be taken to bring tax havens and tax the minister standing at the bar shrieking in an absurd manner, he must calm himself or leave the chamber. Jeremy corbyn. M. P. Corbyn thank you, mr. Speaker. I suggest, mr. Speaker, the Prime Ministers record, particularly over the past week, shows the public no longer has the trust in him to deal with these matters. Does he realize why people are so angry . Does he realize do members realize why people are so angry . We have gone through six years of crushing austerity. Families lining up at food banks to feed their children. Disabled people losing their benefits. Elderly care cut and slashed. Living standards going down. Much of this could have been avoided, if our country had not been ripped off by the superrich refusing to pay the taxes. I say this to the Prime Minister, mr. Speaker, ordinary people in the country simply wont stand for this anymore. They want real justice, they want the wealthy to pay their share of tax like they pay when they work hard all the time. Prime minister. P. M. Cameron thank you, mr. Speaker. First of all, let me join the right honorable gentleman in congratulating the journalists who broke the story in uncovering this huge cache of information in the Panama Papers. What is important is that the information is shared with tax authorities in the United Kingdom so that action can be taken. The right honorable gentleman accused me of distraction. I think the biggest distraction today has been waiting for the right honorable gentlemans tax returns from which we finally got published at about 3 35 after the session had begun. How incredibly convenient that no one could scrutinize now, let me answer each and every one of the questions that he said. First of all, he asked whether we would resource revenue and customs with the right amount of money. We have put 1. 8 billion pounds into various initiatives since 2010 to make sure they have the resources to find this morning, first point. Second point, he asked me about my register of members interested ive complied with every aspect of the register of members interest and even before the labor Party Complaint arrived at the commissioners door i provided her with all the necessary information. Third question, he asked me when i made the sale of these shares. I sold the blairmore shares in january and every thing else in june. Next comes the asked if i had a list of these shares with the cabinet secretary. I difficult because i sold them but i sat down with the cabinet secretary, through all of my interests, all my connections come all my family, as all ministers are devised to do, so you have a conversation with the cabinet secretary in that way. Fourth, why were we not extending the Beneficial Ownership of companies and Beneficial Ownership of trust . The reason is we want International Action to take place, and a very clear advice i got was that if we included trusts our initiative the reason is we would not get any International Action done. Now he asks about the task forces where others will be investigating all the information coming out of panama. They have operational independence. If they find people to prosecute, prosecute. Independent operationally, and that is what they will do. They are reporting to the home secretary because we want to make sure that action is taken. If the shadow chancellor questions this, he should not be doing that. Let me answer the last question which is the action weve taken about overseas territories. No government has done more to encourage them to take part in exchanging information, reporting Tax Information, and making sure they give us the information on Beneficial Ownership. The leader of the labour party suggested we should force them. How is he going to force them . Have we found a potential Prime Minister that wants to give the Falkland Islands back to argentina and invade gibraltar . What we have seen from the labour party is we have seen there to colors when it comes to inheritance tax. If you want to help your children, they will tax it. We have seen their true colors. They are the enemies of aspiration. That is the real lesson of today. Mr. Speaker i was going to call the chair of the select committee, but the gentleman is out of the chambers. Get in here, man. [laughter] mr. Speaker order. Im sure it will be worth waiting for. M. P. very good for you to give me the floor, mr. Speaker. I do not think the Prime Minister has done anything wrong except possibly to comment tax evasion is illegal and should be vigorously pursued, if necessary, with criminal prosecution. Tax avoidance is not if the government or permit do not like it, there is no point in moralizing. Does the Prime Minister agree that to deal with taxes, we need to reform to close loopholes, to ensure there are fewer mr. Cameron i am glad that my friend was detained. Tax evasion is illegal, and tax avoidance, if the government disproves it, should be legislated against. What i have said before is that there are practices that are aggressive tax avoidance that merit proper questions and legislative actions. To be fair to jimmy carr, as soon as it was pointed out he made it clear to play triggered for doing that. M. P. i welcome the Prime Ministers statement, the new measures to deal with tax evasion. The publication of his Tax Information and the apology for the way he has handled it. It is estimated between 21 trillion and 32 trillion is untaxed around the world. Our estimate is 10 trillion. The Panama Papers leak is so large that the final document would be 650 million pages long. It is right that a special Tax Task Force has been set up to go to this information. As the Prime Minister said, hopefully charges will follow if criminality can be proven. The public are indignant here and around the world. People are rightly angered by the different rules for normal taxpayers and the ultrarich. We have to ask yourselves whether the scale of the problem has been taken seriously, because it has not been thus far, either domestically or internationally, and u. K. Bears a responsibility given the u. K. And its overseas territories and dependencies sit at the top of the top of the financial secrecy index of the tax justice network. In scotland, we are confronted why reality of a small number of land owners owning huge swaths of the country, many through tax havens. Across scotland, land is owned through transparent firms based in havens like panama and the British Virgin islands. May i ask the Prime Minister, will he revisit his decision not to fully cooperate with the European Union partners on overseas trust . On the welcome register of Beneficial Owners across the british dependencies and overseas territories, specific question who will this be available to and when . Will it be publicly available . And if not, why not . Will the Prime Minister prioritize bilateral tax treaties with panama and other tax havens as part of his global efforts to coordinate against tax avoidance, and will you update this house on progress . Lastly, given it is the u. K. Cabinet that agree government policy on tax rules, potential loopholes, and arrangements with tax havens, will the Prime Minister ensure all of his cabinet colleagues, all of them, confirm whether they have ever benefited through offshore financial dealings . Mr. Cameron first of all, let me agree with the gentleman, that there is no doubt that there is some jurisdictions, there are bad things in happening in terms of hiding of assets, wealth, avoidance of tax, and that is why we want authorities to go through everything they can to recover that money. Because those bad things happen does not mean we should condemn trust that many investors, Pension Funds, local government, maybe even the pension fund of this house might use as a totally legitimate way of investing and paying tax. I made that point. He says we need as many criminal charges as possible. I agree with that. We should not and they got 1100 cases going through. They can charge up to 300 of the money. On the issue he said have we taken this agenda far enough. This is the first country to make this the number one issue. We have now done it and it is permanently on the agenda come and you see these permanent improvements. I do not think you are being a fair on the overseas dependencies. There was a potentially real problem. They have done a huge amount of address that. No better place than other similar jurisdictions, and there are states in the United States that have less disclosure than they do. Lets not be unfair on dependencies and territories, especially on this side of the house where they are in our family of nations. In terms of scottish trusts and transparency, we are happy to work with and help the administrations in any way we can. We are happy to work with and are working with European Partners on the issue of trust. We would not have made any progress on Beneficial Ownership if we included trusts in that debate in the g8, but we made progress for the reason we give. In terms of Beneficial Ownership information in the territories, he asked who it would be available to. Law enforcement agencies, including our own, and they are not producing Public Registers yet. There is only about three countries in the world, including britain, that have these Public Ownership registries. If we tried to push that on the crime dependencies should away, we would not have gotten as far as we have gotten today in terms of tax treaties. In terms of cabinet ministers, i think the current rules for registering members are right. It indicates that the Prime Minister and chancellors are going forward. M. P. we are likely to lose tax revenue over the next five years because they will sue us in court against the European Court of justice to overturn the taxes we wish to impose with another 35 trillion at risk. What can we do here to make sure they pay their fair amount . Mr. Cameron we took a series of actions in the budget, and there is a tremendous weapon for making sure these comedies pay their taxes in jurisdictions where they are rightly earning the money. This tool of being able to exchange tax permission and have a common reporting standard, which is what we set off in 2013, that will make the biggest difference. M. P. one of the main benefits of uncovering the Panama Papers was they showed some like to some people who do not want it to go. The Prime Minister makes great play that his government has done a great deal to improve transparency, but is nowhere near enough. When is he going to make sure that corporate can publish their Tax Information so that everybody, the public, can see where taxes being paid . Mr. Cameron i am not saying we have a perfect record, but this government has done more than any previous government but i will answer directly, our system is based on full disclosure by companies to the revenue, but a basic deal of taxpayer confidentiality between companies and the revenue. That is the way our system and most systems work. That is why the common reporting standards and exchange of information between jurisdictions is so important to make sure companies are telling the truth to us and other jurisdictions. It is only when that happens when we will be able to recover the money. M. P. the Beneficial Ownership registry that comes in play in six weeks the announcement that the Prime Minister has made with dependencies. It will do much to deal with tax evasion. If the house will forgive me, it will do more to ensure the proceeds of crime, the proceeds of terrorism, cannot be laundered through this jurisdiction, and that is something to be welcome. Perhaps it should be told that the Prime Minister is the a little bit, which is this how do we know personally that we would not have gotten the agreement with the dependencies without his personal intervention and without him being very tough . They should be congratulated on that. It was actually delivered without a single shot being fired by the leader of the opposition. Mr. Cameron what he will remember from his time in government, as he is doing a brilliant shot as my anticorruption lead, we got the crown dependencies and the territories around the table in the cabinet room. As at the same day as the trooping of the colors. You do not have to go all the way to publishing registers. He says that will mean not only more tax paid, but greater ability to uncover corruption. M. P. can i ask the Prime Minister some questions about the announcement in relationship to crime depends on the crown dependency. Is it true that they have applied for registry of Beneficial Ownership . Will hmrc have access to that registry . If he does not succeed in getting these territories to publicly publish those registers he will use his power through the privy council to order the tax basis to publish it . Mr. Cameron there are three things we have been asking the crown dependencies to do. One is to exchange Tax Information. The second of had a common reporting standard. The third is to establish registries. They have done all three. We still need agreement from guernsey and from anguilla. The second question, will our revenue have access to the register . Yes, they will. Will we force them to have Public Registers . We think they should. Lets be clear, very few countries in the world spain, britain, and one or two others have these Public Registers of Beneficial Ownership. Our dependencies will be now advanced of most other countries. We are to praise them and thank them for all they have done. M. P. the Prime Ministers critics set out in indignation and admit that they pay anyone who has a hint of wealth. May i support the Prime Minister in sending off those who are attacking him, particularly thinking of this place, because if he does not come we risk seeing a house of commons which is stuffed full of low achievers, who hated enterprise, a people who look after their own families, and do absolutely nothing about the outside world. Mr. Cameron im grateful for my friends support. We have a system of members interest that is put in place at the end of 13 years at the end of a Labour Government. I do not want us to discourage those people who have had a successful career coming into this house and making a contribution, and that is what i have said for Prime Ministers and chancellors, shadow Prime Ministers, shadow chancellors, it is a different arrangement. M. P. does the Prime Minister recalled at the time after he became Prime Minister under the coalition, at the time when he was dividing the nation between strivers and scroungers, ask him a very important question about the windfall he received when he wrote off the mortgage of the premises in notting hill, and i said he did not write off mortgage the taxpayers were asked to write off at oxford. Maybe he will answer it now. And by the way and by the way mr. Speaker order. Order. Order. I must ask the honorable gentleman order. I do not require any assistance from i invite the honorable gentleman to withdrawal that adjective as he used a moment ago. He is perfectly capable of asking that question without using that word. It is up to him, but if he does not wish to withdraw in him, i cannot ask the Prime Minister to answer the question. We should withdraw that word and think of another. I think he knows the word beginning with d and ending with y that he inappropriately used. Withdraw. M. P. i know what youre talking about mr. Speaker very simple withdraw. M. P. this man has done more to divide this country than anybody else. He has looked after his own profits. I still refer to him as dodgy dave. Do what you like. Mr. Speaker order. I am sorry, i must ask the right honorable gentleman to withdraw the word very well, very well under the power given to me by steady order number 43, i order the honorable member to withdraw immediately from the house for the remainder of this days siing. Very well. Needless to say, no reply is required. We will take next sir edward lee. M. P. it is a very shocking scandal. We now know that the problem is that are divested himself of all his shareholdings before he became Prime Minister and paid his taxes in full shocking, shocking. There is a windup question, and it follows on that question from the chairman of the treasury committee. While hardworking families always use ways of trying to minimize that tax bill . Let me give him one suggestion. The better way to stop people avoiding paying inheritance tax is to abide by a commitment and abolish it. Mr. Cameron we are grateful to my friend for his support, and we have met our manifesto commitment on inheritance tax, which was to exempt the family home. He is right we need to signify, but we need to move in different directions, which you need to submit my taxes, but where you see abuses occur, sometimes need to write new tax code in to make sure they cannot be used, and that can lead to complications. I think he is right. M. P. will the Prime Minister now answer questions that both he and the chancellor refused to answer few years ago and confirm that they both benefited personally from their to the top rate of tax, and on the day that the universal credit passed, does he think that the several thousands of pounds of year in which they both benefited are fair . Mr. Cameron the information is in my tax return. Everybody can look at it. Since we reduced the tax rate from 55 to 45 , we have not only raise more revenue, which were not only raise, but the richest 1 are paying a higher overall percentage. M. P. with my friend clarify again that tens of millions of our fellow citizens benefited from tax exempt investments. In most pension schemes, they pay tax on their investment income, which directly benefits hardworking people saving for and receiving pensions. Mr. Cameron my friend is right about that, what i will reinforce the point. Many of those unit trusts are lifted in other countries. Many of them now in dublin. They are set up to avoid tax, but to make sure the revenues are returned to the unit trust holder and they pay taxes. That is the key point. M. P. does he accept that the revelations last week that he personally intervened in 2013 to water down the effects of the rule does damage to portray his efforts . And would he not commit to fully support the eu transparency rule, including country by country reporting saying how much profit they make and where . Mr. Cameron there were no eu proposals. The thing was based on a british proposal, a British Initiative to encourage all countries to have registers of Beneficial Ownership. The eu joined in by suggesting extending it to trusts, and we pointed out if that happens, no one would take up this proposal. Any number of things, perfectly reasonable under English Common law. The advice i have was that if we went through this proposal of going to beneficial trusts, the move we would made that is helping to change the world with have failed. M. P. mr. Speaker, with my friend encourage to write to him to set out in detail the allegations he makes against the matter of breaking the law or the rules of this house, because having listened carefully, i failed to comprehend what it is he is going on about. On a separate issue, i like to see my friend stand up to the overseas territories. He will know that as attorney general i had quite a lot of dealings with the territories in encouraging them to change their rules. They showed them to be responsive to those representations. You may agree with me that the territories are entitled to provide Financial Services and not be gamed for trying to ensure the wellbeing of their mr. Cameron my friend is absolutely right. What we try to do with the overseas territories is a there is a perfect a legitimate business of providing Financial Services, but they, like us, should be doing it on the basis of high standards. I think that is an argument they accept and are carrying out and we should thank them for them. I listened to the right honorable gentleman. M. P. mr. Speaker it could be forgiven for believing the only virtue is transparency. Privacy and quality are both important virtues that we value in this country. Does the Prime Minister agree that given decisionmakers in this country pay probably through Service Companies . If we are to set any principle, it is privacy . Then we can have a more wide discussion. Mr. Cameron i agree with you, that there is a value in privacy, and that is why you have to have this balance, and i have tried to set up the way forward today. On his issue about private Service Companies, the chancellor will Say Something about that in the budget, and when public money is involved, theres a case to be made that people declare these arrangements in the proper way. The change the chancellor has been about is making sure whether someone chooses to have a private Service Company or chooses to be selfemployed, the tax of they pay will be similar. M. P. i welcome the Prime Ministers announcement there will be a new criminal offense apply to corporations who failed to send their representatives to facilitate tax evasion. There are nearly 40 other Economic Crimes which are unlisted in the crime and court act of 2013 which are susceptible to deferred prosecution. Will my friend have a discussion to make sure that we cannot only have the tax offense that he is too to, but those other Economic Crimes so they can be dealt with under the failure to prevent system . Mr. Cameron my friend has expertise in this area, and the point is making his we have to make sure is as we set out these Economic Crimes, and home secretary has led the charge to make sure we address this issue, we make sure they are properly understood and prosecuted, and we need to make sure the National Crime and that court office work in a way that was being done when he had that job. M. P. the Prime Minister he is leading on International Efforts to crack down tax evasion, but could he explain what he wrote to the then European Council president in 2016 and asked him to the transparency rules of antiMoney Laundering rules despite warnings that it could create loopholes for tax dodgers . Mr. Cameron with Great Respect to the honorable lady, i have answered this question several times, was recently to the leader of the green party, which is that we were keen to get progress on the Beneficial Ownership of companies, and if we accept the proposal to include trust, that would have gotten locked down and would not have made progress that we had, where we got every g7 country, host g20 countries, signing up to have plans of Beneficial Ownership of countries. My advice was the whole thing would have slowed down to a trickle and we would not have gotten the extra money we are going to raise. M. P. as far as i concerned, it is currently clear that the Prime Minister nor his father have done anything at all. In a statement he said, we must defend the rights of every british citizen to it is the various the description of people who have just done that as morally repugnant. In the Prime Minister give us a promise that he will give us the rule of law and that the rule of law is important to not question the morality of people who act lawfully with regard to their tax . Mr. Cameron i am grateful for my friends support, and i agree with the importance of people making money within the law. The simple point i have made and will continue to make government it is the tax evasion that is illegal, not tax avoidance. There are many ways people avoid taxation, not the least by putting money into a pension or preferably perfectly legitimate ways. I would say what we have seen sometimes is very aggressive measures. Ive mentioned some of them in my Statement People putting properties in envelopes rather than paying stamp duty, where it is difficult for government to catch up quickly enough with the huge changes that are taking place. I think a bit of leeway on that is necessary, that he is right, it is the root of law that matters. M. P. does the Prime Minister realized that the difference of the mass majority of constituents who paid their taxes paid in the usual way, and tax bids, the use tax havens for obvious reasons. That is why the acquisition is made between them and those people that i have been referring to. Mr. Cameron there is bad practice that takes place, not the least in some of these jurisdictions, that needs to be dealt with, and that is why that sharing of information and registry of Beneficial Ownership are about. Yet it things to recognize that happened last week is the 11,000 pound personal allowance came in so people could learn 11,000 pounds before they take any income tax at all, and i completed our work of taking the lowest pay people out of the tax whole altogether. M. P. mr. Speaker, the premise or has paid his taxes, has behaved perfect properly, and can i commend him for standing up for his fathers repetition. Can i asked the Prime Minister or of how much extra money has come into the exchequer under the 13 years of Labour Government . Mr. Cameron we have raised an extra 12 billion. We want to raise another 16 billion in this parliament. Also for having a lower rate in Corporation Tax, we have seen more Corporation Tax come in, tax rates that people pay, those are our watchwords. M. P. weve heard the role of law is permanent. The government controls what is legal. And what is illegal. Can the Prime Minister that the law will make offshore tax dodging in all its forms illegal . Mr. Cameron evading tax is already illegal, whether you are doing it in the u. K. Or somewhere else. The point i have been making is we need to have this information sharing and the ability to look at information in jurisdictions in order to see if people have been evading tax, and that is what we are now getting. We should not use that to say it is wrong for people or trade unions or companies or pension schemes to invest in unit trusts list it in other countries, because that is a perfectly normal way of investing. M. P. can i congratulate my friend for bringing the transparency to the office of Prime Minister by publishing his own tax report. Can he say if he has any thoughts about whether this should be extended to former Prime Minister some many of whom still receive public money i would be interested in seeing the tax codes of one mr. T. Blair. Mr. Cameron no proposals to make in that regard. I am not claiming some perfect record. I cut Prime Ministers pay by 5 and froze it for parliament. I reformed the Prime Ministers pension. We have given up the great office of state engine that gave half of your salary in perpetuity. I did it, right . So all of those steps have been taken, which are the right thing to do. M. P. thank you, mr. Speaker. Will the chancellor of the exchequer of his family company, which he holds shares in, but paid no u. K. Corporation tax . Mr. Cameron i would say the chancellors family firm is exactly the sort of manufacturing small firm that is doing carriage in our country. Many years i gather they have not been making a profit, but i am glad the company is doing well and they are paying a dividend. That is something we should welcome. Tax is a matter of the m. P. i would like to welcome the Prime Ministers statement this afternoon, and when he meets with World Leaders in london this may, the first Global Anticorruption summit of its kind, will you press them to bring actions to expose corruption wherever it exists . Mr. Cameron i am writing in a document that will be released before the summit no country, politician, no one can claim they have a perfect and unblemished record in this regard. All countries are battling against these problems, as we did in this house with the problems of expenses. I want to encourage people in the Prime Minister of afghanistan is contributing, the president of nigeria is contributing, and they admit their countries are rife with corruption. The problem is that until nobody stands up and talks about the issues and says about action plans, nothing will get done. M. P. at the last count, 36,364 properties in london were owned by offshore companies. That is one in 10 in one london borough. We should know who owns those properties. Many believe it is dirty money from countries like russia and the middle east, driving up costs, a 50 increase since 2007. Mr. Cameron the first thing we have done is to say if a property is owned by a company, in an envelope structure, so you cannot get to the name of the person who owns the property, they have to pay an annual stamp duty charge of Something Like 15 . This has been a massive money raiser to spend on Public Services and a huge disincentive for this sort of behavior. I want to go further, we need to have more information about who owns what in our country. M. P. mr. Speaker, can i thank the Prime Minister for his creative statement. I received an email from a person in my constituency, said that he watched sky news yesterday, and he said that the shadow chancellor misled viewers and that he should be exposed in parliament. For the shadow chancellor to be so misleading is not acceptable. I am quoting here. The political motivations are obvious, but not an excuse. The Prime Minister could not have pay any inheritance tax if he wished to come and levy taxes on the mr. Speaker order, order. I am grateful to the honorable lady, and this has nothing to do with responsibility of the Prime Minister. Order. That is not a wise course of action. The Prime Minister is not responsible for what the shadow chancellor has said. I say that to the honorable lady kindly, but with some authority in these matters, believe me. M. P. no one in the house should have to feel their family members are being attacked unfairly, and in fact the Prime Minister is absolutely correct. It is not clear to me what he believed about Holding Shares in offshore trusts in tax havens. Does he think it is probably ok . In which case, why with his holding them be a conflict of interest . Does he think tax havens are a problem that need fixing . In which case, why does he have them in the first place . Mr. Cameron do i think it is ok to own shares in a unit trust that is registered in another country, whether that is in dublin or guernsey . Yes, i do, and that is why Companies Hold those shares, Pension Funds, many people in our country cold unit trusts, because the key point is the unit trust does not exist to make money for itself. It makes money for the unit holders, and if the unit holders live in britain, they pay british tax and all the rest of it. That is why these arrangements have been in place for many years. The Labour Government, no labour policy review has ever thought of getting rid of them. It is important they are administered in a proper way. The second question is, why, if i thought the resulting wrong with holding them like that, did i sell my shares because there might be conflict of interests . I sold shares in every company i own. There were two options to put things in a blind trust, nothing wrong with that, very good way to go about it, but i thought maybe even simpler or straightforward was sell everything so then i would not own any shares in any of the companies that i have previously had been a shareholder in had dealings with the government. There was no way to find any conflict of interest. That is why i sold the shares. I thought it was the right thing to do. M. P. will the Prime Minister confirm the only irregular thing about the summary of his tax return is the fact that he voluntarily and privately forsook the 20,000 pound Prime Ministerial allowance, including those that he focused on increasing the personal allowance so that millions of lowincome owners could avoid paying tax altogether . Mr. Cameron i am grateful to give my friend that reassurance. Allowance so that millions of i have the target of 12,500 pound personal allowance, and it was the right thing. As it says in the information, there is support for me and my wife from the conservative party in terms of some of the costs and issues of travel and other things you have to do with as the leader of the party, party money on which i pay a tax charge. M. P. is it the right thing to do to be claiming expenses to live in the grace and favor apartment and at the same time making a big profit on your own main home . Mr. Cameron i am baffled because he said he was going to refer this to the parliamentary commission. There was all the information he has not actually made it. I am very lucky to live in number 10 downing street, precisely, number 11 and 12, and as result of that, i receive a benefit in kind, and because of that, calculated that i think some 7000 pounds i pay a tax on that for living in the house. It is not a subsidy i am getting. It is a benefit that i am grateful for. And i give the tax man his money in that respect. M. P. may i tell the Prime Minister should not be saying he has the good fortune to be born into a welloff family, he has nothing to be ashamed about. May i tell the Prime Minister is not a sin for his parents naturally to want his savings to be cascaded down to the generations. He has nothing to be ashamed of. But can i warn my right honorable friend, no matter how much information he wants to divulge, nothing will satisfy some of those people on the labour front. Mr. Cameron i am grateful to what my friend said. Theres a point at which you have to say i publish the information that i think is relevant, i have gone back over the last six years, but that is the limit of what i am going to release. Some people say, what about your wifes or your mothers Financial Affairs . There comes a time when Prime Ministers and chancellors have done more than that, but we should rely on the register of members interest to police the rest of our affairs. M. P. given that more than half of that companies implicated in the leaks are registered in crown dependencies, does the Prime Minister regret telling this house in 2013 it is not fair any longer to refer to any of the overseas territories or crown dependencies as tax havens . Can he rebuild some of the public trust he is lost in the last week by making sure that in terms of publishing information about Beneficial Ownership, the crown dependencies and overseas territories do follow the u. K. Example and will take concrete examples . Mr. Cameron the reason i have made that statement in 2013 is we had got the crown dependencies and the overseas territories for the first time to share automatically Tax Information with United Kingdom government. That is something that did not happen under the last Labour Government. Now he is right we want to go for it. Not only will they share the information, they will give us access to their information of Beneficial Ownership. Just so he knows how Different Things were under the last government, that then financial secretary of the treasury, in response to questions about the territories, said the negotiation of Tax Information Exchange Agreements with other jurisdictions, including the u. K. , is a matter for the crown dependencies themselves. He was saying nothing to do with me, gov. It is up to them. That is the government we replaced. We took a different approach, and we are made a lot of progress. Mr. Speaker [indiscernible] i would have done exactly the same. His father did nothing wrong whatsoever. The Prime Minister mentioned a debate will come. Can i say that when public figures get into trouble, that in the future there are no more kneejerk reactions, that a long and thoughtful debate is to avoid unnecessary consequences for everybody else. Mr. Cameron i think my honorable friend makes an important point which is we should try to make decisions about these things calmly after debate. I felt after all the questions i was being asked was to publish this information. I could not be clearer that i do not want to see that as some precedent that every member of this cabinet should follow. We have always had a system in this country based on full disclosure to the revenue, and taxpayer confidentiality. Some other countries have complete transparency of information. It has not been our way. That has not been our system. We should not give it up lightly. M. P. [indiscernible] if the were not a millionaire he would be a low achiever. Speaking of the low achiever, the biggest Multinational Company earns more income in a single week than all the combined Companies Put together. That is why we want to make sure that the information that multinationals will be obliged to provide to hmrc should be put in the Public Domain. Will he meet with me to discuss this proposal . Mr. Cameron i have always thought of the lady as a high achiever. The point about the countrytocountry reporting is what we are trying to achieve is a common reporting standards so that Companies Report to tax authorities in the same way and then the sharing of that information so you can see if company a is paying x amount in one jurisdiction and y in another. That is the most powerful way of achieving what we want to achieve. There are those who say we need to go further in public declarations. Interesting argument. Lets not make an enemy of the good. We have a solid way of making sure these Companies Pay tax properly, and i want to make sure that is completed. M. P. does my right honorable friend agree that any course of action designed to reduce tax does not constitute tax evasion must by definition be legal even if some may regard it as aggressive tax avoidance . And it is up to this parliament to legislate to make such courses of action illegal . Mr. Cameron my friend is right, where there is aggressive avoidance taking place that is against the spirit of the law, then parliament should act. As i have said, that is what the chancellor has done what hmrc advises us about. I think sometimes there are occasions when the avoidance is so aggressive that it is right to warn those taking part of it that legislation will follow, and so they should not take part in the scheme in the first place. That should happen, too. M. P. will he be issuing guidance in the form of a leaflet to every household so taxpayers can you how they can benefit from offshore tax havens . Mr. Cameron there are many people in our country, over 12. 5 million shareholders, many of whom hold shares in things like unit trusts that do not need information from me. If you invest in one of those, if you are u. K. Resident, you must pay u. K. Taxes just like you are buying a share in any other organization. M. P. i cannot find an occasion where the members raised any of these issues. The closest he came was when he described the Labour Government to take control of the turks and Caicos Islands as undemocratic. Apparently he now advocates for all territories. Isnt it fortunate that we had a government that took up this agenda . Mr. Cameron i am interested to see the uturn, because recently he has been stressing taking control of these territories. I can now see a use for the Nuclear Submarines as they had off toward the isle of man. Much more sensible to get them to do the things they ought to be doing. M. P. why does the Prime Minister think so Many Companies are registered in panama in the first place . Why not london or new york . Mr. Cameron the reason why unit trusts reside in different countries, and a number of that happening right now, registering in dublin, they want to market their services not simply to u. K. Residents who pay u. K. Taxes, but other people. That is why if you look at the Inland Revenue that way they arranged this, they want to make sure that u. K. Fund managers can be involved and paid their taxes in the u. K. , we can build the investment industry that this country can rightly be proud of. M. P. i think my friend for his open and frank statement today. I think any person will think he has exonerated himself. Can he confirm under rules that reports for documentation should be retained for seven years . Mr. Cameron no fine for having come to the house for having published them. Although disappointed we got it in at 3 45. Obviously, matters of fines of late productions of tax returns, that is a matter for hmrc. M. P. in 2013 was found guilty of an egregious breach of the commons rules and the house of lords rules as to misleading a committee required in 2011 and taking 10,000 pounds a month as a payment for lobbying for the Cayman Islands. He had no punishment from his party. He was allowed to get away with it with a brief apology to the house of lords. Will the Prime Minister tell us if in the future any parliamentarian in his party uses his privileged position and prostitutes it in order to make private gain, he will act and discipline him . Mr. Cameron the point is we have now rules in the declaration of members interests, we have a police in terms of making sure they are properly carried out, and we have a punishment, including expulsion, for misbehavior. I am not as familiar with the situation with the house of lords, but i think they have been moving in the same direction, and that is all for the good. M. P. the conversations around panama are interesting, we have a reality check here. [indiscernible] actually benefit from inheritance as a result. Does my friend agree with me that the time is now to reform inheritance tax to help more people get out of the Poverty Level . Mr. Cameron there is a rule for making sure that people can pass on the family home exempt from inheritance taxes, and that is why we have set out steps to make sure that it happened. That completes what was set out in our manifesto. M. P. the public will be more inclined to take the Prime Minister at his word if he was to clamp down on tax avoidance and his government not appointed edward troup as the chair of her majestys revenue in 2012. This is the way that taxation iy does someone with those views belong in this . He does a very good job. He had a commercial career at simmons and simmons, one of the most respected city Legal Practices that there are. It is a good thing we can attract people from private practice into revenue and customs to make sure we collect all of the money that we should. In the future any taxation would do nothing to diminish the aspirations of working families. They want to do the right thing, provide for their future, pay for their retirement. Frienderon my honorable is exactly right. If you look at our reports to pension and inheritance tax. To pass upso able their money onto their children and help with key purchases such as a first home and a first car. All of that wealth cascading down the generations. It is part of our goal. M. P. the Prime Ministers announcement that people would be criminalized if they participated in tax evasion. Minister revisit the democratic proposals for forwarding coalitions to see if they can play a significant role in dealing with tax evasion . Mr. Cameron the Coalition Government achieved a lot in this area. It was led by myself in terms of driving the agenda. , we did have the full support of our partners. I listened carefully to the words of the leader of the opposition. Does the Prime Minister share my concerns that you do the opposition seems to forget or is unaware of the aspiration, the determination, and the prospect of eventual financial reward are the ingredients to the Strong Economy we have leading to jobs for many. Does my right honorable friend agree that we should condemn envy . And mr. Cameron we set low tax rates, and encourage people to make the best of themselves and their families to build a stronger economy and a society. Mr. Speaker, the Prime Minister referred to his anticorruption summit. Can he tell us which countries are going to be represented there and will an invitation be extended to either president Vladimir Putin or some of his corrupt cronies, those that fund the propaganda to explain the 2 billion held in panama by that corrupt regime . I welcomed him earlier it is fair to say that the guest list is still being worked on. The point is that we will be asking people on the basis that that they run perfect countries but are they going to commit to public declarations of things like open Beneficial Ownership registration, shearing Tax Information, making sure that when assets are deluded, that we can confiscate them and restore them to the people that they belong to. If countries want to sign up for that, despite their record from the past, we will encourage them to do just that. My mother spent many years working in the factory. Mothere Prime Ministers she lost a husband. How deeply hurtful those remarks have been. In the Prime Minister tell the e i am grateful for my honorable friends remarks and i am sure my mother will as well. She is developing a thicker skin. Many people want to pass wealth and assets and help their children. It is not something we should be ashamed of. It is something we should encourage. It can help build a strong society. M. P. the Prime Minister acknowledged that Current Legislature legislation, it is difficult to prosecute countries that are participating in tax evasion. I would add fraud and corruption. The government made a promise in the manifesto to deal with all Economic Crimes, not just tax evasion. With the Prime Minister commit today to review the current position to incorporate fraud and corruption . Mr. Cameron i will look at the suggestion carefully. We have announced the proposal. Situationsntified ad i think she is arguing tidying up of the offenses. Madam secretary. Delegates for the next president of the united dates. United states. Treasury secretary jack lew said the u. S. And other countries should Work Together to make changes to the International Monetary fund. He also spoke about the u. S. And Global Economy at an event hosted by the council on foreign relations. Mr. Mallaby good morning. This is part of the sea Peter Mccullough series on international economics. This is going to be on the record as this is an introduction and description of secretary lews bio in your package. The 76sworn in as treasury secretary in 2013. Before that, he ran the omb. One thing i remember being relevant to what he will be discussing today is that before that, in the early Obama Administration when he was deputy ares deputy secretary of state and he was running the first ever he was looking at all of the tools of development at the development review. It shows his involvement in these questions with the interaction between economics and state craft. And it is rather extensive. I am going to welcome the secretary to the podium. He will speak for a bit and then we will have a conversation. Thank you. Thanks very much sebastian for that introduction and your leadership at the council. This is a remarkable institution with a long history of intellectual comments on americas foreignpolicy. It is an honor to be here today. Americas leadership in the Global Economy is something we all care deeply about. I want to thank gideon and his Foreign Affairs team in publishing the essay on this topic. It reminds me of a story of getting reform for the imf. Why was it so hard . And why did it take five years to win approval at the end of last year . The imf has been a symbol of u. S. Leadership since its birth at the end of world war ii. Theg the world bank with world bank, it has provided the underlying infrastructure that has helped produce remarkable gains over the last 70 years. American leadership was essential to the creation of that system and the progress that it has yielded. The though it has supported wellbeing of our citizens and it has helped our country advance our foreignpolicy objective, our Global Economic leadership has not we spent popular at home. In the case of imf quota reform, it took five years to have congress act. In the many People International community with a question regarding americas role in the Global Economy. The passage of imf reform was pivotal but was one of only was one of only the first steps to be taken. The Global Landscape of the next century will be difficult different than the postwar era. If we wanted to work for the American People we need to embrace new people new players on the global stage and make sure that they meet the new standards that we have created. The worst possible outcome would be to step away from our leadership role and let others fill in behind us. Making the case for Global Engagement is a responsibility we all share. We must make the choices necessary to ensure the future of the International Architecture we built and americas position in it. Over the last year, the Obama Administration has made significant progress advancing u. S. Leadership in the Global Economy. We worked with congress to secure imf reform, trade authority. We reached agreement with our International Partners on the transpacific partnership, and a landmark climate agreement and ae Iran Nuclear Agreement and steppedup strategy to confront terrorists. To ensure the benefits of our global role and that those benefits remain available in future generations, we have more work ahead of us. The brettont woods system of cooperation has evolved and indoor by preventing a foundation for mutual economic gain that could not be achieved by individual countries alone. Since 1950, real per capita income worldwide has quadrupled raising Living Standards for billions of people and extending life expectancies. Clear rules for Global Economic relations made opportunities to innovate. In a system of mutual responsibility it does not automatically enforce itself. It requires responsible American Leadership as well as constant improvement to raise standards and create that are mechanisms to ensure countries keep their commitments, and cooperate to confront new challenges. The rulebased system was a major reason the Global Financial crisis never turned into a second great depression. The United States and other nations were able to coordinate efforts to the g20 and imf to avoid the downward spiral of predatory macroeconomic policies that characterized previous eras. The worlds Major Economies launched simultaneous economic stimulus programs and mobilized Financial Assistance to vulnerable parts of the global system. We have built on that cooperation in recent years to advance important u. S. Goals including the i messed response to fiscal stress caused i the ebola epidemic in 2014 and its support for ukraine following the russian aggression in crimea. The scale and speed of assistance in those instances would not have been possible if the u. S. Had to act alone. The simple fact is that International Financial institutions amplified u. S. Influence on the global stage. Weve also worked closely with partners to implement financial sanctions that show how the same ring until global architecture actorsused to persuade to abandon behavior that threaten peace and security. The iran agreement is a direct result of the financial pressure imposed by an unprecedented global coalition. And we have and continue to work closely with our allies to impose costs on russia for its actions in ukraine and on entities of bedding north koreas violation. The benefits of coordination cannot be taken for granted. We must take the necessary steps to preserve and strengthen our position. Sustainable u. S. Leadership in the Global Economic system bullet begins at home and we have to lead by example as we did by bouncing back from the financial crisis that threatens our place and the Global Economy. Our economy has now produced the longest streak of job growth in american history. 20092015, the budget deficit has declined to nearly from nearly 10 of gdp to 2 . Producing a Better Capital lysed capitalized and financial system. Tle brinksmanship political brinksmanship heightened global anxieties. Washingtons inability to reach a consensus on domestic priorities such as rebuilding aging infrastructure and reforming the broken business tax code, priorities with bipartisan support raised unnecessary risk to our future. Recent advances including multiyear budget targets, the passage of trade authority, have demonstrated that we have the capacity to Work Together to make important progress. Much more work remains. The worldsorders, economic challenges will not end with the Current Administration nor with the ongoing agenda for u. S. Leadership. There are a number of priorities we have to continue to press. We must work with our partners to further modernized the imf allowing it to intensify its scrutiny of Critical Issues including current account imbalances. Betterformation means policy cooperation and more efficient financial markets. Continuedould promote transparency especially as it relates to foreign reserves. Second, we must work with our partners to make the world bank and the Regional Development banks more efficient and effective. These institutions need policy expertise to help countries promote Sustainable Development and addressed state fragility, natural disasters, and disease epidemics. It must also be able to mobilize resources that cut Carbon Emissions and build societies that are resilient to Climate Change. Third, we have to modernize the Global Trading system i pushing for innovative features in new agreements. For example, strength and labor on the behavior of state owned enterprises to ensure fair competition. Under the agreement, members have also pledged to avoid manipulating exchange raise. These high standards should be the model for the future. Fourth, prevent a repeat of the financial crisis, we have to continue to lead efforts to reform the regulatory system. U. S. Leadership in this area has already resulted in more rigorous capital standards, Greater Transparency in the derivatives market, and stronger tools to manage the failure of financial institutions. Many critical standardsetting reforms in place, the focus should shift to the implementation to emerging threats. We must continue to combat Terrorism Financing, corruption, and money laundry. Is strengthening its antiMoney Laundering and counterterrorism rules at home, working through the task force to improve enforcement globally and partnering with countries to combat Terrorism Financing specifically against isil. Innovationp up with in the private sector and by our adversaries. Regulators should update their regimes. We are committed to building on the progress we have made including with brazil, india, and key priorities such as facilitating investment, promoting Financial Inclusion and combating Money Laundering and Terrorism Financing. The two largest economies, the united gates and china have a unique responsibility to Work Together to share prosperity, maintain a constructive Global Economic order and make progress in challenges as Climate Change. We will hold the seventh to teach it economic dialogue, a platform that has strengthened relations between our countries and provide a forum to discuss important priorities like chinas shift towards consumption and Greater Transparency and predictability in its policymaking. While the progress of the last year has helped advance this important agenda, we cannot take our global role for granted and we must think about how our choices will affect the leadership in the future. Ofvious generations americans have provided a foundation on which to advance our values and build a prosperous future. Now is to strengthen that architecture and adapt it to new challenges. If we come together and accomplish this, we will not only support todays posterity, we will ensure the next generation inherits a stronger platform for navigating tomorrows economic plans. Thank you very much. [applause] we have a bit more than 45 minutes. We will divide that between conversation and then go to the members for questions. Start in a would slightly cheeky way. You lay out a view that the Bretton Woods institution supported u. S. Values. This is the council and most of us will agree with that for the most part. Say that the also central feature of the Bretton Woods architecture when it was built in 1944 was the fixed Exchange Rate regime. The single most important part of it. It was dumped by nixon in 1971. The world moved on and we established floating Exchange Rates. I want to ask you to look wonder if there are parts of the Economic System that we shouldnt support. Can you think of any that are and is are not indispensable . It as an think about evolving institution. The world at the end of world war ii looked so different than it is today. United states is so different. It was not good that the rest of the world has lost its manufacturing capacity. There was no other hard currency that had any promise of being an alternative to the dollar. The system that evolved provided a foundation between the 1940s and the 1970s for a. Growth, time frame of including geopolitical stability. Some of the development showed that when you moved towards a more market oriented system when you are sharing a set of values, political reforms tend to follow. We have to keep in mind that the world is not going to look in 1020 years the way it does today. The think we need to make sure from our perspective is that we have a role in those institutions to help govern how they change as they go along. Beingnot look at it as it completely frozen in time or others will decide to group together in a different set of organizations where they make different rules. The imf, theut world bank, is that they are institutions that are inclusive. That is a strong u. S. Role we have earned. And going forward, these institutions have to be looking at the challenge of the future. You asked about the imf but let me shift and give an answer perhaps more about the world bank. We have over the last year come in the world bank played an Important Role in the discussions on Climate Change. Development ofe lending facilities that are designed to deal with challenges of the future which is governmental and publicprivate partnerships. To invest in things that will lead to a cleaner environment. At the. Mf, if you look at the time frame between 2008 and now, it has played and a normatively significant role in stabilizing the post financial crisis environment and also in responding to the crisis. I mentioned two in my remarks, ebola and ukraine. We dont know what the challenges will be in the future. No one predicted ebola even a month before it became an international crisis. What we know is that we need Flexible International bodies, to go to congress to get funding and deal with something in short term like ebola is a challenge. Mr. Mallaby the world bank and the imf key institutions. Bank, i of the world think it is certainly true that the government system on the has neither the disadvantages of the Un Security Council which is way too narrow, north the disadvantage of the uns General Assembly which is way too democratic. That strikes me as an uncontestable point. The tools of the world bank me that thes to evolution you were mentioning might be federated somewhat. That setlending window the Interest Rates. World in which a the clients would have access to they all do have access to private capital. What is the residual rationale . Global public goods. Where you want more lending than the market would deliver for those things because they are Global Public goods and a single country is not interested in creating enough of them. The lending Interest Rates do not differentiate. They dont give you a break if you are borrowing to create economic goods. Sec. Lew if you look at the discussions that we had last year at odyssey by the at very ababa. There were significant debate about how resources could be put into funds. There was a debate about whether it was competing with more traditional forms of lending or if it should be all additive. It was resolved in a way that was quite constructive where the world bank became a major partner in making Resources Available to deal with what is one of the most pressing public goods of our generation, investing in a more Energy Efficient mr. Mallaby right now, there is a surge in lending which is driven by the budget gaps in countries like nigeria. And where the private markets have been less of, date of in lending for general budget expenditures. A large portion of what the bank ors is substituting competing with the private capital market. A mistake tois think of any of these institutions as dealing with one challenge. Stability isasic core to what the imf does. Although it does many things beyond that. The world bank has shored up systems which meet the standards set by entities like the imf to be on a sustainable path. Having multiple points of access to make sure that you avoid the destabilizing consequences of or price shockal effect that leads to political or economic decisions is very important. You dont choose between doing Climate Change or another. How do you strike the right balance . When of the things the world how tos done is look at manage its resources creatively to gain a bit of reach through better management of Financial Capabilities to be in more places. That is a good thing. If you look at the countries that are on the cusp and are shifting from developing to developed countries, they tend to still be countries that you find a lot of poverty. Youre a as if once economy reaches the next level, the benefits of that are broadly shared that as they need to be. Mr. Mallaby if the government of a middle income country wants to reduce poverty it can borrow commercially to do projects. To be ane bank there additional source either the government wants to do the projects or it doesnt. Sec. Lew there is a time frame in that transition where the government wanting to do it and the ability to do it are not totally matched up. That is where having an International Financial institution this is not confessional financing. Theave to maintain principle that below market lending is restricted to the poorest countries. That is something that comes under pressure on a regular basis. Important to develop new instruments. We are seeing now in the refugee crisis that there are geopolitical situations that create surges of need. There are not necessarily the tools in place to deal with where those needs it show up in a timely way. One of the discussions underway now is how to make sure you have a facility that can step in in a case like a refugee crisis where in one sense it is a global problem but in another sense it has a local dimension because people end up in a concentrated place or set of places. Is an important conversation for the 21st century. We are seeing the challenge of dealing with that and it is something that institutions like the world bank is set up to think through. We are doing it now by adapting old tools to new challenges. The idea of adaptation is key. You have to be nimble enough to deal with the problems of today. Mr. Mallaby on the subject of financial crisis management, your essay and your remarks both your attention to the imf as grow after 2008 i think it worth arguing it has been the Federal Reserve and other economies which have invested. The bigger aggregate and more decisive. That is a trend that is not going away because the shared volume of crossborder claims has grown so much that even an expanded imf with more resources will have trouble being big enough. What happens in south korea when suddenly there is a massive flight to safety in and you have to have the fed recycling them. As you think about that come in the next big financial crisis globally, the imf will be there to deal with medium problems but in a biger sense, crisis, isnt it really a case of Central Banks dealing with one another . If you look at the financial crisis and the response to it, the imf played a critical role. It was part of country plans in a number of critical instances where if you had not stabilized those economies, we would have seen a new bottom that was far worse than the bottom we ended up hitting. That there wasse somewhere to go which psychologically had an important effect. If you look at the role of the United States, i dont think that it is a defensible notion that the United States is going to respond to every Global Crisis on its own unilaterally. Bele the ukraine example may a mediumsized country, look at the numbers that were involved. 17 billion imf program. We have done three 1 billion loan guarantees. Got byerage that we being part of a larger effort is the difference between making a difference and not. Ukraines economy turned from negative to neutral to may be positive faster than anyone thought and our loan guarantees alone would not have been enough to accomplish that. One of the things that has happened since the financial crisis is the imf has developed new tools, a flexible credit line being used in a different way and more effectively. With reform, we have recapitalized the imf taking the money and putting it in the main fund itself. Now, the imf has considerable resources. We do have to ask the question always what would be the consequence of the next crisis. You dont have the luxury of knowing the contours of a crisis until it is upon you which is why you have to have the tools in place and also the adaptability. Look at what happened after the financial crisis. Facility that could deal with that crisis. If you had to create an imf out of whole cloth, you couldnt put it in place very quickly. No one country could have that amount of firepower. Mr. Mallaby you make a case that notwithstanding the s advantage, reform is being constructive because you are allowing emerging nations to have a louder voice and stake in the international system. Would you apply the same logic to the question of global reserve currency . The dollar is dominant. You have the chinese explicitly saying that they do not like that and they would prefer an International Currency to be the renminbi. You have various others expressing reservations. The sentiment is out there. Interestbe in the u. S. If more Global Funding including by the private sector took place . Sec. Lew it is a marketplace to decide these questions fundamentally. At the moment, there is no likely country that can take the place of the United States and the dollar. We cant just think about the next year or two, but the next decade. Anyone sitting in a discussion like this in the 1940s or 1950s, would have predicted a world that looks as it does today. We have to look at the role of the dollar both as members of the Global Economy and what it means in terms of giving the United States an extraordinary amount of power and authority in the world and treat that as an asset to be protected. I raise some issues of things that are potential threats. If we look like we are stepping back from the international Economic Leadership role, that invites others to fill a void. If we use tools like sanctions in a way that overdoes it in terms of unilateralism and doesnt maintain the unity that ofhave had in the case irans sanctions and north korean sanctions come that is a challenge. We always have to maintain the ability of the United States to act unilaterally but it has to be mindful of the fact that we have something that gives out that gives us power, leverage, and economic strength. We have to keep an eye on protecting those. When you look at the current Global Economic situation, it probably will be a longer we might have said five years ago because the United States has recovered from the Great Recession in a way that demonstrates the resilience of the u. S. Economy and notwithstanding the noise of our political process, the ability of our political system to respond in a timely manner. When you look at a currency like the renminbi, the challenge will be for china to make the changes it needs to make to have its currency be convertible, to have its markets be open for foreign and for services and goods from abroad. They have made progress. It is clear. They are not all the way there. They still have work to do. The reason that is an era an aea where we have engaged considerable amount of detail is because it is an area that the chinese Economic Leadership knows it has to make changes. It is an area of common interest potentially but also of conflict. Your answers are provoking. I have one more question. Your essay does a good job of highlighting the dilemma that occurs because of the position of the u. S. And the dollar which gives us the opportunity to exercise sanctions. That is a point well taken. You have to balance the use of sanctions. I am thinking about a different is the issue of the reserve currency is issuing safe assets that will protect value during a crisis. People around the world will want had insurance. Because it becomes easy to issue willdollar debt, the u. S. Issue too much debt. As a result, there will be a u. S. Where the of the becomes a problem and threatens the stability we have been creating the u. S. Has been creating. One consequence of that position is the constant inflow of capital into the u. S. Which makes the dollar stronger which creates imbalances. Would like the imf to police. Some of the things that troublous in the international order, either excess u. S. Indebtedness, global imbalance. In extreme reliance on the dollar globally. To encourageetter private actors to use other Capital Markets more. You could make it more restrictive for corporations from asia to come. I think the u. S. Financial market has the leadership role they had in the world because of all of the things that makes the United States, the United States. , theical stability liquidity of our markets. Those are all good things. I dont want to change that. I want to protect that. That is one of the main point that im making. Policy,comes to fiscal we ought not to take our ability to borrow infinitely as license to borrow infinitely. During the second, we dug our way out of a very deep hole that we got into in the intervening years. We need to look on the horizon. Great progress in this administration in reducing the deficit by three quarters, stabilizing the debt as a percentage of gdp and creating a window where we have time to deal with the longerterm fiscal challenges on a stable foundation. That is something that will be a challenge that has to be undertaken a new. I dont think our ability to borrow infinitely ought to be viewed as a justification for ignoring that over the long term and maintaining stable fiscal policy is important. We have achieved a great deal in this administration to repair the damage that was done by policies and recession. Going to bed, it is the responsibility for a new team to take a stable economy and look beyond the front beyond the horizon. We saw a timeframe where frankly we were seeing inadequate access to debt in this country. It is only in the last few years where we have seen businesses and individuals have the kind of better access to credit that they should have. Families improved their Balance Sheets and businesses are sitting on a great deal of capital right now. The current practices if anything are on the recovering part of the curve. Where it goes beyond is a question but we are a long way away from the easy borrowing that we saw decades before the financial crisis. The thing the challenge we have is making sure you dont lend to individuals and firms that are not credit worthy. Tot because they want borrow. On the other hand, had we make sure that individuals and firms that are credit worthy have access to the credit they need for their families and for investing in small and mediumsized enterprises. We are not seeing as much investment as i would like to see. I wish we have tried to ease the credit because we think for mortgage lending purposes, if you have a solid credit history, you should have access to a mortgage. That is different from a subprime loan. Similarly for a business for an entrepreneur. They are linked because one of the waste and entrepreneur has had access to credit is through a mortgage product. We still have work to do. But that is moving in the right direction. We are a ways away from having to worry about an overhang of loose credit. Laby thank you very much. I run a program on iran. I am going to read this question. We have seen a lot of problems with sanctions relief for iran. Is part of the difficulty because they have dollar assets now and they are having trouble accessing it and moving . Banks find itse difficult to do transactions without some reference to the dollar . Dont you need to reinstitute a limited you turn so i can avail itself of its own money which is sitting primarily in asian banks . Sec. Lew Nuclear Sanctions on iran that limited access to irans reserves were lifted when i ran complied with its Nuclear Related obligations under the joint comprehensive plan of action. We have been clear in going around the world come making that oink both government to making that point government to government. Were they continue to engage in supporting terrorism, regional destabilization, missile testing. Agreementsolating and human rights problems that they have in their own country. We have to be clear. Iran complied with the Nuclear Agreement so the Nuclear Sanctions have been lifted. That is a process that is becoming more clear. The u. S. Financial system is not open to iran. That is not something that is going to change. The challenge is going to be how to work through an International Financial system that is complicated where there are a lot of attention paid to what u. S. Law requires. Our obligation is to be clear which i have tried hard to do. What makes at sanctions regime work, sanction regimes were in order to get relief from the sanctions, the government changes its policy. The government of iran changed its policies. The government of iran has not all of its behavior in the other areas and there are still other sanctions in place. Navigating through that will be a challenge but one where priority will help. On todays washington journal, a look at the role of money in politics. And meredith of the Campaign Legal center joins us. And the discussion on Campaign Fundraising and the role of outside groups. Sheila from the center for responsive politics will join us. 7 00ngton journal live at a. M. Eastern on cspan. We give 72cretary, of our delegate votes to the next president of the United States