Tax Avoidance and Multinational Companies
(Limited Text - Ministerial Extracts only)
Read Full debate17:00 - The House divided: - Ayes: 271 / Noes: 299 - Question accordingly negatived.
17:14 - The House divided: - Ayes: 303 / Noes: 261 - Question accordingly agreed to.
The Financial Secretary to the Treasury (Mr David Gauke)
I beg to move an amendment, to leave out from “House” in line 1 to end and add:
“notes that the Government has taken action to promote international cooperation in relation to clamping down on tax avoidance by multinational companies, challenging the international tax rules which have not been updated since they were first developed in the 1920s, that multilateral cooperation at an international level has included the UK playing a leading role in the G20-OECD Base Erosion and Profit Shifting Project to review all international tax rules and increase tax transparency, and as part of that, the UK was the first country to commit to implementing the OECD country-by-country reporting model within domestic legislation, that the Government recognises the case for publishing country-by-country reports on a multilateral basis, that the Government has introduced more than 40 changes to tax law, that the various measures taken by the Government have included the introduction of a diverted profits tax aimed at targeting companies who use contrived arrangements to divert profits from the UK, stopping the use of offshore employment intermediaries to avoid employer National Insurance contributions, stopping companies from obtaining a tax advantage by entering into contrived arrangements to turn old tax losses or restricted use into more versatile in-year deductions, and requiring taxpayers who are using avoidance schemes that have been defeated through the courts to pay the tax in dispute with HM Revenue and Customs upfront, and that the Government is committed to going further, enabling HM Revenue and Customs to recover an additional £7.2 billion over the Parliament.”
It is a great pleasure to move the Government’s amendment. There is much that we have heard from the Labour party today on this subject that is wrong, confused and, to put it kindly, oblivious to the record of the last Labour Government. However, before addressing those points, I hope to strike a note of consensus. Both sides of the House believe that all taxpayers should pay the taxes due under the law. Both sides believe that taxpayers should refrain from contrived behaviour to reduce their tax liabilities, and all taxpayers should be treated impartially. That is why the Government’s record is one of taking domestic and international action to tackle tax avoidance.
I will set out details of that action, but first I want to address another issue. The shadow Chancellor’s approach has generated more heat than light, and often reveals a complete misunderstanding of how the corporation tax system works. Let me take this opportunity to explain to the House how it does, in fact, work.
The independent Institute for Fiscal Studies, in a paper it published last week, puts it well:
“The current tax rules are not designed to tax the profits from UK sales. They’re certainly not designed to tax either revenue or sales generated in the UK. They are instead designed to tax that part of a firm’s profit that arises from value created in the UK. That is the principle underlying all corporate tax regimes across the OECD.”
I make that point because it is fundamental to understanding the tax we are entitled to receive from multinational companies. It is not a point that the shadow Chancellor appears to have grasped.
Let me give an example of why this matters, and it is similar to the point made by my hon. Friend the Member for Dudley South (Mike Wood). The UK is home to one of the most successful video games sectors in the world. Would it be fair for a firm to design a game here, develop it here and take the risks here, but to go on to sell it overseas and then have to pay corporation tax on all that activity in the country in which it makes the final sale, and not in the UK? The current international tax arrangements are clear that such profits are taxed in the UK—the place of economic activity—rather than in the place where the sales are made. That is the internationally agreed and internationally applied concept of corporation tax. That is the law that HMRC applies. Quoting numbers to do with revenues or profits from sales, as opposed to activities, demonstrates a lack of understanding of how the tax system works, or—and this is worse—an understanding of the way the tax system works, but the hope that those following these debates do not.
John McDonnell
Is the Minister saying that Google employs 2,300 staff in this country on an average salary of £160,000, and they cannot be defined as involved in economic activity or as adding any value? What are they doing? Playing cards all the time? Are they not actually involved in economic activity—this sizable proportion of the Google workforce?
Mr Gauke
The point I am making is that the shadow Chancellor goes around quoting numbers based on profits from sales. To be fair, he went through the methodology carefully in the House today, but that methodology appears to be based on a complete misunderstanding of how the tax system works.
Rachel Reeves
I do not misunderstand how the corporation tax system is applied, but without information from HMRC, and without publication of the deal, it is difficult to know exactly how much tax Google should be paying. That is why we are seeking answers. Also, there have been $8 billion of royalty payments to Bermuda. Does the hon. Gentleman really think that that is where the economic activity is and where the value is being added?
Mr Gauke
I will deal directly with the issue of transparency in a moment.
On the issue of how our international tax system works, I have explained that it is based on economic activity. However, I would be the first to say that that international tax system needs to be brought into the modern world. That is the very reason why the UK has led the way on the base erosion and profit-shifting process. We should also be aware that there are particular issues with the US tax system, which is failing to tax intellectual property developed in the US in the way that it should.
I gave the example of video games companies. However, I recognise that there are many cases that are much more complex, and where it is not so easy to identify where the economic activity takes place. There is an issue about where multinational companies allocate their profits and where they identify economic activity as taking place. There is a need to address that, which is why we need tax rules that genuinely reflect where economic activity takes place, to ensure that profits are aligned with it. However, that is a very different matter from making big claims about profits from sales and saying that those sales profits have to be taxed where the sales take place. That is the misunderstanding I wish to address.
Mr Richard Bacon (South Norfolk) (Con)
The Minister is right, of course, that these issues are sometimes very complicated. However, sometimes there are loopholes that are exploited. Will he identify some of the loopholes closed by this Government that were opened by the previous Labour Government?
Mr Gauke
There is a whole host I could draw attention to, but in the interests of time, I will not run through that lengthy list. I have it here, and there are quite a number of cases—there are 40 I can identify straightaway—where there were loopholes, and we have tried to address that.
The diverted profits tax—I will come back to this again in detail in a moment—is designed to ensure that, where companies divert their profits away from the UK, and where the economic activity is happening in the UK, we get some of the tax yield.
David Mowat (Warrington South) (Con)
The difficulty with the economic activity test the Minister talks about is that it is intrinsically judgmental, and that gives us many of the issues that we try to grapple with. The test came in in the 1920s, way before the internet. Might it not be a way forward to move more towards taxing sales and, if necessary, dividends, with less on corporation tax, which would take these judgments away?
Mr Gauke
The first point to make is that this is a debate on the operation of the tax law as it stands, not on how people might want it to be, and to be fair to HMRC, it can only collect the tax that is due under the law as it stands, not as how people might want it to be. On reform of this area, there is no reason why we should not debate these matters. However, with regard to a move towards taxing profits on the basis of sales—there is a perfectly respectable case for reform in that direction—I would be worried about the impact on, for example, the UK’s creative and scientific sectors. I have mentioned the video games sector, and one could also look at pharmaceuticals. There are a number of areas where the UK—businesses in our constituencies—would lose out in those circumstances, so I would be a little wary about it.
Joan Ryan
May I bring the Minister back to the fundamental point about transparency? It would make this debate much easier and more useful if he published the details of this deal in full so that we can be sure that we are not talking about mates’ rates and a special tax loophole for Google.
Mr Gauke
I will come on to transparency, but let me first return to this Government’s record on changing domestic law and leading the way in updating the international system.
This Government have led internationally on the G20 and OECD base erosion and profit-shifting project, making the international tax rules fit for the 21st century. My right hon. Friends the Prime Minister and the Chancellor of the Exchequer, in particular, took on highly prominent roles in initiating those discussions and taking them forward through the G20 and the OECD. The outcome will be to level the playing field among businesses, give tax authorities more effective tools to tackle aggressive planning, and help us better align the location of taxable profits with the location of economic activities and value creation. This is a major step forward in addressing the underlying causes of aggressive tax avoidance.
We have been at the forefront of implementing this agenda, acting swiftly to change the rules on hybrid mismatches and country-by-country reporting. Because we consider it important not to rely solely on international rules, we have also legislated domestically to introduce a world-leading measure to address the contrived shifting of profit from this country—the diverted profits tax. The diverted profits tax targets companies that divert profits from the UK, principally those with substantial activities in the UK who are trying to avoid creating a UK permanent establishment. Under our rules, those companies either declare the correct amount of profits in the UK and pay the full amount of corporation tax on them, or risk being charged a higher amount of diverted profits tax at a rate of 25%. By the end of this Parliament, the diverted profits tax will raise an extra £1.3 billion, both directly and as a result of associated behavioural changes. The tax is already having that effect, and multinationals will pay more corporation tax as a result.
Stephen Timms (East Ham) (Lab)
Of course, the diverted profits tax was referred to as the Google tax. My hon. Friend the shadow Chancellor has alleged that under the terms of the deal Google will not pay a penny. Is he right about that?
Mr Gauke
The purpose of the diverted profits tax, which came into effect in April, is to ensure that companies stop diverting their profits and pay corporation tax like everybody else. I repeat that I cannot talk about the Google case beyond information that is in the public domain, but if this tax is effective in driving companies to stop diverting their profits, it is a success.
Mark Durkan (Foyle) (SDLP)
The Minister refers to the Government’s record over the past Parliament and this one, but he has not mentioned the changes to the controlled foreign companies rules, which favoured a number of companies at the expense of the Exchequer and, in net terms, at the much greater expense of exchequers in developing countries.
Robert Jenrick
The Minister is making a very important point about the diverted profits tax. It is important that Members on both sides of the House recognise that this extremely important development was brought in by this Government, and that it is not correct to say that Labour Members supported it, because at the time, a year ago, their position was that it was not wise to bring it in until the BEPS process was completed, which it still is not. Had we taken the advice of the then shadow Chancellor and shadow Chief Secretary, there would be no diverted profits tax, and the points made by Labour Members would be irrelevant.
Mr Gauke
I am grateful to my hon. Friend, who reminds the House of an important point. When we brought in the diverted profits tax, the intention was clearly to make sure that we got more money being paid in corporation tax. We want to stop companies diverting their profits out of the UK, and we are leading the way in bringing forward legislation on this.
Let me address the shadow Chancellor’s point about resources for HMRC. We have invested heavily in HMRC’s ability to strengthen its anti-evasion and compliance activity, including through extra funding and hiring professionals whose area of expertise is multinational companies. For example, contrary to the impression that he gave, the number of people working in HMRC’s large business directorate has gone up, since it was formed in 2014, from 2,000 to 2,600 people. We believe in competitive taxes—that is why we have cut our rate of corporation tax so that it is the lowest in the G7—but we also believe in making sure that those taxes are paid.
I turn to the issue of transparency raised by several hon. Members. Taxpayer confidentiality is a fundamentally important principle of our tax system, as in the tax systems of every other major economy. We hear complaints that HMRC is not disclosing full details of the settlement. HMRC is prevented by law from disclosing taxpayer information. The resolution of tax disputes, however, is subject to full external scrutiny by the independent National Audit Office, which has reviewed how tax inquiries are concluded by HMRC. In 2012, it appointed a retired High Court judge, Sir Andrew Park, to investigate HMRC’s large business settlement process. Sir Andrew concluded that all the settlements he scrutinised
“were reasonable and the overall outcome for the Exchequer was good.”
I do wish that those who are so keen to accuse HMRC and its staff of sweetheart deals were as keen to look at what happens where independent scrutiny occurs in order to see that in fact there are no sweetheart deals. HMRC introduced—
Helen Goodman
I am grateful to the Minister, who is doing his best in a difficult situation. However, Ministers are not barred by law from publishing the minutes of meetings that they have, so could he now publish the minutes of all 25 meetings that Ministers have had with Google?
Mr Gauke
We have a very open and transparent arrangement for disclosure of meetings. I am very clear that when it comes to determining the tax liability of a company such as Google—or, indeed, any other taxpayer in this country—there is no ministerial involvement. HMRC is entirely operationally independent. There is no ministerial interference in such areas, and no suggestion that there would be. When it comes to determining the tax bill of any taxpayer, it is a matter of HMRC enforcing the law; it is not for ministerial involvement. HMRC introduced new governance arrangements for significant tax disputes in 2012 to provide even greater transparency, scrutiny and accountability. They included the appointment of a tax assurance commissioner to ensure that there is clear separation between those who negotiate and those who approve settlements. The tax assurance commissioner oversees the process and publishes an annual report on his work.
Let me be absolutely clear. There are no sweetheart deals, and there is no special treatment for large businesses. HMRC resolves disputes by agreement only if the business agrees to pay the full amount of tax, penalties and interest. Otherwise, it is a matter for the courts—an arena in which HMRC has a strong track record of fighting and winning.
Wes Streeting (Ilford North) (Lab)
I am grateful to the Minister for his assurance that there are no sweetheart deals, but if the process is so independent and Ministers are so far removed from it, how can he give us that assurance? Similarly, how was the Chancellor able to hail the deal as a major success?
Mr Gauke
We have in place strong governance. The NAO has looked in the past at settlements when accusations have been made of sweetheart deals, and those accusations have been dismissed. It is very clear that HMRC’s remit is to get the tax that is due under the law, and no one has ever produced a shred of evidence to suggest otherwise; they have merely displayed a prejudice against HMRC staff and a tendency to insult them.
Several hon. Members rose—
Chris Philp
Does the Minister agree that the reason why this announcement is welcome is that we collected £130 million of tax from Google, while Labour collected nothing?
Mr Gauke
I must press on. Tax avoidance is a global issue, which requires global solutions. Fruitful partnerships with other countries on the matter are part of the reason why the Government have been at the forefront of efforts to increase tax transparency. That appeared last year in the Conservative party manifesto, in which we pledged to
“review the implementation of the new international country-by-country tax reporting rules and consider the case for making this information publicly available on a multilateral basis.”
The Government are dedicated to increasing tax transparency, and we have already taken action. Just last week, the UK signed an agreement with 30 other tax administrations to share country-by-country reports from next year. We want such agreements so that information can be made public, as we spelled out in our manifesto. We will continue to lead any multilateral debates on tax transparency, as we have done in so many areas of international tax avoidance.
Reforming the international and domestic rules, investing in HMRC’s capacity and leading the way on global tax transparency—those actions were taken by this Government, but were sadly lacking during 13 years of Labour. The result of those actions has been £130 million to the Exchequer from Google, on top of the tax already paid. Under Labour, that sum was next to nothing. That is testament to the importance we have given to tackling the tax risks posed by multinational enterprises. Last month’s announcement represents an important result of our actions on the matter, and I assure hon. Members that we will continue to work hard on that agenda over the coming years, to give the Exchequer more money to fund the public services that we rely on. I urge the House to support the Government amendment.
Dame Margaret Hodge
I agree entirely. The Minister talks about the work done by the Public Accounts Committee. The law is not a complete ass. I do not believe that. When the National Audit Office looked at, I think, 10 cases—I will be corrected if I am wrong—it found three where HMRC had not abided by its own rules. Every time something like this happens, it damages British jobs and British businesses—nobody else. We have definite proof that a sweetheart deal was entered into with Goldman Sachs.
Dame Margaret Hodge
No. With the greatest respect, those are not the facts. The judge looked at five cases. The NAO looked at 10 cases and found in three of them that HMRC had not abided by its own rules.
The reason the Chancellor and his team do not get it is the people they talk to about tax. A small army of tax professionals and multinational companies are the only people with whom they converse. I have to say to the Minister that there is a difference between good working relationships, which I applaud, and undue influence and preferential treatment, which I do not. Talking to stakeholders is a good thing. Being captured by stakeholders is a bad thing.
We just have to look at the evidence—and not just the 25 meetings held with Google. If we look at the Tax Professionals Forum, its members are KPMG, Ernst and Young, Grant Thornton and so on. There is nobody from any of the tax campaigning organisations. There is nobody from any of the charities and no academic with a different view. Ernst and Young made £250 million in recent years by advising Google, Apple, Facebook and Amazon.
Let us look at what the Minister has done. He appointed David Heaton from Baker Tilly to the Government’s advisory panel on the general anti-abuse rule, which was supposed to look at closing loopholes. That particular gentleman was captured on video describing
“ways to keep the money out of the Chancellor’s grubby hands”.
Let us look at what happened to Dave Hartnett—within six months he was going to work at HSBC and within a year he was going to work at Deloitte. Let us look at Edward Troup, who is now our commissioner on taxation. He wrote in the Financial Times that “Taxation is legalised extortion.” This is a small bunch of people who all have the same interests.
I want to make two other brief points. The Government say they want companies to pay proper tax, but the Government are obsessed with tax competition. That means far from tackling tax havens and so on, they are trying to make the UK an alternative best tax haven in the world. We only have to look at three changes the Government brought through on the control of foreign company rules, Eurobonds and the infamous patent box tax relief to see that that is right.
We do not know whether the Google settlement is fair, because under the existing law—the Minister is right—we cannot see it. I personally do not accept that HMRC properly challenged Google on the evidence the Public Accounts Committee collected, which demonstrated that it engages in economic activity here in the UK. I personally do not think the whistleblowers were listened to properly. Google does sell here. It does complete sales here. It does research and development here. Its economic activity is here. What on earth is that massive complex in King’s Cross for if not to undertake economic activity?
I have to say to the Minister that he has lost the argument on transparency. He ought to cave in gracefully and open up the books of these multinational companies so we can restore confidence.
Wes Streeting (Ilford North) (Lab)
I am grateful for the opportunity to speak in this debate. As someone who represents a constituency containing thousands of business, of all shapes and sizes, many of which feed into the national supply chain, I wish to say at the outset that I am very proud of the role that not just my constituency, but this country plays, with many of our leading industries leading the way globally. I want this country to be a good place to do business and to set up a business, and to continue to lead the world with competitive tax rates.
This debate is actually about fairness and transparency. To follow up something that the hon. Member for Croydon South (Chris Philp) said, the fact is that the Minister could not tell us last week what effective tax rate Google would be paying. I can tell him what the effective tax rate is for businesses in my constituency—what rate of corporation tax they will be paying—so why is it so difficult for Google, a multinational giant, to be transparent with the public about the rate of tax it is paying?
Mr Gauke
Just to be clear, the statutory rate is 20% and that applies to everybody. There are businesses that will have a lower effective rate, entirely lawfully and in accordance with the spirit of the law, because, for example, they make use of capital allowances or they might have losses that they are making use of. Someone having an effective rate below the statutory rate does not mean that they are conducting avoidance activity.
Wes Streeting
That is a fair point, but of course many tax experts have estimated that Google is paying an effective tax rate of 3%. If that is not the case, we need to see the numbers that give us that assurance. We do not doubt the difficulties here. In an increasingly globalised world, where intellectual property and the growth of internet companies makes this more important in the debate about tax, these are difficult issues to grasp, but there is no hint of fairness or transparency about this deal, and that is what we are seeking with this debate.
We would have more confidence if there had been consistent messages on this issue from both the Government and Google. On 23 January, the Tory Treasury Twitter account—not the most accurate of sources—claimed that the
“Google tax bill is for years 2005-2011, almost all under Labour”.
Yet Google Ltd’s account for the period ended 30 June 2015 reported
“a liability to HMRC of £130 million in respect of additional taxes and interest due for prior accounting periods and the current accounting period.”
The Minister says that there has been no sweetheart deal, but, as I asked him earlier, how can he give us that assurance if he has not seen the deal and is as far removed from it as he says. The Chancellor said it was a “major success”. How can he laud it as a major success if he is not close enough to the deal? If it is such a major success, why did the Prime Minister in Downing Street run so far away from that claim? Why has the Financial Secretary to the Treasury not once in recent weeks stood by his Chancellor in saying that this deal is a major success? I believe that it is because he knows that it is nothing of the sort, and that this Government look deeply out of touch with the public.
Labour were accused of attacking HMRC staff. The fact is that HMRC has a responsibility to apply tax law. It has a duty to go for the full rate of tax due, but, as my right hon. Friend the Member for Barking (Dame Margaret Hodge) pointed out, it has not always applied that duty. I am sure that, following the work of the Treasury Committee and the Public Accounts Committee, we will find that the issue at HMRC is to do with resourcing and extra teams and whether there are the people and the capacity to pursue not just the current claims and outstanding tax, but the historical backlog that exists as well.
Also of concern is the fact that Google itself has made some rather odd claims. On the one hand, we see senior Google executives writing to the newspapers about how great the deal is and how they have stood by their obligations, while, on the other, they are committing to paying more tax in the future. What is the reality? Is it that Google is paying the tax liability that is due; that it has somehow got away with it and plans to pay more in the future; or that it sees tax as a means of charity towards the state and it is willing to prop up the Treasury coffers a bit more generously in the future? Whatever the reality, there is deep inconsistency in the messages from the Government and Google.
We should look at the comments recently made by the Mayor of London who went as far as to suggest that finance directors have a fiduciary duty to minimise tax exposure. That cannot possibly be the case. If the Mayor of London looked at the duties under the Companies Act 2006, he would see that they also have to make reference to
“the likely consequences of any decisions in the long term…the company’s business relationships with suppliers, customers and others”—
and—
“the impact of the company’s operations on the community and the environment”.
There is a problem with the ethos of those on the Conservative Benches. Many of them see tax as a form of theft, whereas we see it as a civic responsibility and duty and as a means of creating a more civilised society. I want businesses in my constituency to pay their fair share of tax, and indeed they do. It is not unreasonable to expect a multinational company such as Google to do the same. The Government need to do much more to ensure that there is transparency for all such companies in all of the jurisdictions in which they operate.
The Exchequer Secretary to the Treasury (Damian Hinds)
The budget deficit that we inherited from the previous Labour Government was £153 billion. That is equivalent to nearly £6,000 for every household in the country. When a Government inherit such a deficit, one of the first things that they go after is the money that is supposed to be coming in, but is not. As my hon. Friend the Financial Secretary set out comprehensively at the start of the debate, no Government have done more than we have to crack down on tax evasion and aggressive tax avoidance.
The Government crackdown, led by my right hon. Friends the Prime Minister and the Chancellor, has resulted in more than 40 changes to tax law to close loopholes that Labour left in place. Among those changes was the world-leading diverted profits tax, which stops multinational companies shifting their UK profits to other countries. That policy alone will bring in an extra £1.3 billion from multinational corporations by the end of the Parliament, some directly but some, more importantly, as a result of its deterrent behavioural impact. I believe that the Government can be proud of that record, but we need to continue to do more and we are doing so. Tax avoidance is a global problem and it calls for global solutions.
To be clear, corporation tax is not a tax on the sales that happen in this country, or even a tax on the profits that derive from the sales that happen in this country. The system that operates internationally is that profits should be allocated on the basis of what is called “economic activity” in each country. Economic activity is not just about sales, but about where research and development takes place, where the various stages of production take place and so on. In short, that was a simpler formula to work out in the 1920s, when the world tax system came into being, as the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin), in his entertaining style, reminded us. Since then, there has been a move from manufactures to services, from the tangible to the intangible, and from the mechanical and the edible to the digital.
This Government have embarked on a programme to tighten the rules and the definitions. Domestically, we have acted to prevent companies trying to take advantage of ambiguities. Internationally, we are working to plug gaps and address loopholes.
Damian Hinds
I cannot give way because of the time. I apologise to the hon. Lady.
The Institute for Fiscal Studies has said that there is “literally nothing” that any one national Government can do unilaterally about some of the loopholes. That is why we are working together with our international partners. We led the debate on updating the international tax rules by initiating the G20-OECD base erosion and profit shifting projects during our presidency of the G8. We were the first country to take action to implement the G20-OECD recommendations to help us better to align the location of taxable profits with the location of economic activity. As part of the implementation of the recommendations, the UK last week signed an agreement with 30 other tax administrations to share country-by-country reports from next year. We now want agreements on making information public, as was spelled out in our manifesto. We will continue to lead any multilateral debates in this area.
We know that to achieve sustainable and long-term economic growth, to drive up productivity and to carry on creating jobs we need internationally competitive taxes. We are clear, however, that those taxes must be paid. In 2009-10, the tax gap—the difference between tax liabilities and the amount of tax collected—was 7.3%; last year, it had fallen to 6.4%. Over the last Parliament, HMRC secured more than £100 billion in compliance revenues. In the spending review, the Chancellor approved an additional £800 million of funding for HMRC to recover an additional £7.2 billion of taxes, which is a great deal for the British taxpayer.
Let me be clear: HMRC investigates tax impartially. No organisation or individual gets preferential treatment because of their size or because of their income. Let me remind hon. Members, including the right hon. Member for Barking (Dame Margaret Hodge), that during the tenure of the Labour party in government, the House of Commons reaffirmed and enshrined in law the long-standing principle of confidentiality through the Commissioners for Revenue and Customs Act 2005. The principle of taxpayer confidentiality means that HMRC cannot publish details of a settlement. That is a fundamental principle of the tax system of every major economy, including ours: there is no ministerial involvement in this country. The hon. Member for Ilford North (Wes Streeting) asked how we can know that there has not been a sweetheart deal. HMRC publishes online its litigation and settlement strategy, which makes it clear that the department cannot and will not settle for anything less than the full tax, interest and penalties payable under the law.
My time is very short, but I want to respond briefly to a couple of points made in the debate. The hon. Member for Glasgow South West (Chris Stephens) secured a debate in this place on the HMRC office estate. As he knows, the plan is to concentrate expertise in a number of regional centres, which will make interaction between the areas of expertise more straightforward and, indeed, improve career opportunities for many people. The number of HMRC staff dealing with large businesses is not going down; it is going up in line with the increased investment that, as I have mentioned, the Chancellor has committed to tackling evasion and avoidance.
The hon. Member for Wythenshawe and Sale East (Mike Kane) talked, rightly, about developing countries. It is right that we give extra support to countries that need it. In 2015-16, HMRC established a new tax experts team to support a number of developing countries. I would be happy to take him through more of the detail of that if we had the time.
We had excellent and informative speeches from, among others, my hon. Friends the Members for Sherwood (Mark Spencer), for Mid Worcestershire (Nigel Huddleston), for Norwich North (Chloe Smith), for South Norfolk (Mr Bacon) and for Thirsk and Malton (Kevin Hollinrake). My hon. Friends the Members for Spelthorne (Kwasi Kwarteng) and for Croydon South (Chris Philp) reminded us of the record of the last Labour Government, but I fear that the Opposition’s current plans are much worse. They claim that they want to make businesses pay more tax in the UK, but in truth their policies would drive companies away from this country, which would mean fewer jobs, lower wages and a weaker economy. This week, we have learned that they want to put taxes up not just for businesses, but for working people.
To achieve long-term economic growth, we need internationally competitive taxes, but our message has been clear: “If you operate in the UK, you pay tax in the UK, and whoever you are, the same UK law applies.” We will continue to strengthen the law, to close the loopholes and to invest in HMRC’s capacity through additional funding and extra powers. We will continue to lead the world in the fight against international tax avoidance to ensure that the UK has an internationally competitive but fair tax regime. I urge hon. Members to support the amendment and to reject the motion.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.