Finance Bill

Baroness Laing of Elderslie Excerpts

Tuesday 1st July 2014 Commons Chamber

[Several hon. Members]

rose—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I assume that Members taking part in the Finance Bill debate are arithmetically astute, so will be able to work out as quickly as I can that, if the Minister is to have any chance of answering the many points put to him, particularly by Opposition Front Benchers, the four people wishing to speak have little more than 10 minutes left. If they take less than three minutes each, everyone will get to speak; if they take more, they will be being discourteous to each other.

[Charlie Elphicke]

I will endeavour to be as brief as possible, Madam Deputy Speaker.

I have often made the case against tax avoidance—international and national—in the House. I have often mentioned the behaviour of the water companies, which used the quoted eurobond exemption to further their strategies. Yet I cannot support the new clause, which is, in the words of the Labour party’s head of policy, the hon. Member for Dagenham and Rainham (Jon Cruddas), nothing less than an “instrumentalised, cynical” nugget

“of policy to chime with…focus groups and…press strategies”.

The shadow Chancellor showed that at the weekend.

The new clause would not raise £500 million. I will be interested to hear the Minister say exactly how much it would raise, as in many cases double taxation treaties could be used. When I raised the loophole in question, my case was about the debt-equity gearing ratio—a far more effective way of looking at the issue. I would be surprised if the Labour party had consulted experts beyond its own advisers. Indeed, there was a consultation on this issue in 2012. I stand to be corrected, but I do not believe the Labour party gave a response to that consultation. It simply thought, “What wheeze can we table as a new clause to plonk out there for our press strategy as our instrumentalised policy nugget?”

The new clause is highly cynical. It has been devised purely to make a case and to say, “Yes, we are on the pitch in the tax avoidance debate.” In fact, when the Labour party was in power receipts from income tax doubled but receipts from corporation tax went up by 6%. Again, we heard cynicism in the debate today with remarks about the tax gap going up by £1 billion to £35 billion. That is because the economy is growing. In reality, the percentage has fallen from 7.1% to 7%, so the tax gap has been heading in the right direction.

The Government have done a lot to make the case on this issue and to take the battle to the tax avoiders. I support the accelerated payments regime—I differ from my hon. Friend the Member for Aldershot (Sir Gerald Howarth) on this—because people who are subject to it know that they are engaging in a tax avoidance arrangement that is going to be under attack, and so should be prudent and keep the money to one side. If they are not doing so, they should be thinking about things rather more carefully, because they know they have entered into an arrangement that is likely to be under attack from the Revenue.