Taxation: Tax Havens

Lord Dubs Excerpts

Wednesday 9th January 2013 Lords Chamber

Asked by

[Lord Dubs]

To ask Her Majesty’s Government what further discussions they have had with European Union member states and other countries about the issue of tax havens.

[Lord Newby]

My Lords, the Government are fully committed to tackling tax avoidance and evasion wherever it occurs. This is an issue of international concern on which we work closely with European Union member states and other countries, in particular through the G20. The G20 focus has been on increasing international tax transparency and identifying gaps in the international tax standard to help better address profit shifting and erosion of the corporate tax base at the global level.

[Lord Dubs]

My Lords, I have a terrible suspicion that the Minister is saying, in effect, that nothing is happening. Perhaps I may ask him this. If the Government fail to get international agreement quickly, could we as a country at least move forward by doing two things? First, could we take action in those territories where we have power or influence? Secondly, could we change the basis of taxation of those companies that do not claim any profits in this country by basing the tax on turnover rather than on bogus low-profit figures?

[Lord Newby]

My Lords, the accounting rules are internationally based and it makes sense to change them on an international basis. That is why we, France and Germany, between us, have given €450,000 over recent months to the OECD to come forward with proposals to deal with this issue. Those proposals will come forward and there will be a progress report in February. There is a strong head of steam in this country and in France, Germany and the US to tackle this issue.

Taxation: Avoidance

Lord Dubs Excerpts

Tuesday 11th December 2012 Lords Chamber

Asked By

[Lord Dubs]

To ask Her Majesty’s Government what plans they have to prevent companies that have significant operations in the United Kingdom being based in a tax haven to avoid United Kingdom taxes.

[Lord Newby]

My Lords, the Government are fully committed to tackling avoidance and evasion wherever it occurs. HMRC is to receive additional investment of £77 million to expand its anti-avoidance and anti-evasion activity, including resources to identify and challenge multinationals’ transfer pricing arrangements. Following the Chancellor’s call for international co-operation to strengthen international tax standards, the UK, Germany and France have pledged resources to the OECD to speed up work to tackle profit-shifting and base erosion at the global level.

[Lord Dubs]

My Lords, the Minister will be aware that if companies and individuals complied with the letter and spirit of the law, the Treasury would be £32 billion better off. Is he aware that the public are extremely angry about this and that the whole situation is grossly unfair to those companies that pay their taxes, such as John Lewis and Marks & Spencer? Is he further aware that the army of bankers, accountants and lawyers advising those companies on how to evade their taxes are the same people the Government employ for their own business? Will he take action in the tax havens that make all this possible?

[Lord Newby]

My Lords, HMRC does indeed estimate that the tax gap in 2010-11 was £32 billion, which represents 6.7% of total tax due. The tax gap as a percentage of tax due has fallen from 8.2% since 2004. It is not good enough but it is going in the right direction. The absolute determination of the Government to bear down on this was evidenced by the decision we took last year to divert £900 million into this area, which has since been supplemented by an additional £77 million to increase the specialist abilities within HMRC to deal with some extremely clever advisers and companies that seek to minimise their tax.

Taxation: Avoidance

Lord Dubs Excerpts

Thursday 28th June 2012 Lords Chamber

[Lord Sassoon]

As a general proposition, I very much share the view of my noble friend.

[Lord Dubs]

My Lords, I will put a suggestion to the Minister and I ask him not to reject it out of hand but to think about it. My suggestion is as follows. Would it not be helpful if all tax returns were in the public domain?

[Lord Sassoon]

My Lords, I am always prepared to consider every suggestion that comes up in your Lordships’ House. However, I think that one is getting a little radical and I cannot promise him much early progress on it.

Taxation: Plastic Bags

Lord Dubs Excerpts

Monday 28th May 2012 Lords Chamber

[Lord Sassoon]

My Lords, I am sure that the authorities of the House have listened carefully to that bit of advice.

[Lord Dubs]

Is the Minister aware that he must be the first Treasury Minister in history who seems not to want the money when there is pressure for a tax? The fact is that the voluntary scheme is useful, but does he not agree that taxation could significantly reduce the number of plastic bags in use, thereby saving the environment and perhaps giving the Treasury some more money?

[Lord Sassoon]

My Lords, this is also a Government who take the burdens on business through red tape extremely seriously. We have to balance the various factors at play here.

Tobacco: Smuggling

Lord Dubs Excerpts

Thursday 26th April 2012 Lords Chamber

Asked by

[Lord Dubs]

To ask Her Majesty’s Government what is their estimate of the loss of revenue through the smuggling or illegal sale of tobacco products in the United Kingdom.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the latest estimate from 2009-10 of the annual lost revenue to the Exchequer through the smuggling or illegal sale of tobacco products is £1.3 billion for cigarettes and £750 million for hand-rolling tobacco.

[Lord Dubs]

My Lords, given that this large sum of money is lost to the Exchequer, what do the Government propose to do to reduce the amount? Above all, does it not drive a coach and horses through the policy of trying to reduce smoking if there are cheap cigarettes, some of them even worse for health than the cigarettes that we make in this country, on sale on street corners up and down the country? We have both a revenue problem and a health problem.

[Lord Sassoon]

My Lords, the strategy has many different strands. The Government issued a comprehensive tobacco smuggling strategy in April 2011. Specifically, £25 million of HMRC’s total expenditure on tax avoidance is going in this area. It has to be said that over the past decade, the illicit market in cigarettes has come down from 21 per cent of the market in 2000 to 10 per cent in 2009-10. As I am sure the noble Lord knows, very significant progress has been made, and the Government are fully committed to continuing with that. On the other side, there is the tobacco control plan to make smoking less affordable. The noble Lord, Lord Dubs, is quite right regularly to press on this. It is a multi-layered strategy, and the present Government will continue to press on all aspects of this challenge.

Financial Services: Shareholder Engagement

Lord Dubs Excerpts

Wednesday 19th January 2011 Lords Chamber

[Lord Sassoon]

My Lords, there is a fine balance to be struck between making sure that shareholders get all the information they require on the one hand, and on the other hand allowing companies to take advantage of electronic and other media to disseminate information in a way in which an increasing proportion of shareholders wish to receive that information and which may be environmentally friendly if it does not require large amounts of paper to be used. I am glad that the FRC is grappling with that issue.

[Lord Dubs]

Does the Minister agree that many shareholders have no voice in this at all because they are shareholders through pension schemes or through owning PEPs? These shareholders can exercise no influence. Can the Government think of doing something about that?

Banking: Bonuses

Lord Dubs Excerpts

Monday 1st November 2010 Lords Chamber

[Lord Sassoon]

My Lords, the Walker report, which was commissioned by the previous Government and reported in November 2009, made a number of important recommendations, some of which have already been incorporated by the Financial Reporting Council in its governance code. Sir David Walker made other recommendations on disclosure which remain to be considered. As for taxation, I have already said that we are considering the costs and benefits of a financial activities tax in relation to banks and remuneration. We are doing that by working with our international partners to make sure that, if we produce proposals along those lines, they are consistent with international practice and with keeping the banks operating in this country.

[Lord Dubs]

Even if the bankers say that they will leave the country if they are taxed more heavily, will the Minister assure us that that outcome might be a good thing rather than a bad one?

[Lord Sassoon]

My Lords, lots of people threaten to do all sorts of things when they are in the middle of a negotiation. Whatever we continue to do to tackle unacceptable bonus structures in banks, we want to ensure that, among other things, they are incentivised to align their remuneration structures with the reduction of risks that bankers entail, and that we continue to have an important banking sector in this country.