Oral Answers to Questions

Alex Chalk Excerpts

Tuesday 17th April 2018 Commons Chamber

The Chancellor of the Exchequer was asked—

[Alex Chalk (Cheltenham) (Con)]

1. What progress has been made on reducing tax avoidance and evasion.

[Nigel Mills (Amber Valley) (Con)]

8. What progress has been made on reducing tax avoidance and evasion.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

Since 2010, Her Majesty’s Revenue and Customs has secured more than £175 billion that would have gone unpaid and introduced more than 100 new measures to crack down on tax avoidance, tax evasion and other forms of non-compliance, so that the tax gap is now at a record low, and one of the lowest in the world, at 6%.

[Alex Chalk]

It is extremely encouraging that the UK tax gap is at a record low, but it appears that multinationals are trying to run rings around HMRC, so will my right hon. Friend outline what further steps the Government are taking to build on that excellent success?

[Mr Hammond]

I am grateful to my hon. Friend for raising this issue. It is a great achievement to have got the tax gap down to one of the lowest in the world, but we are not complacent. We are currently calling for evidence on whether online platforms should play a greater role in ensuring tax compliance by their users; we are consulting on an innovative split payment method to tackle online VAT fraud; and we will continue to lead in the G20 and other forums on seeking agreed multilateral solutions to the challenge of where and how to tax global digital companies, which are particularly difficult to tax under the current system.

--- Later in debate ---

[Mr Hammond]

As the right hon. Gentleman will well understand, I much prefer a system based on mutual recognition. There are problems with the EU’s equivalence regime: it is arbitrary, it is unilateral, and it can be withdrawn with zero notice. No one can operate a multitrillion-dollar business on the basis of such arbitrary arrangements. However, we are working with the Commission and key member states, and I am optimistic that we will reach a satisfactory solution.

[Alex Chalk (Cheltenham) (Con)]

T5. What assessment have the Government made of the prospects for real wages in our country?

[Mel Stride]

As my hon. Friend will know, this morning we were given the good news that we are now back in positive real-wage territory. He will also know from the projections of the Office for Budget Responsibility at the time of the last Budget that we anticipate an increase in real wages throughout the projection period.