Taxation: Avoidance

Baroness Kramer Excerpts

Thursday 14th March 2013 Lords Chamber

[Lord Newby]

Yes. This is an area to which DfID is giving increasing priority. Last year we supported 48 programmes in 20 countries and spent £20 million in this area. Of course, the extent to which we can do it in any country depends on an assessment of that country’s capacity to take advice and act on it.

[Baroness Kramer]

My Lords, I very much support the GAAR, the general anti-abuse rule, which the Government are bringing in to deal with abusive tax avoidance, but would the Minister agree that the version that the Government are looking at is very narrow, with the double reasonableness test? If it proves ineffective, would it not be wise to review that test sooner rather than later?

[Lord Newby]

The road to the GAAR, as it were, was long and difficult. As the noble Baroness will know, it was resolutely opposed by the party opposite when it was in government. We are making a proportionate start, and hope that it will be successful in dealing with the most egregious tax avoidance schemes. The great thing about it is that it is a deterrent. It will definitely be kept under review, but it is a big step forward, and we should not underestimate that.