Public Appointees (Tax Arrangements)

Bob Blackman Excerpts

Wednesday 23rd May 2012 Commons Chamber

[Danny Alexander]

I am interested to hear that there are particularly egregious offenders in North Tyneside and am grateful to the hon. Gentleman for drawing that to the House’s attention. My right hon. Friend the Secretary of State for Communities and Local Government has of course drawn this process to the attention of all local authorities precisely to get them to show a transparency similar to that which we have shown with the review today, and I very much hope that they will all follow that example. It is for HMRC to decide whether it wishes to investigate an individual case and whether there is a case to answer. As I have said, the existence of these arrangements does not in itself demonstrate that tax avoidance is taking place, because it is perfectly possible for the arrangements to be in place and for the proper amount of tax to be paid. The problem is a lack of transparency, so getting people to publish the information so that HMRC can decide whether it wishes to investigate must be the right process to go through.

[Bob Blackman (Harrow East) (Con)]

I welcome my right hon. Friend’s statement. Everyone wants to see public servants paying their right and fair share of tax. I respect the fact that he cannot investigate the tax affairs of all the individuals concerned, given the scale of this activity and the length of time it has been going on for, but what estimate has he made of the total loss that would be caused to the Exchequer if all these people used this legal means to avoid paying tax?

[Danny Alexander]

I am grateful for my hon. Friend’s welcome for this work. I am sure that he would not wish Ministers to investigate the tax affairs of individuals, as that way would lie ruin for the country. I cannot make such an estimate for the reason behind my previous comment: taxpayer affairs are confidential and it is for HMRC to deal with particular cases when it finds that avoidance is taking place. What I can say is that there is a very large number of cases and that this relates to the wider question of consultancy and contingent labour in government. He might be interested to know that in 2009-10 the previous Government spent £2.4 billion on contingent labour of various sorts. In 2010-11, thanks to the additional controls on consultancy that we put in place, we reduced that to £1 billion, and I expect the bill to be reduced further in 2011-12. There are things that central Government can do to reduce dramatically those costs across government, and that is precisely what the coalition Government are seeking to do.