Oral Answers to Questions

Catherine McKinnell Excerpts

Tuesday 11th December 2012 Commons Chamber

[Mr Gauke]

That is a very good question, but I am afraid I cannot give an answer to it. What I can say is that we have today published draft legislation for a general anti-abuse rule and it will come into force next year.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Government’s shares for rights scheme is not only unpopular with the business community, but the head of the Institute for Fiscal Studies warned in the Financial Times today that it will

“foster a whole new avoidance industry”,

and the Office for Budget Responsibility believes the tax avoidance loophole it will create could cost up to £1 billion. Does the Minister agree with the OBR estimate? If so, why is he pressing ahead with a policy that is unpopular with business and could cost the taxpayer £1 billion?

[Mr Gauke]

First, it is not unpopular with business. Business groups have welcomed it, and the fact is that some aspects of our employment law can stand in the way of job creation. The OBR estimates that within the scorecard period this policy will cost £80 million in 2017-18. We believe it is the right move in order to ensure we have a more competitive environment.