David Gauke
Main Page: David Gauke (Independent - South West Hertfordshire)Department Debates - View all David Gauke's debates with the HM Treasury
(9 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Katy Clark (North Ayrshire and Arran) (Lab)
1. What recent estimate HM Revenue and Customs has made of the amount of uncollected tax in the UK.
The Financial Secretary to the Treasury (Mr David Gauke)
Her Majesty’s Revenue and Customs published its latest tax gap estimates on 16 October 2014. In 2012-13, the tax gap was estimated at £34 billion, 6.8% of total tax due.
Katy Clark
The Government’s own figures suggest that the tax gap has increased by £3 billion. Independent experts say that the tax gap could be up to £120 billion. In North Ayrshire, the local tax office has been closed by this Government, and since 2010, 10,000 people in the Treasury have lost their jobs, despite the fact that every tax inspector brings in far more—in taxes—than they cost. Do the Government believe that they should rethink their strategy?
Mr Gauke
The reality is that the tax gap for 2012-13 was lower than in any year under the previous Labour Government. As for the yield—the money that is brought in by HMRC as a consequence of its activity—that has gone up by £9 billion since 2010-11, and is forecast to be £26 billion this year. That is a very good record.
Andrew Jones (Harrogate and Knaresborough) (Con)
Will the Minister confirm that the compliance tax yield for this year has been revised up to £26 billion, which is an increase of £9 billion since this Government came to office?
Mr Gauke
My hon. Friend is absolutely right to make that point, and there has been an increase—[Interruption.] It is a point that bears repeating. Members really should take in the fact that, under this Government, we have seen a significant increase in HMRC’s yield. HMRC is more effective than ever in dealing with tax evasion and tax avoidance.
Nick Smith (Blaenau Gwent) (Lab)
Two thirds of people getting tax credits are in work, so why does the Chancellor want to cut tax credits again? That will penalise hard-working families.
Mr Gauke
I suspect that, a couple of weeks ago, the hon. Gentleman walked through the Lobby in support of the charter for fiscal responsibility, which requires us to find £30 billion of savings, either in tax increases or in spending cuts. If he is not prepared to take action in that area, he has to tell his constituents where he is prepared to take action.
Mr Philip Hollobone (Kettering) (Con)
I congratulate Her Majesty’s Treasury on its successful efforts to reduce the tax gap. Where are the main hiding places that people are using to try to avoid tax?
Mr Gauke
My hon. Friend raises an important question to which I could give a lengthy reply. But what I will say is that, as a Government, we have taken action, for example, to improve the automatic exchange of information between various jurisdictions, so that there is nowhere for people to hide their money. The net is closing in on those who have evaded their taxes, and we are increasingly effective at dealing with tax avoidance as well.
Chris Leslie (Nottingham East) (Lab/Co-op)
With economic growth now showing signs of slowing and wages stagnating, is the Minister not worried that the amount of income tax and national insurance that he said he would collect is failing to live up to expectations? Will he tell the House by how many billions of pounds income tax and national insurance receipts have fallen short because of low wages, compared with the original Office for Budget Responsibility forecasts back in 2010?
Mr Gauke
We are aware that, since 2010, the economy has had to face challenges, which in 2010 were not anticipated by the OBR to occur in the way that they did. We have had to deal with the eurozone crisis, the high commodity prices at the time and the aftershocks of the financial crisis. The consequences have been significant, but if we want wages to rise we need to improve productivity. That is about improving our education system, and having more apprentices and a competitive tax system, and that is what this Government are delivering.
Chris Leslie
The answer is that income tax and national insurance receipts are down by a staggering £95 billion over this Parliament. Is it any wonder that the Minister and the Chancellor have failed so woefully to eradicate the deficit, and when will he realise that it is the low-wage economy that is the recipe for more borrowing, more welfare spending and more debt?
Mr Gauke
We discovered this morning that in 2014 the UK was the fastest growing major western economy. Employment is at a record level and unemployment has fallen dramatically, contrary to the Opposition’s predictions—but, yes, we have got further to go to reduce the deficit, which is why we need a Government who are prepared to make difficult decisions. All that we have heard from the hon. Gentleman is that he is going to put up fees on gun licences, which is not going to solve the deficit.
Sir Tony Baldry (Banbury) (Con)
Am I right in thinking that under the charter for fiscal responsibility, to which everyone recently signed up, we have made it clear that part of the savings that we are going to make involves bearing down on tax avoidance? Indeed, we have set out clearly exactly where we are going to save every penny of the £30 billion that needs to be saved. How is it possible for anyone to sign up to a charter for fiscal responsibility without making it clear where they are going to make those savings?
Mr Gauke
My right hon. Friend is absolutely right; the Opposition have given no indication of the balance between tax and spending and how they are going to find that £30 billion. At a time when Labour Back Benchers are saying that Syriza shows the way while those on the Labour Front Bench apparently support a £30 billion fiscal tightening, all we get from the Opposition is chaos.
Kerry McCarthy (Bristol East) (Lab)
2. What recent representations he has made to the EU on the cap on bank bonuses.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
11. What progress he has made on his fiscal consolidation plans.
The Financial Secretary to the Treasury (Mr David Gauke)
The Government inherited the largest deficit since the second world war. Since then, we have made substantial progress on reducing the deficit. Borrowing has already fallen by more than a third since 2009-10 and is forecast to have fallen by half this year as a share of GDP. The Government’s consolidation plans have been central to the reduction of the deficit.
Daniel Kawczynski
I thank my hon. Friend for that answer. Given the eye-watering amount of British taxpayers’ money that is spent on paying the interest on our national debt, I am pleased that the Government have already reduced the annual structural deficit by half. Does he agree that it is vital to continue with the policy of reducing the annual structural deficit in order to tackle our national debt?
Clive Efford (Eltham) (Lab)
Is the Office for Budget Responsibility not right to say that stagnant wages have led to more borrowing? Is that not the key reason why the Government have missed their borrowing targets by more than £200 billion?
Mr Gauke
If we want wages to increase, which we do, we need to improve our education system, ensure that we have a welfare system that makes work pay, improve our infrastructure and have competitive tax systems. In brief, we need a long-term economic plan. That is what we have got with this Government, and it is not what we would have with the Labour party.
Alec Shelbrooke (Elmet and Rothwell) (Con)
My hon. Friend will recognise that getting the deficit under control is vital if we want a strong economy. For all the posturing that we have seen today from the Labour party about the NHS, does he recognise that Greece, which had a smaller deficit to the one we had in this country when we came to power, had to cut spending on health services by 14%? Does he agree that only a strong economy can deliver a strong health service?
Steve McCabe (Birmingham, Selly Oak) (Lab)
In the long-term economic plan—[Hon. Members: “Hurray!”] I would wait for the second part of the question. In the long-term economic plan, is missing a target by 50% evidence of success or failure?
Miss Anne McIntosh (Thirsk and Malton) (Con)
12. What recent representations he has received on creating a northern powerhouse.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
T6. This Government are demonising those on benefits, while doing little about tax evasion and avoidance, which, as we have heard, have risen significantly on their watch. Today sees the launch of the Tax Dodging Bill campaign, as 85% of British adults say that tax avoidance by large companies is morally wrong, even when it is legal. Why will the Chancellor not impose penalties for breaches of the general anti-avoidance rule, as we have called for?
The Financial Secretary to the Treasury (Mr David Gauke)
First, it was this Government who got the base erosion and profit shifting process running with the OECD, looking to deal with the international rules. It was this Government who announced at the autumn statement that we are bringing in a diverted profits tax to deal with some of the contrived and artificial behaviours that people are worried about. It was also this Government who introduced the general anti-abuse rule and it is this Government who are consulting on bringing in penalties for it. I have to say, it is not a bad record.
Mr David Ruffley (Bury St Edmunds) (Con)
T5. I commend the Chancellor’s aim of running an overall budget surplus in 2019-20 and cutting the national debt so that the next generation are not saddled with punitive taxes. Does he agree that this is a case of simple fairness, not ideology?
Ms Margaret Ritchie (South Down) (SDLP)
Considering the economic modelling carried out by one of the Treasury’s own economists, Professor Blake, what further progress has been made on reducing VAT on tourism, which would benefit all regions and particularly coastal regions in the UK?
Mr Gauke
We have looked at that, but there is a significant cost involved in making the changes. On the point of helping tourism, the hon. Lady will be aware of the substantial increase in Northern Ireland and other places over recent years and, secondly, the coastal communities fund provides a lot of support to many of the areas that benefit from tourism.
Mr Nigel Evans (Ribble Valley) (Con)
Cutting beer taxes, raising income tax thresholds and stopping the petrol tax increases proposed by the Labour Government have helped the Evans household and, probably, a number of other household budgets throughout my constituency. In the next Budget, will the Chancellor please keep calm and carry on cutting taxes?