Oral Answers to Questions

David Gauke Excerpts

Tuesday 10th March 2015 Commons Chamber

[Mrs Mary Glindon (North Tyneside) (Lab)]

4. What recent estimate Her Majesty’s Revenue and Customs has made of the amount of uncollected tax in the UK.

[The Financial Secretary to the Treasury (Mr David Gauke)]

HMRC 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.

[Rosie Cooper]

I thank the Minister for those figures. Will he confirm that HMRC’s own figures show that under this Government the amount of uncollected tax has risen by £3 billion?

[Mr Gauke]

The number I quoted a moment ago, 6.8%, is a lower percentage of tax due than was achieved in any year under the previous Government.

[Mrs Glindon]

There has been speculation that the Chancellor’s Budget next week will deal with tax avoidance and evasion, but there has also been speculation that by 2016 the number of staff working in HMRC will drop from 50,000 to just over 40,000. How do the Government expect to deal with evasion and avoidance if they are unwilling to properly resource HMRC?

[Mr Gauke]

Over the course of this Parliament, HMRC has brought in more yield year after year. If the measure is just on the number of staff, the hon. Lady will be aware that, when HMRC was formed in 2005, it had something like 92,000 members of staff and that by the end of the previous Parliament it had below 70,000. It is not about the number of staff. We are seeing a huge improvement in HMRC’s performance.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the Minister confirm that HMRC’s compliance yield target has actually been revised up this year to £26 billion, which is £9 billion more than when this Government came to office?

[Mr Gauke]

My hon. Friend is absolutely right. The important point here is the output, not the input. I should point out that the number of staff employed in enforcement and compliance has gone up over the course of this Parliament.

[Paul Blomfield (Sheffield Central) (Lab)]

17. A young man in my constituency had his jobseeker’s allowance taken away because he missed an early morning appointment, despite having notified the jobcentre of the illness that prevented him from attending. He is just one of many vulnerable people affected by the sanctioning regime imposed by this Government. According to the House of Commons Library, the amount lost in tax evasion and tax avoidance exceeds the entire spend on JSA by £2 billion. Does the contrast between the persecution of the most vulnerable and the Government’s failure on tax avoidance not say everything about their priorities?

[Mr Gauke]

Over the course of this Parliament, the number of prosecutions for tax evasion has gone up fivefold. The reality is that the Government are taking more measures to deal with tax avoidance and tax evasion. We have done that consistently at every Budget. Ever since the 2010 spending review, there has been a greater focus on HMRC being able to bring in the yield. The numbers, as my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) pointed out, speak for themselves.

[Sammy Wilson (East Antrim) (DUP)]

Hundreds of millions of pounds are lost in revenue, criminal gangs are financed and untold damage is done to the environment in Northern Ireland as a result of fuel laundering. Why have the Government resisted putting effective trace measures into fuel, which would stamp this out? Is the Minister concerned that despite numerous raids nobody is ever caught for fuel laundering in Northern Ireland?

[Mr Gauke]

Our record across the piece shows that we take tax evasion and criminal activity in this area very seriously. This is a complex matter, but the hon. Gentleman will know that considerable efforts have been undertaken to address fuel laundering. This is a matter we take very seriously.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

The Minister must acknowledge the significant damage that the recent HSBC tax avoidance and evasion scandal has done to the public’s confidence in the Government’s willingness to pursue tax avoiders and evaders, thereby reducing the amount of uncollected tax in the UK. In the Chancellor’s absence, will the Minister now answer the question that the Chancellor failed to answer six times on the “Today” programme? Did the Chancellor ever discuss tax evasion at HSBC with Lord Green—yes or no?

[Mr Gauke]

As I have pointed out, the Government’s efforts and success in dealing with tax avoidance and tax evasion are a huge step forward from what we inherited. On the appointment of Lord Green, the proper processes, as put in place by the previous Government, were undertaken. The Cabinet Secretary looked at Lord Green’s tax affairs, and just as the previous Government appointed him to their business advisory council, so he was appointed as a Minister—an appointment that was welcomed by the Labour party.

[Shabana Mahmood]

Still we have no answer to the simplest and clearest of questions. If we cannot get a straight answer from the Chancellor or his Ministers, we should at least hear from Lord Green—the man who was in charge of the bank and was then made a Conservative Minister—either in front of a parliamentary Committee or through a statement in the other place. Why are the Government parties so desperate to silence Lord Green? What are they so afraid he will reveal?

[Mr Gauke]

We are not afraid of anything. The Government have been more successful at prosecuting criminals involved in tax evasions, more successful at closing tax avoidance loopholes and more successful at getting money in. That is a record we can be proud of.

[Jessica Morden (Newport East) (Lab)]

2. What proportion of recipients of tax credits are in employment.

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[Tim Loughton (East Worthing and Shoreham) (Con)]

6. If he will make a comparative assessment of the level of duty on wine paid in the UK and in other EU member states.

[The Financial Secretary to the Treasury (Mr David Gauke)]

Industry estimates show that there are 135 wineries in England and Wales, producing 4.5 million bottles of wine. The UK’s growing and award-winning wine industry benefited from the Government ending the wine duty escalator at Budget 2014.

[Tim Loughton]

There will be much responsible dancing in the streets if the Chancellor completes a hat-trick of beer duty cuts in his Budget and there will be much responsible celebration if he cuts the duty on spirits. But there will be much wailing and irrepressible disappointment if he does not reduce the duty on wine, which has gone up by 54% since 2008 alone and accounts for 67% of all the duty on all wine in the whole of the EU. Will he complete a fantastic treble-whammy by dropping the duty on wine, too, which it has been estimated would generate some £3 billion in extra revenue—and 20,000 jobs!

[Mr Gauke]

If it is not already too late to make this suggestion, I think my hon. Friend deserves a good bottle at lunchtime after that effort. He has put his case on the record, but of course all announcements are for the Chancellor on Budget day.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

If this Government do indeed have a long-term economic plan, which most of my constituents do not believe, will the Financial Secretary stop worrying about the older generation of wine drinkers and start concentrating his mind on the young people of this country who are underprivileged and overtaxed and have more problems in getting a good job? It is about time that the 18 to 35-year-olds, rather than the older wine drinkers of this country, were taken into account by this Chancellor.

[Mr Gauke]

First, may I reassure the hon. Gentleman that there is a long-term economic plan, and thank him for using the phrase? Credible public finances will benefit the younger generation, who will not face many years of paying off higher debt levels.

[Mr David Heath (Somerton and Frome) (LD)]

While the Financial Secretary is looking carefully at the duty on English wine, will he redouble his efforts to support artisan and small-scale cider makers, who risk being put out of business as a consequence of a disastrous recent EU decision?

[Mr Gauke]

I appreciate the point made by my hon. Friend. The Government’s support for small cider makers across the piece has helped to create a diverse and vibrant market in this area, and we will continue to study the Commission’s arguments carefully because we want to support this industry.

[Charlie Elphicke (Dover) (Con)]

8. What plans he has to introduce penalties for financial advisers who promote aggressive tax avoidance and tax evasion schemes.

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[Sir Edward Leigh (Gainsborough) (Con)]

13. What his policy is on the future of tax allowances related to marriage.

[The Financial Secretary to the Treasury (Mr David Gauke)]

The Government have introduced the marriage allowance for married couples and civil partners, which takes effect from 6 April 2015. The transferable amount has been fixed at 10% and will rise in proportion to the personal allowance.

[Sir Edward Leigh]

More than 4 million people could benefit from the marriage allowance, for which they have been able to register since 20 February. Does my hon. Friend agree that this is about much more than just pounds or pence—it is about valuing commitment and marriage as a bedrock of society?

[Mr Gauke]

As the Prime Minister made very clear in the 2010 general election, it is right that we recognise marriage in the tax system, and that is precisely what we have done. As my hon. Friend rightly points out, it is now possible for people to register to be able to benefit from the transferable tax allowance.

[Kate Green (Stretford and Urmston) (Lab)]

Does the Minister consider it either fair or socially useful that money is being spent in this way when only one in four of the couples who benefit are raising children?

[Mr Gauke]

This is about recognising marriage within the tax system, but it should also be noted that it will benefit many low-income households, including 1 million households where tax credits are claimed.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

14. What steps he is taking to support jobs in the north-east of Scotland by maximising the economic recovery of North sea oil and gas. [R]

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[Andy McDonald (Middlesbrough) (Lab)]

T5. Is it not the case that those earning more than £1 million a year have benefited from an average tax cut of up to £100,000 a year in this Parliament? Does that not illustrate that, as ever under the Tories, the mega-rich get richer and the poor get poorer—and that this time they have been aided and abetted by the Liberal Democrats?

[The Financial Secretary to the Treasury (Mr David Gauke)]

It is this Government who have dealt with disguised remuneration by which loans were never repaid, benefiting the highest earners. It is this Government who have increased the rates of stamp duty land tax on high-end properties and ensured that they are properly enforced. It is under this Government that capital gains tax has gone up so that cleaners do not pay a higher rate of tax than hedge fund managers. It is this Government who have ensured that those with the broadest shoulders bear the greatest burden, as the Institute for Fiscal Studies confirmed last week.

[Alistair Burt (North East Bedfordshire) (Con)]

T6. Is my hon. Friend the Economic Secretary aware that in my rural constituency, businesses regard the words “long-term economic plan” with the same degree of comfort and familiarity as evensong in an Anglican church? Will she be good enough to give an assurance that, following the election, those words and the benefits that they bring will continue, not least through the expansion of broadband which is so important for rural business?

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[Nia Griffith (Llanelli) (Lab)]

We all want to see an end to big companies wriggling out of tax by offshoring profits, but what assessment has the Minister made of the impact on kitchen table digital industries, such as the sale of knitting patterns, of the way in which HMRC has implemented the new EU rules on VAT being collected in the country of sale, and what can he do about it?

[Mr Gauke]

Those are EU rules. It was the previous Government who signed up to the principle of changing the way in which the VAT system worked, and they were right to do so. This Government have taken two measures to try to mitigate the impact on some smaller businesses. None the less, without the support of other member states, we are still faced with a change in the rules.

[Sarah Newton (Truro and Falmouth) (Con)]

T7. Under this Government, food and drink manufacturing is a great British success story. However, our dairy farmers are being badly affected by volatile global markets. Will the Financial Secretary look favourably on proposals to implement tax averaging reforms, such as those in Ireland, to help these essential producers who contribute so much to our rural economies?

[Mr Gauke]

I am grateful to my hon. Friend for her question; I shall take it as a Budget representation. I am sure she will understand that I cannot say any more about it at this point, other than to thank her. She has been vigorous in putting forward that case.

[Mr William Bain (Glasgow North East) (Lab)]

For hard-pressed taxpayers, the real test of whether the Government are committed to cracking down on tax evasion and avoidance will be whether this month’s Finance Bill contains legal penalties for breach of the general anti-abuse rule. Will the Financial Secretary tell us whether those will feature in the Finance Bill—yes or no?

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[Sir Oliver Heald (North East Hertfordshire) (Con)]

The Financial Secretary to the Treasury will be aware that Hertfordshire is a prosperous and successful county. However, it had reached the point at which growth was being compromised because the A1M was not being widened between Stevenage and Welwyn. That work has now been announced but, for the future, are the Government satisfied that they are planning such infrastructure projects far enough ahead to enable us to maintain the kind of strong economic growth that we have at the moment as a result of the long-term economic plan?

[Mr Gauke]

I am grateful to my hon. and learned Friend and fellow Hertfordshire Member of Parliament. He is absolutely right to highlight that issue. As my right hon. Friend the Chief Secretary to the Treasury said earlier, we have in place a pipeline of road building and train improvements, the like of which we have not seen for many years. All of that will benefit Hertfordshire in particular and the United Kingdom as a whole.