Loan Charge

Gerald Jones Excerpts

Thursday 18th January 2024 Commons Chamber

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

I am grateful for the opportunity to speak in today’s debate, and I congratulate the right hon. Member for East Antrim (Sammy Wilson) on having secured it. I thank the Backbench Business Committee for granting the debate. I declare my membership of the loan charge and taxpayer fairness all-party parliamentary group.

As we have heard, this is a long-standing issue that continues to have an impact on the health and wellbeing of thousands of people right across the country, including residents of Merthyr Tydfil and Rhymney. Among them is my constituent, Geraint Owen, whom I have met on a number of occasions over a long period of time. He and other victims of this scandal have experienced considerable frustration in attempting to deal with HMRC.

The way HMRC has dealt with this issue has caused unbelievable hardship, distress and anxiety for large numbers of the people we serve. This sorry saga bears striking similarities to the Post Office/Horizon scandal, which we have heard so much about in recent weeks. Ordinary people up and down the country are being asked for unrealistic payments, which is causing huge financial hardship, bankruptcy and worse, such as the risk of losing their home and an increased risk of suicide. There are real concerns that this is another scandal where the Government have ignored the alarm bells and cries for help, so I urge them to revisit it and ensure a fairer and more effective approach.

This debate is a huge opportunity to highlight the injustice of the loan charge scandal. At a recent meeting of the all-party group, we heard more harrowing stories about how people’s lives had been ripped apart by the loan charge. The Government’s approach has meant that ordinary people who were victims of mis-selling are facing huge bills, which is causing them untold distress and personal harm. Tragically, the number of suicides linked to this scandal has reached double figures. Clearly, Labour supports attempts to tackle tax avoidance schemes, but that is not what we are talking about in this case. The fact that there have been so many shocking accounts of harm and distress suffered by people liable to the loan charge, including those we heard at meetings of the all-party group, demonstrates how the Government’s approach has gone badly wrong.

Labour has consistently called for a fair and effective approach from HMRC instead of the current approach, which is extremely tough on those caught up in these schemes. We are clear that the 2019 Morse review cannot be the final word on this matter. We tabled an amendment to the Finance Act 2020 that would have forced the Government to review the impact of the scheme and the fairness of HMRC’s implementation of the policy, and a proposed new clause to the Finance Act 2022 that would have required the Chancellor to commission an independent review to consider HMRC’s approach to the loan charge scheme and make recommendations on how it should be altered; it would also have required the Government to explain to the House of Commons what efforts they had made to guarantee the review’s independence.

We need a fair and effective approach from HMRC instead of the current approach, which is extremely tough on those caught up in these schemes, but weaker on their architects. As the all-party group previously suggested, the tax burden should not fall solely on the individual users of the schemes, but should be shared by the employers and agencies and also, ideally and appropriately, the operators and promoters of the schemes. On that basis, the Government should change course and announce a fairer approach.

We must remember the human impact of the loan charge: as we know and as I touched on earlier, HMRC has confirmed that there have been 10 suicides of people facing the loan charge; it has also confirmed that there have been 13 suicide attempts. That in itself should be enough reason to stop this cruel retrospective policy. I urge the Government to accept that there is something deeply wrong with their current approach to the loan charge scheme.

Reports to the Treasury Select Committee last October stated that around 40,000 people still face the loan charge, meaning that four and a half years on, there are still many unresolved cases. The current approach has not worked: HMRC is still trying to resolve tens of thousands of cases, and 10 families have lost loved ones to suicide. This whole sorry saga is cruel and unacceptable. Action is needed now. The Government must think again. When ordinary people who are the victims of mis-selling face financial ruin and personal harm because of the way the loan charge has been pursued, action must be taken urgently. I hope that in summing up today’s debate, the Minister will address the points I have made.