Oral Answers to Questions

Jeremy Lefroy Excerpts

Tuesday 29th January 2013 Commons Chamber

[Danny Alexander]

The hon. Lady will know that working people in this country are net beneficiaries of the measures announced in the autumn statement. I would have thought that she would welcome the fact that 2.2 million Scots will gain from the increase in the personal allowance. It is a massive policy to ensure that the working people of this country have more of their own money back in their pockets to use for themselves.

[Jeremy Lefroy (Stafford) (Con)]

7. What progress HM Revenue and Customs has made in closing loopholes in the tax system.

[Charlie Elphicke (Dover) (Con)]

9. What plans he has to tackle corporate tax avoidance and to close the tax gap.

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

Over this Parliament, we have introduced 31 measures to tackle tax avoidance, including loophole closures. This year, our work will focus on strengthening the disclosure regime, consulting on new sanctions for avoidance promoters and introducing the general anti-abuse rule. HMRC will also increase its risk assessment and specialist transfer pricing resources to target multinationals. Combined, those measures will strengthen our commitment to tackling tax avoidance and reducing the tax gap associated with it.

[Jeremy Lefroy]

I thank the Minister for that answer. How will the Government use the presidency of the G8 this year to tackle international tax loopholes that have an effect on receipts to the UK Treasury?

[Mr Gauke]

My hon. Friend is right to raise that point. The Prime Minister has said that he wants to use the G8 for this purpose and to have a serious debate about tax avoidance. The OECD is looking at this matter. We are encouraging it to do so and have provided it with additional resources. It will report back on solutions that could be developed to tackle profit-shifting by multinationals and the erosion of the corporate tax base.

--- Later in debate ---

[Danny Alexander]

I think that is a very poor way to phrase the question, especially when the hon. Lady will know that disability living allowance payments, for example, are continuing to be uprated in line with inflation, even as we have to take more difficult decisions on other parts of the economy.

[Jeremy Lefroy (Stafford) (Con)]

T9. A recent article in MoneyWeek suggested that raising the minimum wage would cut the cost of tax credits and benefits and increase employment. What work has the Treasury done on the interrelationship between the level of the minimum wage, the cost of benefits, tax revenues and employment levels?

[Sajid Javid]

It is not clear that tax credits are being used to supplement lower wages, but what I can say is that the Government have taken action to bring unsustainable levels of tax credit spending under control. It has already been reduced in respect of eligibility from nine out of 10 families with children to six out of 10. Our reforms are also making work pay. Universal credit will unify the current complex system of welfare and make sure it always pays for people to go into work. The withdrawal rate will aim to smooth that transition into work.