Oral Answers to Questions
Debate between Jesse Norman and Julian Lewis(3 years, 7 months ago)
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The Financial Secretary to the Treasury (Jesse Norman)
Promotion or enablement of a tax avoidance scheme is not, in and of itself, a criminal offence, as we have regularly debated in this House. However, there have been numerous cases in which Her Majesty’s Revenue and Customs has made arrests or prosecuted people in relation to fraud, and particularly in relation to disguised remuneration loan-busting schemes.
Dr Lewis
My understanding is that very few promoters of these schemes have been prosecuted. Is it not rather shocking that so many people who were mis-sold the schemes on the basis that they were perfectly legitimate are being pursued so relentlessly, while the promoters are in some cases being allowed to continue their work unhindered?
Jesse Norman
The suggestion that promoters are being allowed to do just anything is quite wrong. If my right hon. Friend had looked closely at the current Finance Bill, he would have seen a range of measures in that Bill alone aimed at preventing the promotion of tax avoidance schemes and at the disclosure of tax avoidance schemes, as well as other measures. HMRC takes such issues extremely seriously, and that is why the avoidance tax gap fell from £3.7 billion in 2005-06 to £1.7 billion in 2018-19—a fall of more than 50%.
Loan Charge 2019: Sir Amyas Morse Review
Debate between Jesse Norman and Julian Lewis(4 years, 8 months ago)
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The Financial Secretary to the Treasury (Jesse Norman)
I congratulate my right hon. Friends the Members for Haltemprice and Howden (Mr Davis) and for New Forest East (Dr Lewis) and the hon. Member for Brentford and Isleworth (Ruth Cadbury) for securing this debate today, and I thank colleagues on both sides of the House for their contributions. It is a measure of the effect they perceive on their constituents that, in these circumstances, they are here in such numbers.
The outbreak of covid-19 has created extraordinary circumstances, and it is important to say up front that the Government are keeping the situation under close review, as elsewhere, and will take a proportionate and reasonable approach to anyone covered by the loan charge who is unable to file their return by 30 September. That date has been moved back to give people enough time to respond to the Morse report and its recommendations, but the Government will insist that HMRC takes a proportionate and reasonable approach to anyone covered by the loan charge who is unable to file their return by 30 September.
Anyone who believes they may be affected by this should please contact HMRC as soon as possible. Equally, we must recognise that HMRC’s workforce may well be affected by the outbreak. Where appropriate, HMRC has made it clear that it will take steps to support anyone who has been disadvantaged by delays at its end as a result of covid-19. As the House will know, HMRC has already established a helpline to support any businesses and individuals affected. The hon. Member for Bootle (Peter Dowd) raised that issue, and I can confirm the helpline has now been in place for some time and has an expert and supportive staff behind it.
As this debate has made clear, the loan charge, and with it the wider issue of using disguised remuneration schemes to avoid tax, has been the subject of public concern and considerable controversy. Let us be clear that tax is never popular, and my colleagues and I recognise the strength of feeling and sympathise with those who may be subject to the charge. Today’s motion reflects some of the arguments and concerns expressed by colleagues that the loan charge is retrospective and unjust and that the law was not settled, it is claimed, until 2017. If I may, I will deal with each of those charges in turn.
First, however, we need to be clear what we are talking about. Disguised remuneration is a term of art—it is a fancy term—but the House should be under no illusion as to what it amounts to. Such schemes are a form of contrived tax avoidance in which people are paid in the form of a loan with no interest and no intention or requirement to pay the loan back.
Jesse Norman
I thank my right hon. Friend for the question. All he needs to do is attend to the detail of the Morse report, in which Sir Amyas Morse goes through the efforts made at that time, before and after 2010, in some detail. That is the basis for the judgment that he reaches about the appropriate relief.
House of Commons Governance
Debate between Jesse Norman and Julian Lewis(9 years, 10 months ago)
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Dr Julian Lewis (New Forest East) (Con)
The whole House should be grateful to the hon. Member for Somerton and Frome (Mr Heath) for his work on the House of Commons administration, not least for the masterly way in which he summarised current concerns and controversies and how they have been resolved. He also briefly mentioned a slight dysfunction in co-ordination between the two Houses, and I will conclude my remarks with a small and rather sad recent example of that.
The hon. Gentleman said that there is a great difference between the atmosphere of this debate and the debate held on 10 September, and I agree. It is a measure of the success of the right hon. Member for Blackburn (Mr Straw), and his Committee, that he has managed to reconcile two apparently irreconcilable views, and that the central question of whether it made sense for the leading procedural expert in the House of Commons also to be the chief manager of the House has apparently been decided.
In my intervention on the right hon. Gentleman I asked what would happen if there was disagreement on a matter concerning management—not procedure—between the new director general and the next incumbent of the office of Clerk. If I understood correctly, he said that it would be decided at a level that was, in a sense, above the two of them, and that it would not be a question of the Clerk overruling the director general on a matter of management that by rights ought to be in the sphere of the director general.
In our debate on 10 September, I suggested that the Committee ask itself four questions. I think we will find that those four questions have now been answered. Should a top chief executive officer be expected to be a top procedural adviser, too? The answer is clearly no. Should a top procedural adviser be expected to be a top chief executive officer? The answer is equally no. Should the two roles be combined by default in the future, as they have been in the past? Should the top procedural adviser be allowed, if the roles are separated, to overrule the top chief executive officer on management matters, or vice versa on procedural matters? I think we have learnt that the answer to those two questions is no as well.
Jesse Norman
My hon. Friend is being typically clear and precise, but the answer to the first two questions is not quite as clear as he suggests. The Committee’s decision was that the roles could be combined by one person and had been combined by one person in the past—that is the evidence for it—but that now, for reasons of other commitments and the development of the House, they should be separated.
Dr Lewis
I am delighted at the result, even if I do not entirely endorse the reasoning. I wish to say a word of sympathy, if not appreciation, for the situation in which the House of Commons Commission found itself a few months ago. It was faced with either making a single appointment from a very limited pool of top procedural advisers who would become, by default, the director general of the House of Commons—as if by some magical process of osmosis during their rise up the learned ladder of becoming a top procedural adviser they had somehow imbibed the skills needed to be a top chief executive officer or director general—or, alternatively, if it wished to go outside that very limited pool of possible candidates, it had to decide whether it was appropriate for a top manager to sit in the Clerk’s chair without having imbibed, by a reverse magical process of osmosis, the skills required to be a top procedural adviser. That was precisely why the message went out loud and clear, on 10 September last year, that we needed to send for the marvellous negotiating and reconciliation skills of the right hon. Member for Blackburn, to decide once and for all whether the two functions should be separated.
Dr Lewis
In just a moment, but I want to make one more point. I know my hon. Friend is concerned with the constitutional aspects of this matter, but I am concerned with another aspect. The new arrangement will not work unless the individuals who occupy the two posts—I am glad to see the hon. Member for Walsall North (Mr Winnick) indicating his approval—have their respective roles clearly in their minds. If either of them tries to play games of superior status, the new system will not work. We can construct the best system in the world, but if the people who occupy the top posts are not minded to make it work, it will not be a success.
Jesse Norman
My hon. Friend shares my view that harmony at the top of the new arrangement will be vital. None the less, there is a very clear arrangement. The Clerk is top dog. The director general reports to the Clerk. The director general has clearly delineated responsibilities: the managerial delivery side. That is the unified structure that has been created and will hopefully be agreed.
The training of the Clerks—I have no interest in revisiting this, and we have generally taken the view in the debate that we will not do so—has not been ignored in previous years, although the Committee came to the view that it could be strengthened. The training of the Clerks has so far enabled the Clerk Assistant to run a department that is roughly 40% of the whole. These people do not arrive at their jobs by some mystical process; there is some structure of responsibility and training by which they achieve their posts. The Committee has decided that that needs to be extended, providing a further rationale for the separation.
Dr Lewis
My hon. Friend is fighting a gallant rearguard action for the old guard, but if the degree of management skill imbibed previously led to this spectacular spaghetti junction of an organogram of the existing system, there was something deficient in the in-house management training. Any Committee that comes up, by contrast, with something as clear and sensible as the new—