Tax Avoidance (HSBC)

Debate between John McDonnell and David Gauke

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

My hon. Friend makes an important point. When it comes to banking licences, politicians should perhaps not be directly involved; we have a regulator for that purpose. Ensuring a change of behaviour in our banks is important. We have all been appalled by this behaviour over the last few hours––for some of us, it has been longer. This occurred some years ago, at the same time as we saw banks acting recklessly in a number of ways. It is really important for the banking sector to get its house in order. We know that the reforms we have undertaken as a Government can play an important role in ensuring that happens.

[John McDonnell (Hayes and Harlington) (Lab)]

Let me ask a simple question. Was Lord Green interviewed about these matters by HMRC officials or the Cabinet Secretary at any time?

[Mr Gauke]

I am not aware of whether interviews were held on Lord Green’s appointment, either as a lord or as a business adviser, under the previous Government.

Finance Bill

Debate between John McDonnell and David Gauke

Tuesday 1st July 2014 Commons Chamber

[Mr Gauke]

That is correct. It is a higher proportion than ever; it is more than was being received under Labour—

[John McDonnell]

Will the Minister give way?

[Mr Gauke]

I really should allow time for the hon. Member for Birmingham, Ladywood to speak. On this record, this Government can be proud.

Taxation: Rebates

Debate between John McDonnell and David Gauke

Monday 7th April 2014 Ministerial Corrections

[John McDonnell]

To ask the Chancellor of the Exchequer how many tax refunds were made in the tax years (a) 2009-10, (b) 2010-11, (c) 2011-12 and (d) 2012-13 for (i) income tax, (ii) value added tax, (iii) corporation tax and (iv) national insurance; and what the total value of refunds was in each such category in each such year.

[Official Report, 31 March 2014, Vol. 578, c. 479-80W.]

Letter of correction from David Gauke:

An error has been identified in the written answer given to the hon. Member for Hayes and Harlington (John McDonnell) on 31 March 2014.

The full answer given was as follows:

[Mr Gauke]

The figures shown represent the value of repayment figures as included in the accrued net revenue figures in the Statement of Revenue, Other Income and Expenditure which are published in the Annual Report and Accounts. We hold only the total value not number of repayments made by tax type.

HMRC Inquiry Centre Closures

Debate between John McDonnell and David Gauke

Tuesday 4th March 2014 Westminster Hall

[Mr Gauke]

The point I was making is that, yes, 281 inquiry centres are being closed, but there will be something like 350 venues that will be used for face-to-face meetings under the new regime. HMRC fully acknowledges that there is a need to deal with those people who require enhanced support and face-to-face meetings. It has been clear about that.

[John McDonnell]

The problem with call centres is that in order to secure a face-to-face meeting, someone has to get through on the phone. At the moment, the Public Accounts Committee has set HMRC a performance target of 90% of calls for 2013-14, but performance, as at December 2013, was 76.2%. So HMRC is significantly failing its existing call centre targets already.

[Mr Gauke]

It is worth making the point that HMRC has recently gone through one of the biggest peaks for telephone calls during the year, which is the self-assessment deadline at the end of January, and it met the 90% target even on the last day of January, so there is some progress in terms of HMRC’s contact centre performance.

In the time that I have available, I will turn to the consultation and pilots. As many hon. Members will be aware, in developing and refining the new service, HMRC undertook a wide-ranging consultation on its proposals last year. It also piloted the new service in the north-east of England from June to December 2013, closing 13 inquiry centres including, as we have heard, the Morpeth inquiry centre in the constituency of the hon. Member for Wansbeck, so as to run the live trial. Feedback from customers and staff has helped to shape the service that will now be rolled out nationally, which includes introducing alternative routes for deaf, hard-of-hearing and speech-impaired customers to contact HMRC online, and making it easier for a friend or family member to contact HMRC on behalf of a customer to arrange a face-to-face appointment.

Customers who have used the new service have liked it. Independent research has shown that the new service has delivered an improved service for customers who need extra help, compared with their previous experiences with HMRC. Some calls, particularly those about tax credits, can also be handled effectively by HMRC’s contact centre advisers. I know that concerns have been raised about the ability of contact centres to cope with the increased demand, as the hon. Member for Hayes and Harlington (John McDonnell) said. However, as I have said, even in the self-assessment tax return peak in January, HMRC handled almost nine out of 10 calls first time.

I conclude by reassuring hon. Members that HMRC is making these changes for two main reasons: first, to better meet the needs of those 1.5 million customers who need more help with their tax and benefits; and, secondly, to ensure that the services it provides represent the best value for money for taxpayers. Many inquiry centre staff will have the opportunity to apply for roles in the new service; many others will choose to leave HMRC through a voluntary exit scheme, or will seek redeployment to other roles within HMRC or in other Government Departments. In short, HMRC is doing the right thing for its customers and for the country, and as a responsible employer it is treating its staff with consideration and respect as it implements this important new service.

Question put and agreed to.

Finance (No. 2) Bill

Debate between John McDonnell and David Gauke

Wednesday 17th April 2013 Commons Chamber

[Mr Gauke]

The “double reasonableness” test was the one we came to after the lengthy process following the Aaronson review. We believe that it focuses attention on aggressive, abusive tax avoidance. Let me be clear: this is an additional tool that HMRC can use; it does not necessarily mean that for those outside the GAAR, everything is fine. I want to make it explicitly clear that that is not what we are saying. There is avoidance that will not fall within the GAAR, but which HMRC would none the less take action against.

The panel will be broad-based, but I see nothing wrong whatsoever in its having commercial expertise to provide reassurance and ensure that the GAAR will not be abused in the way that some Members have expressed concern about this evening, with too much power being placed in the hands of a part of the Executive. It will be broad-based, in just the way the interim panel has been.

The GAAR does not override UK tax treaties. Given the lack of time, I will not go into further detail, but it acts in much the same way as GAARs do for other countries that respect OECD and UN model tax treaties.

[John McDonnell (Hayes and Harlington) (Lab)]

Will the Minister give way?

[Mr Gauke]

I will, because the hon. Gentleman has been here for much of the debate.

[John McDonnell]

The Minister said that there will be a review of the penalties. When, and will it look at criminal activity as well?

[Mr Gauke]

Let me deal with that in the context of amendment 8, which looks at the general issue of post-implementation evaluation and seeks to establish a review within two years of Royal Assent. We and HMRC have made it clear that we will manage and monitor the GAAR’s operation centrally, so that all cases and potential cases will be scrutinised and recorded. The deterrent effect, which we will see immediately, will be important, but we must also remember the issues of getting the tax returns in and being able to make a full assessment of the implications. We believe that a two-year period would not be practical for a general evaluation. It will take longer properly to evaluate how the GAAR is working, just because of how our tax system operates, so I will not accept amendment 8.

Amendments 3, 6 and 7, which deal with tax avoidance by multinationals and the impact on developing countries, raise a number of important points. The hon. Member for Birmingham, Selly Oak (Steve McCabe) wanted me to set out the Government’s objectives for the G8. I am sorry that I am not in a position to do that this evening; it will be left to the Prime Minister, who will make the UK Government’s position very clear.

The point about transparency is important and the Government have a good record of encouraging transparency in a number of areas, particularly among extractive industries through the extractive industries transparency initiative. We play a leading role internationally through the global forum. We ensure that jurisdictions comply with the international standard on tax transparency and work with the G20 to maintain pressure on non-co-operative jurisdictions. We have been making a lot of progress in the Crown dependencies, particularly as regards the exchange of information, and in ensuring that the US Foreign Account Tax Compliance Act, or FATCA, arrangements on the exchange of information become the international norm. I can assure the Committee that that will continue to be a key part of what we do and part of our G8 agenda.

Amendment 6 asks the Government to require UK companies to report their use of tax-avoidance schemes that affect developing countries and for HMRC to notify those countries and assist them in recovering the tax owed. Amendment 7 asks the Government to carry out an impact assessment on the effect of the changes to the controlled foreign companies, or CFC, rules on developing countries’ tax revenues. The answer to both points is that as a matter of practicality it is difficult for HMRC to perform the roles required by the amendments as they require assessments not of our tax rules but of the tax rules of developing countries. That takes us outside what HMRC can realistically do. The point was raised that amendment 7 largely repeats the debate we had during last year’s Finance Bill, when a similar, if not identical, amendment was tabled. I refer hon. Members to the speech I gave a year or so ago, in which I stated that simply as a matter of practicality that is not something that HMRC can do.

On amendments 11 and 12, tabled by my hon. Friend the Member for Amber Valley, I do not believe that a de minimis rule would be appropriate as regards the general anti-abuse rule as it would miss the point. We do not want anyone involved in abusive schemes to make use of them, and even if only £100,000 was at stake as a de minimis, that could have a significant effect on a number of people. We believe that that would be unfair.

As I said at the outset, I believe that the general anti-abuse rule is a major new development. It sends a message to those who persist with abusive avoidance schemes that even if they try to dance around the tax law, they will face the tough but plain question, “Is it reasonable?” That is a question that we all understand. Those who think about using the schemes will all understand it and, I hope, those who create the schemes will come to understand it. The GAAR will ensure that the time for their clever games, paid at the expense of the tax-paying public, is at an end. I therefore recommend that clauses 203 to 212 and schedule 41 stand part of the Bill.

HM Revenue and Customs

Debate between John McDonnell and David Gauke

Tuesday 5th February 2013 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Howarth, and to respond to the debate. I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on securing it. He has taken a close interest in HMRC funding over a number of years. Although I did not agree with everything he said, I commend him for his consistency and the non-partisan way in which he has pursued this issue over many years with a willingness to criticise Governments of both descriptions.

Time may be short, but before addressing the points raised today, it will be helpful to set out some context by discussing the history of the resources available to HMRC over recent years and the results that it has managed to achieve with those resources.

As hon. Members will know, HMRC was formed a little under eight years ago by the merger of Customs and Excise and the Inland Revenue. At that time, it was made up of around 100,000 staff. The previous Government sought efficiencies and, as a result, staff numbers fell by around 25,000 between 2005 and 2010. As part of that process, the number of staff engaged in compliance work also fell each year, and by 2010, about 10,000 staff had been lost in those important revenue-raising areas.

In 2010, as part of this Government’s first spending review, it was crucial that we recognised the dual role that HMRC would play in contributing to deficit reduction, through both cost reductions and, more significantly, collecting additional revenue by tackling tax avoidance and evasion—a point that several hon. Members raised this morning. Our priority was to ensure that HMRC delivered a service that would provide the best possible value for money to taxpayers. Consequently, we required HMRC to make 25% efficiencies to reduce its costs. We then agreed to reinvest a proportion of those efficiencies to tackle avoidance and evasion. The result was a net impact of overall savings over the spending review period of about 16% and a net reduction in overall staff numbers of about 10,000. I say “net” because in that figure is an actual increase of about 2,500 in the number of staff HMRC deployed on its compliance activities over the period.

[John McDonnell]

The Minister mentioned the impact. One of the points made by PCS, ARC and the ICAEW is that the impact assessments religiously fail properly to assess not only the implications for staff, but the cost to business and taxpayers overall. Will the Minister look at, and perhaps consult on, how such impact assessments are undertaken and how they can be improved?

[Mr Gauke]

I will indeed. I understand that the NAO will publish a report tomorrow on cost savings in HMRC and the way in which HMRC has proceeded. Time prevents me from running through in detail all the areas in which there have been savings, but it is worth pointing out that there have been significant savings of £74 million in the price paid for IT equipment and services, and savings in estate costs through vacating buildings. It is important that HMRC seeks savings, but it is also important that we raise the revenue. A number of hon. Members mentioned the tax gap.

Finance (No. 3) Bill

Debate between John McDonnell and David Gauke

Monday 4th July 2011 Commons Chamber

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

We have had an interesting and wide-ranging debate on this group of amendments, which propose a number of changes to the taxation of business. Let me start by reiterating our position on business tax. The first step in the Government’s plan for growth is a competitive UK tax system. In fact, the Government’s aim is to create the most competitive corporate tax regime in the G20, and we have been clear about how we intend to achieve that. Last November we published our corporate tax road map, setting out our plans for reform over the next five years and the principles underpinning those reforms. I am quite clear that if we are to provide business with the certainty that it needs to invest in the UK, tax reforms need to maintain stability, avoid complexity and ensure a level playing field for taxpayers.

Let me deal first with the amendments tabled by the hon. Member for Hayes and Harlington (John McDonnell), and in particular amendment 15, which deals with directors’ pay, and on which we saw an unlikely alliance between him and my hon. Friend the Member for Wycombe (Steve Baker) in defence of the interests of capital versus workers—if I can phrase it in a way that will please my hon. Friend but not the hon. Gentleman—albeit the highest paid workers. It is worth noting that both hon. Members have made many declarations of independence, and today was no exception. As I have said, a competitive tax regime is the foundation of our plan for growth, and the consequence of amendment 15 would be to delay the reduction in corporation tax.

The Government take the essence of the hon. Gentleman’s concern—directors’ remuneration—seriously; indeed, my right hon. Friend the Secretary of State for Business, Innovation and Skills raised it on 22 June in a speech to the Association of British Insurers, asking how we can ensure that directors’ remuneration is effectively linked to company performance. To help answer that question, the Government already have plans to consult in two relevant areas. In July, the Department for Business, Innovation and Skills will look at the narrative aspects of reporting directors’ remuneration, examining the provisions dealing with the disclosure of directors’ remuneration and making the link to company performance much clearer. In the autumn, the Department will explore other policy options related to the role of remuneration committees and company accountability to shareholders.

Turning directly to the proposals made by the hon. Member for Hayes and Harlington, let me first remind him that UK-quoted companies are already required to publish a directors’ remuneration report. That includes full individual details of each director’s pay, including salary and bonuses, share schemes and all other forms of remuneration. His proposal to make the remuneration vote binding in nature would raise difficulties, as such a vote would inevitably cut across contractual arrangements already entered into between the company and the director. That is why the vote is currently advisory in nature.

[John McDonnell]

Is this issue to be part of the consultation in the autumn? Will it be addressed at all?

[Mr Gauke]

As I have said, the consultations I have announced will focus on the narrative provisions, the role of remuneration committees and company accountability to shareholders. I am sure that representations could be made to the latter consultation. However, there remains a difficulty with cutting across contractual arrangements and I dare say that there might be issues with the Human Rights Act 1998 were that to happen.

[John McDonnell]

First, I think it would be greatly reassuring to the House overall if the issue of the binding vote was within the scope of those consultations. Secondly, the issue of contractual commitments has always been the red herring brought up on any future reform. The way around it is simply to make future contracts subject to that binding vote of shareholders.

--- Later in debate ---

[Mr Gauke]

I do not know whether my hon. Friend is trying to lose the support of the hon. Member for Hayes and Harlington on this, but I fully take his point on board and I shall ensure that BIS is aware of this debate. My right hon. Friend the Business Secretary has said that shareholder accountability is an area that his Department will be looking into in the autumn.

[John McDonnell]

This is a serious point, and I say to the Minister that this will come back time and again, because every Government structure put in place by successive Governments on this issue has been unsuccessful in controlling remuneration. There is outrage among the general public about what has been happening, not just in recent years but today with £6 billion bonuses in the City and elsewhere. I say to him in all seriousness that any Government need to address this issue, which concerns the democratic control of what are now public companies in terms of ownership.

[Mr Gauke]

The hon. Gentleman makes his point forcefully. It is worth pointing out that the UK leads the way internationally on the reporting of executive pay and accountability to shareholders. I hope that he will acknowledge that, just as I acknowledge the legitimate concerns he raises. It is our intention to make sure that the framework remains fit for purpose and in line with our approach to delivering long-term returns as our economy grows out of the recession.

The hon. Gentleman’s second amendment, amendment 17, would delay the introduction of clause 42 until a report on the impacts of the enterprise investment scheme had been published. In contrast with corporation tax as a whole, EIS is a focused relief with a particular purpose and is a vital component of the Government’s plan for growth. The scheme encourages investment into smaller, riskier companies by offering a tax incentive to investors. For example, it benefits new start-ups in high-tech sectors such as IT bioscience. Since 1994, about £7 billion from private investors has been contributed to qualifying companies. The Government are building on the success of the scheme with changes in this Finance Bill and in the Bill next year that will increase the incentive for people to invest in smaller companies, helping them to establish and grow.

--- Later in debate ---

[John McDonnell]

How do the Government assess value for money with regard to those schemes, if not in job creation?

[Mr Gauke]

There have been assessments of the enterprise investment scheme, which has been in place since 1994. We want to encourage greater investment, particularly in smaller companies. We recognise that sometimes there is market failure in that area, which is why tax incentives are justifiable. We have set out as much information as we can, but it is not something on which we can provide precise numbers. That is not the nature of the economy, but the scheme will encourage greater investment and that should be welcomed.

I thank my hon. Friend the Member for Amber Valley (Nigel Mills) for his remarks on my award as tax personality of the year. Some may think it a somewhat oxymoronic award, but I can tell the House that it has changed my life considerably.

My hon. Friend brings much greater expertise to these matters than I do. I welcome the fact that he seeks simplicity, which is not always the case with new clauses and amendments to Finance Bills. I want to make a couple of points that relate to both his new clauses.

First, we do not see it as our role to direct the Office of Tax Simplification. The office has done a lot of good work, but it is important that its independence is respected. Secondly, in its broad work the OTS has looked at the various allowances and reliefs in the tax system and has concluded that they are not areas where it wants to devote its efforts. None the less, I know that the OTS will closely read my hon. Friend’s speech. We are always keen to look at areas where we can improve the administration of the tax system, including his proposals in new clause 14 on consolidated filing.

On new clause 12, the OTS has given initial consideration to capital allowances as part of its review of tax reliefs and its ongoing review of small business taxation. The Government have set out their approach to capital allowances in the corporate tax road map. Allowing each business asset to be written off for tax purposes in line with its own depreciation rates would not necessarily bring the benefits to businesses that the new clause anticipates. Some business assets would depreciate more slowly than they currently do under the capital allowances regime, and it should be noted that the annual investment allowance gives immediate write-off for the plant and machinery expenditure of 95% of UK businesses. There is thus a danger that the new clause could increase business tax complexity.

I know that my hon. Friend tabled his new clauses as probing provisions. I may not have entirely satisfied him, but he has put his case on record and the OTS will of course look carefully at what he says.

I turn finally to amendment 51, tabled by my right hon. Friend the Member for Gordon (Malcolm Bruce), who has played a constructive role on the issue in the three months since the Budget announcement on oil and gas. He made an important contribution when the House debated clause 7 in the Committee of the whole House. He has stressed the importance of working closely with the industry in the months ahead, which the Government committed to do at the time of the Budget. We announced then that we would work with the industry in three key areas: setting the right trigger price for the fair fuel stabiliser; looking at whether we can find a way to provide long-term certainty on decommissioning relief; and looking at the case for new categories of field qualifying for the field allowance. I am pleased to tell the House that we are making good progress in these discussions. My hon. Friend the Economic Secretary, who is here this evening, will update the House on progress on those discussions as soon as is appropriate. I hope and expect that she will be able to do so in the very near future. I thank my right hon. Friend for tabling his amendment. Although I have been unable to respond in full detail, I hope that the Government will be in a position to do so shortly.

In conclusion, I remind the House that it is the Government’s aim to create the most competitive corporate tax regime in the G20. We have set out our plans for reform over the next five years in the corporate tax road map, which was published last November. In order to provide businesses with the certainty they need to invest in the UK, tax reforms need to maintain stability, avoid complexity and ensure a level playing field for taxpayers. Therefore, although we have had a good debate, I invite my hon. Friend the Member for Amber Valley to withdraw the motion.

--- Later in debate ---

[Mr Gauke]

As was mentioned earlier, we have increased capital gains tax rates from those that we inherited, and our income tax decreases have been focused on the low paid. That is an example of what we are trying to do. The point is how to ensure that we have a competitive tax system so that we have the growth that the economy needs and that benefits all our constituents.

Let me turn to the report requested by the hon. Member for Hayes and Harlington.

I draw his attention to the detailed analysis that the Government have published on the impact of direct tax, indirect tax, tax credits and benefit reforms, which can be found in annexe A to “Budget 2011”. The Government have gone further than any previous Government in presenting distributional analysis of how changes to taxes, tax credits and benefits affect households. We have published detailed analysis at Budget 2011, the spending review and the June Budget 2010. That analysis shows that the top decile sees the largest losses from the cumulative impact of tax, tax credit and benefit reforms introduced at Budget 2011 and previous fiscal events. In cash terms, the top decile loses more than twice as much as the ninth decile, and 10 times as much as the bottom decile. That is the case if one looks at the overall impact or in cash terms, as a percentage of net income, or across income or expenditure deciles.

[John McDonnell]

Will the Government publish anything with regard to the distribution of wealth—for example, the impact of such policies on the Gini co-efficient?

[Mr Gauke]

We will make further announcements as and when necessary, but we are publishing much more information on distributional analysis than any previous Government have. It is right to do so, and to take steps to ensure that the House and the whole country can debate such matters with as much information presented in future. A striking contrast can be drawn with regard to one policy—the doubling of the 10p rate—about which the hon. Gentleman and the right hon. Member for Birkenhead (Mr Field) had concerns. It was difficult to obtain any information on that policy’s impact, although we have learned in recent weeks that much of the information about that was available to Ministers at the time.

Amendment 30 seeks to provide a one-off £250 reduction in the tax liability of all public sector employees earning less than £21,000. In the June 2010 Budget, we announced a two-year pay freeze for public sector workers earning a full-time equivalent of £21,000. That is one of the many difficult choices that we have had to make to help put the UK’s public finances back on track, and it does not mean that we do not value the work done throughout the public sector. All Members know that those in the public sector work hard for the benefit of society. However, pay freezes of this sort save jobs. Given that we are having to constrain public spending and given that the fiscal deficit requires cuts, a pay freeze will help to mitigate the effect of those cuts. Because we recognise that the freeze will be hardest on the lowest-paid public sector workers, it was announced in the June Budget that those earning a full-time equivalent of £21,000 or less would receive an uplift of at least £250 in both years of the freeze.

Both the Labour party’s manifesto at the time of the last general election and the 2009 pre-Budget report announced a 1% increase for public sector workers across the board, apart from the armed services. No distinction was made between the low paid and the high paid. Under a Labour Government, none of those earning less than £21,000 a year—including nurses, teaching assistants, police community support officers and hospital porters—would be receiving a £250 increase.

--- Later in debate ---

[Mr Gauke]

It is for local authorities to determine what they pay their employees, but we have given them the extra money to fund this, and we would like local authorities to fulfil the objective that we are achieving at national level. We do not control local authorities, but we can provide them with the funding, and we did that. Our intention was that all low-paid workers would receive the £250, but we do not—and should not—have the ability to mandate local authorities to pay their workers, and that is currently up to them.

[John McDonnell]

When the Chancellor made his statement, there were no caveats; it was a straightforward commitment to pay 1.7 million workers the £250. The Chancellor gave a moral commitment; it therefore behoves the Government to intervene to ensure the Chancellor’s pledge is fulfilled to all 1.7 million workers, without any caveats.

[Mr Gauke]

As I said, where this is within our control, public sector workers earning less than £21,000 are getting the £250. Where it is not within our control, we have funded local authorities; they are funded to make this payment, but it is ultimately for them to decide.

Finance Bill

Debate between John McDonnell and David Gauke

Monday 12th July 2010 Commons Chamber

[Mr Gauke]

I am grateful to my right hon. Friend, who brings me to my next point.

The Government see the distinction between tax avoidance and tax planning, but those lines can be blurred, and sometimes use of the terminology is not as accurate as it might be. For example, I quote the “Missing Billions” report, produced for the TUC, which, after setting out a series of numbers leading towards the estimate for corporation tax avoidance, states:

“Much may be due to legitimate tax planning, but by no means all is. Some, undoubtedly, is due to tax avoidance.”

That seems to me to suggest a slight blurring of the lines. Again, I am sure that I will be corrected in Mr Murphy’s blog if I am wrong, but there does appear to be some confusion.

I am not suggesting that tax avoidance and tax evasion do not matter. The £40 billion figure is significant. However, it is also true that we cannot pretend that if we just address this problem, the deficit will go away. Although it is always tempting for a new Minister in a new Government to attack everything that happened before, I must point out—not purely out of fondness for my predecessor, the right hon. Member for East Ham—that, in international terms, £40 billion is not too bad as a percentage of tax revenue raised.

HMRC does not do particularly badly. Indeed, it tends to lead the field in this respect. Nor has it deteriorated during a period in which it has incurred substantial job losses, as a number of Members have pointed out. I believe that it employed 97,000 people in 2005, and the most recent figure is 69,000. It is a question of deploying resources as effectively and efficiently as possible.

None the less, to the extent that it is possible to go further in reducing evasion and avoidance, the Government are keen to do so, and I have set out some of the ways in which we intend to do so. I can tell the hon. Member for Hayes and Harlington that we already assess the amount of tax lost through avoidance and evasion, and that we are committed to reduce those losses as much as possible. We will also continue to publish the tax gap figures as frequently as possible, to provide a focus for HMRC and to ensure that our debate is well informed.

I hope that what I have said gives some reassurance to the hon. Member for Hayes and Harlington. Let me also remind the shadow Minister that HMRC introduced a banking code of practice in 2009, and HMRC’s annual report will provide anonymised statistics on the number of banks that have adopted it. We believe that the code encourages banks not to enter into, or be party to, avoidance arrangements, but we will of course continue to monitor and review its operation.

[John McDonnell]

I am grateful for the Minister’s assurance that information on the tax gap will continue to be published, but my amendment also deals with when it will be published, and asks for further information to be given on the measures that will be taken to tackle the problem.

[Mr Gauke]

The hon. Gentleman’s points have been noted. Today’s debate is the second on this matter in which I have taken part in my present post—the first was in Westminster Hall—and I am well aware that it is of considerable concern to Members on both sides of the House. It has also featured heavily in Treasury questions, which will take place again tomorrow. Who knows? There may be a question on this very subject then.

The hon. Gentleman is right to hold Ministers and HMRC to account in regard to how we seek to reduce the tax gap. The Government are taking the matter seriously, and, in the spirit of transparency in which we operate, we will provide as much information as we can so that our debate is as well informed as possible. In the light of that assurance, I hope the hon. Gentleman will accept that the amendment is not necessary and will withdraw it.

[John McDonnell]

I think that the debate has been helpful to Members on both sides of the Committee. An attempt has been made to get out of the trenches, and to engage in a wide-ranging discussion of how we can proceed in a pragmatic way. I believe that this will become one of the key issues that people will expect us to address as the economic crisis continues. If they see public expenditure cut so that their local schools are not refurbished, and if they see a tax on welfare benefits, they will expect us at least to maximise the revenue from the tax that people and organisations should be paying. Justice and fairness in the taxation system will become critically important to more and more people.

Some of the arguments that we have heard today have been very helpful, and at times they have been entertaining. I am fascinated by the concept that reducing taxation reduces evasion and avoidance: that is almost an argument for no taxation at all, although it may not gain much purchase in the House. We all accept the arguments about simplicity, but the problem with simplicity is that it makes loopholes possible, and we then need complexity to tackle the loopholes. It is a circular problem. However, it is a joint venture for us to try to ensure that the legislation that we draft is appropriately simple.