Finance Bill

Debate between John McDonnell and Stewart Hosie

Monday 12th July 2010 Commons Chamber

[John McDonnell]

I understand the point that the hon. Gentleman is making. My amendment tackles tax evasion, which is clearly an illegal activity, but we need to address a wider issue that goes beyond the normal tax planning: tax avoidance beyond the spirit of the law. In previous debates, we have tried to insert into the tax laws of this country a general duty of tax compliance, which exists in other countries. Such an approach puts an onus—as a duty in law—on the individual to comply and to try to emphasise that duty, rather than to look for every possible means to avoid tax. There is a gradation in these matters, but I tackle both these things because they are both legitimate concerns in wider society and will become increasingly pressing ones as individuals experience the public expenditure cuts that will take place as we seek to tackle the deficit.

[Stewart Hosie (Dundee East) (SNP)]

The hon. Gentleman is making his case extremely well, but surely he should be pushing at an open door, given that the Red Book itself talks about changes

“to prevent avoidance of corporation tax using accounting ‘derecognition’ rules”.

It also discusses tax avoidance involving “the creation” of certain things “for corporate investors”, and mentions alternative investment funds, financial securities, inheritance tax on trusts and so on. There is also the possibility of a general anti-avoidance rule, as this is being considered informally by this Government as we speak.

[John McDonnell]

That is why I was hoping my amendment would achieve consensus in this House, although that might be a first for me. I was hoping that it went with the flow of Government policy, as well as with past Government policy, if not with past practice under successive Governments. A number of practices of tax avoidance clearly incur public opprobrium. The hon. Gentleman has cited a number that are listed in the Red Book, but there are others. These are seen as instances where people are not doing the right thing within the spirit of the law, which is why, no matter how difficult it can be at times, we can identify practices that fall within either tax evasion or tax avoidance by the practical response from the community.

This is an issue whose time has come, particularly because of the current financial climate. There is clearly a concern among Members in all parts of the House about tax evasion and tax avoidance, and there will increasingly be concern about it in the wider community. Therefore, my simply asking for the Treasury to produce a report before this latest round of taxes are implemented—this would give an element of timetabling and immediacy to the proposals that will be introduced by the Treasury—is nothing but helpful and will be seen in the wider community as actually getting the Treasury to examine this issue with some seriousness in a way that may not have been happening under previous Administrations of all political parties. I cannot see how anybody could vote or argue against this, but I shall sit down and wait for the argument to come.