Dormant Assets Bill [Lords]

Julian Knight Excerpts

2nd reading
Monday 6th December 2021 Commons Chamber

[John Glen]

I thank the hon. Gentleman for his intervention. There will be a consultation; I or the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), will come to it later.

The Bill makes provision to reflect Reclaim Fund Ltd’s establishment as a Treasury non-departmental public body and names it as the scheme’s only authorised reclaim fund. In addition, the Bill includes a new power for the Treasury to designate additional authorised reclaim funds in future. To guarantee consumer protection, the Bill’s money resolution will enable the Government to cover the liability, in the form of a loan, for reclaims should any authorised reclaim fund face insolvency.

The Bill will amend the approach to distributing dormant assets funding in England, aligning it with the model used in the devolved Administrations, who have powers to focus funding through secondary legislation, provided that it is within the parameters of social or environmental purpose. In England, the Dormant Bank and Building Society Accounts Act 2008 restricts the English portion of funding to youth financial inclusion and social investment. The Bill will enable the current restrictions to be removed from primary legislation and put into secondary legislation so that the scheme can respond to changing needs over time. The Bill will require the Secretary of State, before making an order, to publicly consult on the social and environmental focus of the English portion of funds. No changes to the existing restrictions can be made until and unless a new order is laid.

After 10 years of operation, it is right that we carefully consider how the scheme can deliver the greatest impact once it has been expanded.

[Julian Knight (Solihull) (Con)]

With the expansion in the amount of money and the number of areas subject to the scheme, there is a danger that we could end up swamping the economy in those areas. We therefore need to broaden out the scope of the good causes towards which the scheme can work.

[John Glen]

I thank my hon. Friend for that point—a legitimate point that will be raised in different ways across the country during the consultation, and one on which the Secretary of State will need to reflect in due course before an order is laid.

It is vital that we afford everyone a fair and open opportunity to have their say, so the Government plan to launch the first public consultation, which will last for at least 12 weeks after the Bill receives Royal Assent. Until we have launched the consultation and fully considered the responses, the Government are not prepared to make decisions or commitments on the ways in which future funds will be used in England. To do so would clearly undermine the validity and transparency of the consultation exercise.

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[Julian Knight (Solihull) (Con)]

I declare an interest as chair of the all-party parliamentary group on financial education for young people. Several key supporters of the APPG have benefited from the dormant assets scheme, in which I know my hon. Friend the Economic Secretary to the Treasury takes a keen interest. His has often been a lone voice in the wilderness when it comes to financial education for young people, and we are grateful for his support.

It would be fair to say that the current dormant assets scheme has far exceeded expectations since the passage of the Dormant Bank and Building Society Accounts Act 2008. I was a financial journalist at the time, and I well remember that it was seen as revolutionary but relatively small-scale—a staging post. The then Government thought it would raise about £400 million, but it has raised £800 million. I also remember that there were a lot of questions about exactly how it would be brought about, how fair it would be and whether people would get their money back.

There were also questions about whether people would find their money was just taken, whether it would be an example of the state effectively piling into people’s lives, but we have seen a huge amount of fairness. No one can complain—even those from 1864 who lost money from their National Savings and Investments account have not come forward to say they have been mistreated in that respect.

I have seen in my constituency the huge amount of good this scheme has done. Ordinary Magic, a group based in Shirley, received £60,000 through the fund this year, and it is providing support to local children—we know from the tragic events this weekend exactly how welcome this is in my community—who are suffering from mental health conditions by providing psycho-education workshops to teach parents how to enable their children to get through these difficult times and difficult situations. It also provides personal, social, health and economic education sessions in schools, enrichment holiday clubs and breaks for children and carers, which is hugely important.

As Chair of the Digital, Culture, Media and Sport Committee, I believe it is incredibly important for our young people, particularly those living among some of our most deprived communities, to have access to the performing arts. I make reference to the Citizens Theatre, based in Glasgow, which is fantastic in its outreach. I know for a fact that it goes out into the local community; I believe it even tries to recruit young actors in chicken shops, cafés and other such places. The distribution of the dormant assets scheme is therefore providing enrichment experiences that young people in Glasgow need to expand their confidence and explore their identities through the stage. That would not be the case had it not been for this legislation, which has cross-party support.

However, I believe we have a major disparity in the existing system, whereby the devolved Administrations have more flexibility in how the dormant assets funding is distributed in comparison with England, where the funding is restricted to groups promoting financial inclusion—obviously, I have an interest in those—and social investment. While financial inclusion and social investment charities both do important work, it is only right that we widen our funding distribution here in England as well.

That is why I support the Bill before the House. Under this legislation, the Government will be in a position to increase the flexibility on how funding is allocated over time. As they see the money come in, they will be able to suit the distribution of those funds accordingly and be able to bring about real change. That is to be done through amending the Dormant Bank and Building Society Accounts Act 2008, allowing the Government to set out additional clauses through secondary legislation. It will thus be subject to a departmental consultation in the public domain, which is important, and will need the support of hon. Members through parliamentary approval, as per usual.

Supporting this change by approving the legislation before us will allow the Government to bring themselves in line with our devolved Administrations, so they can set their distribution priorities through secondary legislation. According to the Association of British Insurers, which I understand is backing the Bill, it is estimated that £2.1 billion currently sits in dormant insurance and pension products. Let us just think of the life-affirming, life-changing effects that that £2.1 billion, if correctly and safely distributed with the right to reclaim, could have on our communities across the country.

I concur with my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) in his ambition for community banks. I also place on the record my thanks to those within banking and financial services who work tirelessly year in, year out to reconnect dormant assets with their customers. They really do not give up—even with the case in 1864 with National Savings & Investments, they are probably still writing letters. Indeed, I know the sector invests millions each year in reuniting customers with their money. However, despite some of their best efforts to reconnect dormant assets with the customer, sometimes we know it is simply not possible. That said, with the greater move to online banking, customers should be in a far better position to keep track of their finances and securities.

Finally, it is welcome that, following the Government’s public consultation in July 2020, the existing scheme will be expanded to include assets from the insurance, pensions, investments, wealth management and securities sectors. This step will pump even more funding into the dormant assets scheme, in turn supporting some of the most innovative and inspiring work in the third sector.

As the hon. Member for York Central (Rachael Maskell) stated, we know the charity sector has had an incredibly difficult pandemic; £750 million was hugely welcome, but the total shortfall across the sector was £4 billion. Let us hope that some of the redirected resources from this scheme can go towards that third sector, to ensure that they can continue the work they do.

Public Health Restrictions: Government Economic Support

Julian Knight Excerpts

Tuesday 13th October 2020 Commons Chamber

[Steve Barclay]

It has not. It has provided a universal offer to all firms that are able to be open, for exactly the reason at the heart of her question. She is quite right that the displacement impact goes far beyond areas in tier 3 or tier 2. Businesses supplying them are affected. We had a question earlier about support for the fishing industry. One of the key challenges with the fishing industry was exactly the point to which she refers—they were supplying other businesses that had been affected, and that is why we put £10 million of support into that sector.

We have taken a universal approach. It is at odds, though, with the questions we often get in the House, which are very much about whether we can support this sector or that sector. We have taken a universal approach because we recognise that one cannot necessarily draw a geographical line around the suppliers of businesses that are impacted.

[Julian Knight (Solihull) (Con)]

On Sunday evening, Mayor Andy Street was told that Solihull would be in tier 1. The day afterwards we appeared in tier 2. Does the Minister recognise the crushing blow that that gives to the hospitality industry and that tier 2 is economically the worst of all possible worlds?

[Steve Barclay]

I think we all agree in this House that we want to do all we can to get the virus down and get businesses open. We do not want businesses to be in tier 2 or indeed tier 3. We want to support them so that they are able to function as much as possible.

The timing of moving between different tiers is shaped by a range of factors—the number of positive tests, the amount of testing that is being done, the views of the local director of public health and the views of local leaders such as Andy Street. We all want to ensure that as many businesses as possible remain in tier 1.

Covid-19

Julian Knight Excerpts

Monday 11th May 2020 Commons Chamber

[Julian Knight (Solihull) (Con)]

The Government took decisive action to protect the public, but as we consider our phased exit from lockdown, we must also consider the impact on UK businesses and workers. Specifically, I would like to speak to the experiences of the digital, culture, media and sport sectors.

The Department for Digital, Culture, Media and Sport accounts for less than 1% of Government spending, yet these sectors account for almost a quarter of the UK economy. Ensuring the integrity of the economy therefore means giving businesses in the DCMS sectors the support they need to deal with the challenges of covid-19. Whether in the arts, sports, media or tourism, these sectors punch well above their weight and enrich the lives of people in this country every single day. They are also the sectors that are disproportionately impacted by lockdown and social distancing measures.

Heavily regulated industries, such as financial services these days, have much more interaction with Government and the Treasury than most businesses in the DCMS sectors. Ordinarily, that is an advantage. These businesses are often small, operating for the most part without Government intervention, and many survive on tight margins, with surprisingly complex and diverse operations. When it comes to knowing how to help them in troubled times, however, that poses a challenge, with what I have to say is a lack of comprehension on the part of the Treasury.

The Digital, Culture, Media and Sport Committee, which I chair, is currently conducting an inquiry into the impact of covid-19 on the DCMS space. Already we have seen that the Government support, although welcome, is not reaching some of the freelancers and organisations that are desperate for assistance. Too often they fall between the bureaucratic cracks riven by the Treasury, which is more used to dealing with banks than bands and with accountants rather than actors.

Charities in particular are suffering. The best of British good will can be seen in our charitable sector and the more than 160,000 diverse charities across the country, which in normal times work to fundraise extensively. That is now largely impossible, and charities report that they are struggling. A shortfall of almost £4 billion over a quarter has been cited as the likely black hole that they face.

The Government’s £750 million package for charities is helpful to those working on the covid frontline, but most charities, despite doing exceptionally valuable work, without which our communities would face significant struggles, are not working specifically on the covid frontline. They still have bills to pay and are facing the same collapsing revenues. Many still have statutory requirements to keep working. To further complicate matters, charities that have furloughed staff find that those staff are unable to volunteer for them, despite being able to volunteer for other charities. If furloughed staff could volunteer for their own organisations, with regulatory oversight, that would go a significant way towards ensuring the survival of many.

For that reason, the DCMS Committee has been calling for a separate coronavirus job retention scheme to be established specifically to meet the needs of organisations and individuals in the charity and voluntary sectors, and that substantial notice be given on phasing out furloughing support to avoid a cliff edge, which is an issue for many other parts of the UK economy. The charitable sector has also called for a stabilisation fund to provide certainty to organisations at this unprecedented time, which we also support as a Committee. We ask that consideration be given to the sums that the sector says it needs and that further clarity be given about how the £750 million earmarked so far can actually be claimed.

Charities help us and our communities when we need support. Without them, public services would be inundated. We must now support them in their hour of need, so that they can continue with their vital work.

Economy and Jobs

Julian Knight Excerpts

Monday 20th January 2020 Commons Chamber

[Sajid Javid]

Absolutely. May I take this opportunity to commend my right hon. Friend for all the work he has done on all three of those issues. He is absolutely right in what he says.

Our work has started with this Queen’s Speech, the most radical Queen’s Speech in a generation. It will enshrine in law the largest cash settlement in the NHS’s history and invest more in our schools; it will revolutionise our national infrastructure and make great strides towards net zero emissions by 2050; it will level up, spreading prosperity and opportunity across every region and country of the United Kingdom; and it will build that brighter future for our country on the foundation of economic security and sound public finances. This is a one nation Government delivering the people’s priorities as we embark on a decade of renewal.

As we begin this new chapter in our country’s history, we start with strong economic fundamentals. Our economy has grown in each of the past nine years, and just today, when the International Monetary Fund updated its world economic outlook, it forecast that this year the UK will grow faster than France, Germany, Italy and Japan. Our jobs miracle continues—it is a miracle; Members would think that a party that calls itself the Labour party would welcome a jobs miracle—with the highest employment rate ever and an unemployment rate that is the joint lowest for 45 years.

The UK is an open and competitive economy with some of the most innovative and exciting businesses in the world. Just last week, new figures showed that tech investment in the UK grew faster last year than in the US, China, France and Germany. Although we are optimistic about the future, we are not complacent. It is clear that the uncertainty and indecision of recent months has held back our economy. The global economy is slowing, and an open economy like ours is not immune to global trends. Our productivity growth has not yet recovered to pre-crisis levels, acting as a brake on the potential of our country. The Government have a real opportunity to tackle some of these long-term challenges. I will set out our new economic plan in the Budget on 11 March.

[Julian Knight (Solihull) (Con)]

On my right hon. Friend’s point about investing in new technology and in the future, will he confirm that the Government remain committed to the 2018 automotive sector deal on funding for research into and the development of the infrastructure necessary to support connected and autonomous vehicles? That is a matter of great concern to my constituents and the wider west midlands.

[Sajid Javid]

Yes—I am pleased that my hon. Friend has asked me that. We are absolutely committed to that deal; indeed, we want to go further. The automotive sector is one of our most important sectors, responsible for much of the growth and many of the jobs in our economy. It will certainly get the Government’s strong support.

Let me briefly address an important question for the future of our economy: our future relationship with the EU. We are leaving the EU, its single market and the customs union. We are seeking an ambitious, Canada-style free trade agreement. In doing so, we will be a sovereign and independent country, not a rule taker, so yes, some things will change. It is a new chapter. We are ambitious for British businesses, through a close relationship not only with the EU but with other partners. Some 90% of global growth is expected to come from outside the EU over the next decade, so there are real opportunities for the UK. We will maintain high standards not because we are told to, but because that is what the British people want. Above all, we will be driven by British interests.

Oral Answers to Questions

Julian Knight Excerpts

Tuesday 1st October 2019 Commons Chamber

[Mr Speaker]

The hon. Member for Solihull (Julian Knight), the House will want to know, is a former money and property editor of The Independent and a very distinguished fellow, I am sure.

[Julian Knight (Solihull) (Con)]

I am sure whatever cachet I had has now been completely ruined; thank you, Mr Speaker. There are reports that the Government are looking at bringing forward the date of the banning of diesel and petrol cars. Does the Chancellor share my concerns about the fiscal damage of lower new car sales, the lack of electric car infrastructure and the negligible impact that such a virtue-signalling move will have on emissions?

[Mr Simon Clarke]

I thank my hon. Friend for his question. He is a tireless champion of the motor industry, which we all take very seriously. The Government have made a commitment to delivering net zero emissions by mid-century; that is hugely important and has cross-party support across the House. We will not be making any precipitate moves that would concern him without proper consultation fully across Government about the ramifications of any change in that date.

Privileges

Julian Knight Excerpts

Tuesday 2nd April 2019 Commons Chamber

[Damian Collins (Folkestone and Hythe) (Con)]

I thank the Deputy Leader of the House for his statement. I also thank the Leader of the House for giving me notice that she would be unable to attend the Chamber today, and for the words that the Deputy Leader of the House read out on behalf of the Government. I thank my fellow members of the DCMS Committee, and I thank the Chair of the Privileges Committee and her colleagues for their investigation.

We are not here today as a consequence of a rush of blood to the head and the “at whim” decision of a parliamentary Committee to order a private citizen to give evidence in front of us. Today we are at the end of a process that has run for the best part of 10 months, from the Committee’s first attempts to invite a witness to attend to the process of its ordering that witness to attend, to that being reported to the House and the House also ordering him to attend, and then to the matter being referred to the Committee of Privileges for it to investigate.

I am pleased that that Committee has agreed with the statement in our report that we were within our rights to call the witness, and that the witness should have attended. The witness himself, Mr Cummings, was critical of our Committee’s inquiry, of other witnesses who had attended, and of the evidence that they had given. Our main reason for wishing him to attend was so that he could respond to the allegations made by other witnesses. That is an important part of the inquiry, and also demonstrates the Committee’s desire to hear all sides of the story. We are frustrated in that process when witnesses refuse to confirm dates, put up spurious reasons why they cannot attend, and then, in correspondence with the Committee, seek to behave in a way that is contemptuous of its work and, therefore, of the work of the House.

[Julian Knight (Solihull) (Con)]

This is the heart of the matter. The report states that many of Mr Cummings’s communications were highly inappropriate, including some outside the House. He did not do himself any favours in that respect. I personally wanted to hear what he had to say, and I honestly believe that many members of the Committee had open minds and wanted their questions to be answered. Is it not also true that we asked very probing questions when it came to the other side of the debate? We questioned Christopher Wylie very closely about his desire to hawk information to Vote Leave.

[Damian Collins]

Indeed. The questions that we wished to put to Mr Cummings were highly relevant to our inquiry. They were also highly relevant to evidence presented by other people, including representatives of organisations that had worked with him in his capacity as director of Vote Leave. I think that we should have had an opportunity to put those questions, as a relevant part of our inquiry and the work of the Committee. As the Committee of Privileges says in its report, it cannot be for individuals to seek to interfere with the work of a parliamentary Committee. We should regard that as a very serious matter.

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[Damian Collins]

My hon. Friend is right; that is an important point. There has to be some penalty. For some people, that would involve damage to their reputation. Someone who is running a public body or a regulated industry, for example, might find that their reputation was damaged because they had behaved in a way that was inconsistent with upholding the high standards of their office. Clearly, Dominic Cummings does not seem to care about those things. We need to ask whether someone who has been found in contempt of Parliament and admonished by Parliament would be an appropriate candidate to hold a public position such as a Government adviser or a member of a public body in the future. Should there be a bar on that?

[Julian Knight]

Does my hon. Friend envisage a similar bar on someone for being a bankrupt, for example?

[Damian Collins]

Absolutely; my hon. Friend and fellow member of the Committee makes an excellent point. That is a good example of people finding themselves in a situation of which they are the cause, and of clear penalties being in place that can restrict their future actions and activities, although not necessarily their liberty. Someone who has been found in contempt of the House should face some sort of real-world sanction that takes into account their appropriateness to be a fit and proper person to hold certain positions and roles, and certainly to be appointed to public office. For example, if Mr Cummings were ever again asked to be a Government adviser or special adviser, these sorts of things should be taken into account, and I am sure that they would be.

There needs to be a further sanction in law as well, including a range of penalties depending on the severity of the offence, with someone in authority to adjudicate and enforce those sanctions. As the Chair of the Women and Equalities Committee, my right hon. Friend the Member for Basingstoke (Mrs Miller) has said, there should be a clear process so that we can understand how long it should take and, ideally, a witness could be compelled to come within the scope of an inquiry, rather than doing as I believe Dominic Cummings intended to do, which was to offer to come here at some point in the future, knowing full well that that could be one or two years later. Indeed, I do not believe that the conditions he set out in his initial email have yet been met, so he probably still would not come before the Committee, more than a year later. We have to consider whether that is in any way acceptable, because it massively impedes the work of parliamentary Committees if they cannot summon witnesses who are relevant to their inquiries. In his case, we were asking him to come here in direct response to evidence that the Committee had received that was relevant to him and to our inquiry. We had very strong grounds for asking him to come.

Flybmi

Julian Knight Excerpts

Monday 18th February 2019 Commons Chamber

[Mr Speaker]

Order. The Minister is answering the question and there is quite a lot of sedentary chuntering on both sides, and no shortage of gesticulation, either. I am sure that Mr Knight will now behave with his usual statesmanlike reserve.

[Julian Knight (Solihull) (Con)]

Thank you, Mr Speaker. The Minister is clearly deeply concerned about this collapse and the wider issues affecting aviation across Europe. Will she assure the House that she will do everything she can to support our regional airports— Birmingham airport, despite its successes, is running at 35% capacity—because they are so important to our country and our regional economic diversity?

[Ms Ghani]

My hon. Friend has my assurance, and I would be at fault if I did not mention Birmingham airport, which I grew up very close to and to which we are obviously committed, as he can no doubt tell by our commitment to High Speed 2 stopping at the airport. We are committed to all our regional airports, which is why we have the “Aviation 2050” consultation under way to make sure we do all we can to ensure the sector continues to remain healthy.

Sport in the UK

Julian Knight Excerpts

Monday 4th February 2019 Commons Chamber

[Mims Davies]

I feel that my hon. Friend has read the next part of my speech. Participation and a culture of participation within families and communities is absolutely vital. I would be delighted to set out some of my thoughts on that, so let us talk about participation. We are making good progress on getting more people active. We want half a million people to be more regularly active across England by 2020, with at least half of those being women. Over 470,000 more people are already active compared with when we launched the strategy in 2015, but delivering long-term change in habits requires persistence. We know that we need to do more to get and keep people active.

[Julian Knight (Solihull) (Con)]

In the three months that my hon. Friend has been in post she has been an absolute champion for women’s sport and women’s participation in sport, and we welcome that. In that spirit, will she join me in wanting to see women’s T20 cricket at the Birmingham Commonwealth games? It is a fantastic sport and we want to see it there in the west midlands.

[Mims Davies]

My hon. Friend tempts me on that point—he knows it is very tempting and I have recently been hoping to visit his constituency—but that is not fully down to me. However, I have made it very clear that participation, particularly of women, and broadcasting opportunities are absolutely vital, so this is on my radar.

Balanced Budget Rule

Julian Knight Excerpts

Wednesday 23rd January 2019 Westminster Hall

[Peter Dowd]

First, I did not make the latter point. The Tories can make up their own policies on the hoof—but don’t make up ours. Secondly, the Minister still has not answered the question. It has nothing to do with the outcome; it is about why the Government, if they are so economically capable and confident, have missed all their targets.

[Julian Knight (Solihull) (Con)]

He has already answered you.

[Peter Dowd]

No, he hasn’t.

2019 Loan Charge

Julian Knight Excerpts

Tuesday 20th November 2018 Westminster Hall

[Mr Steve Baker (Wycombe) (Con)]

I beg to move,

That this House has considered the effect of the 2019 loan charge.

I will take a moment to say how glad I am to serve once again under your chairmanship from the Back Benches, Mr Walker.

It is right that everyone, both individuals and corporations, should pay the correct amount of tax, and I welcome the Government’s commitment to a fairer tax system. I was pleased to see that the UK’s tax gap has fallen to a record low of 5.7% in recent months.

I should start by explaining what the loan charge is. The gov.uk website explains:

“Loan schemes—otherwise known as ‘disguised remuneration’ schemes—are used to avoid paying Income Tax and National Insurance.”

The loan charge was announced at the 2016 Budget. The policy ensures that users of tax avoidance loan schemes pay their share of tax and is expected to protect £3.2 billion for the UK’s vital public services. The website also says:

“The loan charge works by adding together all outstanding loans and taxing them as income in one year.”

Therein lies the difficulty, and the fundamental cause of the impact on individuals and families.

In 2005, my right hon. Friend the Chancellor said:

“Certainty and transparency are the hallmarks of a fair, effective and competitive tax system. A taxpayer is entitled to know with certainty…what he may or may not do in planning his tax affairs.”—[Official Report, 7 June 2005; Vol. 434, c. 1139.]

That is why I object to retrospective legislation that undermines the rule of law.

The introduction of the 2019 loan charge has been beset by challenges, confusion and complications. Over 100 MPs have signed early-day motion 1239 calling on the Government to significantly revise this piece of legislation. I am glad we are meeting today in this well-attended debate to consider the impact of the loan charge.

In the 2016 Budget, the Government announced that they would introduce legislation to tackle disguised remuneration schemes. Statutory provision was included in the Finance (No. 2) Act 2017, with further provisions included in the Finance Bill introduced after the autumn Budget last November, now the Finance Act 2018. The Government say they will protect £3.2 billion by taking action to tackle both historic and continued use of these schemes. That is a not inconsiderable sum. It will include a new charge on loans paid through disguised remuneration schemes that have not been taxed and are still outstanding on 5 April 2019.

Her Majesty’s Revenue and Customs states that the schemes affected by the 2019 loan charge were not and never have been legal. However, that is disputed by the Loan Charge Action Group. I refer to a letter by the Chancellor of the 19th of this month, published today on the Treasury Committee website. The Chancellor writes:

“Finally, I would like to clarify my comments to the Committee in reference to the use of disguised remuneration (DR) schemes which I described as ‘tax evasion’. I should have said ‘tax avoidance,’ and that in the Government’s view, tax was always due.”

That is a very important distinction, because evasion is illegal, while avoidance is an undesirable and unintended use of Parliament’s legislation. In drawing that distinction and correcting the record to say “avoidance”, the Chancellor has made an important concession.

[Julian Knight (Solihull) (Con)]

My hon. Friend is making an interesting speech, and I congratulate him on securing this important debate. As a former personal finance editor before entering this place, I used to have many inquiries from readers about these schemes as they were offered to them. My advice was always, “Steer clear, because eventually the price will be paid.” Does he agree that there is a role for regulators to look at the poor and potentially dangerous advice given by accountants about these schemes?

[Mr Baker]

It is my intention in my concluding remarks to stridently condemn the promoters of these schemes, who have ended up luring people into misery through what they have done.

Before closing with this letter, I want to mention that the Chancellor also wrote:

“It is not normal, or indeed reasonable, to be paid in loans that are not repaid in practice. It is not fair to the vast majority of taxpayers who pay their taxes in full and on time for anyone to benefit from contrived avoidance of this sort and that is why this government has legislated the charge on DR loans.”

I agree with the Chancellor that it is not normal or reasonable, but I make it very clear that I place the blame on the promoters of these schemes.

HMRC initially expected 40,000 people to be affected, although in a recent parliamentary question, my right hon. Friend the Financial Secretary to the Treasury gave a new figure of 50,000. HMRC’s impact note stated:

“The government anticipates that some of these individuals will become insolvent as a result.”

The Loan Charge Action Group suggests that the loan charge will end up affecting probably upwards of 100,000 people and their families.

The hon. Member for Eastbourne (Stephen Lloyd) has tabled an EDM criticising the measure, arguing that

“retrospectively taxing something that was technically allowed at the time, is unfair”.

Of course, I would agree. HMRC has argued that the loan charge is a new tax on a new source, and described it as retroactive rather than retrospective. I would like the Minister, if he can, to explain both terms and any difference that the Treasury is implying.