Public Health Restrictions: Government Economic Support

Debate between Lord Beamish and Steve Barclay

Tuesday 13th October 2020 Commons Chamber

[Steve Barclay]

I hear the concerns of my right hon. Friend, but there is a balance that needs to be struck between the comprehensive nature and the fiscal cost of the range of packages that we have put in place and the measures that we have taken to control the virus. The balance that we have struck, in line with the advice that we have received, is about balancing how we control the virus with the wider implications not only for the economy, but for non-covid health issues as well. That is the balance that we are striking. Of course it is attractive for him to say that we should keep spending more and more, but we have already committed more than £200 billion.

[Mr Kevan Jones (North Durham) (Lab)]

The Prime Minister has been clear that the Government’s response to the covid crisis will follow the science. Last night, on a conference call with Professor Stephen Powys, the medical director for England, the hon. Member for Windsor (Adam Afriyie) and my hon. Friend the Member for Gateshead (Ian Mearns) asked about the science behind the 10 pm curfew on pubs and restaurants. Professor Powys said that there was no specific advice and in his words it was a “policy decision”. Given that thousands of jobs and businesses are at risk in tier 2 areas such as the north-east, can the Minister tell us what the logic is behind this policy decision?

[Steve Barclay]

As the right hon. Gentleman will know, that same SAGE guidance also says that there are multiple anecdotal reports of outbreaks linked to bars, and the Public Health England case control study also identifies visits to entertainment venues as a risk factor. It comes back to the point about balance. Some in the House say that there is a risk of infection in these hospitality venues and we should close them entirely; others say that we should have no restrictions at all. We have taken our decision on the basis that compliance tends to decrease later in the evening and that there are links to outbreaks in these venues. That is the balance that we have been striking.

Oral Answers to Questions

Debate between Lord Beamish and Steve Barclay

Tuesday 24th March 2020 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

Supply teachers play a vital role in our schools. Many thousands, including my constituent Ellie Atkinson, have found themselves out of work, so may I urge the Treasury to look at a way of supporting these vital workers, either with direct financial support or by ensuring that they can actually work in the schools that are being kept open?

[The Chief Secretary to the Treasury (Steve Barclay)]

The right hon. Gentleman will know that school budgets have been allocated, so the schools already have that money to spend; that will not change. The announcement that the Chancellor has made about the PAYE system is about supporting people through that mechanism. If the right hon. Gentleman has other proposals, I am happy to engage with him to discuss them further.

Self-employed Persons: Financial Support

Debate between Lord Beamish and Steve Barclay

Tuesday 24th March 2020 Commons Chamber

[Steve Barclay]

As I have said, the Chancellor held meetings with small business leaders this morning. He is having further meetings on this issue today. He is very aware of the concerns raised by my right hon Friend and other Members, and we continue to work at pace on this issue.

[Mr Kevan Jones (North Durham) (Lab)]

I am sorry that the Chancellor is not here, but may I ask the Minister to pass on to him that the self-employed people contacting me are not wealthy individuals? They are individuals such as Andrew Brown, who I raised last week—a self-employed graphic designer whose income has disappeared. They are taxi drivers. They are small catering companies. Unless action is taken now for these individuals, not just to relieve the hardship they are facing, their businesses will no longer be in existence. My fear is that we will generate unemployment among these people for a long time to come.

[Steve Barclay]

I agree with the first part of that. The right hon. Gentleman is absolutely right about the vast majority of these people. I have made that point repeatedly. I referred earlier to the fact that the target population has different elements, but the vast majority of those who are self-employed face enormous challenges. We absolutely hear that, and I accept that. On his second point, we have taken a number of measures, but we recognise that more is needed. That is why my right hon. Friend the Chancellor is meeting leaders on this issue today to look at what further measures we can bring forward.

Tax Avoidance and Evasion

Debate between Lord Beamish and Steve Barclay

Tuesday 25th February 2020 Commons Chamber

[The Chief Secretary to the Treasury (Steve Barclay)]

There is a shared desire across the House to ensure that the correct amount of tax is paid and that tax is not evaded, not least because the public services on which we all rely in our constituencies depend on that happening. Since 2010, we have introduced over 100 new measures to tackle tax avoidance, evasion and other forms of non- compliance, which, alongside HMRC’s other compliance work, have secured and protected significant revenue that would otherwise have been lost.

In 2018-19, HMRC brought in an additional £34.1 billion that would otherwise have gone unpaid, including £1.8 billion from the wealthiest individuals and £10 billion from the largest businesses. Our tax gap is at 5.6%—lower now than at any point before 2010 and one of the lowest in the world. To put that in context, in 2005, for example, under a Labour Government, the tax gap was as high as 7.2%. Action has been taken, but there is a shared desire across the House to continue to take further measures on this.

We have achieved that progress through a mixture of enforcement action for those seeking to avoid payment of what is due and through reform, because not all the tax gap is due to malicious behaviour. It can also be due to basic errors, whether that means the data that is used to calculate tax or how the calculations have been assessed. HMRC estimates, for example, that £10 billion of the current £35 billion tax gap is due to taxpayer error rather than evasion or avoidance, all of which shows that the Government have an important role in helping more individuals and businesses to get their tax right first time. A further £4 billion stems from firms going bust while owing tax. Likewise, other areas of the £35 billion tax gap are due to long-standing issues on which there will be a shared desire—for example, tackle tobacco smuggling, which is not a new issue under this Government, alcohol smuggling, and the tax lost through the hidden economy. Many of these are long-standing issues, but the crux of the matter is that the tax gap is at a near record low, thanks in large part to the actions taken by my predecessors in the Treasury.

[Mr Kevan Jones (North Durham) (Lab)]

I wonder whether the Minister thinks that there is a strong ethos of enforcement within HMRC, especially on landfill tax fraud, which I will speak about. In a case I was involved in, HMRC was not interested unless there was more than £20 million a year in evasion. Does that not send a signal that some people can get away with evading large amounts of tax, because there is not an ethos in HMRC to properly investigate?

[Steve Barclay]

As a point of principle, HMRC always seeks to collect the tax that it is due. One of the areas of innovation—I will come on to such areas as Making Tax Digital—is about making that easier for HMRC, but I appreciate that the right hon. Gentleman is making a point more about fraud than error. The underlying principle is that HMRC always looks to collect the tax that it is due, but if he has a specific point on a constituency basis, I know that my right hon. Friend the Financial Secretary to the Treasury will always be keen to discuss it with him, because he has a zeal for cracking down on any such practice.

The Government have done much to squeeze the tax gap: by ensuring that companies increasingly pay their way; by cracking down on offshore avoidance and evasion; by tackling tax avoidance schemes; by helping people to get their taxes right first time; and by investing in HMRC’s toolbox. If one looks at the actions being taken in terms of large businesses, they will see that there is an exceptional level of scrutiny. At any one time, HMRC is engaged with half the UK’s largest businesses and we have introduced specific measures to shape behaviours. For example, the diverted profits tax was introduced in 2015 to ensure that multinational companies pay UK tax in line with their UK activities. Under our rules, those companies either declare the correct amount of profits in the UK and pay the full amount of corporation tax on them, or they risk being charged a higher amount of diverted profits tax at a rate of 25%. It raises tax directly through encouraging changes in groups’ behaviour that, in turn, leads to increased tax receipts.

--- Later in debate ---

[Steve Barclay]

The hon. Member picks up on a point the shadow Chancellor made in his opening remarks about the total number of staff, but the key issue is how staff are deployed and what technology we are using. I was just referring to Making Tax Digital. If tax is being filed through the Making Tax Digital platform, the number of staff that HMRC uses will change; that profile will change. We now have about 25,000 staff dedicated to tackling tax avoidance, evasion and other forms of non-compliance, and the proof of the staffing levels is reflected in the fact that we have a near record-low tax gap—far lower than for many years under the previous Labour Administration.

Since 2010, our criminal investigations have prevented the loss of more than £15 billion and resulted in more than 5,400 individuals being criminally prosecuted and convicted. In 2018-19, HMRC investigations secured nearly 650 criminal convictions for tax and duty fraud, resulting in numerous custodial sentences. HMRC has used billions of pieces of data, combined with analytics, to identify where tax is most at risk of going unpaid and to make tailored, targeted and proportionate interventions. Technology and capabilities have moved on, therefore, but, as I am sure the Financial Secretary will mention later, what continues is the dedication of staff within HMRC, who share the House’s desire to close the tax gap and ensure that people do not evade their responsibilities.

[Mr Kevan Jones]

On the analytics, what is HMRC doing to track individuals who set up companies, fold them after two or three years and then open up new companies? A constituent came to me with a case in the cosmetic surgery industry where the same individuals moved from one company to another while owing huge amounts to the Inland Revenue and to local councils in council tax. What is HMRC doing to track these individuals? The three individuals involved in the company my constituent highlighted to me have evaded huge amounts of tax.

[Steve Barclay]

The right hon. Gentleman raises an important point about the moving target of criminality and the ingenuity of approaches to evade tax or abuse the tax system. That is partly why I referred earlier to the fraud service set up within HMRC in 2016. It is also a key part of how technology is used in a dynamic way within HMRC to tackle that moving target of criminality. As I said in answer to his earlier intervention, if in their surgeries Members are told of case involving firms or local authorities in their constituencies, that intelligence is obviously of relevance to colleagues, and I can commit that the Financial Secretary would take those forward.