Criminal Finances Bill

Kirsty Blackman Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Tuesday 25th October 2016 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

I had not been in a debate with the hon. Member for Islwyn (Chris Evans) until this morning, and now we have the pleasure of two in one day.

It is very strange to stand here and talk about the Criminal Finances Bill, because I think that a lot of the things under discussion are totally alien and completely baffling to many of my constituents. Many of them will be thinking, “Why aren’t we doing this stuff already? Why has it taken so long for Governments to get around to addressing the issues?” That is particularly true of unexplained wealth orders, which, for the avoidance of doubt, I support. It is a good idea to introduce them, but I am sure that many people are wondering why that has not happened before.

Most of my constituents will only ever pay tax through pay-as-you-earn. None of the taxes under discussion, such as corporation tax and inheritance tax, apply to them, so they will not know quite how complex the UK tax code is, or that a van is needed to transport it, as is regularly mentioned in this Chamber. I am aware that repetition is allowed—in fact, it is positively encouraged—in this place.

The fact that the tax code is so complex means that it is very easy for people to find and exploit loopholes in it. I appreciate the Bill’s measures to close at least some of them, but there are some glaring omissions. As my hon. Friend the Member for Dumfries and Galloway (Richard Arkless) has said—I am sure that my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin) will mention this, too, because I may have read his speech—Scottish limited partnerships are still missing from the measures. We have brought up the issue and it has been widely reported by The Herald. I think that people in Scotland who have read those articles will be clear that the UK Government need to fix that and that they can do so relatively easily because of the high percentage of SLPs that are being used for financing crime.

The right hon. and learned Member for Harborough (Sir Edward Garnier) mentioned the Victorian principles behind some aspects of finance and tax law. That is a big problem. A lot of the laws have evolved over a number of years and there has never been a wholesale review. The approach has been not “Let’s take it all apart and start again,” but “Let’s tinker by adding a little bit and taking away a little bit.”

When some of the tax powers were devolved, Scotland was, in some ways, in a much better position, because we could start with a much cleaner slate. Our general anti-avoidance rule was said by Isobel d’Inverno, convenor of the tax law sub-committee of the Law Society of Scotland, to be

“much fiercer than the UK one.”

It has also been widely commented that the Scottish Government are in a positon to have a much stronger law and stronger rule, and that that has been beneficial for us to administer the devolved taxes.

As my hon. Friend the Member for Dumfries and Galloway has said, we are calling for a moratorium on the closure of HMRC offices. If it is a massive priority for the UK to ensure that tax loopholes are closed and that criminals do not exploit the tax system, particularly through tax evasion, it is bizarre that offices are being closed, rather than more staff being taken on and more resources being spent on ensuring that such exploitation does not happen. I would appreciate it if the UK Government would reconsider, again, the loss of those important offices and dedicated staff. That is key.

What the Government are doing and the way in which the current system is set up do not encourage people to have confidence in the economic system. It is much like the House of Commons, which is set up in a very traditional way with Standing Orders that were written hundreds of years ago. They do not encourage transparency or confidence in the system, because they allow some people to have too much power. The tax law and the tax codes have much the same problem. Some of them are far too old, and they have been tinkered with rather than changed wholesale. They encourage and allow some people who are in receipt of millions of pounds to continue to have millions of pounds without paying appropriate tax on it, whereas the people at the bottom cannot do so. One of the problems with the system is that nobody has confidence in it. Criminals have worked out how to get around it, and they continue to do so. The people at the bottom of the pile, who are not involved in those tax affairs and who do not see the criminal proceeds, do not have confidence in the system either.

The Government have a real job of work to do if they are to ensure that Bills such as this restore confidence in our tax and regulatory systems. My hon. Friend the Member for Dumfries and Galloway talked about the free market economy in America and some of the moves that that country has made. If we were to introduce similar financial regulation for banking and property ownership, not only in and around London but for those who own vast swathes of land in the Scottish highlands, we would inspire confidence among the general public.

The right hon. Member for Barking (Dame Margaret Hodge) and my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) mentioned the recent YouGov poll, and they talked about public confidence in these measures and public concern about tax evasion, particularly in the Crown dependencies. Because such tax evasion has been widely reported in the news, the public are really concerned about it. Their concern is increased by the fact that the Government have not used the Bill to introduce a public beneficial ownership register, and they have not given Parliament a timetable for introducing such a register. The quicker the Government can publish such a timetable, the better for the confidence of the general public in the tax system. As my hon. Friend the Member for Dumfries and Galloway has said, we are generally supportive of some of the measures in the Bill, but it does not go far enough to inspire public confidence in the measures that the Government are taking.