Tax Avoidance and Evasion

Kirsty Blackman Excerpts

Tuesday 14th November 2017 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

Thank you, Mr Speaker. It is not common for me to exceed 10 minutes, so I will try to stick to that. Let me start by thanking you for granting this debate under Standing Order No. 24, as I very much appreciate that, and the right hon. Member for Barking (Dame Margaret Hodge) for securing it. I also wish to thank all the journalists who have done all the work on the Paradise papers. They have done a huge amount of work in investigating this, exposing the issues and bringing them to the attention of the international media as well as this House. They deserve to be thanked for that.

I normally have quite a lot of time for the Minister—I find him to be often wrong but generally reasonable—but the speech he made today was badly pitched. The one made by the right hon. Member for Sutton Coldfield (Mr Mitchell) was much better, in that he talked not only about resting on the laurels of all the great things the Government have done, but about what the Government were going to do and could to in the future. [Interruption.] And should do, absolutely. I hope the Minister listens to the voices from across the House and what they are calling for. As has been said, this is not a party political issue. I do not have a huge amount of respect for the actions of either the Labour Government or the Conservative Government on tax avoidance and evasion. I do not think either party has done a particularly good job on that. A huge amount more can be done, as Members from across the House would agree.

Transparency International looked into companies dodging tax and found 766 UK companies that were involved in corruption and money laundering, to the tune of £80 billion. A quarter of those companies that were investigated by Transparency International are still active—the UK Government could take action on those organisations. The UK Government are making a number of incredibly ill-advised and not great decisions at the moment, on things such as closing HMRC offices and their continued pursuance of austerity. The only reason the Government are tackling Scottish limited partnerships is the work done by a number of journalists, as well as colleagues from my side of the House. I appreciate that the Government have taken action on that, but it took a very long time for them to be convinced by MPs such as Roger Mullin to make any move on it.

As I said, not only this UK Government but previous ones have successively failed to crack down on this. The UK tax code is out of hand and requires simplification. The changes the UK Government are making, in conjunction with the Office of Tax Simplification, have not gone far enough. It still requires a van to carry the tax code; people can no longer carry it, because it is so significant. The potential for loopholes and for people to dodge things as a result of that incredibly complicated tax code is ridiculous. The hon. Member for Bootle (Peter Dowd), the shadow Minister, talked about the UK Government previously calling for the EU’s sanctions around tax dodging to be watered down. That was grim action for them to take, particularly in the wake of the Paradise papers, when this call came. The UK Government should be leading by example. They should not just be saying, “Oh, we’ve got the tax gap down to 6%.” They should be saying, “The tax gap is still 6%. We have a huge amount of work to do to crack down on that final 6%.” The UK has the opportunity to lead the world in this regard and it should do so.

[Luke Graham (Ochil and South Perthshire) (Con)]

Does the hon. Lady think the introduction of further tax bands and thus further complication by the SNP Administration in Edinburgh is an additional complication or a simplification of the UK tax code?

[Kirsty Blackman]

The hon. Gentleman is confusing income tax with a number of other types of tax. What has happened in Scotland in relation to the paper that has been produced, which sets out a number of options and their effects, and then consults on them, is way more transparent than any action that any UK Government take in advance of any Budget, where they pull rabbits out of hats. The Scottish Government have entered into dialogue with the other parties, which have the opportunity to take that chance to criticise or to praise. They should do that, as he should. The Scottish Government and the SNP have called for this area to be devolved to Scotland because we think we would do a better job.

As everyone knows, tax evasion is illegal, but the Paradise papers highlighted that tax avoidance is immoral.

[David Linden (Glasgow East) (SNP)]

On the Paradise papers, does my hon. Friend share my concern at seeing the Duchy of Lancaster’s investment in BrightHouse, a company that exploits constituents in vulnerable areas such as mine with extortionate annual percentage rates of 70%? Does she find that immoral as well?

[Kirsty Blackman]

I agree with my hon. Friend on that, as I, too, have constituents who are exploited by organisations such as BrightHouse. It is not a company that anyone reputable should be investing in.

It is not that difficult for people to pay the tax that they owe; it is not that difficult to say to a financial adviser—this is for those who have bags of cash—“I would like my money to grow, but I wouldn’t like it to grow by avoiding the tax that I owe.” It would be easy for people to say that. It is clear that some people lack a moral compass. Where they are taking decisions to engage in aggressive tax avoidance, the Government must legislate so that they can no longer do so—to provide that moral compass for people and make sure that the tax is paid when it is owed. We must have the best possible tax rules in place. We must simplify the tax code. We must crack down on evasion, and we must legislate to reduce avoidance. The Government are in an untenable position: they cannot continue to implement austerity while leaving a tax gap.

[Angus Brendan MacNeil]

We note that many of the tax avoiders do not avoid using our roads, our schools and our hospitals, and they certainly do not avoid using the police to look after their lumps of money, here, there and everywhere.

[Kirsty Blackman]

I absolutely agree with my hon. Friend from the Western Isles. People, however much they are earning and however much tax they are paying, are using public services. Our party aspires to have brilliant public services. We aspire to have people working in our public services who are paid a reasonable amount and do not have to face a pay cap. The only way we can provide the public services and benefits system we want is by having a system where people pay the tax they owe. We continue to call for this to be devolved to Scotland because we think we would take better decisions. In the absence of devolution, we would like the UK Government to take actual action, rather than just saying, “Look how great we are.”

[Several hon. Members rose—]