Finance Bill

Lucy Frazer Excerpts

Tuesday 31st October 2017 Commons Chamber

[Peter Dowd]

As much as I would like to debate the tax gap with the hon. Lady, I think that shows an ignorance of the issues involved in the nature of the tax gap. As far as I am concerned, I am quite happy—more than happy—to debate this issue in due course, but I am simply making the point that we must move on.

[Lucy Frazer (South East Cambridgeshire) (Con)]

Will the hon. Gentleman give way?

[Peter Dowd]

I want to make a little progress, but I will come back to the hon. and learned Lady in a few moments.

In the past month alone, the Government have faced a barrage of criticism from the European Union for their poor record on tackling tax avoidance. The European Parliament’s report on money laundering, tax avoidance and tax evasion has accused the Government of directly obstructing the fight against tax avoidance, while the European Commission has opened an investigation into the Government’s changes to controlled foreign company rules, which made it easier for multinational companies to shift their taxable income offshore and reduced last year’s tax take by £805 million. That goes to the heart of the point I am making about the tax gap and some of its intricacies.

[Lucy Frazer]

The hon. Gentleman is being very generous with his time. He has made it clear that he wants to talk about the issue before us rather than others. Labour Members say in new clause 1 that they want a review after 15 months. Despite speaking for more than 10 minutes, he has not addressed that. Has Labour assessed how much a review would cost and whether it would divert resources from the Treasury?

[Peter Dowd]

I thank the hon. and learned Lady for that intervention. Government Members have taken up about seven minutes of the time I have been on my feet—[Interruption.] Six and a half minutes, the Minister says.

I am quite happy to debate these issues, but that is the point of a review. Why not have a review? It is a perfectly reasonable and legitimate proposal, given the nature of what we are considering. If there is nothing to hide, and if the Government are quite happy to be open and transparent and to tell everybody how wonderfully they are doing, let us have a review. No doubt the hon. and learned Lady will support the new clause in due course.

[Lucy Frazer]

Forgive me for intervening again, but I do not think the hon. Gentleman heard my question: how much would the review cost?

[Peter Dowd]

If we had a review and identified areas of non-compliance, I suspect we would bring in far more money than that review would cost. That is why we have reviews. Again, I am sure that the hon. and learned Lady will support the new clause.

The Government’s opposition to any action to crack down on offshore trusts is not new. In 2013, while G8 leaders attempted to push forward new measures to deal with tax evasion, the previous Prime Minister was busy undermining them by writing personal letters to the President of the European Council, Herman Van Rompuy, begging him to stop the inclusion of offshore trusts. By contrast, the last Labour Prime Minister, Gordon Brown, to his credit, spent his last year in office attempting to get world leaders to agree to strict measures on offshore tax havens. That is all the more reason for a review, so let us have that review. I am speaking directly to our proposal. As I have said, if there is nothing to be fearful of, let us have the review.

Our opposition to the exemption of offshore trusts from these measures is well noted. We have been calling for the exemption’s removal since March. I called for its removal in the debate on the Ways and Means resolutions for this Bill, on Second Reading and in the Public Bill Committee, as the Minister knows, and I now call for its removal once again. I am happy to give the Minister an opportunity to reconsider, because the British public are no fools. They are more educated than ever about what an offshore trust is and what it is used for.