Tax Avoidance (HSBC)

Debate between Margot James and David Gauke

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

Part of the issue is that, as I have said, HMRC has consistently used civil penalties as the most cost-effective way of collecting the revenue and changing behaviour. When these cases have been taken to the Crown Prosecution Service, it has taken the view that a successful prosecution would be unlikely without corroborating or additional evidence and just on the basis of the data from the leaks.

[Margot James (Stourbridge) (Con)]

The last Government presided over an unsustainable boom in the financial services sector and, at that time, aggressive tax avoidance flourished. What steps has my hon. Friend taken to close the tax loopholes that were left wide open by the last Government?

[Mr Gauke]

My hon. Friend raises a good question, and this Government have closed 42 loopholes. We inherited a tax system in which not enough had been done to tackle tax evasion or avoidance, and we have addressed that over the past four and a half years. That is partly why the yield from HMRC’s activities has risen from £17 billion in 2010 to a forecast £26 billion this year.

National Insurance Contributions Bill

Debate between Margot James and David Gauke

Monday 4th November 2013 Commons Chamber

[Mr Gauke]

That is a similar point, and, as I say, I am nervous about giving precise numbers. Of the FSB respondents, 28% believed that this would help them. We believe that we have to consider a range of measures, but clearly measures that reduce the cost of taking on staff must help in increasing employment. For example, the Bill would enable a business to take on four people on the national minimum wage and not pay any employers’ national insurance contributions at all. That will clearly help.

[Margot James (Stourbridge) (Con)]

My hon. Friend mentions the welcome for this Bill from the FSB. Is he aware that charities and social enterprises will also benefit from it? Alex Swallow, chief executive of the Small Charities Coalition, said:

“For a lot of the smallest charities, having one paid member of staff is a big step forward…having this allowance now helps them to do that, so it is a very positive thing.”

[Mr Gauke]

I am very grateful to my hon. Friend for that intervention. She makes an important point that applies to both businesses and charities. Taking on the first member of staff can be the most difficult step, as it is a big event for a business. If we are able to help and to reform our tax system to enable businesses or charities to take that member of staff on without paying the jobs tax—employer’s national insurance contributions—that will clearly encourage those businesses, which, I hope, will then take on further staff and expand.

--- Later in debate ---

[Mr Gauke]

To have implemented the policy we inherited would have destroyed jobs. It did not do businesses in the United Kingdom any good to have the prospect of an increase, sending the wrong message that we were going in the wrong direction. I am pleased to say that we have reversed that direction of travel by not implementing the previous Government’s policy in full. We have increased thresholds for national insurance contributions, which has clearly helped. Now, through this Bill, we are providing an employment allowance of £2,000.

[Margot James]

Does my hon. Friend agree that the reason the previous Government proposed the ridiculous increase in the jobs tax was testimony to the fact that they could not countenance cutting public expenditure? That was their downfall. They were content to continue to borrow £1 for every £4 this country was spending, and their proposal was evidence of a wholesale mismanagement of the economy.

[Mr Gauke]

My hon. Friend makes a valuable point that is well worth highlighting. When running a deficit of the size that we were running, we face some tough decisions. We have taken a range of measures to reduce the deficit, and it has reduced by a third.

Ultimately, though, whoever was in government was going to have to take these difficult decisions. If we are not prepared to take difficult decisions on spending—there is no evidence that Labour Members would do so—the answer is that we have to increase taxes. When we look around to see what taxes are available, it is clear that some very difficult decisions have to be made. Labour Members chose to go for employers’ national insurance contributions; perhaps they considered that that option was less visible to the general public than some of the others. However, the consequences would have been higher unemployment, and this Government were not prepared to face that.

--- Later in debate ---

[Mr Gauke]

If I remember correctly, that was in autumn 2010, when the next leader of the Labour party was saying that 1 million jobs would go missing. The hon. Gentleman says that the NICs holiday was too complicated. One of the lessons that can be learned from the NICs holiday is that the simpler the scheme, the better. Perhaps the Labour party has not been listening to him because since that debate, it has proposed two NICs schemes, both of which are more complicated than the one that we had in place. If he is making the case for keeping NICs schemes simple, perhaps he ought to have a word with his party leader.

[Margot James]

My hon. Friend is being exceedingly generous in giving way. Does he agree that the Opposition’s latest wheeze of giving a subsidy to employers who take on employees at the living wage will have a huge dead-weight cost, because 12 months before the appalling prospect of the return of a Labour Government, employers are likely to stop giving salary increases to workers who are on the minimum wage, mindful of the fact that if they give it another year, they might get it all rebated by the taxpayer?

[Mr Gauke]

My hon. Friend makes two valuable points, but I detect that you do not want me to dwell on the issue, Madam Deputy Speaker.

Budget Leak Inquiry

Debate between Margot James and David Gauke

Thursday 22nd March 2012 Commons Chamber

[Mr Gauke]

I know that the hon. Lady speaks with great knowledge on this issue. I agree that it is very important that sensitive information is protected and can assure her that, on the one potentially sensitive area of stamp duty, the Treasury was not involved. If something is announced in the morning, even if it comes into effect at midnight, people still have the opportunity to exchange contracts in the interim period, as indeed was the case when previous Governments raised stamp duty.

[Margot James (Stourbridge) (Con)]

I was an avid reader of pre-Budget commentary in the newspapers and found that there was plenty of new content in the Chancellor’s presentation yesterday that had not been covered at all and plenty that the media had got wrong. Is this not a complete waste of parliamentary time, and will my hon. Friend ensure that none of his official time is wasted in the pursuit of this phantom leak?

[Mr Gauke]

If the intention is to keep the shadow Chancellor’s speech off the lunchtime bulletins, I suspect that it will succeed, and who would blame the hon. Member for Nottingham East (Chris Leslie) for wanting to do that?

Office of Tax Simplification

Debate between Margot James and David Gauke

Tuesday 20th July 2010 Commons Chamber

[Mr Gauke]

We certainly anticipate that the Treasury Committee will want to take evidence from the tax director and the chairman, and that documents and recommendations produced by the OTS will be available to Members. I dare say that those recommendations will inform our debates on Finance Bills and, if it is possible, raise the quality of debate.

[Margot James (Stourbridge) (Con)]

By how much did the tax code lengthen under the previous Government? I understand that its length is now a record in the western world.

[Mr Gauke]

I am afraid that I will not be able to give my hon. Friend a precise number, but the code did increase substantially in length. It is also worth noting that during the same period our tax competitiveness, as measured by the World Economic Forum, fell.

Oral Answers to Questions

Debate between Margot James and David Gauke

Tuesday 8th June 2010 Commons Chamber

[Mr Gauke]

I thank the hon. Gentleman for his kind words. I should congratulate him on being re-elected on this occasion, but I also note that my hon. Friend the Member for Harrow East (Bob Blackman) is here, which is a bit of a triumph for us. On the hon. Gentleman’s specific points, the decision will be made collectively. The Government will work in a cohesive manner in making those decisions.

[Margot James (Stourbridge) (Con)]

When I was in business, it was the oldest trick in the book for managers to come in with hopelessly optimistic growth estimates. Does the Minister think that that was endemic in the last Administration, and has he greater confidence, now that we have the impending Office for Budget Responsibility, that it will not be the case with our Administration so that, for the first time in many years, we will have realistic growth estimates?

[Mr Gauke]

It is clearly very important that we have credible growth projections. We look forward to hearing the projections from the Office for Budget Responsibility. As for the previous Government’s record, time will tell.