(11 years, 5 months ago)
Commons ChamberI am not going to get drawn into individual cases, but I will say that under this Government the number of prosecutions will increase fivefold. We are giving additional resources to HMRC to help to deal with prosecutions, and we have strengthened its offshore team. Our record on dealing with tax evasion—dealing with those who have cheated the system—is one of which we are proud, and it compares very favourably with the record that we inherited.
Private equity is an important source of investment for expanding businesses, but when they over-leverage it can lead to disasters such as that with Castlebeck. It can also lead to protracted negotiations with the Revenue over the deductability of interest and an erosion of the tax base. Will my hon. Friend consider the German approach of limiting the level of interest that can be deductible in any tax year as a proportion of a company’s profit—the so-called bright line?
We did look at interest deductibility when we first came into office. However, in the corporate tax road map that we set out in 2010, we took the view that we were not going to change the rules fundamentally with regard to interest deductibility. What we have done, of course, is favour equity more by cutting corporation tax. My hon. Friend also raises wider issues about private equity and leverage that the Banking Commission is considering.
(11 years, 5 months ago)
Commons ChamberThere is no particularly sensible reason why there should be a different personal allowance for someone who is 64, compared with 65 or 75. It is clearly a simpler and, I believe, fairer system that one personal allowance should apply to everybody. That was never an option available to the Labour party because the main personal allowance for someone under the age of 65 was so low. We have been able to increase it substantially so that one personal allowance can apply to everybody. That is a simpler and fairer way to deal with that issue. At the same time, we have increased pensions, thanks to the triple lock guarantee, by much more than we would have done if we had stuck with the plans that we inherited. Last year, pensioners saw their biggest increase in the state pension.
While my hon. Friend is on the subject of the last Labour Government, he will recall that in 2009-10, the last financial year of the last Labour Government, expenditure exceeded income by £159 billion, equal to 11% of the whole country’s income. Since he has been a Minister at the Treasury, have civil servants explained to him why that was allowed to happen, virtually bankrupting this country?
My hon. Friend makes a very good point. There is no explanation that civil servants can give for that. An explanation and an apology are due from the Opposition, but we await either of those. I think that they persist in the view that there was no structural deficit even before the crash—
(11 years, 6 months ago)
Commons ChamberI should point out that those units were not in existence under the previous Government and were introduced as a consequence of our reinvestment programme. On enforcement and compliance more generally, I also point out that if we are looking only at numbers, under the previous Government the number of people working in HMRC’s enforcement and compliance department fell by 10,000. Under this Government it will increase by 2,500.
The managing partner of Ernst & Young has dismissed the concerns of the House about aggressive tax avoidance by stating:
“The simplest solution is to stop banging on about morality and change the law.”
Does the Minister share my view that in a civilised society we do not live by rules and regulations alone, but by what we consider to be right? Should not boards of companies that operate in this country be asking themselves a key question about all their activities, including their tax policy: is this the right thing to do?
Increasingly, artificial contrived behaviour is something that all of us, including the public, simply do not accept. My hon. Friend is right to say that this is a board matter, and boards should take tax policy seriously. Companies should think very seriously about aggressive, artificial, contrived behaviour and there is low tolerance for such behaviour.