Finance (No. 2) Bill

Peter Dowd Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 21st February 2018 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

New clause 4—Public register of entities paying the bank levy and payments made—

“(1) Schedule 19 to FA 2011 (bank levy) is amended as follows.

(2) After paragraph 81, insert—

“Part 11

Public register of payments

83 (1) It shall be the duty of the Commissioners for Her Majesty’s Revenue and Customs to maintain a public register of groups paying the bank levy and the amounts paid.

(2) In relation to each group, the register shall state whether it is—

(a) a UK banking group,

(b) a building society group,

(c) a foreign banking group, or

(d) a relevant non-banking group.

(3) In relation to each group, the register shall state the amount paid in respect of each chargeable period.

(4) In relation to chargeable periods ending between 28 February 2011 and 31 December 2017, the Commissioners must make public the register no later than 31 October 2018.

(5) In respect of subsequent chargeable periods, the Commissioners must make public the updated register no later than ten months after the end of the chargeable period.””

This new clause requires HMRC to prepare a public register of banks paying the bank levy and the amount they have paid.

New clause 5—Bank levy: Part 1 of Schedule 9: pre-commencement requirements—

“(1) Part 1 of Schedule 9 shall come into force in accordance with the provisions of this section.

(2) No later than 31 October 2020, the Chancellor of the Exchequer shall lay before the House of Commons an account of the effects of the proposed changes in Part 1 of Schedule 9—

(a) on the public revenue,

(b) in reflecting risks to the financial system and the wider UK economy arising from the banking sector, and

(c) in encouraging banks to move away from riskier funding models.

(3) Part 1 of Schedule 9 shall have effect in relation to chargeable periods ending on or after 1 January 2021 if, no earlier than 30 November 2020, the House of Commons comes to a resolution to that effect.”

This new clause requires the Government to provide a separate analysis of the impact of Part 1 of Schedule 9 nearer to the time of proposed implementation in 2021 and to seek the separate agreement of the House of Commons to commencement in the light of that review.

Amendment 1, in schedule 9, page 134, line 2, at end insert—

“34A After paragraph 81 insert—

“Part 10

Review of entities on which the bank levy is charged

82 (1) Within six months of the passing of the Finance Act 2018, the Chancellor of the Exchequer shall undertake a review of the provisions in this Schedule defining which groups are covered by the bank levy.

(2) The review shall consider in particular—

(i) the adequacy of those provisions in applying the bank levy to groups that are—

(a) not a group in paragraph 4(2) and

(b) derive their income from investments in the manner of a group in paragraph 4(2),

(ii) the adequacy of the groups in paragraph 4(2) in charging the bank levy to lending and investment entities,

(iii) the degree to which the groups in paragraph 4(2) reflect lending and investment entities that have entered into contracts with public sector bodies,

(iv) the adequacy of the definition of “investment group” in paragraph 12(9) in reflecting lending and investment entities that have entered into contracts with public sector bodies, and

(v) the revenue effects of changes to include lending and investment entities that have entered into contracts with public sector bodies within groups covered by the levy.

(3) The Chancellor of the Exchequer shall lay a report of the review under this paragraph before the House of Commons as soon as practicable after its completion.””

This amendment requires a review about the appropriate extent of the bank levy in terms of the lending and investment entities which it covers, considering the extent to which it covers PFI finance groups and assessing the revenue effects of such an extension.

Amendment 5, page 134, line 6, leave out from “in” to end of line 7 and insert

“accordance with the provisions of section (bank levy: Part 1 of Schedule 9: pre-commencement requirements)”.

This amendment is consequential on NC5.

Amendment 2, page 134, line 10, at end insert—

“37 The amendments made by paragraph 34A have effect from the day on this Act is passed.”

This amendment is consequential on Amendment 1.

New clause 6—Analysis of effectiveness of provisions of this Act on tax avoidance and evasion—

“(1) The Chancellor of the Exchequer must review the effectiveness of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider—

(a) the effects of the provisions in reducing levels of artificial tax avoidance,

(b) the effects of the provisions in combating tax evasion, and

(c) estimates of the role of the provisions of this Act in reducing the tax gap in each tax year from 2018 to 2022.”

This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effectiveness of the provisions of the Bill in tackling artificial tax avoidance and tax evasion, and in reducing the tax gap.

Amendment 3, in schedule 8,  page 103, line 41, at end insert—

“21A After section 461 (counter-acting effect of avoidance arrangements) insert—

“Chapter 11

Review

461A Review

(1) Within six months of the passing of the Finance Act 2018, the Chancellor of the Exchequer shall undertake a review of the effects of amending the operation of this Part in relation to the excess profits of PFI companies.

(2) For the purposes of the review under this section, it shall be assumed that the operation of this Part would be amended so as to—

(a) deduct the uncompensated excess profit amount of PFI companies from the aggregate of the interest allowances of the group for periods before the current period so far as they are available in the current period for the purposes of calculating the interest capacity of a worldwide group under section 392 (the interest capacity of a worldwide group for a period of account),

(b) provide that, for groups that contain a PFI company, the uncompensated excess profit amount for a period is equal to the group excess profit amount less the aggregate amount by which the group’s taxable profit has been reduced in prior periods as a result of such provisions,

(c) provide that the group excess profit amount for any period will be the aggregate PFI excess profit amount for each PFI company in the group, and

(d) provide that the PFI excess profit amount for a PFI company for a period will be the amount by which the internal rate of return on shares and related party debt in that company (from inception to the end of the previous accounting period) exceeds the internal rate of return set in the relevant PFI contract or, if no such return was specified, 10%.

(3) For the purposes of this section, “a PFI company” means a company which has entered into a contract with a public sector body under the Private Finance Initiative or the PF2 initiative.

(4) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons as soon as practicable after its completion.”

This amendment requires a review about the effects of making provision to discount the excess profits of a PFI company for the purpose of calculating the aggregate of the interest allowance of worldwide groups in the provisions of Part 10 of the Taxation (International and Other Provisions) Act 2010.

Amendment 4, page 105, line 17, at end insert—

“26A The amendments made by paragraph 21A have effect from the day on this Act is passed.”

This amendment is consequential on Amendment 3.

[Peter Dowd]

Let me start by reiterating the sentiments that I expressed in Committee when we were debating the bank levy. I said then that it served no one to

“homogenise the people who work in the banking sector as either saints or demons.”—[Official Report, 18 December 2017; Vol. 633, c. 814.]

Such a simplification ignores the complexity of our financial services, the individuals who work in them, and the institutional culture that informs the practices within them. About 2,000 people work in the banking sector in my constituency, particularly in Santander, and many of them are my committed constituents.

Similarly, we cannot ignore the important role that banks play in the smooth functioning of our economy. We should avoid a “one size fits all” approach that lumps all banks together for the purpose of a bank-bashing session. The House should have a grown-up, mature discussion about issues such as the bank levy, the indisputable reasons for its introduction, its effectiveness, and why the Government are now desperate to cut it further. First, however—if I can be indulged slightly—I will say a few words about the political context of today’s debate.

Since we last debated the Government’s proposed changes in the bank levy, there have been several developments. This has continued the long saga of what is now recognised as a divided and directionless Government, and it goes to the heart of the whole question of the Government’s finances. We have seen the resignation of the Prime Minister’s deputy, and a botched Cabinet reshuffle in which the Secretary of State for Health refused to budge, another Secretary of State returned to the Back Benches rather than moving to the Department for Work and Pensions, and the Conservative party headquarters wrongly announced that the Secretary of State for Transport would become the party’s chairman. That goes to the heart of the question of the Government’s competence, which also relates to the bank levy.

During the recent Black and White fundraising dinner, at which the bank levy and our review of it were no doubt discussed, and which was held at the Natural History Museum—evidently live dinosaurs were visiting dead dinosaurs—the Prime Minister, addressing the Jurassic attendees, said:

“we are on a renewed mission to fight and win the battle of ideas and to defeat socialism today”.

How did the Government plan to defeat socialism in our modern age—the age of the fourth industrial revolution and the internet of things? The answer was that they held a raffle. While no doubt discussing the bank levy and issues relating to it, they raffled, at £100 a ticket, an eight-gun, 500-pheasant and partridge shoot donated by a millionaire hedge fund supporter who must know a great deal about the bank levy. That is how the Government will defeat socialism: by slaughtering 500 partridges and pheasants.

To keep Tory MPs’ spirits up, the Chief Whip recently sent them all a letter telling them that their performance in Parliament had been “excellent”, and that

“Remaining united in Parliament is a vital part of ensuring that Jeremy Corbyn remains in opposition”—

I am not sure whether he was trying to convince his colleagues or himself. And so it goes on. It is little wonder that the Secretary of State for Exiting the European Union has suggested that Ministers would have to be locked in a room for any agreement to be reached—that is, if they could all find the same room. I would agree with that suggestion, on the condition that we could throw away the key. Meanwhile, the Treasury has been briefing the press that the spring statement will be scaled back to include no Red Box, no official document, no spending increases and no tax changes—and perhaps no embarrassing U-turns either—as well as, no doubt, an inability, yet again, to talk about the bank levy, what we could do with it, and how we could make progress with it.

Rather than the Government outlining a long-term economic plan, we have yet another Finance Bill engineered for the benefit of the few. There is little in the Bill to tackle our dreadful productivity performance, stuttering growth, high inflation and lack of investment in our infrastructure and people, but if we raised more from the banking levy, we could do something about that. In that context, the Government have come up with the bright idea of offering another tax break to the banks by further limiting the scope of the bank levy. That would ensure that, from 2020, banks will pay the levy only on their UK balance sheets, not their overseas activities.

Our position on the bank levy has been clear: we have consistently argued for a more proportionate levy and pointed out that the levy, which would introduced in 2011, would raise substantially less than Labour’s bankers’ bonus tax. In short, we have always stood against the Government’s divisive austerity fetish.

[Chris Philp (Croydon South) (Con)]

I must gently point out that the Labour party’s position on the bank levy has been anything but clear. Labour Members opposed the levy when it was first introduced. They then called for it to be retained, and their amendments today propose neither retaining nor abolishing it. As the hon. Gentleman’s party’s position is entirely unclear, perhaps he could take this opportunity to clarify it.

[Peter Dowd]

We opposed the levy because it was a reduction in the taxes that the banks were paying. I know the hon. Gentleman wants to be generous to people who already have money and very ungenerous to those who do not have money, but he should give considerable thought to that before he makes such interventions, because it does not do his party’s reputation any good, as that sort of approach is mean and miserly.

That was why we voted against the levy during our consideration of the 2011 Finance Bill, which introduced the bank levy along with cuts to corporation tax and tax giveaways for the most well-off—that is the context. It was also why we expressed concern in 2015 about the Government’s cuts to the bank levy and the introduction of the corporation tax surcharge, and it is why we will vote against this measure today. We will support my hon. Friend the Member for Walthamstow (Stella Creasy), who will—I suspect forlornly—call for a review of the effects of making provisions to discount excess profits of a private finance initiative company for the purpose of calculating the aggregate of the interest allowance of worldwide groups under the provisions in part 10 of the Taxation (International and other Provisions) Act 2010. We support that as a step in the right direction to tackle the whole construct and operation of PFI schemes, which was a policy announced last September by my right hon. Friend the Member for Hayes and Harlington (John McDonnell), the shadow Chancellor.

The bank levy was not the brainchild of a Conservative Government. It was not introduced because the previous Chancellor had been suddenly moved by public outrage about reckless decisions made by some in the banking sector who plunged us into the world’s greatest economic crisis in modern times. That is the context for this issue. The levy was not designed to ensure that banks received enormous and unprecedented bailouts from the taxpayer, such as when the Government purchased £76 billion of shares in RBS and Lloyds. It was instead designed to make banks pay their fair share, and I refer Members to the comments about schedule 9 on pages 83 to 93 of the explanatory notes, where that is laid out clearly and unambiguously.

In fact, the very concept of a bank levy was developed at the G20 summit in Pittsburgh in 2009. It was championed by the previous Labour Government, who subsequently introduced the bankers’ bonus tax. In the austerity Budget of 2011, the coalition Government decided to dump the bankers’ bonus tax and to adopt the bank levy. At that time, Labour made it clear that the levy threshold was far too low when compared with the money that would have been raised if the Government had stuck with Labour’s bonus tax. Ministers folded under pressure from the banks and set the levy at a lower rate of £2.6 billion.

The threshold was established—here we come to the issue of experts and taking expert advice—despite Treasury officials openly acknowledging it to be far too low. Under the original Treasury plans, the levy would have raised £3.9 billion a year, which is nearly £1.3 billion more than the £2.6 billion that has been indicated. But the then Government, lobbied by the privileged few, ensured that the threshold remained low. At 0.078% for short-term liabilities and 0.39% for long-term liabilities, the level that was set was—not to put too fine a point on it—a pretty tasteless joke compared with that of other countries that introduced a similar levy. It was less than a third of the level set in France, substantially smaller than the level in Hungary, which was set at 0.53%, and even lower than that of the United States of America. In 2015, under pressure from some of the Government’s friends in the finance sector, the then Chancellor cut the bank levy rate, and the current occupant of No. 11 has continued on that particular sojourn. In so doing, he has ensured that, by 2020, the UK’s biggest banks will have received a tax giveaway worth a whopping £4.7 billion. That £4.7 billion could been spent on our public services, and notably on children’s services, which have been cut to the bone.

[Chris Philp]

The hon. Gentleman says that the banking sector has received a whacking tax cut. I will dispute that further in my later comments, but the figures are these: in 2009-10, the banking sector paid £17.3 billion in tax; last year, it paid £27.3 billion. That represents a 58% increase. So, far from having a tax giveaway, the banks are now paying more in taxes than they were six years ago by some margin.

[Peter Dowd]

That is not surprising: the banks returned to profitability because the taxpayer bankrolled them. That was how they got back into profitability, and they must pay their fair share of taxes as a result. The constituents of every Member of Parliament paid towards that, and when the profits came back in, the taxes went back up. We have helped the banks out, and they have to help our public services out.

The Government claimed that their introduction of the 8% corporation tax surcharge would offset the cuts to the bank levy. If we look at the autumn’s Budget Red Book and the forecasts from the Office for Budget Responsibility, however, we clearly see that the surcharge will not match the fall in the bank levy. According to forecasts, the surcharge is set to increase by £300 million a year, while the receipts that the Exchequer receives from the levy will fall by £1.7 billion a year. That leaves a £1.4 billion gap. That is a fact that is printed in the Government’s Red Book and, as John Adams opined, “facts are stubborn things”.

In 2018, we are still feeling the economic consequences of the actions of the banks. Every day, the Government tell us that there is no money for productive investment and that austerity must continue, yet they have conspired to undermine and limit any remuneration from the banks that caused this sorry state of affairs in the first place. Once again, the Opposition’s ability to amend this Bill has been hamstrung and blocked by the Government’s continued use of arcane parliamentary procedure.

[Anna Soubry (Broxtowe) (Con)]

The person who said that there was no money left was actually the occupant of the Treasury who left a note for the incoming Conservative-Liberal coalition Government in 2010. The reality is that of course there is money. We raise taxes and we spend them exceptionally wisely as a Conservative Government, particularly on infrastructure which, as the hon. Gentleman must surely agree, is now at record levels. It is just that we are still having to clear up the mess that was left by the last Labour Government.

[Peter Dowd]

The right hon. Lady can believe what she wants, but who will pay any attention to the Chief Secretary to the Treasury who took over from a Labour Chief Secretary to the Treasury, but was out of that job within two weeks because of issues around his parliamentary expenses? Does she expect us to pay any attention to that whatever? [Interruption.] That was what happened. David Laws—

[Anna Soubry]

Will the hon. Gentleman give way?

--- Later in debate ---

[Peter Dowd]

I will not give way. I am going to move on—

[Anna Soubry]

There’s a surprise!

[Peter Dowd]

The right hon. Lady can come back later on. This is not a dialogue, as you would no doubt tell me, Madam Deputy Speaker.

We have a timid, feckless and self-obsessed Government who are frightened of their own shadow. They continue to give more money back to the banks, notwithstanding the fact that they keep telling us that the resources coming into the Government are insufficient to support our public services.

We are seeking three things by moving new clause 3. First, we want to require the Government to carry out a review of the bank levy, including of its effectiveness in relation to its stated aims. Secondly, we want to establish the extent of the effect of the 2015 cuts on revenues from the levy. Thirdly, we wish to calculate how much would have been raised if the Government had stuck with Labour’s bankers’ bonus tax. Such a report would put under the microscope for all to see the Government’s malpractice—that is what it amounts to—in cutting frontline services while offering tax giveaways to banks that can more than afford them. It would require the Minister to acknowledge that far more would have been raised under Labour’s bankroll tax and, just as importantly, that the Government’s current bank levy has done little to influence and mitigate the risky banking practices that remain in use in our financial services industry.

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[Chris Philp]

I thank the hon. Gentleman for being generous with his time. He is trying to suggest that the Government have a bad track record on clamping down on avoidance and evasion. The key measure of that is the tax gap, which was 8% under the last Labour Government and has now fallen to 6%—that is the lowest in the world. Will he congratulate the Financial Secretary to the Treasury on that achievement and acknowledge that this Government are doing a better job in this area than the last Labour Government?

[Peter Dowd]

That does not take international profit shifting into account, as the hon. Gentleman knows. He should consider that.

The figures I have mentioned not only add to the growing hole in our public finances but demonstrate the Government’s complete lack of interest in taking on tax avoiders. I am glad the hon. Gentleman raised the last Labour Government’s record. So what was our record on tax avoidance? It might surprise Conservative Back Benchers to hear that Labour brought in anti-tax avoidance measures in the 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009 and 2010 Budgets. Most notably, in March 2004, the Labour Government introduced a disclosure scheme that required anyone marketing a tax mitigation scheme to give HMRC advance notice, giving the Revenue authorities an opportunity quickly to counter the scheme with new legislation. The Primarolo statement in December 2004 announced that the Government would introduce legislation, with retrospective effect, to counter any future scheme.

Labour’s tax transparency and enforcement programme has outlined 16 measures that the Government could take immediately to crack down on tax avoidance, including holding a public inquiry and publishing a public register of offshore trusts. In that fashion, new clause 6 would require the Government to commission a review of the effectiveness of the Bill’s anti-avoidance provisions and their impact on reducing the tax gap. I am proud of Labour’s measures on tax avoidance, and I am proud to stand here and say that.

Members should ponder this question: how can the Government possibly justify cuts in the banking levy while, on average, 30% of our children—it is even more in some constituencies—live in poverty? That question will not go away, however much the Government want it to.

[Chris Philp]

As always, it is an enormous pleasure to follow the hon. Member for Bootle (Peter Dowd), whose speeches are always entertaining and occasionally informative. He spent a great deal of time talking about the bank levy and the various new clauses standing in his name on that topic. I wish to start by addressing the central thesis of his comments on the bank levy: his suggestion that banks are not paying their fair share, particularly as two of them received state money from about 2009.

It is a matter of incontrovertible fact that banks, as organisations, are paying more tax proportionately than other kinds of corporates. It is of course right that they do, for the reason that the hon. Gentleman and my right hon. Friend the Member for Broxtowe (Anna Soubry) mentioned: they did receive taxpayer money. They pay this extra money, compared with other businesses, in two ways. The first is through the surplus profit tax of 8%—they pay about a third more corporation tax proportionately than a non-bank corporation does. The second is through the bank levy. Although the bank levy is being reduced, it will remain in force, so banks will continue to pay proportionately more tax than non-bank businesses after the implementation of this Budget. That is a vital point to get across.

The hon. Gentleman also tried to link funding for children’s services to the bank levy. In one of my interventions, I gave some figures on the total amount of tax that banks are paying. We can argue about why they are paying that extra tax. Clearly, it is at least in part due to the surplus profits rate and to the bank levy. It may also, in part, be due to the fact that the banks’ profits have increased. Whatever the cause, the bare fact is that they are paying £7 billion or £8 billion a year more in tax now than they were some time ago. So suggesting that children’s services have been deprived of money as a consequence of changes to bank taxation simply does not bear scrutiny, given that the financial services sector is paying significantly more tax than it was before, whatever the cause of that may be.

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[Chris Philp]

Let me take each of those points in turn. The hon. Gentleman asserts that, had the corporation tax rate remained at 28%, we would now be collecting more than £53 billion. That is an assertion, and not one with which one can agree without contention. For example, because of the lower corporation tax rate, plenty of businesses have made investments that they would not have made otherwise. Several companies had located their corporate headquarters outside the UK—

[Peter Dowd]

rose—

[Chris Philp]

Just a moment; let me respond to these two points.

Those companies had located their corporate headquarters outside the UK and so paid corporation tax outside the UK, but in response to the Government’s cutting the rate of tax, they came back onshore and now pay corporation tax here. It does not follow at all that a higher corporation tax rate—28% in the case mentioned by the hon. Member for Stalybridge and Hyde (Jonathan Reynolds)—would lead to a higher tax yield. The direction of travel shows that, as the rate has come down, the amount collected has gone up. I just do not agree with the suggestion that, if the corporation tax rate were 28%, we would be collecting £60 billion or £70 billion.

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[Chris Philp]

A number of points have been raised there. On the point about correlation and causation, of course I understand that they are not the same thing. However, in my remarks about corporation tax reductions, I did point to some of the causal links. The two causal links that I cited were, first, encouraging investment and, secondly, companies choosing to move their domicile—for example, from Switzerland back to the UK. Therefore, there are two causal explanations as to why a reduction in the rate of tax might lead to an increase in the tax yield.

[Peter Dowd]

The explanatory statement for new clause 3 says:

“This new clause requires the Government to carry out a review of the bank levy, including its effectiveness in relation to its stated aims, the revenue effects of the changes made in 2015 and the comparable effectiveness of the bank payroll tax.”

The stated aim, as set out in the Government’s own document, is as follows:

“Its purpose is to ensure that banks and building societies make a fair contribution, reflecting the risks they pose”.

We are asking for a review. If the hon. Gentleman is so sure of his facts and his case, why not have the review and see who is right in this debate?

[Chris Philp]

The Government conduct analyses and reviews the whole time. I am not sure whether we need to put the review into primary legislation. As the hon. Gentleman refers to new clauses 3 and 4, which stand in his name, I will turn to them now.

The new clauses call for various reviews and registers. Of course, analysis is important. That analysis, I believe, takes place in the Treasury already—I am sure that the Financial Secretary will comment on that in due course. What is interesting about the new clauses tabled by the Opposition is not so much what is in them, as what is not in them—it is the dog that did not bark, if I can borrow from Sir Arthur Conan Doyle.

I mentioned in an intervention that the Labour party appears to have taken a number of different positions on the bank levy: it voted against it in 2011; it voted against the surplus tax in 2015; and then it stated in public that it wished to leave the bank levy in place, despite having voted against its introduction, which strikes me as rather confused. I was rather hoping that its new clauses and amendments might enlighten us on what its position actually is on the bank levy. This is primary legislation. This is a finance Bill soon to become, I hope, a finance Act. The Opposition had a chance here in this Chamber today to explain to the House and to the country how they think our tax system should work in relation to the bank levy. They could have tabled an amendment, had they chosen to, saying that they wanted to leave the bank levy in place as it was, or they could have tabled an amendment abolishing it altogether, yet they have done neither of those things; they have simply called for analysis. I am disappointed that their plans have not been elucidated.

[Peter Dowd]

rose—

[Chris Philp]

However, if I am about to be enlightened, I will of course give way.

[Peter Dowd]

The hon. Gentleman cannot have it both ways. The Government introduced an arcane procedure, which was first used, I think, by Winston Churchill in 1929, effectively to stop us moving any substantive amendments. Does he not recognise that, whatever we wanted to do, we would not have been able to change things anyway, because the Government were not permitting us to do so?

[Chris Philp]

I am not sure. This is a moment when my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) is required to advise on such matters. I do not share his expertise in parliamentary procedure. However, the shadow Chief Secretary did not specify in his quite extensive—and, at times, amusing—remarks the official Opposition’s position on the bank levy. There is certainly no parliamentary procedure that prohibited him from doing so, so he could quite easily have chosen to specify his exact view—whether the bank levy should continue as it is, go or do something else—yet he did not do so. I am rather disappointed by the lack of clarity on that point.

The hon. Member for Stalybridge and Hyde said a few moments ago in one of his many interventions that HSBC might contemplate its jurisdiction in the light of Brexit. In fact, HSBC was debating where to domicile itself well before the referendum. If anyone or anything threatens the City of London’s status as a global financial centre, it is not the matters being debated today and it is not Brexit. In fact, it is the right hon. Member for Islington North (Jeremy Corbyn) and the comments he made a day or two ago, which, in the words of one commentator, threatened to turn London into a new version of Pyongyang. That is what he said. It was in the Evening Standard—a newspaper edited by a highly reputable journalist.

PwC has done some analysis of the tax contribution made by the financial services sector, finding that it paid £72.1 billion in taxes last year. That is about 9% of the UK’s total tax take. It is no laughing matter when misguided and populist politicians take a cheap shot at the City to get some headlines. If business is driven away, the implications will be very severe for our tax take and for employment. If we lose the tax revenue generated by the City, the people affected will of course be children and the NHS.

I ask the shadow Chief Secretary to convey gently to his dear leader that comments such as those made a day or two ago are very unhelpful to the City. They endanger jobs and jeopardise the £72 billion of tax that the City pays. Whether it is through fiscal measures or through words, it is a very serious matter when we endanger jobs and the tax revenue from the City that funds about two thirds of the NHS’s budget. In this Bill and in our words, we should protect that tax revenue and those jobs.

[Peter Dowd]

I am more than happy to convey the hon. Gentleman’s comments to the Leader of the Opposition, although I do not accept them. Will the hon. Gentleman also pass on my comments to the Prime Minister? She is making a mess of Brexit, which is far more dangerous to this country than the comments allegedly made by the Leader of the Opposition.

[Chris Philp]

There is no allegation; they were said publicly. I will of course convey the hon. Gentleman’s comments in a spirit of reciprocation, but I dispute the remarks about Brexit. We saw fantastic progress before Christmas and are moving on to the next stage. I look forward to the series of speeches by my Cabinet colleagues in the coming days and weeks that I appreciate are on a different topic to the one at hand.

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[Rachel Maclean]

It is a pleasure to follow the hon. Member for Aberdeen North (Kirsty Blackman) and the other contributors.

I will keep my remarks short as many of my points I wish to make have already been made by colleagues. I want to bust the myth that we on the Conservative Benches are friends of nefarious bankers and bad people trying to swindle money out of the honest taxpayer. Nothing could be further from the truth. We on these Benches want a healthy financial system underpinned by banks, and we want those banks to contribute fairly, as they can and must, and as they have been doing under this Government. The facts speak for themselves, as my hon. Friend the Member for Croydon South (Chris Philp) set out.

We have set out a plan to raise an additional £9 billion by 2022—a significant contribution to the Exchequer that will help to fund the public services on which people rely. The banks are making money out of businesses in this country. They need to make a return—they need to contribute fairly—and the Bill will ensure that that happens.

When Labour Members start to attack us and our policies, they need to look at themselves in the mirror. They need to bear in mind the number of times they voted against the introduction of corporation tax and bank levy measures which, as we have seen, have raised money from the banks. Theirs was the party that allowed the Mayfair loophole to develop, so that hedge fund managers were getting away with not paying tax while their cleaners were paying it. I remind the House that it was this Chancellor, in this Budget, who imposed a tax on private jets. Could any measure indicate more strongly that the Conservatives believe in fairness and taxing the proceeds of profit in the right way to fund our public services?

The hon. Member for Bootle (Peter Dowd) said that the banks were not making a fair contribution. I completely disagree with that narrative and that agenda. The banks are making a fair contribution.

[Peter Dowd]

When I have made statements and I have been wrong, I do not mind people bringing that to my attention, but I did not say that the banks were not making a fair contribution. We were talking about a fairer contribution in the context of the Government’s own definition of what they should be doing. That is the point. The hon. Lady should have a look at the work. She should have a look at the book. She should do her research, and then make an accusation.

[Rachel Maclean]

I am not making an accusation at all. I apologise if I have misrepresented the hon. Gentleman. I merely wish to make the point that I believe that banks must make a fair contribution, and that the Bill will enable them to do so. Through measures that we have introduced since we have been in government, £160 billion has been raised for the Exchequer.

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[Madam Deputy Speaker (Mrs Eleanor Laing)]

I call Peter Dowd.

[Peter Dowd]

Very little that I have heard from the other side in this debate has convinced me that we should withdraw our new clause—

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Turning to new clause 6 and the points raised about tax avoidance and evasion, I have little to add to what I have set out in our extensive debates on these issues at earlier stages of the Bill. A public review is not necessary. This Government have an extremely strong record on tackling tax avoidance, evasion and non-compliance, both domestically and internationally. Since 2010, HMRC has secured and protected £175 billion that would have gone unpaid. The UK is the only country to measure and publish a tax gap covering direct and indirect taxes every year. Our tax gap is, as other Members have pointed out, one of the lowest in the world, at 6%—that has come down from 7.9% under Labour in 2005-06. Despite our demonstrable successes, the Government cannot and will not be complacent. We will continue to keep the tax system under review at all times, and I urge the House to reject the new clauses and amendments.

[Peter Dowd]

That response from the Minister had complacency running through it like a line through a stick of rock. It contained self-congratulation and a rejection of any suggestion of a review, in any area. Not only have the Government not allowed us to make any significant changes, but they are not even prepared to listen to our asking for reviews, such as that requested by my hon. Friend the Member for Walthamstow (Stella Creasy). It is unacceptable if the Government are not prepared even to go that far, having shackled us this much. That is disgraceful. The Government, in this Parliament, should be ashamed of themselves for shackling the Opposition to this degree. We will push the new clause to a vote.

Question put, That the clause be read a Second time.

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[Peter Dowd]

The only thing I agree with the Minister about is that I too thank everyone who has taken part in the proceedings. The Bill is not up to the challenge. It contains nothing of substance on public services, on the productive investment that we need, on housing, on tax avoidance or on the scandal of private finance investments. It is an insubstantial Bill from an insubstantial Government, with more tax cuts for the richest. I shall sum up by saying that the Tory party is financially bankrupt in Northamptonshire and morally bankrupt in Westminster. That sums up this Bill, and we will vote against it.

Question put, That the Bill be now read the Third time.