John Bercow
Main Page: John Bercow (Speaker - Buckingham)Department Debates - View all John Bercow's debates with the HM Treasury
(9 years, 3 months ago)
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Danny Alexander
Finishing the job we started in 2010 will require roughly £30 billion of fiscal consolidation by 2017-18. All parties in this House signed up to that in January, although the shadow Chancellor has been trying to wriggle out of that commitment ever since.
Our first priority must be to ensure that those with the broadest shoulders bear the largest share, so the fiscal plans I am setting out today are based on a further £6 billion from tax dodgers—an additional £6 billion of tax rises. We should expect those in high-value properties, the banking sector and others to pay more, rather than asking those working on low incomes to accept less. That would leave around £12 billion of departmental expenditure savings and the remaining £3.5 billion from welfare savings. Those measures would allow the structural current deficit to be eliminated in 2017-18. In fact, the coalition’s fiscal mandate is met with headroom of £7.7 billion.
Once that task is complete, we need to continue to cut the debt as a share of the economy, and we will not flinch from that task, because to do so would be to leave an intolerable burden to future generations. Provided that we can meet that target, borrowing for productive investment in infrastructure—in roads, railways, broadband and housing—can and should be part of our plan. We will therefore grow public expenditure as the economy grows after 2017-18. Ten years on from the financial crisis is the right time for the public finances to turn the corner. To continue the pain beyond that date is unnecessary and simply making cuts for cuts’ sake. To go too slowly, as the Opposition recommend, would drag out the pain for too long.
The national debt as a share of the economy would fall in every year of this plan, from 78.2% in 2017-18 to 76.1% and then 73.9%. The implied spending envelope for Departments would be £314.3 billion in 2017-18, rising to £324 billion and then £348.1 billion in the last year. That is £25 billion, £36 billion and then £40 billion more available for public services and infrastructure investment than in the plans presented yesterday. Just think what could be achieved with that. [Interruption.] They might not like to hear it on the Opposition Benches, but that money could be used—[Interruption.]
Danny Alexander
That money could be used to ensure that the NHS has the £8 billion it needs to secure its future, or to ensure that the education budget can be protected in real terms from cradle to college and not allowed to wither, or to support growth-enhancing spending of the sort delivered so effectively by my right hon. Friend the Secretary of State for Business, Innovation and Skills—[Interruption.]
Mr Speaker
Order. The hon. Member for Denton and Reddish (Andrew Gwynne) must resume his seat.
Mr Speaker
Order. Sir Bob, I do not think I require a lecture from you upon the matter of good order. Calm yourself, man; it will be better for your health.
Danny Alexander
Labour Members may not like it, Mr Speaker, but I am setting out the numbers in the Treasury document published today, which is an entirely legitimate thing to do.
This will also allow us to reward the hard-working public servants whose pay restraint has helped so much to balance the books. Public servants have made big sacrifices, and we need to repay that.
No Chief Secretary has ever had to control public spending in the way that I have, and no Chief Secretary should ever have to do so again. But this scenario proves that there is no need to shrink the state in the way that some in this House propose. The recovery secured, the fiscal mandate met, national debt down, public finances that have turned the corner, a stronger economy and a fairer society, and a better future for the United Kingdom: that is what these plans deliver.
However, fairness is not simply embodied by the numbers on a spreadsheet; it is also about the actions that we take. Nothing makes people more angry than the sight of some refusing to pay the tax that they owe. Last month I committed to ensuring that any individual or company that facilitates tax evasion would face stronger criminal penalties and financial sanctions. Today we deliver on that commitment by publishing a substantial package of next steps in the clampdown on these immoral and illegal practices. We inherited—[Interruption.] If the hon. Member for Denton and Reddish (Andrew Gwynne) would simply listen to what is being said instead of ranting like a lunatic, he would hear the measures that the Government are taking to clamp down on tax evasion.
We inherited from the previous Government a tax system that had more holes than a Swiss cheese and was more complex than a Rubik’s cube. The opportunities for those who wish to get away without paying were many and varied.
Andrew Gwynne (Denton and Reddish) (Lab)
Which page of the Budget is this on?
Mr Speaker
Order. The hon. Gentleman should not keep shrieking from a sedentary position, “Which page?” If the Chief Secretary wishes to go through page numbers, that is his prerogative, but if he does not, excessive gesticulation is rather unseemly. I have high aspirations for the hon. Gentleman’s future as a statesman, but I am not sure he is aiding his objective of becoming a statesman by this rather shrill shrieking, which in any case, as I am sure Mrs Gwynne will confirm, will be injurious to his health.
Danny Alexander
We would not wish to injure the hon. Gentleman’s health, Mr Speaker, nor to allow him not to hear the changes that we are making to deal with tax evasion.
For too long, our tax system struggled with the fact that a small minority felt it perfectly okay to indulge in tax avoidance and commit the crime of tax evasion. The public will not tolerate being stolen from any more. When this coalition Government came into office, we made it clear that we would eradicate loopholes that the previous Administration had left wide open. We said, “If you have not been compliant, we will give you the chance to put your affairs in order, but then we will come after you.” Since 2010, in every year of this Parliament we have put in place measure after measure to tackle the abuse of the tax system. Her Majesty’s Revenue and Customs will have secured £100 billion in additional revenue over the course of this Parliament. That includes more than £31 billion from big businesses and an extra £1.2 billion from the UK’s 6,000 richest people.
Yesterday’s Budget announced further measures targeting those who persistently enter into or market tax avoidance schemes that HMRC defeats. The Budget also announced game-changing information exchange agreements with over 90 tax authorities worldwide. Today I can announce the next steps—a tough, comprehensive new evasion-deterring package. First, for offshore evaders, following consultation we will introduce a new strict liability criminal offence so that people can no longer simply plead ignorance in an attempt to avoid criminal prosecution. Strict liability will bring an end to the defence of, “I knew nothing—it was my accountant, m’lud.”
Secondly, the Government will introduce a new offence of corporate failure to prevent tax evasion or the facilitation of tax evasion. No longer should any organisation be able to get away with facilitating or abetting others to evade tax. If people help a burglar, they are accomplices and criminals too. Now it will be the same for companies that fail to prevent their employees from helping tax evaders; they will be treated as accomplices too.
Thirdly, we will increase financial penalties for offshore evaders, including, for the first time, linking the penalty to underlying assets. A billionaire evading £5 million of tax will not just be liable for that £5 million. Fourthly, we will introduce new civil penalties so that those who help evaders will have to pay fines that match the size of the tax dodge they facilitate. If someone helps someone else evade £1 million of tax, they risk a penalty of £1 million, or even more, themselves. Fifthly, we will extend the scope for Her Majesty’s Revenue and Customs to name and shame both evaders and those who enable evasion.
Our message is simple: “Come forward and settle your affairs, or be caught and face the consequences.” These measures are helping to put in place a far more effective tax system in the UK. Once again it combines fiscal responsibility with fairness.
I would like to mention one last measure. Mr Speaker, you and the right hon. Member for Salford and Eccles (Hazel Blears) have pioneered measures to open up politics and Parliament to people from a more diverse range of backgrounds. Following extensive discussions, I am delighted to confirm that the Treasury has agreed to provide reserve funding of £200,000 a year for the Speaker’s parliamentary placement scheme in both 2015-16 and 2016-17, to ensure that its excellent work can continue beyond this year. I pay tribute to the work done by you, Mr Speaker, and the right hon. Lady as the driving forces behind the programme.
Combining fiscal responsibility with fairness—that is the approach that we as Liberal Democrats have brought to the coalition Government. We will finish the job of dealing with the deficit, and do so fairly. We will get the national debt down, we will secure the economic recovery and we will have no tolerance of people who evade tax or those who help them. That is the approach that will deliver a stronger economy and a fairer society. I commend this statement to the House.
Mr Speaker
Order. I must tell the hon. Member for Leeds North West (Greg Mulholland) that he is a cheeky fellow. He came into the Chamber after the start of the statement, and I therefore know that he will not expect to be called to ask a question on it, for in parliamentary terms that would be inappropriate. I know that he would not knowingly commit a misdemeanour in that regard. He can sit and listen if he so wishes, but he will not take part in this particular exchange. That is only fair.
Adam Afriyie (Windsor) (Con)
I have to say that I am stunned by this statement. The fact that not a single Conservative is on the Front Bench says an awful lot. This is the Westminster bubble at its absolute worst, and it represents everything that is wrong with politics today. The Liberal Democrats have betrayed their voters, and their voters know it; their own candidates are now pretending to be independents; and today’s display is an absolute betrayal of the role they have played in government. I have no question, Mr Speaker. I think the voters will make up their own minds.