Tax Avoidance and Evasion

John Bercow Excerpts

Tuesday 14th November 2017 Commons Chamber

[Robert Jenrick (Newark) (Con)]

The right hon. Lady’s central contention is that those territories should publish open registers of beneficial ownership. First, does she acknowledge that the United Kingdom is now one of the only countries in the world to do so, as a result of action by this Government? That was a huge achievement on the UK’s part. Secondly, in an international context, virtually no other major developed country in the world has done it. The state of Delaware, in which 90% of US corporations are registered—

[Mr Speaker]

Order! When I say “order”, the hon. Gentleman must resume his seat. I do not wish to be unkind to him. He is always very fluent, but he usually takes too long, and that was not just too long; it was far too long.

[Dame Margaret Hodge]

I simply observe that the UK also has responsibility for the overseas territories and Crown dependencies, and I wish that its own tax code did not contain so many harmful elements that encourage tax avoidance.

Appleby’s lobbying illustrates another continuing problem. The Treasury, and other Ministers and Departments, listen only to a very small and exclusive group of tax professionals when making decisions on tax policy. It is one thing for the Government to consult stakeholders on issues, but it is quite another for the Government to be captured by the tax industry at the expense of the wider public interest. Tough and active regulation of the industry to ensure compliance with existing rules is therefore vital. Curtailing the influence of tax professionals on tax policy is essential, and making the advisers accountable for the schemes that they invent and market is central to the campaign to destroy tax avoidance.

The measures in the Finance Act 2017 represent one small step in the right direction of holding advisers to account, but the small print suggests that very few, if any, will be caught by the legislation. The definitions are too narrow, and the penalties too weak. Those measures have been introduced so that the Government can claim that they are acting, but until advisers are really called to account and properly punished for inventing schemes that are purely aimed at avoiding tax, the army of lawyers, accountants and bankers will continue to prosper. If the Government are serious about tackling tax avoidance, they must act strongly to deal with the illegitimate practices of those who make a huge living from peddling tax avoidance advice.

--- Later in debate ---

[Mel Stride]

What I actually asked was whether the right hon. Lady would join me in calling for the ICIJ to release that information. [Interruption.] That is a slightly different question, and I am happy to give way again if she will tell us, yes or no, whether she will do that. [Interruption.]

[Mr Speaker]

Order. Stop the clock. There is far too much noise in this Chamber. I say gently to the Parliamentary Private Secretary, the hon. Member for Croydon South (Chris Philp): don’t do it! You may think you are being clever, but it does not enhance your reputation as a parliamentarian in the end. Please don’t do it. It is juvenile, the public despise it and I have no patience for it.

[Dame Margaret Hodge]

I will certainly join the Minister in seeking any documentation that HMRC requires to pursue those who are guilty of avoidance or evasion. I would say to him, however, that when I have given papers to HMRC in the past—whether relating to Google or from other whistleblowers—they have just disappeared and no action ever appears to have been taken.

--- Later in debate ---

[Mr Speaker]

Order. Characteristically and courteously, both the right hon. Member for Barking (Dame Margaret Hodge) and the Financial Secretary to the Treasury gave way extensively. They are not being criticised for that, but I simply draw attention to the limited time remaining in the debate and ask those speaking from the Front Bench to be extremely sparing in their remarks. The first responsibility for brevity is that of the hon. Member for Bootle (Peter Dowd).

--- Later in debate ---

[James Cartlidge]

I had not expected—[Interruption.]

[Mr Speaker]

Order. There is no obligation on the hon. Gentleman to speak if he does not want to.

[James Cartlidge]

I will ask the shadow Minister a question. The tax gap is now 6%. It averaged 8% under Labour. Does he accept that if the tax gap was 8% now, the deficit would be £12 billion bigger?

--- Later in debate ---

[Several hon. Members rose—]

[Mr Speaker]

I ask the SNP spokesperson not to exceed 10 minutes, in the interests of facilitating others, but we are in her hands.

--- Later in debate ---

[Several hon. Members rose—]

[Mr Speaker]

On account of the number of people wishing to contribute, there will be, with immediate effect, a six-minute limit on Back-Bench speeches. I call Mr David Morris.

--- Later in debate ---

[James Cartlidge (South Suffolk) (Con)]

I will speak relatively briefly. Slightly earlier, I had the pleasure of intervening on the shadow spokesman. In fact, I had a unique pleasure in that he allowed me a second intervention; I think it is called a BOGOF.

[Mr Speaker]

There is no obligation on the hon. Gentleman to speak any further if he does not feel inclined to do so. It will be difficult, but we will probably manage without him. If he does want to speak further, he may.

[James Cartlidge]

I was referring to my earlier intervention, when there was some confusion; the point of substance I was trying to get at was the difference in the tax gap. The precise figure for the tax gap is now 6%, and it was 8% under Labour. The difference in annual terms is £11.8 billion. That is incredibly important, as the newspapers are dominated by all the coverage of the Paradise papers, and the impression that gives the public is that multinational companies are running the rule over us and getting away without paying their fair share of tax, and that we are failing to deal with that. In fact, all the statistics show significant improvement under this Government in closing the tax gap and bringing forward measures to deal with avoidance and evasion.

As my hon. Friend the Member for Amber Valley (Nigel Mills) mentioned, one important issue is property. My experience, before I came to the House, was in property, as I ran a business helping first-time buyers. One of the great grievances felt by first-time buyers is the sheer quantity of money that has come into the property market, particularly in London. That money is driving up prices and making property less accessible to local people who want to get on the ladder. We should remember that we have brought in two important measures to deal with that. Until April 2015, foreign nationals did not pay capital gains tax when they sold a property in the UK. We closed that loophole in April 2015.

--- Later in debate ---

[Several hon. Members rose—]

[Mr Speaker]

I am afraid there is a three-minute limit with immediate effect. I call Craig Mackinlay.

--- Later in debate ---

[James Duddridge (Rochford and Southend East) (Con)]

On a point of order, Mr Speaker. Have you heard from the Foreign Office of an intention for a Minister to come to the House to make a statement on what appears to be an ongoing coup in Zimbabwe?

[Mr Speaker]

The short answer to the hon. Gentleman is that I have received no indication from any Minister from the Foreign Office or any other Department of an intention to make a statement on that matter. However, what the hon. Gentleman has said will have been of great interest to Members in all parts of the House, and, importantly, his remarks will have been heard by those on the Treasury Bench. Knowing him as I do, with his interest in and experience of this subject, I have a feeling that we will hear more about the matter before very long. Meanwhile, he has put his point very firmly on the record.