Finance (No. 2) Bill

Debate between Stephen Doughty and Danny Alexander

Tuesday 1st April 2014 Commons Chamber

[Danny Alexander]

I am grateful to my hon. Friend for his comments. The House should note that he drew these matters to my attention in the preparation of the Budget, and he has campaigned assiduously to ensure that those important bodies are treated similarly to other emergency services in that respect.

Having set such competitive tax rates—rates designed specifically to support businesses—everyone in this House rightly expects those taxes to be paid, and this Bill continues the Government’s firm action against the persistent minority who continue to seek out unacceptable ways to reduce or delay paying the taxes they owe. We are tackling avoidance by large businesses by taking action in this Bill to close down avoidance schemes involving the transfer of profits among group companies and closing a number of other loopholes.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I am interested to hear the right hon. Gentleman talking about tax avoidance. How much of the amount the Chancellor claimed would be raised from the deal with Switzerland was actually recovered by the UK?

[Danny Alexander]

We anticipate that that deal will bring in about £1.7 billion. That is less than was originally forecast but it is a great deal more than would have happened had we continued the previous Government’s position of not having any such deal in place. I draw the hon. Gentleman’s attention to the many other Labour tax loopholes this Government have closed. I particularly draw his attention to measures on partnerships, where the revenues expected now far exceed those originally forecast. I draw his attention to the measures on disguised remuneration, which his party voted against in this House, disgracefully trying to allow people to continue to disguise loans as remuneration—his party should be ashamed of that. I draw his attention to the annual tax on envelope dwellings, a measure this Government have introduced to ensure that people who seek to own properties through companies pay a proper amount of tax. That measure is raising five times more than was originally forecast. So I will take no lessons from him or any other Labour Member on tackling avoidance and evasion.

--- Later in debate ---

[Danny Alexander]

I encourage the hon. Lady to read the detailed analysis published by HMRC more than a year ago.

Let me deal with some of the measures to tackle—

[Stephen Doughty]

rose—

[Danny Alexander]

I have given way to the hon. Gentleman previously, so I am going to make some progress.

This Finance Bill also tackles avoidance by wealthy individuals by preventing high-earning, non-domiciled individuals from using dual employment contracts artificially to reduce their UK tax liability. We are tackling the avoidance of employment taxes by taking action to prevent offshore and onshore employment intermediaries from avoiding their obligations. We are tackling the avoidance of taxes on residential property through the use of corporate envelopes by creating new bands for the annual tax on enveloped dwellings and extending the related stamp duty land tax and capital gains tax charges. In addition, the Bill also creates a new requirement that users of avoidance schemes which have been defeated in another party’s litigation, or which fall within the scope of the disclosure of tax avoidance scheme rules or the general anti-abuse rule, which this Government have introduced, should pay the disputed tax up front. That will bring forward almost £5 billion of revenue over the next five years and will ensure that those who knowingly enter avoidance schemes cannot hold on to the disputed tax but have to pay up front, like all other taxpayers. Those actions will radically reduce both the incentives and the opportunity for individuals and businesses to engage in abusive behaviour.

Let me now deal with the ways in which this Finance Bill will help people in work. This Government have an incredibly proud record of reducing tax for the lowest paid. Not only are we delivering our coalition commitment to raise the income tax personal allowance to £10,000 this week, but we are going further. This Finance Bill legislates to set the personal allowance at £10,500 in 2015-16. I never tire of telling the House that that policy has travelled from the front page of the Liberal Democrat election manifesto to the pockets of tens of millions of people, in all parts of the UK.

Oral Answers to Questions

Debate between Stephen Doughty and Danny Alexander

Tuesday 11th December 2012 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

T4. Thanks to Jobs Growth Wales, an innovative start-up in my constituency called Boulders Climbing Centre, which I recently visited, has taken on a new member of staff. Will Ministers join me in congratulating the Welsh Government on their scheme and explain why they cancelled funding for the future jobs fund?

[Danny Alexander]

The future jobs fund was a massively expensive programme that saw more than half of participants return to benefit after completing it, and it was largely in the public sector. Of course I welcome the scheme that the hon. Gentleman mentioned; if it has created a job in his constituency, that is welcome. The truth is, though, that the biggest problem we have in this country is clearing up the mess that Labour left, and that is why we have to find better, more efficient ways of doing things.