Sir Mel Stride
MP for Central Devon · Conservative · United Kingdom
“May I welcome the Chancellor to his position and thank him for his kind remarks earlier? May I also wish him every success, because I am afraid that under this Government we need some? He will know that if we are to fix the economy, we have to fix the welfare bill.”
“Given all that is going on, this could be the last time. The legacy of this Chancellor has been the highest taxes on record, a benefits bill spiralling out of control, and unemployment 300,000 higher than it was at the last general election. The right hon.”
“The right hon. Lady cannot bring herself to answer the simple question I asked. I will tell her: she is borrowing one quarter of a trillion pounds more than the plans that she inherited—that is her legacy. We hear that the right hon. Member for Makerfield (Andy Burnham) is considering borrowing even more.”
“May I begin by agreeing with you, Mr Speaker, and saying how disrespectful it is that this U-turn on fuel duty has already been released to the media earlier this week?”
“Today’s announcements will bring little comfort to the hundreds of thousands of people who have lost their jobs, the countless businesses that have folded and the high streets that are now hollowed out.”
“The Conservative party has been campaigning for a fuel duty freeze for months. The Chancellor repeatedly rejected those calls, creating unnecessary uncertainty for motorists and businesses. Why did it take her so long to realise that putting up fuel duty during an energy crisis is a bad idea?”
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“I am pleased that the hon. Gentleman has raised the issue of investment in HMRC, because we have a very good record in that respect. Some £1.8 billion of additional money has been invested in HMRC since 2010, of which £800 million will relate to the period after 2015, bringing in £7.2 billion by 2020-21. We will also be trebling the number of investigations of the wealthy to ensure they are paying their appropriate level of tax, as a direct consequence of all that additional investment.”
“I challenge those figures: a far larger number than the hon. Gentleman suggests are engaged in clamping down on tax evasion and avoidance. About 50% of the 2,100 largest corporations in this country are under investigation at any one time—not necessarily because they have done anything wrong, but because they have complex tax affairs. So we are investing in that.”
“This Government have an exemplary record on the tax take from the wealthiest in this country. The wealthiest 1% pay about 28% of all income tax. Under the last Labour Government that figure was below 24%, so I will not take any lectures from the Opposition parties on this.”
“I am pleased that the right hon. Lady has raised this issue, because the robustness of this tax gap figure is extremely high. The International Monetary Fund says it sets one of the highest standards in the world. The figure is audited and agreed by the National Audit Office and is made public in HMRC’s annual report and accounts.”
“My hon. Friend is entirely right. It is this Government, for example, who raised the personal allowance to £11,500, taking 3 million to 4 million of the lowest paid out of tax altogether. It is this Government who brought in the national living wage, and it is this Government who will go on ensuring that those who have the broadest shoulders pay their fair share of tax.”
“The hon. Lady raises an important point. There is an assumption on the Opposition Benches that nothing is being done about these various issues. The right hon. Member for Barking referred to an element of the “Panorama” programme on the Panama papers that described income that had been diverted overseas and then loaned back to individuals. That is known as disguised remuneration. She rightly asked what the Government were doing about such practices. Let me point her in the direction of the Finance Bill that has just gone through this House. On the matter of disguised remuneration, individuals will be given until 2019 to clear up those arrangements. Otherwise, they will pay a penalty. It is as simple as that.”
“I want to make just a little more progress, as I am conscious of the time and the shortness of the debate. In fact, we have brought in 75 measures since 2010 to clamp down on these practices. A further 35 will come in from 2015, raising £18.5 billion by 2020-21. One of the problems is that we have been so active in bringing in so many measures that, unfortunately, not all of them have been noticed. In last week’s debate, the right hon. Member for Barking raised the issue of taking action against those who promote tax avoidance schemes. Once again, she needs only to look at the Finance Bill—all 777 pages of it; it is very technical, and it will probably put her to sleep at night—in which she will find measures to deal with precisely what she was urging us to take action on last week. We have already done it!”
“My hon. Friend is absolutely right. The general anti-avoidance rule has had a significant impact. It was brought in under this Government and it has been very effective. The Opposition profess the importance of all these measures, some of which have already been brought into law while they are calling for them. There is a certain irony in the fact that, when it came to the Third Reading of the Finance Bill that brought these measures in, the Opposition voted against it.”
“Going after the tax gap is exactly what this Government are doing, and we have an exemplary record. We have the lowest tax gap in the entire world. It is the lowest in history—far lower than it was under the last Labour Government. The hon. Gentleman asked a specific question about tax officers. We need to move towards an HMRC that is ready and equipped for the 21st century. That does not mean a large number of scattered offices; it means hub offices with the necessary staff and technical skills to facilitate the transfer of knowledge and understanding in order to move forward.”
“We have introduced a directory of beneficial ownership that is accessible by HMRC, the authority that needs to have that information. All this has happened in the last couple of years, and it is a game changer. Many of the issues arising from the Paradise papers go back very many years, but these measures are in place right now. I also want to make an important point on transparency. In last week’s debate, I asked the right hon. Member for Barking, in relation to the 13 million files held by the International Consortium of Investigative Journalists, whether she would join me in calling on the ICIJ to release that information to HMRC so that we could go after anyone who, as a consequence of that data release, was thought to be abusing our tax system. Will she support us in that endeavour?”
“I will now make some progress. I am aware that this is just a two-hour debate and that many Members wish to speak. We have covered the various measures that we have taken, and we have covered the huge investment that we have made in HMRC. Perhaps I can now turn to the international aspects. We all agree that we need to look closely at what is happening in the international sphere. On that, this Government have a record of which we can be proud. Through the OECD, we have been in the vanguard of the base erosion and profit shifting project. We have worked closely with the Crown dependencies and overseas territories. We have brought in a diverted profits tax, which will raise £1.3 billion by 2019, and common reporting standards to ensure that information is exchanged in relation to around 100 countries.”
“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. ]”
“I am grateful to the right hon. Lady. I will take that as a yes—we can work together to try to ensure that that information is provided to HMRC. I see no reason why that should not happen.”
“1442.] That speaks directly to the heart of this issue: an apparent legacy of tax abuses going back many years, framed by the inaction of the Labour party. It speaks to the core of Labour’s approach to the world that the opportunity always lies in criticism and derision, rather than in action and justice. This Government are acting and will continue to leave no stone unturned in the pursuit of those who seek to duck their responsibilities at the expense of us all. Whenever and wherever they are found, this Government will continue to bring the avoiders, the evaders and the non-compliant to book.”
“I am grateful to my hon. Friend for that intervention. In relation to corruption inquiries, for example, we have automatic access to our Crown dependencies and overseas territories as a result of that co-operation. I recognise how important this issue is to the public, and it is of critical importance to the Government as well. The UK’s tax authority now has more information and more power than ever before to clamp down on avoidance and evasion, because of the actions of this Government. The Government of which the right hon. Lady was a member failed to take those actions. I conclude with the words of the right hon. Lady in last week’s Adjournment debate, when she said “I have never defended the record of the Labour Government in this area”. —[ Official Report , 7 November 2017; Vol. 630, c.”
“Yet despite repeated requests over the last 10 days, The Guardian and the International Consortium of Investigative Journalists have refused to hand over that information. If the right hon. Lady is able to assist in that, as well as congratulating the individuals concerned, that would be of great assistance to the Government and to her endeavours.”
“The UK Government will continue to work with the Isle of Man to help it address these issues and take steps to put an end to any evasion or avoidance. Where there are any problems of tax avoidance and evasion, these should be dealt with by us fixing these issues together and not by ending our co-operation with the Isle of Man. Let me turn now to some of the specific points the right hon. Lady raised. She referred to the plethora of leaks there have been over the years, and she is quite right. She congratulated The Guardian , among others, on its part in ensuring the dissemination of the information that has come to light. However, there is an important point here, which is that HMRC is determined to follow up any information, from whichever quarter, to ensure we clamp down on tax evasion and non-compliance.”
“While the Isle of Man must apply VAT rules similar to the UK’s, the administration of the tax, including tackling avoidance and evasion, is the responsibility of its tax authorities. However, when required, the UK Government are always happy to provide advice and technical assistance to help the Isle of Man counter evasion and avoidance. I welcome the announcement from the Isle of Man Government that they are conducting a review of their procedures on VAT and the importation of aircraft. I also welcome their invitation for Her Majesty’s Treasury to carry out an assessment of these procedures, and I can inform the House that Treasury officials have been in the Isle of Man today, engaged in that important process. That is a responsible and appropriate approach to addressing these allegations and correcting potential non-compliance.”
“By implementing 75 measures since 2010, we have secured £160 billion in additional tax revenues. But more on that later; I will now respond to the points raised by the right hon. Lady. The right hon. Lady has raised the allegations regarding aircraft importation into the Isle of Man, which were also covered in the BBC’s “Panorama” programme in the last two days. I should first note that the Isle of Man, like all Crown dependencies, is a separate jurisdiction with its own democratically elected Government, under which it is responsible for fiscal matters. However, under the Isle of Man Act 1979, it has agreed to follow VAT rules very similar to the United Kingdom’s.”
“May I begin by congratulating the right hon. Member for Barking (Dame Margaret Hodge) on securing this important debate and on raising these important issues in her speech? She has, of course, been a determined campaigner over many years on these matters, especially as the Chair of the Public Accounts Committee. I am grateful for the opportunity to speak in this debate and to be given the chance to discuss the Government’s approach to tackling tax avoidance and evasion. I will respond to as many of the points that the right hon. Lady raised as I can. The Government take all allegations of tax avoidance and evasion extremely seriously. If any new allegations come to light, we will treat them with similar seriousness. We have a strong track record of tackling tax avoidance and evasion.”
“Lady made a clarion call for us to tackle avoidance schemes and those who enable them. I confess that the Finance Bill that went through this House very recently was not the most entertaining of Bills; it ran to about 775 pages and was highly technical. However, I point her to the provisions within it for ensuring that those who enable tax avoidance will now be subject to sanction and penalty. I hope that I have covered the majority, at least, of the points that the right hon. Lady raised. I again recognise the sterling work on this issue that she has done over many years, and pay tribute to her for it. I conclude, Mr Speaker, by wishing you a very—”
“She referred to an automatic uplift in the Isle of Man’s share under that formula—it is a 4.5% uplift—and suggested that it may be overly generous. It will not be in the long run; once all the surveys and research have been carried out, in the event that it is found to be more generous than it should have been, there will be a clawback mechanism within the arrangement. In terms of transparency, once the formula is concluded it will be available within the public domain. On her assertion that this is a one-way subsidy from the United Kingdom to the Isle of Man with regard to VAT, I should say that there have been years when quite the reverse has been the case and there has in fact been a transfer from the Isle of Man to the United Kingdom from which we, and indeed her constituents, have benefited. The right hon.”
“However, those investments were, I understand, primarily made in 2005 under the previous Labour Government rather than under this Government. I believe that the amount invested as at today’s date is something in the order of £3,000 in total. The right hon. Lady asked why HMRC allowed the Isle of Man situation to happen in respect of VAT and aircraft. Let us see what the investigation yields rather than perhaps jumping to a series of conclusions currently based on—from what I have seen, at least—a couple of television programmes. However, there may well be something there, and we will get to the bottom of it in due course. The right hon. Lady asked about the sharing agreement in place between the Isle of Man and the United Kingdom in respect of VAT. She is right that there are at the moment ongoing discussions on a new formula.”
“That is important money that we need in our Exchequer for the purposes of employing doctors, nurses, teachers and members of the police force, and of keeping our hospitals and all those vital public services that are the hallmark of a civilised society. The right hon. Lady referred to the Duchy of Lancaster and transparency. The Duchy does of course publish its accounts—it lays them before this House, in fact. There has been no suggestion that I am aware of that any of the Duchy’s activities or investments have been improper or illegal. Of course, the Queen voluntarily pays tax on all the earnings from the Duchy of Lancaster. The right hon. Lady referred specifically to Bright-House. She is correct in her assertions that it has been fined by the FCA for the kinds of activities that she mentioned.”
“I was not actually aware of those comments, but I can say that, from the Government’s perspective, we are certainly not in the business of advocating the locking-up of any journalists. The second point the right hon. Lady raised was that we were “tinkering at the edges”—I think that was the expression she used—in clamping down on avoidance. Nothing could be further from the facts of the matter. Since 2010, we have brought in £160 billion, as I said, and £2.8 billion of that was from clamping down on those who have sought to hide wealth in overseas jurisdictions. We have one of the lowest tax gaps in the world, and the lowest in our history. She will probably know that if we were to have today the level of tax gap that we saw under the previous Labour Government, we would be about £45 billion worse off as a consequence.”
“Country-by-country reporting is another important issue. Our view is that it is best met on a multilateral basis, so that all countries get involved at the same time. We continue to work with our European partners and others through the OECD in that endeavour. Finally, for a second time, which is even more delightful than the first, may I wish you, Mr Speaker, and everybody in the House—all the staff, and all who make this extraordinary and wonderful institution work so well—a very happy and productive recess? Question put and agreed to.”
“The hon. Gentleman raises two important points, and I will certainly take to the bank his offer to go easy on me when I appear before the Select Committee. His first point was about whether we should create registers of overseas interests in the public domain. What matters is that we give HMRC the tools to do the job. I file a tax return every year, and I have a last will and testament. They are not in the public domain, but HMRC is entitled to look at my tax return and ask me questions about it. What matters is the information available to the relevant tax authorities, and that is why the common reporting standard that we have introduced —in fact, a year earlier than the OECD suggested was required—is so important. Information is transferred between more than 100 countries to make sure that HMRC has the tools to do the job.”
“It is important to note, and I quote the ICIJ’s disclaimer here: “There are legitimate uses for offshore companies and trusts” and the ICIJ does “not intend to suggest or imply that any people, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly.” So, notwithstanding the generalised aspersions made by the Opposition, the use of offshore accounts or trusts does not automatically mean dishonesty. But this House should be assured that, under this Government, HMRC will continue to bear down with vigour on any tax avoidance or evasion activity, wherever it may be found.”
“Nevertheless, since these data were retrieved in 2016, the Government have implemented international agreements that have changed the game for those seeking to avoid and evade their taxes. HMRC is already benefiting from the automatic exchange of financial account information through the common reporting standard—an initiative in which the UK has led the world, with over 100 jurisdictions signed up. The Crown dependencies and overseas territories are among those signed up to this initiative, and have been exchanging information with HMRC for over a year. The Crown dependencies and overseas territories have also committed to holding central registers of beneficial ownership information, which the UK authorities are able to access.”
“Yesterday evening, several international news organisations, led by the International Consortium of Investigative Journalists, reported on an information leak regarding the financial affairs of a large number of individuals. I should remind the House at this stage that Ministers do not intervene in the tax affairs of individuals or businesses, as to do so would be a breach of taxpayer confidentiality. However, I can inform the House that, on 25 October, HMRC requested that the ICIJ, The Guardian and the BBC share the leaked data so that this information can be compared with the vast amounts of data that HMRC already holds due to the initiatives this Government have undertaken. They have yet to respond to this request.”
“The Government believe in a fair tax system where everyone plays by the rules. It is this Government who have taken decisive action to tackle tax avoidance and evasion and to improve the standards of international tax transparency. The UK has secured an additional £160 billion in compliance revenue since 2010—far more than was achieved under the last Labour Government. Under this Government, the UK now has one of the lowest tax gaps in the world. We have provided Her Majesty’s Revenue and Customs with tough new powers. In 2015, HMRC received £800 million in additional funding to go on tackling tax avoidance and evasion. Let me turn to recent events.”
“It is the Conservative party that has put an end to permanent non-dom status, and it was Labour that sought, by voting against that Bill on Third Reading, to stop that from happening.”
“The right hon. Gentleman raises the veracity or otherwise of our figures. We have collected £160 billion through clamping down on avoidance, evasion and non-compliance. That is a figure that he will find broken down and indeed published in Her Majesty’s Treasury’s annual report and accounts. The right hon. Gentleman refers to Lord Ashcroft. As I said in my opening remarks, I am clearly not going to start getting into the individual tax affairs of any particular individual, regardless of their political allegiance or whoever they may be. The right hon. Gentleman raises non-dom status and non-doms, and the measures that he and his party put forward for the most recent Finance Bill. Can I remind him of two things?”
“I thank my hon. Friend for his question, which I take to be directed at me, Mr Speaker. It is of course for the Labour party to account for any situation in which its headquarters may or may not be owned by an overseas trust.”
“The hon. Gentleman will know that this Government have been at the forefront of clamping down on international tax avoidance, evasion and non-compliance through the OECD’s base erosion and profit shifting project, which we have been in the vanguard of, and through the work on common reporting standards that we have been introducing among our Crown dependencies and overseas territories. He will find that we are no slouches when it comes to grappling with the items that he raises.”
“As my right hon. Friend knows, one of the measures of how on top or otherwise the country is of its tax affairs is the tax gap, which is at an historic low of just 6%. Under the last Labour Government in 2005, the tax gap was 8%. If it were at the same level today as it was under Labour, we would be £11.8 billion of tax short—enough to employ every policeman and woman in England and Wales.”
“As the right hon. Lady knows, there are many good reasons why, for perfectly honest and decent purposes, individuals use trusts. She also knows that we have made a great deal of progress on the common reporting standard across 100 different countries, including those to which she alludes. We are also bringing forward the registers of beneficial ownership across those jurisdictions so that HMRC has the information that it requires.”
“My hon. Friend will know that we are examining several areas. He will also know that in June of this year—very recently—we brought in the money laundering regulations to make sure that banks, lawyers and accountants are properly focused, in real time, on ensuring that corrupt practices are identified and borne down on as appropriate.”
“As I have already explained to the hon. Lady and the House, the register of beneficial ownership is now an element within these tax jurisdictions. It is accessible by HMRC, which is, after all, the authority that we rely on to bear down on tax avoidance. As to her comments about Russian money, I have no doubt that if HMRC can get the information that it has requested from the BBC, The Guardian and the group of journalists, it will be even better prepared to clamp down on such issues where activity is found to be inappropriate.”
“My hon. Friend is absolutely right. We need to work with our international partners, which is why, as I have said, we have been working closely with the OECD on the base erosion and profit shifting project. We are well ahead of the pack in implementing those recommendations.”
“As the right hon. Gentleman knows, we are engaged in a variety of discussions with our international partners—not least with the European Union, in terms of the so-called blacklist—and we are looking closely at the concerns that they and others have, in order to strike an appropriate balance between protecting services that are very important to those particular jurisdictions and making sure that tax is paid fairly and as it should be.”
“My hon. Friend raises a very important point. To put it simply, it is not just the tax rate in a particular regime that is pertinent to the issues we are discussing—he mentioned the Republic of Ireland, where the rate is just 12.5%—but the other factors we need to look at in coming to such judgments.”
“As the hon. Lady will know, this Government have brought in £160 billion in relation to tax avoidance since 2010, including £2.8 billion in respect of individuals attempting to hide funds overseas. She raises the issue of HMRC. As is quite right and proper, it is going through reconstruction and reassignments at the moment, so that we have a series of hubs with a critical mass of individuals in them and the right technology and infrastructure to go after those who, as assessed on a risk basis, are avoiding taxation.”
“I thank my hon. Friend for her question. As I have pointed out a few times already, we are currently looking at reporting standards. We are also looking at various recommendations coming out of the BEPS regime, some of which were covered in the Finance Bill, to stop flagrant tax avoidance, sometimes on the part of some of the largest corporations in the country. As I mentioned earlier, the Labour party sought to kill that Bill on Third Reading.”
“As the right hon. Gentleman will know, we are committed to country-by-country reporting, which we will push forward with multilaterally. As for our future trade treaties, they are for the future and for the Department for International Trade.”
“I cannot comment on a specific tax structure put to me in these questions, other than to say that if it falls foul of our very rigorous disguised remuneration arrangements—some of them are being put in place by the latest Finance Bill—the people involved should clearly expect to receive a hand on the shoulder from HMRC.”
“The hon. Gentleman overlooks a simple fact: this country has one of the most progressive tax systems in the world, with the wealthiest 1% of income tax payers paying no less than 28% of all income tax. As I mentioned earlier, £2.8 billion has been raised from the wealthy who may have been trying to avoid paying their tax. That is a far stronger record than that of the Labour party.”
“My hon. Friend is absolutely right. One measure that the Opposition have said a future Labour Government would take is to stick the corporation tax rate up to 26%, which would do nothing to create jobs, nothing to create wealth, nothing to improve our economy and, most importantly, nothing to raise the vital taxes that we need to support our vital public services.”
“The hon. Lady is simply wrong. The discussions on the blacklist at the European Union are ongoing and the United Kingdom Government have done nothing to attempt to block them. We are firmly and deeply engaged in them and expect them to conclude by the end of this year.”
“My hon. Friend is absolutely right. We seek to move forward on the basis of unity with our overseas partners. That is why we have played such a full role with the OECD.”