Mark Garnier
MP for Wyre Forest · Conservative · United Kingdom
“Many commentators have commented about public sector productivity underperformance. EY tells us that the public sector has underperformed to the point where it has cut GDP growth by 3% since 2019. The Institute for Government highlights an average of nearly 1% underperformance every year for that same period.”
“My right hon. Friend raises another big argument that we could have on the issue of rural broadband, but it is worth making the point regarding internet connectivity that I was just coming on to. I know this is as painful in other constituencies as it is in Wyre Forest.”
“I remember the impact that was felt in 2015 when HSBC closed the last bank in Bewdley in my constituency; people were utterly dismayed. Happily, the post office stepped in and was able to help resolve the issues, but since then we have now discovered that that the post office is under threat.”
“As I say, I am not an apologist for banks, and I am keen to ensure that we get a balanced argument. The hon. Lady is absolutely right that that is an awful lot of money, but it all comes down to what should be the right and proportionate response.”
“If a branch is not viable, should the bank keep it open? We must look at the other opportunities. The last Conservative Government recognised that and were committed to retaining vital banking services.”
“New York is the biggest financial services centre in the world and London is the second biggest, but in New York, 80% of the turnover is driven by the domestic market of America, while just 20% is international; those numbers are reversed in the UK, where 80% of the activity is international.”
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“On the global restructuring group, the Financial Conduct Authority identified a number of clear failings in customer service and poor interactions. I understand that NatWest bank has accepted that the conduct fell far below the standards expected and has paid out something in the region of £100 million in compensation. In the grand scheme of things, that is not a huge amount of money; none the less, it has accepted that. However, it seems from the results of the regulatory reviews by the FCA, as well as the judicial proceedings, that it has not properly compensated people. I should also point out that banks did a great deal to support businesses around the time of the financial crisis. That might sound counterintuitive to hon.”
“Of course, we have also seen mismanagement of Government—I am the first to admit that, under Liz Truss’s Government, we saw interest rates spike at 15%. Collar and cap arrangements would have protected borrowers from that, so there is a benefit to them. However, I completely understand that we are looking here at where there has been malpractice behind these contracts. It is incredibly important, though, to look at the problem with the Financial Services Authority, the precursor of the Financial Conduct Authority, which identified that lenders failed to ascertain borrowers’ understanding of risk. That is why it was right that the nine banks involved compensated customers to the tune of £2.2 billion. I appreciate that we are talking about those who were not compensated, but there was a recognition that there was a problem.”
“On the hedging products, it was common practice back in the 2000s for businesses to be sold variable rate loans, as well as interest rate hedging products, which were known as collars and caps. In principle, they are not inherently bad products in themselves, as they offered the borrower greater flexibility. If people are borrowing money at 6% and are capped at 8%, but the quid pro quo is that they are collared at 4%, that actually works for them, because it protects them from a spike in interest rates. Of course, the problem was that we did not see a spike in interest rates; rather, we saw a massive collapse of interest rates during the financial crisis. Interest rates dropped from 575 basis points in 2007 to just 50 basis points in 2009, and that is where borrowers were left out.”
“None the less, we looked into the fundamental malpractices going on in banks, and what we saw, absolutely beyond a shadow of a doubt, was a mismatch in the balance of interests between shareholders, customers and staff that was massively in the favour of staff. That is what we found, and that fundamental malpractice by the financial services system is what those two Acts of Parliament were designed to resolve. What we are looking at today is three important areas: those who were sold interest rate hedging products, which most of this debate has been about; those who were placed into RBS’s global restructuring group; and those who were on fixed-rate loans in Northern Ireland. I want briefly to go through each.”
“We looked at the Financial Services Act 2012, which created the Financial Conduct Authority and the Prudential Regulation Authority to replace the previous regulator, the Financial Services Authority, which had been an abject failure. The FSA was created under the Financial Services and Markets Act 2000, which started the tripartite regime that singularly failed our economy and resulted in the financial crisis in 2008. There is absolutely no question but that what we saw prior to the financial crisis, when we had that credit bubble, were some very bad practices. We looked into this again on the parliamentary commission on banking standards. The legislation that came out of that, the Financial Services (Banking Reform) Act 2013, was originally started due to the LIBOR scandal.”
“Thank you, Sir Roger, for chairing the debate. I congratulate the right hon. Member for Hayes and Harlington (John McDonnell) on bringing this incredibly important subject up for discussion. At the heart of the debate are individual people—people who have lost their businesses, their livelihoods and, in some cases, their health and, indeed, their lives. Let me be crystal clear: where there has been malpractice, those affected should and must be supported and compensated. Every stakeholder in this issue, from the banks to the business owners—certainly the business owners—should agree with that. I have a certain amount of experience of this. I was a member of the Treasury Committee from 2010 to 2016 and a member of the parliamentary commission on banking standards.”
“Can the Minister confirm whether he has resigned, or has he been sacked? Can he confirm whether the chief executive received bonuses over this period of poor performance? Finally, what confidence do the Minister and the Government have that this is the true depth of the problem affecting bereaved families? What work is he doing to identify whether this might be the tip of an iceberg? I am not trying to imply that it is the tip of an iceberg, but I ask the question to ensure that this is the limit of the problem. People have been let down. While NS&I has apologised for the mistakes, it will be of little comfort to those thousands of people who have lost out. The Government need to act swiftly and the families need to be compensated. The Opposition will work collaboratively with the Government to ensure a swift resolution.”
“It has apparently taken a breaking news story in The Daily Telegraph for the Government to make a statement today. Can the Minister please explain why it has taken him over three months to come forward with this statement? He also says that the previous Government failed to act. That implies that there was something to act on. Can he set out what actions he has taken between coming to power on 4 July 2024 and 18 December 2025? I have some further questions for the Minister. What provision has been made for compensation and who will pay for it? Where bonuses have been paid to senior staff over the period of poor performance, will they be recovered? On that note, we have seen reports that the chief executive will be resigning as a result of this issue and the botched digital transformation process.”
“Is it any wonder that the Public Accounts Committee was damning about the digitalisation plan, calling it a “full-spectrum disaster” and concluding that NS&I is “over-confident” and “has no workable plan, and no idea of eventual cost.” If the Public Accounts Committee could see it, why have this Government been sitting on their hands? Poor performance and a botched digital transformation mean that NS&I is short-changing savers at a time when raising money for the Government has never been needed more. NS&I is an arm’s length body overseen by the Treasury. Specifically, it is an Executive agency of the Chancellor, so it is concerning that the Minister has today admitted that NS&I notified the Treasury of these operational failings on 18 December last year.”
“In the breaking newspaper reporting today, we have heard how people have had to chase up their own cases, only to be told that they would have to wait a further six to nine months for a resolution. Some families have also had to call in lawyers to obtain money that is rightfully theirs, and there are examples of bereaved family members receiving letters incorrectly addressed to their dead relatives. NS&I has in the past tried to blame some of these failures on covid and the outsourcing of staff, but whatever its excuse, this is unacceptable and a complete failure of management. NS&I is letting down its customers, and complaints have more than doubled in just over three years. At the same time, the digital transformation of NS&I that was meant to cost £1.3 billion has now ballooned to £3 billion.”
“I thank the Minister for early sight of his statement. This scandal affects tens of thousands of people, and it could end up costing taxpayers many millions of pounds. NS&I is supposed to be as safe a place as anywhere for people to put their savings—a place where savers can trust that their money will be looked after. As we have heard, 24 million people do so. It is also a savings scheme that the Government can use as a benefit to taxpayers, borrowing to provide funds for the running of the country. It needs to be demonstrably secure. In reality, bereaved families have been short-changed, with NS&I losing track of investments, delaying transfers and withholding premium bond payments. Customers have faced a complete breakdown in communication at the most difficult time, adding stress and worry.”
“Maybe he can tell us how the policy is fair for those hard-working people, or whether they are just casualties of rushed policymaking. Secondly, a behavioural outcome may be that employers will remove salary sacrifice as an option for all their employees. We already recognise that salary sacrifice is mutually beneficial for employees and employers. It is also more attractive to both sides, as it is simple to understand. By enforcing the cap, it will change not only the viability of salary sacrifice arrangements, but employers’ perception of them.This may result in many employers removing them as an option altogether, meaning that 4.4 million people who are supposedly protected may be affected. If this Government were really serious about their policy objective, they would exempt basic rate taxpayers altogether.”
“While that might be the stated purpose and the political justification, in reality that is not the case for two reasons. First, the cap will still affect 858,000 basic rate taxpayers, according to the Society of Pension Professionals. In fact, reporting from the Financial Times has highlighted how the Bill will disproportionately affect those people, compared to those on a higher rate of tax. Those on the basic rate of tax pay 8% national insurance contributions, while those on the higher rate of tax pay 2% NICs. That means that on national insurance contributions alone, lower earners are being hit four times as hard by this policy—four times. On Second Reading, I asked the Minister how that could be fair. He did not answer my question then, but I hope he will be able to answer it when he winds up.”
“The Opposition remain opposed to the Bill, but the amendments do go some way to address those issues and support the stated objectives of this policy, even though we disagree with the fundamental policy. Lords amendments 1 and 7 would make basic rate taxpayers exempt from this policy. That would protect a group who typically under-save and allow them to continue to put savings into their pensions. The hon. Member for Harlow (Chris Vince) may be interested in listening to this, because he raised a very important point about lower rate taxpayers. The amendments are identical to the amendment we tabled in the Commons and that Labour MPs decided to vote down. As the Government’s own impact assessment clearly states, they are trying to target higher earners or those making larger contributions.”
“However, in this case the Government have singled out pensions and are attacking one of the most important things that people should be saving towards—their pensions. This is hard-earned taxpayers’ money that could be going towards a good thing. Instead, the Bill will remove an avenue that 7.7 million employees are currently using. The Bill will add even more cost to the 290,000 businesses and charities that use it. It will pile more cost on to students already saddled with student loans. It will harm pensions adequacy and force more people to rely on the state, pushing more costs on to the next generation. I am proud that my colleagues in the Lords, as well as Liberal Democrat and Cross-Bench peers, understand those concerns.”
“I know there is cross-party consensus on that point, if nothing else, so let us be honest: the changes to salary sacrifice arrangements will do the complete opposite. As the Association of British Insurers and Pensions UK have outlined, we should be improving our current offering and providing new opportunities. Instead, the Government are making the situation worse in a desperate attempt to balance the Government’s books, conveniently in three years’ time. Frankly, it makes little sense and that is why we oppose this legislation. The point of salary sacrifice arrangements is that they incentivise certain behaviours. That is why people are allowed to use these schemes to put money towards not just pensions but workplace nurseries, childcare vouchers and cycle-to-work schemes. Those are all good things.”
“The pact that has been established between the state and the pension saver, which goes back to the 1920s, is all about not just helping savers but taking the strain off the state: encourage saving now and there will not be a burden on the state of an impoverished pension in the future. Under the previous Government, we saw the roll-out of auto-enrolment, bringing 10 million people into the savings culture, and we introduced the triple lock to reverse the decline in the value of the state pension under the previous Labour Government. Despite those positive steps, we recognise that people are still not saving enough for their retirement. As the Government’s own analysis shows, 50% of savers are projected to miss their retirement income targets set by the 2005 Pensions Commission, so we need to do better.”
“I would also like to start by thanking the Lords for their very hard work. I do not think the Government won a single vote during the Bill’s passage in the other place. Over the past few months, we have seen how enthusiastic the Government are to raid savings. In particular, they are very keen to raid pension pots. Whether by taking powers to mandate private pension funds to invest in Government white elephants or through the Bill we are debating tonight, the Government have established beyond any doubt that they have no interest whatsoever in savers and strivers. Pensions are important. They provide for security in retirement.”
“I thank the Minister for his statement. One characteristic of volatile energy markets is that when wholesale prices rise, consumer prices tend to rise like a rocket, and when the wholesale price stabilises the consumer price tends to fall like a feather. Can the Minister assure me and my constituents that in the conversations that he is having with the Competition and Markets Authority he is also looking at whether, when the market returns to normality, prices will fall as quickly as they have risen in this volatile moment?”
“Thanks to this Government’s policies on pensions, which actively disincentivise saving into private pension schemes, people will increasingly rely on the support of the state. This is not sustainable. I asked the Minister about this yesterday, and he dodged the question, so I will ask him again: will the Government cancel pension fund mandation and abandon salary sacrifice caps—yes or no?”
“Helping millions of people ensure financial security in their retirement is a cornerstone of the Minister’s Department, but in the Government’s first 18 months, they have disincentivised pension savings by introducing inheritance tax on pensions, removing pensions from their lifetime ISA reforms, forcing pension trustees into mandation and, most recently, introducing a cap on salary sacrifice savings incentives. Through their actions, this Government are pushing people to be more reliant on the state pension, rather than encouraging people to take control of their own financial future. Which will be the next Government U-turn: cancelling mandation, or abandoning salary sacrifice caps?”
“I should alert Members that I am the chairman of the British Shooting Sports Council. On that point about mental health issues, does the hon. Gentleman agree that medical markers on doctors’ records would be a perfect solution to that problem, rather than necessarily doing what is proposed in the petition?”
“What is cruel about both those diseases is that it can take years for symptoms to start presenting themselves, and therefore, by the time that someone receives a diagnosis, in most cases it is already advanced and leaves them with little time to react. The other issue with the latency of diagnosis is that many sufferers struggle to pursue civil claims against employers. These schemes help to address those issues and provide decency for people affected. They also underpin the point that our benefits system should be a critical safety net for the some of the most vulnerable people in our society. I reiterate that the Opposition welcome this compensation lump sum uplift today and support the Government’s proposals.”
“We welcome the uprating for both the mesothelioma lump sum payments and the Pneumoconiosis etc. (Workers’ Compensation) Act payments. This has been done on an annual basis and over many Governments. Today’s regulations specifically provide a 3.8% increase in line with the September 2025 consumer prices index rate. We welcome that inflation-linked increase so that the compensation amounts are more representative of today’s cost of living. That is especially important in this instance, given how debilitating these diseases can be. Colleagues will know that mesothelioma is a rare and aggressive cancer with known links to asbestos exposure. Pneumoconiosis is equally serious, often affecting those who worked in heavy industries such as coalmining.”
“I was going to say thank you for the Pride in Place money, actually; I am very grateful that the Government have given £20 million to my constituency. On the subject of funding for councils, the Government are requiring district councils to pay for food waste recycling. That is not an unreasonable proposition, but there was a principle under the previous Government of new burdens funding, whereby when a new burden was presented to a council, the Government would sort it out. Why have the Secretary of State’s Government decided not to support councils with new burdens funding?”
“The Secretary of State is being incredibly kind. He talks about the settlement, but the settlement does not work. Wyre Forest district council has had a 0% increase in core funding. Dare I say that across the whole of Worcestershire, where there is a district council with a Conservative Member of Parliament, there has been a 0% increase, but where there is a district council with a Labour Member of Parliament, there has been an increase of up to 5%. Can he explain why that has happened?”
“On exactly this point about the democratic process, my constituents were promised by the Reform candidates that they would cut council tax, but Worcestershire county council’s council tax is going up by 9%. It is a shame that not a single Reform Member of Parliament has turned up to defend what they have done. The worrying point is that we are being denied a referendum even though this goes above the 5% threshold. That bit of the democratic process has been removed from Worcestershire.”
“My hon. Friend and neighbour is raising incredibly important points about how our constituents were promised that their council tax would be cut and have been royally let down by Reform councillors. Can I embarrass my hon. Friend? It is worth remembering that many Conservative district councils do well. My hon. Friend led Wychavon district council within the last 14 years, and for five years it was deemed the most financially resilient district council in the country, and at the same time it did not increase council tax by a single penny. That is what Conservative councils deliver.”
“I do not want to press the Minister on too many questions, but could he in due course let us know when the Government expect inflation to return to the target rate of 2%, which everybody agrees is where it should be? The other point that I want to make about the statutory instrument is that it extends the employer national insurance contributions relief for veterans to 2028, which means businesses will continue to pay no employer NICs on salaries up to the veterans upper secondary threshold of £50,000 or £270 for the first year of their employment, which is a very good thing, as I think the Minister will agree. We introduced this relief in 2022, as we wanted to encourage as many employers as possible to help our veterans. These people have done a huge amount to protect our country, and it is important that we show our gratitude to them.”
“We had managed to get it down following a once-in-a-generation pandemic and Russia’s illegal invasion of Ukraine and the subsequent energy crisis. Since Labour has come in, inflation has risen almost every month and is now stuck at about 3.6%. Why is that? It is because the Government are relentlessly pursuing policies instead of making practical solutions—for example, the drive towards net zero. We of course want net zero and to get to the point where we clean up our carbon footprints, but by going too far they have managed to put up energy bills by £300 since they were elected. Is it any wonder that inflation is so high and shows little sign of coming down any time soon?”
“Specifically, they uprate the lower earnings limit, the small profit threshold and the rates of class 2 and class 3 national insurance contributions. The increase will be 3.8%, which is the consumer prices index figure from September 2025. All other limits and thresholds that these regulations cover will remain frozen at their current level. This highlights that the increase last year was 1.7% compared with 3.8% this year. Both these percentages represent the rate of inflation that our constituents are suffering, but the 1.7% is of course what we left the Government when they came to power, and 3.8% is the level of inflation they are now delivering for consumers. When we left office, inflation was at 2%.”
“It is a great pleasure to debate these two statutory instruments with the Exchequer Secretary. As he stated, they are made each year, and the precedent is for them to be debated on the Floor of the House. I am glad to see that that practice continues, and I hope that the Government will keep this going for the remainder of the current premiership, however long that may last. I want to make it clear that we will not be voting against the measures before us when the debate concludes. However, I would like to comment on each SI and the wider political discourse around them. First, the social security regulations set the rates of certain national insurance contribution classes and the level of certain thresholds for the 2026-27 tax year.”
“That is not fair to taxpayers, or to those who need support the most. In due course, I hope the Minister will set out when the needed benefit reforms will be brought forward and what steps he is taking to ensure that taxpayers’ money goes to those who need it most. The Conservatives will not stand in the way of any of the statutory instruments before us today, but we look forward to hearing what the Minister has to say—not necessarily this afternoon, I stress—on the points I have raised.”
“Although these state benefits are important, the Government are abandoning their responsibilities to tackle the wider benefits bill. In this debate last year, the former Exchequer Secretary, who is now the Chief Secretary to the Treasury, said: “the Government are committed to delivering a welfare system that is fair for taxpayers while providing support to those who need it.” —[ Official Report , 4 February 2025; Vol. 761, c. 716.] When it came down to it, however, this Government did not take the opportunity to make those savings. Instead, it appears that they caved in to their Back Benchers, and we are now in a position where the benefits bill continues to balloon. According to The Times , even the Prime Minister has vetoed plans to reform the welfare system, simply to avoid the embarrassment of yet another U-turn.”
“In due course, it would be great if he or the Government could let us know what is being planned and on what timeframe, so we may understand what will be happening for veterans. The child benefit and guardian’s order will uprate the allowances in line with CPI for the 2026-27 tax year. Again, we welcome the increases as these benefits are an important part of our welfare system. Guardian’s allowance is designed to provide further support to people who care for someone else’s child—for example, if the child’s parents have died. When these people step as guardians, they are incredibly important in the upbringing of young children, and we have a duty to support them so that they can ensure that the children they care for have the best start in life.”
“The Minister is nodding, and I am sure he agrees with us on this point. Therefore, we welcome the fact that the Government have committed to extending this relief for the next two years. However, I point out that the Government said in the Budget document: “The government will extend the employer NICs relief for employers hiring veterans in their first civilian role to April 2028, from which point support for veterans into employment will be covered through spending review settlements rather than through this tax relief.” The Government have committed to consult on which way would be best to do that, which is positive, and I hope the Minister is open to considering continuing this relief as an option if a suitable alternative cannot be found.”
“I am grateful to my constituency next door neighbour for allowing me to intervene. Some of the post that goes to the southern part of his constituency may well be sorted through the Kidderminster postal sorting office. He mentioned that people are not getting their letters, and we have heard from other Members that urgent mail is not getting there. I too have raised this on Facebook and, independent from my residents in Stourport, Kidderminster and Bewdley—towns that should be well served—I have had 700 uninvited comments from people who are thoroughly fed up with the postal service in our part of the world. Does my hon. Friend agree that this Ofcom requirement is not being met in any way, shape or form?”
“That was followed by a consultation that the industry has described as “very short, limited and confidential”. Will the Minister and HMRC therefore consider running a more open consultation?”
“Secondly, how can the Government prove that someone is promoting arrangements that have “no realistic prospect” of success? Will it be for individual officers of His Majesty’s Revenue and Customs to determine, or will clarity be provided in the statutory instrument that will eventually follow? I ask because, as the Chartered Institute of Taxation points out, the term was not in the draft Finance Bill. Originally, the Government wanted to introduce a new criminal offence of failing to notify a tax avoidance arrangement under the rules on disclosure of tax avoidance schemes. We welcome the fact that the Government have consulted and, following the responses from industry, have decided to change tack. However, the new terminology of “no realistic prospect” of success was first raised only on 12 November last year.”
“Those definitions are welcome, but the Chartered Institute of Taxation has flagged concerns about the wording. For example, the clauses use the terms “marketed” and “likely to be” marketed but never define what they mean. The intention to prevent ineffective tax avoidance arrangements at source is noble, but “likely to be” marketed is too loose. What evidence would constitute an arrangement being classed as likely to be marketed? What evidence would an adviser need in order to show that advice was not likely to be marketed? Clarity is needed because the provision, if left unchanged, could accidentally catch normal tax advice. Will the Minister therefore commit to tightening up the wording of the clauses and providing specific details, either before Report or in any follow-up regulations?”
“Clauses 156 to 162 will place a statutory ban on promoting tax avoidance arrangements that have no realistic prospect of success. The clauses also set out the civil and criminal penalties. The Opposition absolutely support the Government’s efforts to tackle tax avoidance and tax evasion, both of which are variations on a theme. It is important to remember exactly what they are. Tax planning is to be encouraged; tax evasion should lead to being sent to prison; and as for tax avoidance, we should try to persuade people not to use the letter of the law to avoid the spirit of the law in their tax planning. However, some concerns, which I hope the Minister can answer, have been raised with us about the clauses. Clauses 157 and 162 define what is meant by “promotion”, as well as other key definitions that are applicable to these clauses.”
“At the moment, that is the only recourse: a person cannot make a formal appeal to the tax tribunal. Subsequent clauses, which the Committee will discuss later, include a “reasonable excuse” defence. Not having such a defence leaves open the possibility that the bad behaviour of one rogue actor will lead to the prosecution of the wider organisation. Will the Minister and her officials agree to take those points away and consider tabling a new clause on Report?”
“I wholeheartedly agree. The more we discuss it in public, the more the general public will realise that avoiding tax is a very bad thing. Anything that highlights that point is to be welcomed, so I strongly urge the Government to do the right thing so that we can make this prohibition work and protect advisers who may simply have made an error. Clause 159 lays out the civil penalties, including a financial penalty of up to £1 million if the prohibition is breached. Additionally, it sets out an individual fine of £5,000 that can be issued for each person who has participated in the arrangements. We agree with the Government’s aim of creating a deterrent, but given how steep the sanctions are, there is a concern that the 30-day window for making representations is not enough of a safeguard.”
“I think we all agree with the sincerity of the intention, but the problem is that there is always a grey area at the boundary. The question is how we define that area so that we make certain that a legitimate person does not get wrongly drawn in, while a bad actor gets away with it.”
“That means that preliminary notices will require a lower threshold of evidence in comparison with a promoter action notice, with no judicial oversight. In its technical consultation last year, UK Finance raised the fact that that could affect financial institutions as well. Clause 166 is similar. It specifies the information that an authorised HMRC officer and recipient of a preliminary notice or promoter action notice can disclose. Following the issuance of a notice, the investigation process keeps a suspected promoter completely unaware. That potential overreach could have chilling effects on people whom HMRC merely suspects. As clause 165 states, a person may sever ties with an entity being investigated even if that entity is only under suspicion.”
“What steps are being taken with other countries to catch promoters not residing in but operating in the UK? That is an important point. Clause 165 is about the notification of a personal business that HMRC reasonably suspects is enabling a promoter. It is sensible to have that soft approach—to be followed, if necessary, by harder enforcement action later in the process. Our concern, however, is about the chilling effect that a preliminary notice might have on a legitimate actor. Once a recipient receives a preliminary notice, they may choose to pre-emptively sever ties with somebody whom HMRC has flagged as a suspected promoter, despite the fact that a preliminary notice is based on suspicion and is not an official conclusion.”
“Clause 163 outlines the process that HMRC undertakes to officially deem a person as a certified promoter. The big issue, however, is the difficulty of completing the process to officially certify what a promoter actually is. These promoters can be notoriously difficult to catch because some of them are based offshore and hide behind complex corporate structures, so although we support the purpose of clause 163, we are not entirely certain that it will achieve its intended result of tackling promoters offshore. Clause 164 has the same problem: it outlines how HMRC will require people who engage with promoters to disengage by issuing them with a promoter action notice. Will the Minister outline whether the Government are considering further steps to make the clauses enforceable?”
“We would all agree that there is certainly a need to enhance HMRC’s ability to catch promoters of tax avoidance schemes. According to HMRC, there is currently a tax gap of about £500 million related to marketed avoidance schemes sold to individuals. HMRC has identified approximately 20 to 30 active promoters responsible for that. It seems that clauses 163 to 173 would theoretically affect only those engaging in highly risky schemes that HMRC has already disapproved of. We support the work of HMRC to protect the public from those groups and the overarching principles that drive these clauses but, on closer inspection, the scope of the proposals is wide. We have concerns that the proposals could inflict collateral damage on legitimate actors in the wider markets.”
“It means that reporting a recipient to the regulator in combination with publishing recipient details, as well as applying civil penalties, would all run concurrently before the recipient has even had a chance to reach a tribunal. Again, will the Minister outline what discussions have been had to ensure that there is not excessive duplication?”
“As the Association of Chartered Certified Accountants pointed out, the first-tier tribunal can take a significant amount of time. Therefore, is the Minister certain that HMRC has the resources to compensate for the increased workload? Will he consider implementing a suspension period provision? At the end of the day, if that drags on for too long, a provider could be put in financial jeopardy of business failure. Finally, clause 170 sets out when HMRC can report a recipient of a promoter action notice to a regulator, representative or trade body. I agree that regulators, and representative and trade bodies should be involved in the informative process, as their integrity and reputation could be at stake, too. However, the clause echoes similar concerns of mine regarding clauses 167 to 169.”