The Economy

Ed Davey Excerpts

Thursday 24th October 2019 Commons Chamber

[The Chancellor of the Exchequer (Sajid Javid)]

I have been sitting here for the last 30 minutes or so listening to the shadow Chancellor, and I have to say, “The brass neck of the shadow Chancellor!” No mention of the jobs boom and rising wages; no mention of bringing the deficit down by four fifths; no mention of our huge investment in public services; and no support at all for this Queen’s Speech, which delivers on the people’s priorities and moves this country forward from a decade of recovery to a decade of renewal. It is a Queen’s Speech that backs our NHS with £34 billion a year of new investment by 2024, that backs law and order with 20,000 new police officers, that backs the next generation with £14 billion more funding so that every school has more money for every child, that takes great strides towards decarbonising our economy and that boosts our economic infrastructure, increasing investment in roads, railways and energy.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

Will the Chancellor publish today an economic impact assessment—an assessment of the public finance impacts —of the Prime Minister’s hard-deal Brexit, and if he won’t, why not?

[Sajid Javid]

If the right hon. Gentleman bears with me, I will come on to that issue in just a moment.

We can only do all these things that I have just mentioned because of the strength of our economy and our commitment to fiscal responsibility, and because of the hard work of the British people over the last decade. We will not throw that away.

One of the most important measures in the Queen’s Speech is of course the withdrawal agreement Bill. Passing this Bill will allow us to get Brexit done, to focus on the people’s priorities and to move forward as a country.

And let me be clear about one thing: people said that we could not do it—they said that we would not be able to reopen the withdrawal agreement—and we did; they said that we would not be able to get rid of a backstop, and we did; they said that we would not be able to negotiate a better deal, and we did. And then they said that we would not get Parliament to support that deal, and, guess what, we did that too. They were wrong, wrong and wrong again, as they always are.

Let me address the issue raised by the right hon. Member for Kingston and Surbiton (Sir Edward Davey) and the shadow Chancellor about concerns expressed in this House about the impact assessment of the deal. What Parliament is being asked to vote on is the withdrawal agreement, which covers the deal on the budget, citizens’ rights and Northern Ireland. The Government have already provided and published a full impact assessment; it is a shame that the shadow Chancellor has not even bothered to look at it yet. The political declaration lays the groundwork for our future relationship, and with those final details still to be negotiated the only thing blocking us from getting on with Brexit is the Labour party and its disposition to dither and delay. Once we leave the EU we will start those talks, and of course we will keep Parliament fully informed at every stage of the process.

--- Later in debate ---

[Sir Edward Davey (Kingston and Surbiton) (LD)]

It is a pleasure to follow the hon. Member for West Worcestershire (Harriett Baldwin), who I voted for yesterday.

Rarely before in our history have a Government presented a Queen’s Speech that will do so much damage to our economy. By placing Brexit at its heart, the Prime Minister is delivering on one promise: his crude, four-letter pledge to business. This hardest of hard Brexits is as bad as it could get, save for a no-deal Brexit. The Conservatives once claimed to be the party of business, but they can never make that claim again. Let us just go through the basic economics. Reducing access to our closest international markets is highly damaging. Tearing up our membership of the EU’s customs union and single market, the best trade deal this country has ever had, is very destructive. Exiting our country from the multiple external trade deals that the EU has achieved is simply dreadful. Then we add the red tape that our exporters will be tied up in, at a cost to the private sector of at least a whopping £7.5 billion a year.

The Conservative’s central policy of the Queen’s Speech not only harms our economy, but will plunge our public finances into crisis. Regrettably, we do not yet have an official estimate of the red ink that this hard Brexit deal will pour over Britain’s finances but, as the hon. Member for Nottingham South (Lilian Greenwood) said earlier, a report by UK in a Changing Europe estimates a cost to the Exchequer of between £16 billion and £48 billion a year, and a cumulative hit to borrowing of nearly £100 billion. This Government are sowing the seeds of a new austerity—a Brexit austerity, and a totally avoidable austerity.

If this Conservative Government are economically illiterate and fiscally incontinent, Labour’s shadow Chancellor is doing his best to give them cover. Take Labour’s plans to renationalise water, railways, energy and the Royal Mail. What is the cost—£100 billion, or perhaps £150 billion? Whatever the cost, it would be a calamitous waste of money. Of course there are problems with aspects of how our utilities have been operating, but there are positives, too. Just as we can fix the problems in Europe without the cost of the Conservatives’ ideological Brexit, we can fix the problems in these utilities without Labour’s costly ideology.

Take energy, for example. With the climate emergency, we must accelerate the pace of decarbonising energy, but instead Labour wants to spend years legislating for energy renationalisation—what a climate catastrophe! Liberal Democrats showed in government that if we intervene intelligently, we can harness the market to tackle climate change. Thanks to our decisions, Britain is now the global leader in offshore wind. Offshore wind farms now have much greater UK content than people ever imagined possible, and future offshore wind farms will no longer need a subsidy to be built. So if you want to go green, don’t go red, go yellow—and don’t destroy capitalism; decarbonise it.

It is this practical, business-like approach that goes through all Liberal Democrat economic policies. We start with a positive belief in markets, trade and competition, and we believe that responsible capitalism is possible. Liberal Democrats want to celebrate responsible business, and our policy of remaining in the EU is phenomenally popular with responsible business. It gives us a remain bonus to invest in our public services and our economy, to make them fairer and to equip them for the future.

On the likely eve of a general election, the voters are faced with a choice between two visions of the past and one vision of the future. In the blue corner, we have a return to the 1870s, in a colonial-style global Britain so well personified by the laid-back Leader of the House. In the red corner, we have a return to the 1970s, stoking up old class divisions when our country so desperately needs to come together. Fortunately, there is a yellow corner, from where we can go forward to the 2070s, full of hope and optimism that our country can survive this current nightmare, invest in our children and tackle climate change. As we vote against this damaging Queen’s Speech tonight and prepare to face the electorate—preferably in a referendum but, if not, in a general election —the voters can be in no doubt: the Liberal Democrats are the party for Britain’s future.

HMRC Impact Analysis: Customs

Ed Davey Excerpts

Tuesday 8th October 2019 Commons Chamber

[Jesse Norman]

I pay tribute to my right hon. Friend for the work that he and the Secretary of State for Digital, Culture, Media and Sport have done on alternative arrangements. He raises a very important issue. As he says, Customs operates a risk-based assessment system of checks that is quite different from declarations. As for educating commentators, I absolutely agree with him and wish those commentators also included some Members of this House.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

Given that HMRC has now shown that Brexit means red tape, and that this would harm trade, destroy jobs and cut growth, what estimate has the Treasury made of the impact of lower growth on Britain’s public finances? Does the Minister accept that the Office for Budget Responsibility has said—and now the IFS analysis has shown—that borrowing will rocket under a no deal? Is it not now clear that under the blues, we will be going into the red?

[Jesse Norman]

I cannot match the right hon. Gentleman on verbal wit. What I can say is that the Government have published estimates of the impact of a no-deal Brexit in different forms, and we continue to believe that it is vastly in the interests of this country, this House and all our constituents to leave with a deal. I hope that the right hon. Gentleman will support that.

Oral Answers to Questions

Ed Davey Excerpts

Tuesday 1st October 2019 Commons Chamber

[Sajid Javid]

My hon. Friend has made an important point: it is in everyone’s interests—ours and our European friends and partners—that we reach a deal. Intensive negotiations are going on, both with the Irish Government and with other European partners, and there is a very strong recognition that it is in all our interests that we reach a deal.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

Is the Chancellor aware that the Office for Budget Responsibility’s alarming fiscal analysis of a no-deal Brexit assumes that the Government’s preparations are successful—and so result in a miraculously benign no-deal Brexit—and that even with this least-damaging no-deal Brexit the OBR predicts a hit to Britain’s finances that would destroy every single spending announcement by the Prime Minister and the Chancellor? Given that, is it not unacceptable for a Chancellor in a Government publicly contemplating a no-deal Brexit to fail to tell the truth to the British public that spending on health, schools and police will be slashed in the event of a no-deal Brexit?

[Sajid Javid]

First, I do not recognise that picture at all. It has been made up by the Liberal Democrats. Secondly, the right hon. Gentleman talks about what is unacceptable. What is unacceptable is for the Liberal Democrats to pretend that the referendum on the European Union never happened.

No-deal Brexit: Short Positions against the Pound

Ed Davey Excerpts

Monday 30th September 2019 Commons Chamber

[Mr Clarke]

My hon. Friend is absolutely right: the third quarter figures for the UK economy look very robust. Clearly, there is a lot to be said about the ongoing work to make sure that we are ready for a deal or no-deal scenario. My right hon. Friend the Chancellor delivered the spending review earlier this month and today he will give an excellent speech in Manchester, no thanks to the Opposition, setting out our plans for how we move forward. Clearly, we are deploying billions of pounds and the most robust plans available to make sure that we are ready to thrive in all scenarios.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

When the last Conservative Chancellor, a former permanent secretary to the Treasury and the Prime Minister’s own sister blow the whistle, the Minister simply cannot brush aside these most serious claims of a conflict of interest. Some of the Prime Minister’s biggest donors are clearly betting against Britain, and, intentionally or not, the Prime Minister is aiding and abetting them by pursuing a no-deal Brexit. I therefore ask again: will the Government set up an urgent independent investigation?

[Mr Clarke]

No.

Spending Round 2019

Ed Davey Excerpts

Wednesday 4th September 2019 Commons Chamber

[Sajid Javid]

I thank my right hon. Friend for his support for the increase in defence spending and I can give him that assurance. When the fiscal rules are looked at in time for the next Budget, that will be done openly, transparently and clearly, which is exactly what is needed to maintain market confidence.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I welcome the Chancellor to his post, but is it not the case that headteachers, chief constables and NHS managers simply cannot rely on his fantasy figures if Britain crashes out of the EU?

The independent watchdog, the Office for Budget Responsibility, said just two months ago that a no-deal-Brexit would add £30 billion a year to public borrowing for the next four years. What insurance has the Chancellor taken out against that massive risk to his spending plans? Is this not just a con?

[Sajid Javid]

The right hon. Gentleman should know that the Government have no plans to—as he puts it—crash out of the EU. Our plan is to get a deal and, if he wants to help us to get a deal, he should not vote for the surrender Bill tonight.

Discrimination in Football

Ed Davey Excerpts

Thursday 11th April 2019 Commons Chamber

[Mims Davies]

I pay tribute to Show Racism the Red Card, and to all those who do great work in our community clubs up and down the land. It is right to listen to our youngsters on this issue. There have been roundtables with governing bodies to discuss school sport action plans. We need more people across the game, including mentors and leaders from different backgrounds, as that helps to show women, girls, and people across the game that there is a place for them in football at every level.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I strongly welcome the Minister’s statement and her leadership on this issue. Will she say a little more about why she thinks there has been this appalling upsurge in racism in football? Does she agree that Raheem Sterling was right to call out parts of the British media for the way they treat black British footballers?

[Mims Davies]

I thank the right hon. Gentleman for his kind words—if we all worked together on this issue we could make a huge difference. I think social media has not been helpful, as it has been a platform on which people have been able to ply racism and hate and disguise who they are. I hate to say it, but if that has crept into the stadiums, perhaps social media is part of the issue. The Online Harms White Paper mentions a new duty of care regarding social media, because too many cowards out there think that football is a cloak to cover their intolerance. We need no more of that.

Finance (No. 3) Bill

Ed Davey Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

[Mrs Main]

My hon. Friend is exactly right. There are many versions of that story. I have constituents who say that HMRC was made aware of these arrangements but no objection was raised until many years later. That has to be fundamentally wrong. What more due diligence can anyone do?

I will conclude, because I know the right hon. Member for Kingston and Surbiton wishes to speak. The huge pressure and distress—even suicidal thoughts—that this measure has put in people’s minds is totally unacceptable. I say to the Minister: if we do nothing else tonight, can we accept new clause 26? There is a clear ambiguity in the law that applied at the time—perhaps clarity has been provided now. The fact that people cannot negotiate a reasonable settlement even though they acted in good faith at the time, and are being pursued to the point of the destruction of their careers, homes, family lives and marriages, is completely unacceptable. We clearly need a review, and I hope the Minister takes that on board and accepts new clause 26. If it is pressed to a vote, I shall vote for it.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I thank the hon. Member for St Albans (Mrs Main) for her passionate speech. I also thank the right hon. Member for Loughborough (Nicky Morgan), who chairs the Treasury Committee, and right hon. and hon. Members from across the House, who have campaigned as a Parliament against this measure and supported new clause 26. It is my wish to divide the House on the new clause if the Minister does not accept it.

Let me make it crystal clear from the start that I support the Treasury’s aim of closing tax loopholes and stopping tax avoidance. The introduction of loan charges in the Finance Act 2017 to stop future abuse was correct, and the review my new clause proposes would not seek to prevent the Treasury from stopping that abuse from the 2016 Budget announcement. Instead—somewhat inelegantly, due to the rules of Finance Bill debate—new clause 26 aims to focus the minds of Treasury Ministers on the gross unfairness of the way the 2017 Act went about closing an unacceptable tax loophole.

I believe that the review envisaged in the new clause would reveal the unfairness of the retrospective nature of the current loan charge legislation in two ways. First, it would show how that retrospective nature is even more severe than non-retrospective but backward-looking proceedings for the recovery of lost tax elsewhere in our tax legislation. Secondly, it would show that the test of reasonableness included in proposed new section 36A, if applied to the loan charge, would in fact prevent any retrospective tax collection from the loan charge.

Let me remind the House why the Treasury should, after the review, ditch the retrospective nature of this measure, delay April’s implementation and amend the charge so it focuses only on payments made after 2016. It is because the loan charge, as introduced, offends against the rule of law. It is the sort of taxation that led the barons to rebel against King John and gave birth to Magna Carta. It is simply not acceptable for a Government to introduce a law that makes illegal something someone did years ago, when that action was considered legal. That is a clear principle.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I thank the right hon. Gentleman for giving way— I realise time is short—and for tabling new clause 26, which I, too, support. Does he agree that it is unreasonable for people to be expected to have kept records going back 20 years when they were reassured at the time that the scheme was legitimate?

[Sir Edward Davey]

The hon. Lady is absolutely right, and I thank her for her support. Let us remember that these people—our constituents—were given professional tax advice and behaved in a way they thought was right and lawful at the time.

[Tommy Sheppard (Edinburgh East) (SNP)]

I fully support the right hon. Gentleman’s comments and will vote for new clause 26 if it is pressed to a Division. I wonder whether he will reflect briefly on my concern that some people who support the Government’s position have implied that, in seeking justice and fairness for our constituents, we in some way condone tax avoidance. In fact, the opposite is the case—we say that there should not be tax avoidance or evasion. The real culprits in this are not the individuals who were conned and duped by professionals into taking out these schemes and now face bankruptcy, but the firms that designed and sold them the schemes in the first place, some of which are still operating.

[Sir Edward Davey]

The hon. Gentleman is right on all the points he makes. When my hon. Friend the Member for Eastbourne (Stephen Lloyd) tabled the early-day motion that got cross-party support when this campaign was getting going, those were exactly the points he made. We all condemn tax avoidance and support the Treasury, but this retrospective approach to taxation is simply unacceptable.

[Crispin Blunt]

I congratulate hon. Members and hon. Friends on their speeches and wholly agree with them. It is grossly unfair that one of my constituents, a contractor between 2004 and 2006, is expected to repay tax from this period. It goes against the whole principle of fairness and surely would not survive any challenge in the European Court of Human Rights.

[Sir Edward Davey]

Indeed. HMRC knew about these tax schemes for years and took no action. They were widely used—as we have heard, right hon. and hon. Members from around the House have constituents affected—and widely advertised and yet were ignored by the tax authorities. People could only take some public sector positions if they agreed to be paid via these schemes, and it emerged ahead of the Westminster Hall debate that even some HMRC contractors were paid through such a scheme.

[Wes Streeting (Ilford North) (Lab)]

I am grateful to the right hon. Gentleman for tabling the new clause. I found HMRC’s answers to the Treasury Committee wholly unsatisfactory. There remain serious questions to be asked of the promoters of these schemes, of the employers, including public sector employers, who promoted them to contractors, and also of HMRC. If people were given tax advice and followed it, and if HMRC was aware of these schemes but did not take action in any previous tax year, how on earth could any reasonable person have concluded that they were doing anything wrong?

[Sir Edward Davey]

I totally agree, and I am grateful for the hon. Gentleman’s intervention.

[Sir William Cash (Stone) (Con)]

Will the right hon. Gentleman give way?

[Sir Edward Davey]

I cannot resist.

[Sir William Cash]

It is not often that I agree with the right hon. Gentleman, as he knows, but I strongly agree with him on this issue. Retrospective legislation is bad in principle. This is an unjust provision, unreasonable and unfair, and I urge the Government to take note of the arguments put forward.

[Sir Edward Davey]

Having taken that wonderful intervention, I bring it to the House’s attention that the hon. Member for Wellingborough (Mr Bone) has signed my new clause. It is bringing the House together at a time when elsewhere it is divided.

I end on what this loan charge and its retrospective nature have meant for our constituents. It has caused misery. It has affected people’s lives, their health, their families. It has caused gross misery. Some people believe they will have to go bankrupt if they are forced to pay, or that they might lose their homes, and that is why the House is united against this retrospective action. I really hope that the Minister will get to his feet, accept the new clause, go ahead with the review and bring it back before the end of the tax year, so that the House can see it and vote on it.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

I rise to speak in support of new clause 2. I was staggered to learn that entrepreneurs’ relief costs the Treasury an estimated £2.7 billion, and this to allow people selling companies worth up to £10 million to keep half the money they would otherwise pay in capital gains tax.

I was even more surprised to learn that this tax relief was concentrated among a few very wealthy individuals, with 6,000 people making gains of over £1 million and averaging £450,000 in tax relief each. This relief is only benefiting the very wealthy and should be reviewed as to its effectiveness. If it is scrapped, the £2.7 billion could be used to fund schools buckling under the pressure of funding cuts and provide huge investment in special educational needs and children and adolescent mental health needs. It could also go some way to funding children’s services and social care in local authorities and policing.

This is not the only area where the Government are giving away money that could otherwise be put to better use. Under amendment 22, in the name of the hon. Member for Aberdeen North (Kirsty Blackman), the Government are being asked to review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979. The Alcohol Health Alliance has stated that the Government’s own figures show that alcohol duty cuts from 2013-14 have cost the Treasury £4 billion, which is the equivalent yearly cost of employing over 100,000 teachers. The figure is expected to rise to £9.1 billion by 2024. Considering the pressures on budgets as a result of austerity, that is not an insignificant amount.

The freeze on duty on beer, spirits and cider for 12 months from February 2019 is in effect a cut, as it is not keeping in line with inflation. Indeed, it has not done so for six of the last seven years. Cheap alcohol has a tremendous effect in causing damage to people’s health, the economy and wider society. Alcohol is the leading risk factor in respect of the deaths of people aged 15 to 49. In England alone, there are more than 1 million hospital admissions and 24,000 deaths related to alcohol every year. That is a clearly an impact that the Government need to consider when they set duties on beer, spirits and cider. Cuts in alcohol duty have a double effect. They reduce revenue for the Treasury, which in turn reduces the amount of funding for the NHS, while simultaneously increasing demand and costs in the NHS by encouraging the consumption of cheap alcohol. I therefore ask the Government to review the impact of the alcohol duty freeze on public health.

2019 Loan Charge

Ed Davey Excerpts

Tuesday 20th November 2018 Westminster Hall

[Mr Baker]

It is my intention in my concluding remarks to stridently condemn the promoters of these schemes, who have ended up luring people into misery through what they have done.

Before closing with this letter, I want to mention that the Chancellor also wrote:

“It is not normal, or indeed reasonable, to be paid in loans that are not repaid in practice. It is not fair to the vast majority of taxpayers who pay their taxes in full and on time for anyone to benefit from contrived avoidance of this sort and that is why this government has legislated the charge on DR loans.”

I agree with the Chancellor that it is not normal or reasonable, but I make it very clear that I place the blame on the promoters of these schemes.

HMRC initially expected 40,000 people to be affected, although in a recent parliamentary question, my right hon. Friend the Financial Secretary to the Treasury gave a new figure of 50,000. HMRC’s impact note stated:

“The government anticipates that some of these individuals will become insolvent as a result.”

The Loan Charge Action Group suggests that the loan charge will end up affecting probably upwards of 100,000 people and their families.

The hon. Member for Eastbourne (Stephen Lloyd) has tabled an EDM criticising the measure, arguing that

“retrospectively taxing something that was technically allowed at the time, is unfair”.

Of course, I would agree. HMRC has argued that the loan charge is a new tax on a new source, and described it as retroactive rather than retrospective. I would like the Minister, if he can, to explain both terms and any difference that the Treasury is implying.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

The hon. Gentleman deserves a lot of credit for bringing this issue to the House. Does he agree that we should be working cross-party ahead of the Report stage of this year’s Finance Bill to put together a new clause that deals with the problem, under which any loan charge would come into effect only after Royal Assent of the Finance (No. 2) Act 2017?

[Mr Baker]

I certainly agree with the right hon. Gentleman that there is a job of work to be done across parties to uphold the rule of law, in particular the principle that legislation should not apply retrospectively. That is a subject on which I have made speeches over the years. We end up in a hideous cycle of undesired action, in particular to avoid taxation, followed by the injustice of retrospective action to protect other taxpayers and the misery that causes to large numbers of people. It must be brought to an end, but underpinning that we must be committed to the rule of law.

--- Later in debate ---

[Sir Edward Davey (Kingston and Surbiton) (LD)]

This House has the chance and the opportunity to put this wrong right. As the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) said at the end of his speech, there will be a Report stage to the current Finance Bill. It will come to the Floor of the House and we—every Member here today of whatever party, whoever signed the early-day motion—have the power to come together, cross-party, and pass a new clause to right this wrong. Frankly, words in a Westminster Hall debate and signatures on an EDM mean nothing unless we are prepared to go through the Lobby to vote this tyrannous legislation down. Constituents, the Loan Charge Action Group and all the people affected will expect their Members of Parliament to vote and act and not simply talk. Today gives us a platform to make sure we send a powerful message to Treasury Ministers that this is a catalyst for the action that was not taken two years ago, but will be taken, I believe, when we get to the Report stage of the Finance Bill.

As has been said by the hon. Member for Wycombe (Mr Baker), there is a fundamental principle here that he and I can agree on: the rule of law. When we talk about British values, about which he and I agree, the rule of law is something the Department for Education says should be taught in every school up and down our country. Well, this is the test. Either Members of Parliament believe in the rule of law and what our children are taught, or they do not. When we vote on the new clause in the Finance Bill, as I am sure we will be asked to, we will see whether we really do believe in the rule of law.

[Mr Baker]

As one liberal to another, it is a delight to agree with the right hon. Gentleman. I hope members of the public will not think I am engaging in too much levity if I say that some of us are engaged in enough rebellion already. I should be very grateful indeed if the Government tabled their own amendment to deal with this matter, so that we do not find ourselves engaged in any sort of rebellion on the Finance Bill.

[Sir Edward Davey]

It was a pleasure to allow that intervention. I have no objection to the way in which the wrong is righted, as long as it is righted properly. If we stick to the principle of the rule of law, as I said in my intervention on the hon. Gentleman, ending retrospection in this tax change means that any charge prior to Royal Assent of the Finance (No. 2) Act 2017 must end. There can be no charges before Royal Assent of that Act; otherwise we are in the area of retrospection.

Like other colleagues, I have had constituents contacting me. Sixteen have contacted me directly, and in my experience that means there are many more out there who have not contacted me. I will read from just one, from Mr Garry Taylor, who talks about the “devastating consequences” that will destroy the finances of “me and my family”. I do not know about other colleagues, but I have had people almost in tears in my surgery over a tax matter, which has never happened before in 20 years.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Does the right hon. Gentleman agree that people are living in genuine fear of bankruptcy and losing their homes, and it is not acceptable that the Government have handled the matter in that way?

[Sir Edward Davey]

I could not agree more. I have never seen people so distressed and distraught by one particular measure, which appears to target pain on just a few people. Those people work hard in our NHS, our industry, our schools and our civil service. Why do the Government want to target so much pain on so relatively few people? The charges involved are massive: hundreds of thousands of pounds. It is completely iniquitous. I believe the Minister knows that and I hope he will therefore put it right. Everyone in this House is clearly against tax scams; we want to close them down, but as other hon. and right hon. Gentlemen have said, people were advised by professional accountants and HMRC appeared to be happy. It was notified of the tax schemes and did nothing. Yes, let us crack down on tax avoidance, but let us not go after victims, the people simply trying to earn a living for themselves and their families.

[Tommy Sheppard (Edinburgh East) (SNP)]

Will the right hon. Gentleman give way?

[Sir Edward Davey]

I will in a second.

I might be the only veteran of the 1999 Finance Bill Standing Committee. I am happy for colleagues to correct me, but in those early days of my parliamentary career, I had the pleasure of sitting on nine consecutive Finance Bills that dealt with the early history of IR35. We had huge arguments then that that was wrong. There is an inherent issue that needs to be tackled, but what is proposed is absolutely not the way. HMRC has got to learn from history. It appears to me to be acting vindictively because it did not get its way a few years ago on IR35. Because people found legitimate ways around it, it is coming back and acting in an outrageously draconian way, and this House has to say no.