Tax Avoidance and Evasion

Debate between Debbie Abrahams and David Gauke

Wednesday 13th April 2016 Commons Chamber

[Mr Gauke]

I want to make a few more points. Even before last week, HMRC had already received a great deal of information on offshore companies, including those in Panama and including Mossack Fonseca. This information comes from a wide range of sources and is currently the subject of intensive investigation. HMRC has asked the International Consortium of Investigative Journalists, the BBC and The Guardian to share the data they have received from last week’s leaks. Clearly, it is important to examine the data very closely, which is why we are providing new funding of up to £10 million for an operationally independent cross-agency taskforce to analyse the Panama papers and take action on any wrongdoing and regulatory breaches. The taskforce will include analysts, compliance specialists and investigators from across HMRC, the National Crime Agency, the Serious Fraud Office and the Financial Conduct Authority. Between them, those agencies will have some of the most sophisticated technology, experts and resources to tackle money laundering and tax evasion anywhere in the world. The taskforce will report to my right hon. Friends the Chancellor of the Exchequer and the Home Secretary on the strategy for taking action, and we will update Parliament later this year. I stress that the taskforce will have total operational independence. If it finds people to prosecute, it will prosecute them. If it finds information about illegality, it can act on it. In addition, the independent FCA has written to financial firms asking them to declare their links to Mossack Fonseca. If the FCA were to find any evidence that firms have been breaking the rules, it, too, has strong powers to take punitive action.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The Minister mentioned last year’s Budget and the £800 million for non-compliance issues. However, I understand from his answer to a written question that only £266 million of that has been allocated specifically to address tax fraud. How much of that will be spent on dealing with tax evasion?

Budget Changes

Debate between Debbie Abrahams and David Gauke

Monday 21st March 2016 Commons Chamber

[Mr Gauke]

This was an excellent Budget for education; it was an excellent Budget for the next generation. If we are going to have the prosperity and economic security the country wants, we have to have a world class education system. That is exactly what the Government are in the process of delivering.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Is it fair to make £4.4 billion of cuts to disabled people through the personal independence payment when they are twice as likely to live in poverty, and at the same time give tax breaks in corporation and capital gains tax?

[Mr Gauke]

As I say, there will be a statement on personal independence payments later this afternoon. In the past six years, we have seen a significant increase in real-terms spending on the disability living allowance and PIP. We also need to ensure we have a productive economy that creates wealth in the first place. I make no apologies for our wanting to have a competitive tax system.

Oral Answers to Questions

Debate between Debbie Abrahams and David Gauke

Wednesday 15th July 2015 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

1. What discussions he has had with the Chancellor of the Exchequer on the effect on claimants in Scotland of changes in entitlement to working tax credits and child tax credits.

[The Financial Secretary to the Treasury (Mr David Gauke)]

The Chancellor has regular discussions with Treasury colleagues, as well as with the rest of the Cabinet, on a wide range of topics. The changes to tax credits are at the centre of the Government’s intention to move to a higher wage, lower tax and lower welfare society.

[Debbie Abrahams]

The independent Institute for Fiscal Studies has shown that the poorest 20% of the population will lose proportionately more than any other income group as a result of the benefit and tax changes. Given that International Monetary Fund analysis has shown that an increase in income to the poorest 20% stimulates growth, what is the Minister’s assessment not just of the increase in poverty in Scotland but of the stifling of growth?

[Mr Gauke]

The point I would make to the hon. Lady is that if we want to have a strong economy, we have to move to a higher wage, lower tax and lower benefits system. That is what the Government have been elected to do; that is what we are delivering.

Tax Credits (Working Families)

Debate between Debbie Abrahams and David Gauke

Tuesday 7th July 2015 Commons Chamber

[The Financial Secretary to the Treasury (Mr David Gauke)]

A fundamental part of this Government’s long-term economic plan is to support working people at every stage of their lives. We have a record we can be proud of: we are providing our children with the best start in life; we are helping millions of people to secure their first job; we are allowing people to keep more of the money they earn; we are helping families get on the property ladder; and we are providing our pensioners security in their old age. We can do that only on the back of a strong, stable and growing economy. This is the Government who have delivered sustained growth—the fastest in the G7 last year. This is the Government who drove income inequality down, reduced pensioner poverty to record low levels and, according to data released earlier this week by the Office for National Statistics, have seen living standards rise by 3.9% on the year. We now need to finish the job. We need to keep our economy secure; to run a surplus; to start paying down our debts; and to put in place the stable future that this country’s citizens voted for.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

How does what the Minister has just said marry up with the International Monetary Fund research showing that taking money from the poorest 20% in society actually stifles growth? IMF figures show that if we invest in the bottom 20%, there would be growth of 0.38%.

[Mr Gauke]

The hon. Lady quotes the IMF, but this is the same IMF that has praised this Government’s record in turning round the economy. The head of the IMF said that she shuddered to think what would have happened had we not got to grips with the deficit. The reality is that if we want to help every part of society, which is what this Government want to do, we need to make sure that we have a strong economy, and that is what this Government are delivering.

--- Later in debate ---

[Mr Gauke]

My hon. Friend is right on both points. It was only because of the difficult decisions that we took that we were able to restore credibility to the UK as an economy and that we were able to make the progress that we made. Labour said that it is committed to closing the deficit. It voted for the Charter for Budget Responsibility, and the shadow Chancellor told us at the weekend that the Government should run a surplus in normal years. It is therefore disappointing that the Opposition have not yet set out how they will do so, because if they continue to oppose finding savings in the welfare budget they will have to explain whether they would borrow more, tax more or cut departmental spending more.

[Debbie Abrahams]

Does the Minister consider it a success that the debt to GDP ratio, according to House of Commons Library figures, is running at more than 80% whereas after recapitalising the banks and the biggest global crash in history it was running at only 60%? Is that a success or not?

[Mr Gauke]

Let me put this as simply as possible. The debt is essentially the accumulation of deficit and for the past five years every measure that the Government took to reduce the deficit was opposed by Labour. Indeed, Labour’s economic argument—its whole case—was that we were going too far, too fast in reducing the deficit and that we should have a looser fiscal policy. A looser fiscal policy means borrowing more. If we borrow more, the debt will rise more quickly. The hon. Lady cannot have it both ways. She can argue that we should have been prepared to borrow more and to allow the debt to rise because that was a price worth paying, but she cannot then turn around and say, “We want the debt to be lower, even though our policies called for higher debt.”