Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate his Department has made of the level of tax (a) evasion and (b) avoidance in each of the last four years.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
HM Revenue and Customs (HMRC) estimates the size of the tax gap, which is the difference between the amount of tax that should theoretically be paid to HMRC and the amount that is actually paid. The latest tax gap estimate for 2021-2022 is a record low of 4.8 per cent of total theoretical tax liabilities. The tax gap statistics are published annually and are available at: https://www.gov.uk/government/statistics/measuring-tax-gaps.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the finding by the British Retail Consortium that workers in Leicester's apparel manufacturing industry are underpaid by over £2.1 million a week, whether he plans to take steps to help ensure that those workers receive backdated pay in line with the National Minimum Wage.
Answered by Kemi Badenoch - President of the Board of Trade
Exploiting vulnerable workers for commercial gain is despicable and the Government will not stand for it. The Government is determined that everyone who is entitled to the National Minimum Wage (NMW) receives it.
All businesses, irrespective of size or business sector, are responsible for paying the correct minimum wage to their staff; and consequences for not complying with paying NMW can include fines of 200% of the arrears, public naming and, for the worst offences, criminal prosecution.
HMRC take seriously and review all complaints from workers referred by the Acas helpline, or received via the online complaints form, and investigate as appropriate. If anyone thinks they are not receiving at least the minimum wage, they can contact Acas, in confidence, on 0300 123 1100 or submit a query online using the link: https://www.gov.uk/government/publications/pay-and-work-rights-complaints(opens in a new tab) .
HMRC NMW has undertaken joint operations with partner agencies in Leicester for a number of years and have historically investigated more than 150 textile businesses, including multiple employers operating in Leicester; recovering over £215,000 in wage arrears for over 400 workers and issued over £325,000 in penalties. HMRC NMW has also opened a significant number of investigations in Leicester since 1 July 2020.
HMRC continues to take proactive steps in this industry: we have written to over 18,000 workers in the textile sector flagging their entitlement to minimum wage, common causes of underpayment and encouraging confidential reporting of employers, and have written to over 2,500 employers in the sector highlighting the main risks which lead to NMW underpayment.
The British Retail Consortium has alleged that workers in the Leicester textile sector are underpaid by £2.1m per week. Previous and ongoing HMRC investigations have not identified non-compliance with NMW on this scale.
We continue to work closely with industry bodies and would welcome any evidence they have in support of the findings by the British Retail Consortium.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to tackle (a) illegal levels of pay, (b) furlough fraud, (c) double record keeping and (d) VAT fraud in Leicester’s garment Industry.
Answered by Jesse Norman
HMRC enforce the National Minimum and National Living Wage (NMW) in line with the law and policy set out by the Department for Business, Energy and Industrial Strategy (BEIS).
All businesses, irrespective of size or sector, are responsible for paying the correct minimum wage to their staff. Consequences for not complying with paying NMW can include penalties of 200% of the arrears, public naming and, for the worst offences, criminal prosecution.
Breaches of NMW legislation are normally a civil matter, but the most serious cases involving obstruction, falsifying of documents by, for example, creating a second set of ‘compliant records’ or wilful failure to pay workers the minimum wage that form part of a pattern of wider criminality may be referred to HMRC’s Fraud Investigation Service and subsequently to the Crown Prosecution Service who decide whether or not to prosecute.
Since 2012-13, HMRC’s NMW team has investigated 150 textile trade employers (59 employers in Leicester), recovering over £215,000 in wage arrears for over 400 workers and issued over £325,000 of penalties to employers.
As a result of the widespread allegations about labour exploitation in Leicester this year, a new multi-agency taskforce (Operation Tacit) led by the Gangmasters and Labour Abuse Authority (GLAA) has been set up to bring together the enforcement bodies (HMRC, Employment Agencies Standards Inspectorate (BEIS), Leicestershire Police, National Crime Agency, Leicester City Council, Department for Work and Pensions and Home Office Immigration Enforcement).
Across tax and the NMW, HMRC have a significant number of live investigations involving businesses in the textile sector (over 90 NMW investigations and over 30 tax investigations), a large majority of which relate to Leicester. In 2019/20 HMRC completed 25 separate investigations into the VAT affairs of businesses in the textile trade in Leicester alone and in doing so recovered more than £2 million of tax that would otherwise have been lost and facilitated 21 director disqualifications relating to the textile sector.
HMRC are also taking steps to counteract those seeking to abuse the COVID-19 support schemes. In line with other “payment-out” regimes, HMRC undertake pre-payment authentication and risking to identify and block fraudulent claims. HMRC also carry out proportionate risk-based post-payment compliance checks to test the accuracy of claims they receive. HMRC are able to retrospectively audit all aspects of the COVID-19 schemes, with scope to claw back fraudulent or inaccurate claims, applying their existing compliance approaches.
HMRC take seriously and review all complaints from workers referred by the Acas helpline, or received via the online complaints form, and investigate as appropriate. If anyone thinks they are not receiving at least the minimum wage, they can contact Acas, in confidence, on 0300 123 1100 or submit a query online using the link: https://www.gov.uk/government/publications/pay-and-work-rights-complaints.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many businesses have been fined for paying below the national minimum wage in (a) Leicester East constituency and (b) the UK in each of the last three years.
Answered by Jesse Norman
The Government is determined that everyone who is entitled to the National Minimum Wage (NMW) should receive it. HMRC enforce the National Minimum Wage (NMW) and National Living Wage (NLW) in line with the law and policy set out by the Department for Business, Energy and Industrial Strategy (BEIS).
All businesses, irrespective of size or business sector, are responsible for paying the correct minimum wage to their staff. The consequences of not complying with payment of NMW can include fines of 200% of the arrears, public naming and, for the worst offences, criminal prosecution.
HMRC take seriously and review all complaints from workers referred by the Acas helpline, or received via the online complaints form, and investigate as appropriate. If anyone thinks they are not receiving at least the minimum wage, they can contact Acas, in confidence, on 0300 123 1100 or submit a query online: https://www.gov.uk/government/publications/pay-and-work-rights-complaints.
The total numbers of businesses which have failed to pay the correct rates of national minimum wage and have received penalties as a result in the last three years are provided in the table below:
Year | Leicester East constituency* | UK |
2017-18 | >5 | 810 |
2018-19 | >5 | 1008 |
2019-20 | >5 | 992 |
* Businesses with a registered address within the Leicester East postcode.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of cancelling the local authority debt held by the Public Works Loan Board.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
A decision to write off PWLB debt would not offer good value for money. The PWLB exists to offer affordable loans to local authorities pursuing local capital projects that have been identified by the elected council as being beneficial to local residents. It is an established principle of the local government finance system that the costs of these local projects are met by their beneficiaries.
If the government were to write off PWLB debt, this cost would move from the local authority that initiated the borrowing to the taxpayer at large. This would have uneven benefits, as it would give a windfall gain to the authorities that had chosen to borrow the most. This would not be fair on local authorities that had chosen to borrow less, or on the taxpayer at large who would have to take on liabilities for projects over which they had no say.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of Public Works Loan Board debt on the ability of local authorities to fund essential services during the covid-19 outbreak.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The government has worked closely with local authorities to understand the financial consequences of the covid-19 outbreak, which includes ongoing costs for pre-existing commitments such as repayment of debt. The government has provided councils with over £3.7 billion of grant funding to help them respond to pressure across all their services, a further £1.1 billion to support social care, and over £300 million to support test and trace. The government has also launched an unprecedented new scheme to reimburse councils for lost income during the pandemic.
This additional support addresses the pressures caused by the pandemic and ensures that local authorities can continue to fund essential services. The cost of managing the repayment of PWLB debt is low and, as most PWLB debt is fixed-rate, has not changed because of the pandemic.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what support his Department is providing to retail supply chain businesses that are ineligible for both the Small Business Grant and the Retail, Hospitality and Leisure Scheme.
Answered by Kemi Badenoch - President of the Board of Trade
The Government recognises that the past few months have been very challenging for businesses in a wide variety of sectors. Small businesses occupying properties for retail, hospitality or leisure purposes were likely to have been particularly affected by COVID-19 due to their reliance on customer footfall, and the fact that they were less likely than larger businesses to have sufficient cash reserves to meet their high fixed property-related costs. The Retail, Hospitality and Leisure Grant Fund was intended to help small businesses in this situation.
Local Authorities could choose to make discretionary grants to businesses in other sectors if they feel there is a particular local economic need. However, the priority of all the grants schemes was to help the smallest businesses, and small businesses which were facing significant property-related costs and operated in sectors which were particularly hard hit by the steep decline in customer footfall.
Businesses which did not receive a grant from any of the business grant schemes should have been able to benefit from other policies in the Government’s unprecedented package of economic support during this difficult time. Businesses in the retail supply chain should also be able to benefit from the additional support measures which the Government announced on 24 September as part of the Winter Economy Plan. These new measures include:
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of preventing businesses that are registered in tax havens from accessing covid-19 related financial support.
Answered by Jesse Norman
The Government’s unprecedented package of support has been targeted at the businesses and individuals who most need assistance. Those businesses that most need support sometimes include foreign companies who employ people and have property in the UK.
The Government continues to be at the forefront of global action to tackle tax avoidance, with a series of robust measures in place to tackle profit shifting arrangements.
Since 2010, the Government has introduced over 100 new measures to tackle tax non-compliance, and HMRC’s compliance activities have protected over £200 billion that would have otherwise gone unpaid. That is the right way to challenge avoidance; not by denying support to British workers, who pay their taxes and would otherwise lose their jobs.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of preventing businesses that engage in high levels of executive pay from accessing covid-19 related financial support.
Answered by Jesse Norman
The Government’s current support measures are well-targeted at the businesses and individuals who most need support, bearing in mind the need to act very quickly to deliver the unprecedented packages of economic support. The Government expects everyone to act responsibly and in the spirit of the package, and only to claim and use support as intended. In certain cases where firms participate in the COVID-19 Corporate Financing Facility (CCFF), it has been appropriate to require businesses to commit to restraint on the payment of dividends and other capital distributions, and on senior pay.
Asked by: Claudia Webbe (Independent - Leicester East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department plans to take to enforce the minimum wage rules for all garment factory workers (a) in Leicester and (b) throughout the UK.
Answered by Jesse Norman
The Government is determined that everyone who is entitled to the National Minimum Wage (NMW) receives it.
HMRC enforce the National Minimum Wage (NMW) and National Living Wage (NLW) in line with the law and policy set out by the Department for Business, Energy and Industrial Strategy (BEIS).
All businesses, irrespective of size or business sector, are responsible for paying the correct minimum wage to their staff.
HMRC continue to take action against employers who ignore the law, ensuring that workers receive the wages they are entitled to.
HMRC take seriously and review all complaints from workers referred by the Acas helpline, or received via the online complaints form, and investigate as appropriate. If anyone thinks they are not receiving at least the minimum wage, they can contact Acas, in confidence, on 0300 123 1100 or submit a query online using the link:
https://www.gov.uk/government/publications/pay-and-work-rights-complaints .
As part of continuing operational activity in Leicester and throughout the UK, over the past two years HMRC have completed over 50 investigations into textile traders, uncovering over £125,000 in wage arrears for more than 280 workers and issuing over £240,000 in penalties.