Shipping: Tax Revenue

Lord Prescott Excerpts

Wednesday 18th January 2012 Lords Chamber

Asked By

[Lord Prescott]

To ask Her Majesty’s Government why, when they are able to provide estimated tax liabilities due to tonnage tax on British shipping, they are not able to supply figures for revenue received.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, estimated tonnage tax liabilities were provided using database information from Her Majesty’s Revenue and Customs. This general approach is regularly used when answering questions on tax.

To construct reliable estimates of tax received would require HMRC checking each tax return, linking it with associated payments and estimating how much tax received related to tonnage tax. This exercise would be extremely time-consuming. However, revenues received will be broadly similar to those figures already given.

[Lord Prescott]

The Minister is aware that this is a successful tax. It increased the British fleet from 4 million tonnes to 18 million tonnes and that is an important factor. But I cannot accept his reply that he knows what the liability is and knows what the profits are but we cannot afford to find out what the tax liability and payments are because that would cost more, as he said in a letter to me, than a parliamentary reply. That is unacceptable. We are entitled to know.

However, I am more concerned about this tax.

[Noble Lords]

Question!

[Lord Prescott]

I am concerned about the recent transfer of the Cunard steamship company, which enjoys this fiscal arrangement, to Bermuda. It has retained the tax but been removed from the statutory requirement to have a captain or crew of a certain kind on its ships. That is unacceptable.

[Noble Lords]

Order!

[Lord Prescott]

The loss of the “Concordia” reminds us of the importance of having a captain and safe crew. The “Concordia” is owned by the American company that owns these ships. There are two standards on cruise liners, which is totally unacceptable.

[Lord Sassoon]

My Lords, I am not sure how I interpret that question, but I think the relevant bit relates to the original Question, which is to do with the numbers that I gave the noble Lord, Lord Prescott, in my Written Answer. I can assure him that it is standard practice to give numbers based on the liability in respect of years. That is done in innumerable Answers to Questions. The numbers in this case, as is normally the case, will be broadly reflective and close to the actual tax paid. It is simply that the tax paid gets paid at different times according to the individual circumstances of the company.

I am happy to recognise that the noble Lord, Lord Prescott, was Secretary of State for Transport and many other important things at the time that this important tax was introduced. Just to correct his figures, the gross tonnage of British shipping in 2000 was 5.8 million tonnes and, indeed, it has increased to 18.2 million tonnes since then.