UK Infrastructure Bank Bill [Lords]

Ruth Cadbury Excerpts

Consideration of Lords message
Wednesday 22nd March 2023 Commons Chamber

[Richard Fuller (North East Bedfordshire) (Con)]

I find myself in the unusual and extremely uncomfortable position of agreeing with what the SNP spokesperson has just said. It is a condition that I hope will be quickly removed so that I can assert my usual sound Conservative principles.

There is an important point here, which I know the Minister is aware of, and which is not specific to this Bill. It seems a little odd, if we are looking at the next 10 or 20 years of our investment in infrastructure under the terms of the new Infrastructure Bank, to omit explicitly one of the foundational aspects of infrastructure from the Bill. I know my hon. Friend the Minister will have already reviewed that and he will say, I think correctly, that there is nothing in this Bill to stop support for investment in the circular economy infrastructure. However, I think it is important to have voices at this stage of the debate who can say that clearly, so that those who will now take forward the Infrastructure Bank know that, even if it is not in the Bill, the importance of creating the foundation of the circular economy is explicitly one of the things we anticipate and hope that the bank will do.

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

On behalf of the Opposition, I would like to say that we support this amendment. As other speakers have said, it improves on the text of the Bill, so we are happy to support it.

[Andrew Griffith]

I thank the hon. Member for Brentford and Isleworth (Ruth Cadbury) for the Opposition’s support. Indeed, the Bill has been characterised by support from across the House for this important institution, which, I remind the House, is already up and running. Today, I am pleased to say, we are putting it on a statutory footing.

I have heard the comments made by the right hon. Member for Dundee East (Stewart Hosie), as well as by my good and hon. Friend the Member for North East Bedfordshire (Richard Fuller), who helped to pilot the Bill through its early stages. I will make the point that my hon. Friend expected me to make: the language in the Bill is inclusive rather than exclusive. His point is well made and understood.

On behalf of this House, we wish the institution well as we put it on a statutory footing. We in this House all look forward to hearing how it fulfils its objectives of levelling up and adding to the transition to net zero.

Lords amendment 3B agreed to.

Oral Answers to Questions

Ruth Cadbury Excerpts

Tuesday 7th February 2023 Commons Chamber

[Victoria Atkins]

I hope the hon. Gentleman reflects on the considerable advantages his constituents gain from being in the United Kingdom, because the Scottish Government receive 25% more funding per person than equivalent UK Government spending in other parts of the United Kingdom. On his challenge about the electric vehicle transition, introducing VAT relief for charging points in public places would impose additional pressures on the public finances, to which VAT makes a significant contribution. Indeed, it is expected to raise £157 billion in 2022-23, helping to fund the key public services we all care about. I welcome his support for the UK Government’s work to reach net zero targets, but I ask him, please, to work with the UK Government to help us to achieve this across the United Kingdom.

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

7. If he will make an assessment of the potential impact of the loan charge on the mental health of people affected by the charge.

[The Financial Secretary to the Treasury (Victoria Atkins)]

The loan charge was independently reviewed in 2019 by Lord Morse, who considered its impact on individuals affected. The Government recognise the impact and have accepted 19 of the review’s 20 recommendations. His Majesty’s Revenue and Customs puts support for those affected at the core of its work in collecting the loan charge; that includes support from trained advisers in its extra support teams.

[Ruth Cadbury]

HMRC has acknowledged that there have now been 10 suicides connected to the loan charge. Can the Minister confirm whether loan schemes like those that the charge was set up to stop are still in operation? What are the Government doing to stop further such tragedies?

[Victoria Atkins]

On the point about the deaths that the hon. Lady understandably raises, we have made referrals to the Independent Office for Police Conduct in relation to those 10 events. The first referral was in March 2019. In the eight concluded investigations, no evidence has been found of misconduct by any HMRC officer, but we are very sensitive to the pressures that people are under, which is precisely why we have the extra support teams in place: teams of trained advisers who can, where appropriate, support taxpayers towards voluntary and community organisations that can help. Of course, people can also ask for help such as time to pay.

The Growth Plan

Ruth Cadbury Excerpts

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

This is not a spending statement, but, of course, we take child poverty and the vulnerable extremely seriously. That was the basis of the energy intervention.

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

First, I thank the Chancellor for overturning his Business Secretary’s statement yesterday on onshore wind, by removing the ridiculous planning restrictions that are unique to that sector. Talk about a one-day Cabinet flip-flop! Secondly, I warn the Chancellor against removing normal planning rules in development and investment zones. When the Tory Government removed the need for planning rules on converting offices to housing, it led to houses like tiny rabbit hutches with no natural light and no basic services, often on industrial estates away from basic things such as footpaths, bus stops, schools and parks. Is this plan a dodgy developer’s charter too?

[Kwasi Kwarteng]

Not at all. The whole principle behind the investment zone is mutual consent. No investment zones will be imposed in any areas, and it will be up to local councils to work out which are appropriate sites for the investment zones. It is a co-operative exercise that will not be the developer’s charter the hon. Lady describes.

Economy Update

Ruth Cadbury Excerpts

Thursday 26th May 2022 Commons Chamber

[Rishi Sunak]

My hon. Friend is a brilliant champion for the ceramics industry in Stoke. I have been pleased to meet him and his constituents on multiple occasions. This is something that the Energy Secretary is looking at to ensure that our support for energy-intensive industries gets to the people who need it most, and I will happily mention this to him.

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

By doubling onshore wind capacity, £6 billion could be saved on household bills. It would also reduce our dependence on imported energy, contribute to our net zero targets and create thousands of jobs. Is the Chancellor still blocking the development of onshore wind?

[Rishi Sunak]

If the hon. Lady looks at the energy security strategy that the Prime Minister and the Energy Secretary published, she will see that there is a section specifically about more onshore wind, with the consent of communities, and making sure that they benefit from that development.

Financial Statement

Ruth Cadbury Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

I just remind the hon. Gentleman that we already have a supplementary corporation tax on oil and gas companies. They pay 40% corporation tax—twice as much as the rate paid by all other companies—and it is right that they do. Going forward, as the Prime Minister’s strategy will outline, we want to see more investment in the North sea, more British energy security and more British jobs.

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

Private sector tenants on low incomes in my constituency face ever-rising rents, which in many cases are well above local housing allowance levels. These are people on universal credit, and over half are working families who are having to make the choice of whether to heat or eat. What assessment has the Chancellor made of the levels of local housing allowance so that my constituents do not have to take £200, £300 and £400 from their non-housing element to pay their rent?

Economic Update

Ruth Cadbury Excerpts

Thursday 3rd February 2022 Commons Chamber

[Rishi Sunak]

My hon. Friend, as ever, makes a thoughtful contribution, and I enjoyed our conversations. He was right to champion those who are on middle incomes. As a result of those conversations with him and others, we have designed a package that does exactly as I think he would like to have seen. By targeting support at those in council tax bands A to D, four out of five households—those up to middle income, those just about managing—will receive £150 extra support, and they will get that support in April.

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

A poll by Survation today reveals that 63% of the public support a windfall tax on oil and gas producers’ profits. It is not like this Government to ignore the polls so may I suggest that, rather than misnaming, as he did in his statement, a renewable loan as a discount, why not go for the windfall tax and give that money to our hard-pressed constituents?

[Rishi Sunak]

We have had this debate. Conservatives believe in more investment in our domestic energy sector. We want to support British jobs and British energy security and we believe in doing the right, responsible thing. That is what a responsible Conservative Government do.

Finance (No. 2) Bill

Ruth Cadbury Excerpts

2nd reading
Tuesday 16th November 2021 Commons Chamber

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

I have a lot of sympathy for the last comments by the hon. Member for Edinburgh West (Christine Jardine), and I thank my right hon. Friend and neighbour the Member for Hayes and Harlington (John McDonnell) for bringing into the debate local government, its finance and the challenges it has faced over the past 10 years. Having come from local government to this place, I know that he speaks wise words on this issue.

I too rise to oppose the Government’s Finance Bill and to support the Labour amendments, and I will cover three aspects. The first is the cost of living. Over the recent weeks and months, I have heard from so many constituents about the hardship they face in seeing their energy bills spike and the cost of the weekly shop rise, and from families seeing their rent climb and climb. This Bill does nothing to support the millions struggling with the cost of living.

We should not forget that, even before the Budget, the Chancellor hit my constituents and those across the country with a double whammy. To plug gaps in the NHS and social care, he hiked up national insurance, a regressive tax payable by everyone in work. Other ways could have been found to find the funding needed than this regressive tax hike.

Then the Chancellor decided to cut £1,000 from universal credit for all those claimants. This is essential income that supports over 30,000 families in the Borough of Hounslow alone. About 40% of those claiming universal credit are in work, something that the cloth-eared Conservatives tried to deny for years whenever we raised the issue of universal credit in this House. At last, they have got it, but the changes they have made to taper relief still trap so many in poorly paid and irregular work—work, sadly, that is far too common in my constituency and across the country. The new taper rate only actually benefits about a third of working people on universal credit. The cut in universal credit is absolutely devastating. It is the choice between heating and eating, or between a winter coat and a pair of shoes for a child.

I recently visited the Hounslow Community FoodBox, which supports about 13,000 people in our local area. Demand for its services has skyrocketed locally over the last 18 months, and this is mirrored across the country. The Trussell Trust, the national food bank trust, distributed over 2.5 million food parcels last year, but it saw an increase of 33% over the previous year. How do the Government respond to this food poverty crisis? They ramp up taxes on families, while cutting the very support that is allowing them to barely stay afloat.

I have also recently visited Look Ahead, which is a national charity on contract to Hounslow council. It supports young people in supported accommodation—young people who, by definition, do not have family support. Look Ahead offers vital support services to these young people, and it and the young people warned me that the universal credit cut would be devastating for them. It is worth remembering that universal credit claimants already face a number of hurdles, such as the benefit cap, the two-child limit—the bedroom tax—and the cruel five-week wait, which makes people wait for five weeks to receive crucial support.

Secondly, I will be voting against the Finance Bill because it does nothing to support those already impacted by the loan charge and still being forced to sign illegal disguised remuneration schemes if they want to do the work in which they are skilled. The all-party parliamentary group on the loan charge and taxpayer fairness published a damning report earlier this year on the wild west supply chain of unregulated umbrella companies and rogue recruitment agencies that conspire to lure workers into tax avoidance schemes, often entirely unwittingly, yet the Government have so far done nothing but publish some guidance.

When will the Treasury take some ownership of the bullying and aggressive activities of HMRC in chasing down those who have signed these disguised remuneration schemes? These schemes are still being openly sold and have been targeted at many lower-paid workers, including, shamefully, NHS staff being recruited to help with the nation’s response to the pandemic. Too many ordinary workers advised to use these schemes have been hammered to the point of suicide, while promoters with known links to the Conservative party have not yet been asked to pay a penny. This is an all-too-common theme with this Government, who continue to ignore the reality and the evidence.

The reality is that if HMRC enforces the loan charge on the thousands of people who now face it, there will be many more bankruptcies, more mental anguish and potentially more suicides, as well as more people losing their homes and more unable to continue to work. The fact is that there is considerable new evidence—evidence not known at the time of the last review—showing that the conclusion of the Morse review was flawed. It seems clear that this important evidence was not shared with Sir Amyas, now Lord Morse. Indeed he was not given an accurate or complete picture by HMRC and the Treasury, and having in the past spoken to Treasury Ministers I sometimes wonder how much control the Treasury has over HMRC or whether it has become a rogue agency.

The clause in the Finance Bill mentioned by the Treasury Minister does nothing to stop the ongoing mis-selling. To stamp that out legislation on umbrella companies is needed. Fining the promoters and freezing their assets is all well and good, but it is much easier to legislate to make agencies responsible, as the APPG proposed, and that would stop the schemes overnight. Without legislation to clean up the supply chain there will be ongoing skimming of contractors’ pay, misappropriation of holiday pay, and backhanders between agencies and umbrella companies. Action is needed to actually stop the schemes rather than pursue the scam after it has happened.

We know that HMRC has not been able to find legal precedent for the loan charge and that it itself used contractors on loan schemes while claiming at the same time that it was clear that that was wrong. We now know that all along it knew that many people would not be able to pay while claiming they could and would do so. Common sense, if not compassion, dictates that effective legislation and a fresh and genuinely independent review is needed to come up with a resolution to the loan charge issue, avoiding devastating consequences for thousands of families and going after the right people for a change. We have new Treasury Ministers now and I hope they will approach the issues of the loan charge and disguised renumeration with an open mind and agree to carry out this much-needed review, as my hon. Friend the Member for Ealing North (James Murray) has urged.

Finally, I want to address the air passenger duty changes. This Government repeatedly say one thing and do another on climate change. If I wanted to buy tickets to go to Glasgow in three weeks I would pay £65 to fly with easyJet from London, yet a train ticket to Glasgow on the same day would cost me £69, and that is before the cut in APD on domestic flights is introduced. The fact that it is still cheaper to fly than to travel by train is a key reason why we are not seeing the reduction in carbon emissions we so desperately need. One way to reduce the number of short-haul flights is to improve train travel, but whether in the choice of routes, the length of journey, the cost of tickets or the experience on board other European countries are miles ahead of the UK and have been for many years. It is no surprise that short-haul domestic flights contribute so heavily to our carbon emissions when this Government have absolutely failed to fix rail travel. And this week we hear they are going to cut the proposed rail services to Leeds and Manchester. This Government are not only failing communities across the country but are failing our climate. The Government should impose the polluter pays principle to their transport policies and the fiscal policies that support them.

In conclusion, I will oppose the Bill because it punishes low-income households but does nothing to relieve the nightmare for current and future loan charge victims and it treats the climate emergency as an afterthought.

Oral Answers to Questions

Ruth Cadbury Excerpts

Tuesday 7th September 2021 Commons Chamber

The Chancellor of the Exchequer was asked—

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

1. What recent estimate he has made of the number of people subject to the loan charge who have been declared bankrupt.

[Mr Speaker]

I call the Minister.

[The Financial Secretary to the Treasury (Jesse Norman)]

Good morning to you, Mr Speaker. It is great to be in a Chamber that is 100% full strength after so many months. If I may make a personal note without undue deference, Mr Speaker, I will say that I thoroughly appreciated your remarks about standards within the Chamber.

To date, Her Majesty’s Revenue and Customs has not initiated insolvency proceedings against any taxpayer for a loan charge debt. No estimate can be provided for the number of people who have fallen into debt or who have been declared bankrupt and are subject to the loan charge because, where debts arise, HMRC is not always the only creditor. Some individuals are declared bankrupt as a result of a non-HMRC debt and some may choose to enter insolvency themselves based on their overall financial position.

[Ruth Cadbury]

We know that there are many, many thousands of nurses, social workers and other public sector workers who have been caught up in the loan charge. They took work via agencies that basically told them, “Sign here or you don’t get the work.” Checking to see whether they would be liable for the loan charge was not an option. Last week, the Yorkshire Post reported that a number of former services personnel had been affected and that one is feeling suicidal as a direct result. What does the Minister say to this veteran and the thousands of other public servants whose lives have been turned upside down by this retrospective taxation?

[Jesse Norman]

I thank the hon. Lady for her question. Taxation is often a difficult matter for the relatively small number of individuals who may be affected by particular pressures. Of course the Government recognise and understand that, but it is nevertheless the case—it is indeed a foundational principle of the tax system—that people should be responsible for their own tax returns. If I may, I would like to refer the hon. Lady to the very wise words of the former shadow Chancellor, the hon. Member for Oxford East (Anneliese Dodds), who said in 2018 that

“we would obviously welcome tightening in the area of disguised remuneration schemes…We are concerned that the measures in the Bill do not go far enough…There should be no excuse”—

these are her words—

“for people not to be aware of the situation”.––[Official Report, Finance (No. 2) Public Bill Committee, 9 January 2018; c. 30.]

I am afraid that she was right about that.

Oral Answers to Questions

Ruth Cadbury Excerpts

Tuesday 27th April 2021 Commons Chamber

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

What recent discussions he has had with the Secretary of State for Transport on providing sector-specific financial support to the aviation sector.

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

We speak to our colleagues on a regular basis about a range of matters. The Department for Transport is in regular contact with the Treasury regarding the challenging circumstances facing the aviation sector as a result of covid-19.

[Ruth Cadbury [V]]

Furlough ends in September, which is of no help to the aviation sector and airport communities, which will take months to recover even partially as we wait for the world to unlock. Many aviation businesses are on the edge financially, and they employ staff in safety-critical roles where there is a risk of skill fade if they cannot be supported. They are seeking longer-term support, as are communities such as ours in Hounslow, where tens of thousands of people depend on the airport for their livelihoods. Will the Treasury address the specific challenge of the aviation sector and airport communities well before the furlough scheme ends in September?

[Kemi Badenoch]

The Government recognise the challenging circumstances facing the aviation industry, which the hon. Member described. The industry can draw on the package of measures announced by the Chancellor, including not just the furlough scheme but schemes to raise capital, flexibilities with tax bills and employment support. The aerospace sector and aviation customers are being supported with over £11 billion made available through loan guarantees, support for exporters, the Bank of England’s covid corporate financing facility and grants for research and development. In addition, the renewed airport and ground operations support scheme, which the Chancellor announced in his Budget, will provide support for eligible businesses in England with their fixed costs for a further six months up to the equivalent of their business rate liabilities for the first half of 2021-22.

Finance (No. 2) Bill

Ruth Cadbury Excerpts

Committee stage & Committee of the Whole House (Day 2)
Tuesday 20th April 2021 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to speak in this part of the debate, and I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

It was probably 15 years after we set up our business that our own accountants came to us—we were making reasonable profits by then—and suggested that we take advantage of a tax avoidance measure, and a pretty aggressive one in our view. This was not a particularly unusual accountants—it had a decent reputation locally— but so much money potentially runs through these schemes that some promoters inevitably see an opportunity for themselves.

I must tell the House that we told our adviser that we did not want to take part in such a scheme, and there were two reasons: we believed that people should pay their tax—that we should all pay a fair amount of tax—but also that any person who takes up such measures should be afraid that HMRC will one day come along and say, “Those measures were not appropriate.” By that time, a lot of the money that they think they have saved has gone out in costs to promoters and the rest of it, and they are left with a huge bill.

Had the person who promoted that scheme to us—our accountant—thought that he would potentially end up on jail, I do not think he would have come to us and told us about it. This was a reputable local person, and perhaps he did not even think that tax avoidance at that point was fraud. Nevertheless, it certainly can be fraud, and in many cases it is. If we are willing to hold people to account, ultimately through a criminal prosecution—as HMRC can, of course, as the Minister pointed out earlier—there would be a lot less of this kind of promotion and a lot fewer of these activities.

Before I talk in more detail about that, I want to tackle some of the shadow Minister’s points. It is a little churlish not to recognise the steps that the Government have taken since 2010. There have been 150 measures to tackle tax avoidance; that was at a cost of £2 billion to the taxpayer, but it brought in £250 billion in contributions to our public services. Of course, the Minister said that we need to go further, but it is wrong to simply say that the Government are not doing enough. Some of those measures, such as the digital services tax and the diverted profits tax, are very significant internationally.

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

I acknowledge the point that the hon. Gentleman makes and the amount of money brought into the Revenue by the measures, but is he not also conscious that the sheer number of different measures has, for many taxpayers, added to the complexity? We have one of the most complex tax regimes in the world and that complexity often catches people unawares, and costs them lots of money and sometimes their businesses and their homes.

[Kevin Hollinrake]

I absolutely accept that our tax system is very complex, and I have proposed a number of measures on the Floor of this House to try to simplify it. For example, abolishing business rates and replacing them with an increase in VAT would simplify the tax system, instead of having an online sales tax. However, in terms of this debate I do not think it is the complexity of the issues that catches people out. We can see that 99% of tax avoidance schemes in the UK involve disguised remuneration—these are very contrived schemes. We should look at amendment 77 carefully. As to whether it is unfair on a person who is a promoter of what I would say is an extremely contrived tax avoidance measure, I am not totally sold that that should be a problem.

One of the biggest problems we have is faith in the system. This Government have done a huge amount to reduce the tax gap, which is at a record low of 4.7%, but if there is a £20 billion tax gap from fraud, the person in the street might reasonably say, “Why should I pay my tax?” This creates an incentive then for people to look at ways of avoiding tax. As to whether tax avoidance is fraud, the Government’s own call for evidence last month says clearly:

“The Government recognises that the design of arrangements that are sold as avoidance schemes may in fact enable fraud.”

So there is a good case for being able to take these further measures, as the Government are doing through stop notices, further civil penalties and stopping individuals hiding behind corporate structures.

The trouble is that, as we see in many areas, not least the banking sector, which I am pretty active in through my work in the all-party group on fair business banking, these kinds of organisations see a fine—a civil penalty—as a cost of doing business; the real deterrent for people is a criminal penalty. One of the best examples of this is to be found in a completely different sector, with the personal liability for a director in the construction industry. As soon as that personal liability came in and there was the potential for someone to go to jail if they did not make sure their sites were safe or they did not put measures in place, there was a huge decrease in the number of injuries and fatal incidents in the workplace in construction. That speaks to the point that if there are real criminal sanctions that we are willing to take forward and people think that that is going to happen, this promotion of avoidance schemes will start to drop significantly.

We probably have better resourced areas in terms of the prosecution of avoidance; I believe there are about three and a half times this number of people in the Department for Work and Pensions looking at benefit fraud, despite the fact that it is a much lower level of fraud—the level of benefit fraud is about 10% of that seen by HMRC. A beefing up of the resources in HMRC is therefore something we should consider. We have seen very famous schemes. I believe the Ingenious film scheme cost the taxpayer £1.6 billion, but not a single promoter has been held to account for it. We need more resources, but we should also look at legislation. This country does not have a great record on prosecuting serious fraud. There are a number of examples where the Serious Fraud Office has failed to make charges stick—I think, for example, of cases involving Tesco and Barclays. That is why the SFO wants to bring in more legislation, which the Government have agreed to do, to create a corporate offence of failing to prevent economic crime. This would be a personal sanction on the directors of a corporation that failed to do that. Of course, in banking we now have the senior managers regime that the Financial Conduct Authority put in place following some of the scandals there, when nobody was held to account for the disgraceful abuse of both consumers and businesses through the past couple of decades in the sector. The excellent Minister might say that amendment 77 is not the right vehicle for this, but some beefing up of the legislation to make it easier to prosecute fraud—criminal activity—is something that we should seriously consider.

--- Later in debate ---

[Catherine West]

I thank the hon. Member, and it is always lovely to have an accountant in the room. If there are some improvements, we are very grateful for them.

[Ruth Cadbury]

If I may intervene, London is one of the few cities that has no residency or nationality rule for owning residential property, and many very high-cost cities for residents to live in, such as Vancouver and Auckland, have such rules. Could this Government consider such rules, because this issue has helped to trigger the explosion in housing prices, particularly in London, but also in our other large cities?

[Catherine West]

My hon. Friend makes a very important point. I am sure it has not escaped the Treasury’s attention that prices of the top 1% of properties in the country—mainly in London—have been skyrocketing, when everybody else’s house prices have been going up by a little. That differential is quite frightening. In this terrible time when our economy has shrunk by 11%, who can afford to buy properties worth several million pounds, and do we know enough about these individuals? We know that there are big gaps in the way that Companies House operates, in terms of simply understanding who owns what, and simplifying that is the sort of thing that would make the work of HMRC much more streamlined.

I would also like to put on record the wonderful work being done by civic society groups to spread information and education about the importance of understanding taxation, what it does and what it purchases. It is through these campaigns—often outside this House—that we can understand how to change things.

Aside from our international reputation often being questioned on the issue of Russian oligarchs, we know that the lack of action on questioning some people’s contacts with the Kremlin is costing us over £30 billion every year in lost revenue from taxes. That is a lot of money, and it would be better used to pay for the furlough, eliminate child poverty, vaccinate more children in the third world, or pay and equip our NHS staff for the heroic job that they do every single day.

The Government must act without delay and begin by supporting amendment 77 and new clause 29, which are a significant improvement on the weaker proposals put forward by the Government. That would send a signal that the UK will no longer be silent in the face of tax evasion and tax avoidance and is no longer a welcome home for the oligarchs and agents who see the UK as the destination of choice for their ill-gotten gains. I urge the Minister to do the right thing.

[Ruth Cadbury]

I speak in support of new clause 29 in the name of Her Majesty’s Opposition and cross-party amendment 77. I congratulate my hon. Friend the Member for Ealing North (James Murray), my right hon. Friend the Member for Barking (Dame Margaret Hodge) and the right hon. Member for Sutton Coldfield (Mr Mitchell) on their speeches.

Addressing tax avoidance and evasion is, of course, an important objective of the Treasury, and Finance Bills and other legislation are the vehicles to do that, but as with all tax changes, Government must assess and respond to the unintended consequences of any changes. This Government have a terrible track record on tackling tax evasion and aggressive tax avoidance. They have consistently stood in the way of Labour’s calls to clamp down on loopholes and have failed to collect over £30 billion in taxes every year. They have promised to legislate on these issues, but the proposals in the Bill fall far short of any substantive change. Instead, they have been responsible for an increasingly complex system of payment, fraught with difficulties and risks for the unsuspecting worker.

A growing number of working people need to work on a contractor basis, either for personal reasons or because it is the only way of getting work in their sector or with their professional skillset. Increasingly, the alternative to being a contractor is to be a PAYE freelancer—to pay tax in full but without any of the rights of being an employee and all the costs of being self-employed. This is zero-rights employment, and it is unfair.

We need an effective tax avoidance policy that criminalises those promoting tax avoidance, rather than going for the workers inadvertently caught up in them, as this Government and HMRC have been doing with the loan charge in particular. That is the wrong target. While ordinary people who are victims of mis-selling are facing ruin and bankruptcy, the Government have done too little, too late to go after those who promoted the schemes.

I acknowledge that the Bill contains measures to tackle the promoters of tax avoidance and changes the system of penalties, but those measures are extremely limited in scope. Indeed, those changes are not even included in the Budget report costings, which suggests that their financial impact must be minimal. IR35 was enacted 21 years ago to stop the practice of those who, in reality, were permanent, generally full-time workers being paid as contractors through personal services companies, as many were paying much less tax than if they had been employees. It was right to address that tax avoidance, but the Government must address the unintended consequences for workers and the labour market that have followed since then.

--- Later in debate ---

[Jesse Norman]

I have been held to account by my right hon. Friend and I am grateful to him for that, because that power—if I have any power—should always be held to account. Let me put the record straight: my hon. Friend the Member for Thirsk and Malton is an estate agent, and yet with that estate agency genius he combines the forensic skills of an accountant in holding to account, indirectly, members of the Government and, directly, the Opposition. I thank him for that.

My hon. Friend the Member for Thirsk and Malton pointed out that these disguised remuneration schemes are highly contrived. It is terribly important to remind ourselves of that. It is all very well to complain about the loan charge, but these are highly contrived schemes. My hon. Friend reminded us—as, indeed, did my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) —of the general rule that all taxpayers are responsible for their own tax, and that if, by implication, a scheme looks too good to be true, it almost certainly is too good to be true. Those are important messages and no Government should wish to weaken that important principle that people are responsible for their own tax.

[Ruth Cadbury]

I understand what the Minister has said. Of course, most of us are aware of our own tax bands. But how can the Minister expect basic rate taxpayers—a nurse, an IT contractor, somebody working in the film industry, even somebody on minimum wage—to do due diligence when nothing they read or have been sent ever mentions loans, and when they are given a convincing narrative that their tax is being paid for and they do not need to worry? Should not HMRC and the Treasury be addressing this issue, because it is a growing part of the employment market?

[Jesse Norman]

HMRC is addressing these issues. That is why this Bill has so many measures in it that are focused on the disclosure of tax avoidance schemes, toughening up that regime and improving the regime against the promoters of tax avoidance. But let me say to the hon. Lady that I thought her remark was dripping with condescension towards the ordinary taxpayers of this country. The fact of the matter is that people, from whatever walk of life, are perfectly competent—they do not need to be patronised by Labour Members of Parliament—at working out when something looks too good to be true. That is why so many—such a high percentage; well over 90% of people—do manage to work out what is too good to be true and behave on that basis. To suspect otherwise, when HMRC is absolutely working as hard as it can to make sure that the truth is out there and well understood, and is closing down opportunities for misleading advertising, in a recent initiative with the Advertising Standards Authority and a whole host of other things, is completely wrong.

I am grateful to my hon. Friend the Member for Burnley (Antony Higginbotham) for what I thought was a very robust and thoughtful contribution. He is absolutely right to highlight that HMRC has not been slow in this area. He was right to pick up the point about VAT on online platforms, but, of course, that is merely the tip of the iceberg. The hon. Member for Ealing North (James Murray) somehow suggested that we were failing to tackle this issue. The tax gap, as he pointed out, is 4.7%—a historic low. Let me remind the House and him of some of the actions that the Government have taken—leadership on base erosion and profit shifting over many years, the diverted profits tax, the corporate interest restriction, the tax charge on offshore receipts, hybrid mismatch rules, our new digital services tax.