“Protecting Tax Revenues”, which was published by Her Majesty’s Revenue and Customs alongside the Budget, sets out the progress made so far and how HMRC is responding to new challenges by further strengthening the strategy. Let me be clear: our approach is based on providing a modern and competitive tax system, which promotes opportunity and enterprise while ensuring that everyone pays their fair share.
I thank my right hon. Friend for her answer, but she will be aware of the recent TUC report, “The Missing Billions”, which identifies at least £33 billion of lost revenue per annum. If even a third of that money were collected, we could easily compensate the 10 per cent. tax losers, immediately restore the earnings link to pensions and pay for free long-term care for all, among other things. Does this not simply require a modicum of political will to collect the money?
First, I do not accept the TUC’s figures, which include reliefs from savings and enterprise and are based on a range of speculative assumptions. It is difficult to measure tax losses that arise from the use of avoidance devices. I hope that my hon. Friend accepts that all recent Budgets have included measures to close down avoidance schemes with a potential cost of between £1 billion to £1.5 billion a year. There have been notable successes, such as halving excise fraud. The measures have already reduced underpayments of tax by more than £5 billion a year compared with five years ago. I therefore hope that he accepts that there is a concerted effort to do exactly as he suggests.
I wonder whether, in our modern and transparent taxation system, we can look at the bonuses that are paid to City workers. Last year, it was estimated that the amount increased to more than £1 billion. Some individuals got a £50 million bonus every year. Such pay increases not only distort housing prices in London and the south-east, but distort society.
Despite what the Financial Secretary has said, there are many higher estimates for tax avoidance than the figure that my hon. Friend the Member for Luton, North (Kelvin Hopkins) suggested. In The Guardian this week, the estimable Prem Sikka estimates it to be between 20 and 30 per cent. of tax take. Is there not more that we can do? Will my right hon. Friend consider setting up a working party, including my hon. Friends the Members for Luton, North and for Great Grimsby (Mr. Mitchell), and advised by Prem Sikka? Perhaps then we could avoid some of the angst and heartache that we have seen this week in the days leading up to today.