3. What steps he is taking to reduce tax avoidance and evasion. (77443)

We have made it clear that tax evasion is both illegal and immoral, and that this Government will not tolerate it. We are increasing the number of staff at Her Majesty’s Revenue and Customs who are dedicated to tackling tax evasion and tax avoidance to 2,500. We also aim to increase the amount of tax collected by £7 billion, and, unlike the last Government, we have concluded a treaty with Switzerland to get back the money that individuals should have paid here in the United Kingdom.

I have been contacted by a fair number of constituents who have expressed concern about tax avoidance. I welcome many of the measures that the Government have introduced to tackle this unfairness. Is the scope of the recent tax avoidance agreement between our Government and the Swiss likely to include cases in which tax is not paid by individuals who are tax-exiled in Switzerland, such as the widely reported case of Mr Andrew Rosenfeld?

Give him a job!

Actually, you just have. You made him your general election strategist. However, I will not comment on the tax affairs of individuals, although I suspect that many will over the coming years.

The Chancellor will remember, in his first Budget, fixing a target for debt

“to place our fiscal credibility beyond doubt”. —[Official Report, 22 June 2010; Vol. 512, c. 167.]

That target was for debt to be reduced by the end of the Parliament, but, according to figures from the Office for Budget Responsibility, it depends on economic growth of 2.8%. How far below 2.8% must growth fall for the Chancellor’s fiscal mandate and his fiscal credibility to be shot to pieces?

Order. The question refers to a reduction in tax avoidance and evasion.

Tackling tax evasion and avoidance—to which the question refers—will help us to reduce both the deficit and the debt. We have the fiscal mandate and the debt target. That has been independently verified by the Office for Budget Responsibility—which is in marked contrast to the situation when the right hon. Gentleman was in the Cabinet—and on 29 November it will provide its update.

Although we are all in favour of dealing with tax avoidance and evasion, are not some of the heavy-handed tactics used by HMRC to collect tax, including the imposition of late-payment penalties under the Labour Government, helping to stifle some growth in small and medium-sized businesses? Will the Chancellor examine the position to ensure that HMRC is being fair?

Of course we always want HMRC to approach things in a proportionate manner, and it certainly handles large companies and their tax bills better than it did several years ago. However, we must collect the tax that is owed. That is a very important principle at any time, and it is particularly important at a time when we are all having to make difficult decisions in our attempts to reduce the budget deficit. We will not tolerate tax evasion, and we do apply penalties to people who do not pay their tax on time.

The Chancellor is talking a good game, and yesterday the Exchequer Secretary announced the establishment of an “affluent unit” to tackle tax avoidance. For the sake of clarity, I should add that that is not a pet name for the Tory Front Bench, but a department in HMRC. However, the £900 million is not new money. It is not additional, and nor are the 200 staff. Is not the reality that the Government are more interested in offering tax breaks to the wealthiest than in tackling tax avoidance?

This is the Government who have introduced additional charges for long-staying non-doms; Labour had 13 years in which to do that, but they did not. This is the Government who have concluded a tax treaty with Switzerland; the previous Government had an opportunity to do that—[Interruption.] Well, this is what a Europe Minister in the last Government said:

“Swiss…deal offered to HMG…more than decade ago but GB turned it down thus losing billions in revenue”.

They had 13 years to deal with tax avoidance and evasion. We are dealing with it now, while they must account for their new general election strategist.