House of Commons
Wednesday 13 April 2016
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
As the economy continues to grow, this one nation Government are ambitious for every part of the UK. In Wales, we are regenerating the south-east with a city deal for the Cardiff capital region. We intend to follow suit with a deal for Swansea in the west, and we have opened the door to a growth deal for north Wales.
May I be the first to welcome the Secretary of State and the Minister to their new roles?
Following the announcement of the north Wales growth deal in the Budget, what plans are there for the deal to be genuinely cross-border and to plug into the northern powerhouse, which has the potential to deliver huge benefits throughout the north, not only for the distinct regions like north Wales but for God’s own county of Yorkshire?
As well as seeking to grow the economy across the United Kingdom, all the way to Yorkshire and beyond, we are seeking to move our dependency in Wales from the south-eastern part of the country. Less than two weeks ago, I was in north Wales talking to local authority leaders, businesses and business groups, all of whom were keen to support the north Wales growth deal. It was interesting to note that they called for the deal to take place on a cross-border basis, extending to Cheshire and the Wirral, to ensure that north Wales was plugged into the northern powerhouse.
Given the importance of north Wales, will the Secretary of State press very hard for the establishment of links to Manchester airport and rail links to enable people to benefit from HS2, and would I, as a north Wales MP, be able to vote on such measures?
As the right hon. Gentleman knows, the new cross-border taskforce is making a bid for control period 6 funding from the Department for Transport with the aim of improving links with north Wales. Franchise negotiations are taking place between the Welsh and United Kingdom Governments, and we are determined to ensure that Members are represented properly in those negotiations.
I, too, welcome my right hon. Friend to his position. As he said, the Budget contained excellent news for north Wales in the form of the growth deal announcement, which recognises the region’s close association with the north-west of England, but does he agree that maximising the benefit will require at least an element of political devolution to north Wales?
My right hon. Friend speaks with authority and knowledge of this issue. Devolution to north Wales from what is seen in many quarters as the remoteness of Cardiff Bay is essential. The community groups whom I met in north Wales, whether they were from the north-west, from the border or from the English side of the boundary, wanted the growth deal to work on a cross-border basis, and I am determined to explore that possibility in the interests of the region.
One of the most effective ways of rebalancing the economy is to empower the Welsh Government by giving them the necessary job creation levers, which is why I welcome moves to increase fiscal empowerment for Wales. If fiscal devolution is to work, however, it must be facilitated by the provision of a genuinely no-detriment fiscal framework. The SNP Scottish Government have negotiated such a framework for their country. What is the Secretary of State’s preferred deduction method for Wales?
The hon. Gentleman will be aware of the plans in the draft Wales Bill for the granting of income tax-varying powers for the Welsh Government. We want Wales to be a low-tax economy. Of course, mechanisms will need to be introduced to protect Welsh interests. The hon. Gentleman will be pleased to hear that I met the Chief Secretary to the Treasury earlier this week to discuss early proposals for such mechanisms, and we are happy to engage in further such discussions.
As my hon. Friend will know, the Budget focused on the city deal for Cardiff, which is the largest city deal in the United Kingdom, with £1.2 billion covering 10 local authority areas. However, we also have ambitions for the Swansea bay city deal and the north Wales growth deal. We need to remember that this involves UK taxpayers’ money in addition to the Barnett block, which is something that we never saw when Labour was in power.
North Wales growth is interdependent on growth in the Republic of Ireland as well as in England. Will the Secretary of State—and I welcome both him and the Under-Secretary of State to their new positions—ensure that north Wales Labour Members are provided with some details of the so-called partnership, given that we are the partners from north Wales?
I am grateful to the hon. Gentleman for his kind words and support.
We are determined to work on that issue. There has been a bottom-up approach on the growth deal. We have met local authority leaders and businesses from north Wales, and we are determined to pursue that further. I am not sure that I can make the growth deal stretch as far as Northern Ireland and the Republic Ireland, but I would be interested to try to take it across the English border.
Severn Crossings: Tolls
This Government’s commitment to halve the Severn crossings toll is a major boost for the economy and people of south Wales. It will make a positive difference to commuters and small business owners and demonstrates our continued determination to rebalance the economy.
I am grateful to my right hon. Friend for that reply. I also welcome him to his place. It seems only a moment or so ago that we were competing to be the parliamentary candidate for the then safe Labour seat of Gower, which was some years ago.
Does my right hon. Friend agree that the reduction in the tolls will also hugely benefit the Welsh tourism sector by encouraging people to come to Wales, and that it is time for the Welsh Government to pull their finger out and deliver the investment and improvements to the M4 corridor?
I am grateful to my hon. Friend for his kind words. It is fair to say that there are no infrastructure projects more important to the south Wales economy than the upgrade of the M4 around Newport. It is hard to believe that our noble Friend Lord Hague was Secretary of State for Wales when a commitment to that was first made, only for it to be cancelled twice by the Labour party when it was in government. Business has called for it; commuters have called for it; visitors have called for it. The Chancellor made money available specifically for this project almost three years ago. We just wish the Welsh Government would get on with it.
The Select Committee on Welsh Affairs found that the operational and maintenance costs of the bridge represented a quarter of the toll, yet, as the bridge goes into public hands, the Government have reduced the toll by half and are therefore creating a 100% margin. When will they reduce the toll to the level of the operational and maintenance costs to give south Wales and the Welsh economy every chance of performing as well as anywhere else, rather than having this stranglehold on it?
I would have hoped that the hon. Gentleman, like business groups, be it the Federation of Small Businesses, the chambers of commerce or the Institute of Directors, would welcome the halving of the tolls. We saw no action in that regard from the Labour party when it was in government. However, we have gone further than just halving the Severn tolls. A small goods vehicle, for example, will move from the current rate of £13.20 to less than £4 when the tolls are halved, because we are also removing the second-class toll.
13. The announcement by this Conservative Government of the cut in tolls is hugely welcome. Does my right hon. Friend agree, however, that in the longer term the revenue generated from the tolls should not exceed the cost of maintaining the two Severn bridges?
I pay tribute to my hon. Friend for his diligent and persistent campaigning on the issue. I know that he was absolutely delighted when the Chancellor was able to respond to his and many other Conservative colleagues’ requests. Of course, a debt will remain on the tolls even when the bridges come back into public ownership in 2018 or thereabouts. That debt will still need to be serviced, as will the innovations on free-flowing traffic that we want to introduce.
I congratulate the Secretary of State and the Minister on their recent appointments. Labour Members look forward to working constructively with them, particularly on the new Wales Bill, whenever that may appear.
To clarify, in last month’s Budget the Chancellor made much of halving the tolls on the Severn crossings, but as we have since discovered that is not quite the bargain it appears to be. The 50% discount includes the 20% of VAT, which disappears anyway when the bridge reverts to public ownership, and of course businesses reclaim VAT. So instead of leaving businesses still paying thousands of pounds a year, why will not the Government do the right thing and scrap these tolls altogether?
We have an election coming and the call from the Labour party is now very different—it is very convenient. It has long called for the devolution of the tolls, but we were fearful that, as soon as the tolls were devolved, they would be used as a cash cow to support the income of the Welsh Government.
The labour market in Wales has never been stronger. Although we recognise the challenges facing the Welsh economy, there is a lot to celebrate. Unemployment has fallen to its lowest since 2008 and the number of people in work in Wales is at an all-time high.
My hon. Friend is absolutely right to highlight that success story. It is a success story for all of the United Kingdom. It is an investment in St Athan, in Wales and in Britain, creating 750 highly skilled jobs in Wales and the west midlands, and I am very grateful to the Prime Minister and to Michael Fallon for the work that they have put into achieving that success.
Since 2012, Jobs Growth Wales has helped 15,000 people into meaningful employment. Given that youth unemployment is falling faster in Wales than in the UK as a whole, does the Minister agree that the UK Government could learn from the Welsh Labour Government in this regard?
It is interesting to note that an independent audit of Jobs Growth Wales has highlighted that some 80% of its spending has been inefficient. However, it is important to point out that successful jobs creation in Wales is dependent on co-operation between the two Governments, which is exactly what we saw in relation to Aston Martin.
11. My hon. Friend will know that tourism is a major employer. Will he take this opportunity of paying tribute to Andrew R. T. Davies, the leader of the Conservatives in the Welsh Assembly, and to Anthony Pickles for coming up with the idea of bringing the Prince of Wales’s regalia to Wales? Will he also praise the Prince of Wales for following up on that idea? What discussions is the Minister having with the Welsh Government to promote this?
I will of course join my hon. Friend in paying tribute to the leader of the Welsh Conservatives. It is important to highlight the importance of tourism to the Welsh economy, and bringing the regalia back to Wales is the right thing to do. I am certain that the castle of Conwy in my constituency would be delighted to host them.
I thank the hon. Lady for her question, but she will be aware that it would be inappropriate for me to comment on a leaked report. The key thing that we need to be aware of is that wherever in Wales we look—north, south, west or east—we are seeing employment growth.
14. I welcome my hon. Friend to his new position and congratulate him on his new job. Does he agree that the reductions to business taxes announced in the Budget and the ability of people to keep more of their own earnings will create an environment in which the private sector can invest and in which employment opportunities can come to Wales in the same way as they do to the rest of the country?
I agree entirely with my hon. Friend. The tax cuts that have been put in place by this Government since 2010 are to be welcomed. Of particular importance in the Budget was the announcement on small business rates, and I call on the Welsh Government to follow the example of the Westminster Government to ensure that Welsh small businesses have the same advantages through their business rates as do those in England.
The right hon. Lady asks an important question. There is more work to be done and, again, there is a need to work together on this issue. However, I would highlight the fact that more and more people with disabilities are now in work—152,000 more in the past 12 months and over 300,000 more in the past 24 months. We need to ensure that the successes we are seeing across the country are replicated in Wales.
The steel industry is currently dealing with unparalleled global economic conditions and the UK is deeply concerned by the social and economic impact that they are having in south Wales. While we cannot change the status of the global steel market, our objective remains to overcome the challenges and play a positive role in achieving a sustainable future for the steel industry in Wales and across the UK.
I pay tribute to my hon. Friend for the way in which he has represented the interests of his constituents and of those who depend on steelmaking in his area. He recognises the way in which the plants are interlinked and he has been working closely with the Business Secretary and me to help to support a secure future. I can reassure him that no stone will be left unturned to secure a long-term future for the Corby plant as well as for every other plant across the UK.
I welcome the Secretary of State and his deputy to their new positions and assure you, Sir, that I will endeavour to give them ample opportunity to explain themselves after my questions. Why did the Secretary of State not travel to Mumbai for the Tata board meeting of 29 March?
The Government have been in close dialogue with Tata steel for many months. My right hon. Friend the Business Secretary was at Tata the month before the Mumbai meeting and had engaged with its directors well before that. I am sure that the hon. Gentleman will be grateful that as a result of the Government’s actions we managed to avert the immediate closure of the plant and propose a sale.
I will give the Secretary of State another go. Did he fail to attend the meeting because a more senior Cabinet colleague told him not to do so? Did he decide not to go off his own bat? Or was it more down to the fact that, as the Minister for Small Business, Industry and Enterprise said of her boss the Business Secretary to the Select Committee on Welsh Affairs yesterday,
“He would not have gone to Australia had he known that they were going to close the ruddy works”?
What stopped our Secretary of State? Was it the Cabinet’s pecking order, was it indolence, or was it just plain ignorance?
I am disappointed with the hon. Gentleman’s approach. Steelworkers want to see Government and Opposition, and the unions and the company, work together to secure a long-term future. The Government have been in a long-term dialogue, which is demonstrated by the ongoing sales process, as opposed to the plant facing the risk of immediate closure.
I pay tribute to my hon. Friend. He met the Business Secretary last week, and he and I have had several conversations about support for his constituents who depend on the plant, demonstrating its regional impact. The Government are determined to do everything possible to secure a long-term, viable future for the plant.
As the Secretary of State well knows, at sites across Wales, such as Shotton, Llanwern, Orb, Trostre and Port Talbot, Tata steelworkers produce a whole range of specialist products. What assurances has he obtained from Tata that it will not siphon off the production of the most profitable lines to their plants aboard? What guarantees has he received that the intellectual property will remain with the Welsh operations in order to attract a suitable buyer and safeguard thousands of Welsh jobs?
The hon. Lady makes an important point about the sale of the operations in the United Kingdom, which demonstrates the positive engagement between the UK Government and Tata Steel that has resulted in its decision to sell off all its operations, rather than simply to dispose of what some might see as the more profitable assets.
Steel Industry: Government Support
We have been in extensive discussions with Tata for months, and it is due to Government intervention that Tata has agreed to a sales process rather than an immediate closure of its operations in Wales. I spoke to the hon. Gentleman before he went to the Tata meeting in Mumbai and have spoken to him since. I am keen to stay in regular contact in order to update him as the position changes. [Interruption.]
Order. These are important matters affecting the livelihoods of tens of thousands of people in Wales and across the country. Let us have some respect for that fact without Ministers wittering away— Mr Evennett—in the background. Important matters are being discussed. Be quiet, sir!
The Secretary of State will know that retaining the order book and customer base is critical for the Welsh steel industry. I want a short answer to a short question. Will the Secretary of State confirm whether he has had conversations with customers such as Honda, Nissan and Jaguar Land Rover to secure the integrity of the customer base? Yes or no.
My father was a welder at the Port Talbot plant for more than 30 years before he was made redundant several years ago. I am from that community and understand how important the steelworks is to the income of the area. My family has been through the good times when records have been broken and the difficult times when my father, like many others, was made redundant. The Government regularly engage with many of the companies, both suppliers and customers, that work with Tata. We are determined to do everything to support them.
Yesterday, the Business Secretary said we need to work together, cross-party, on this, and the Secretary of State for Wales has just said the same. I understand that he is to visit Shotton on Monday—when was he intending to tell me?
I would have hoped that the hon. Gentleman would be grateful for, or approving of, a visit from a UK Minister to Shotton. I have been responding to the calls from the local workers, but I was in Wrexham on the day that the news broke about Shotton, and I spoke to community leaders and business leaders about the impact. I said to the community, “As soon as more information becomes available, I will return.” That is why I am returning to Shotton next Monday, and I am pleased about it.
EU Membership: Economy
The European Union makes a massive contribution to the Welsh economy: it is our largest trading partner; it supports thousands of jobs; and it provides significant investments for projects all around Wales. The economic benefits of a reformed EU are far too great to risk leaving.
Small family farms remain the backbone of the west Wales rural economy, but incomes have declined by £5,000 over the past two years. Does the Minister share the concerns of the Farmers Union of Wales, the National Farmers Union and many in the rural economy that the last thing we need to countenance is withdrawal from the European Union?
I entirely endorse the hon. Gentleman’s comments. Both farming unions in Wales—the FUW and the NFU—are strongly in favour of our remaining in the reformed European Union. The extent of Welsh agricultural produce that is exported to the EU shows how important that market is; 90% of Welsh agricultural produce is exported to the EU and we should not risk losing that.
On this point, the Minister is absolutely right. The best decision for Wales is to stay in the European Union, as our favourite pamphlet says. But can he tell us why, at a time when Sir Terry Matthews, Airbus, NFU Cymru and the FUW support our membership, Andrew R. T. Davies, the person the Conservative party wants to be First Minister of Wales, wants Wales out of the EU? It is a disgrace, is it not? [Interruption.]
The hon. Lady is absolutely right to highlight the support of Airbus, Horizon Nuclear Power and the farming unions, but I make this point to her: the Conservative party is a democratic party that believes passionately that the people who can make a decision about this issue are the people of this country. We have offered them a referendum and their votes will result in a decision in 10 weeks’ time.
Disabled People: Employment
7. What assessment he has made of the effectiveness of support for employment for disabled people in Wales. (904366)
The Government believe every disabled person who wants to work should be able to work. As announced in the spending review, there will be a real-terms spending increase on supporting disabled people into work. That will ensure that valuable talent and skill will be further recognised in the Welsh workforce. [Interruption.]
Thank you, Mr Speaker. Disability rights organisations, the Equality and Human Rights Commission and many others have decried the lack of evidence in support of the Government’s cutting £1,500 a year from disabled people who have been found not fit for work. How many employers in Wales have the Government signed up as active Disability Confident employers for those disabled people who are fit for work?
It is important to point out, first, that supporting disabled people into the workplace is incredibly important, and this Government have a track record of success. Over the past 12 months, we have seen 150,000 disabled people enter the workplace; the figure is more than 300,000 over the past 24 months. I am proud of the fact that Swansea is the first disabled-friendly city in the UK, supporting disabled people into employment. On the specific numbers, I will write to the hon. Lady with the details that she requests.
Will the Minister concede that with more than a third of work capability assessment appeals being successful, Government policy is damaging the lives of a great many disabled people and starving them of money that they need in order to live a reasonable quality of life?
Although the work capability assessments need to be refined and are being refined, it is crucial to highlight the fact that this Government strongly believe that people who are disabled and who want to work and are able to work have a contribution to make. The aim of this Government’s policies is to help people into employment where that is possible, and the figures show that our policies are successful.
Thank you, Mr Speaker. I welcome the Minister to his post. Is he aware that the callous policy of the Conservative Government of implementing personal independence payments is leading to many people being prevented from working because Motability cars are being taken away from them, which prevents them from being able to travel to work? Will he speak to the Prime Minister, who is sitting next to him, to try to talk some sense into him?
I find the hon. Gentleman’s comments slightly disappointing. When he looks at all the changes in the employment situation in his constituency, he should welcome this Government’s work on welfare reform. The welfare reform changes that we are putting in place are contributing to behavioural change, leading to more people supporting their own families and contributing to the economy. When he looks at the statistics for the Wrexham constituency, he should welcome the changes, instead of condemning them.
The Prime Minister was asked—
Last week in Aldridge-Brownhills I visited Laserform manufacturing and Potclays, who supplied clay for the Tower of London poppies. Does my right hon. Friend agree that supporting small businesses and the further increase in personal income tax allowance, which came in this month, show that, unlike Labour, the Conservative party is the party of enterprise and aspiration and believes in enabling hard-working people to keep more of the money they earn?
Let me join my hon. Friend in congratulating the firms that she mentions. She is right that it is predominantly small and medium-sized businesses that will be providing the jobs of the future. We want people to keep more of their own money to spend as they choose. That is why the historic move last week to an £11,000 personal allowance means that by 2018 people will be paying about £1,000 less per taxpayer and we will have taken 4 million of the lowest-paid people out of tax altogether. That is the action of a progressive Conservative Government.
I am sure the whole House will join me in mourning the death today of the dramatist Arnold Wesker, one of the great playwrights of this country, one of those wonderful angry young men of the 1950s who, like so many angry young people, changed the face of our country.
Yesterday the European Commission announced new proposals on country-by-country tax reporting, so that companies must declare where they make their profits in the European Union and in blacklisted tax havens. Conservative MEPs voted against the proposal for country-by-country reporting and against the blacklisting. Can the Prime Minister now assure us that Conservative MEPs will support the new proposal?
First, let me join the right hon. Gentleman in mourning the loss of the famous playwright, with all the work that he did. He is right to mention that.
Let me welcome the country-by-country tax reporting proposal put forward by Commissioner Jonathan Hill, who was appointed by this Government as the United Kingdom Commissioner. That is very much based on the work that we have been doing, leading the collaboration between countries and making sure that we share tax information. As we discussed on Monday, this has gone far faster and far further under this Government than under any previous Government.
If the proposals were put forward by the British Government, why did Conservative MEPs vote against them? There seems to be a sort of disconnect there. The Panama papers exposed the scandalous situation where wealthy individuals seemed to believe that corporation tax and other taxes are optional. Indeed, as the right hon. Member for Rutland and Melton (Sir Alan Duncan) informed us, they are apparently only for “low achievers”. When Her Majesty’s Revenue and Customs says that the tax gap is £34 billion, why is the Prime Minister cutting HMRC staff by 20% and shutting down tax offices, losing the expertise of the people who could close that tax gap?
I am glad that the right hon. Gentleman wants to get on to our responsibilities to pay our taxes, which I think is very important. I thought that his tax return was a metaphor for Labour policy: it was late, it was chaotic, it was inaccurate and it was uncosted. Turning to his specific questions, he is absolutely right to identify the tax gap. That is why we closed off loopholes in the last Parliament equivalent to £12 billion, and we aim to close off loopholes in this Parliament equivalent to £16 billion. HMRC is taking very strong action, backed by this Government, backed by the Chancellor and legislated for by this House. I think that I am right in saying that since 2010 we have put over £1 billion into HMRC to increase its capabilities to collect the tax that people should be paying. The difference between those on the Government Benches and the right hon. Gentleman is that we believe in setting low tax rates and encouraging people to pay them, and it is working.
I am grateful to the Prime Minister for drawing attention to my own tax return, which is there to see, warts and all—the warts being my handwriting, and the all being my generous donation to HMRC. I actually paid more tax than some companies owned by people he might know quite well. He is not cutting tax abuse; he is cutting down on tax collectors. The tax collected helps to fund our NHS and all the other services. Last month, the Office for Budget Responsibility reported that HMRC does not have the necessary resources to tackle offshore tax disclosures. The Government are committed to taking £400 million out of HMRC’s budget by 2020. Will he now commit to reversing that cut so that we can collect the tax that will help to pay for the services?
I am afraid that the right hon. Gentleman’s figures, rather like his tax return, are not entirely accurate. At the summer Budget in 2015 we gave an extra £800 million to HMRC to fund additional work to tackle tax evasion and non-compliance between now and 2021. That will enable HMRC to recover a cumulative £7.2 billion in tax over the next five years. We have already brought in more than £2 billion from offshore tax evaders since 2010. The point that I will make to him is that I think we should try to bring some consensus to this issue. For years in this country, Labour and Conservative Governments had an attitude to the Crown dependencies and overseas territories that their tax affairs were a matter for them, their compliance affairs were a matter for them and their transparency was a matter for them. This Government have changed that. We got the overseas territories and Crown dependencies round the table and we said, “You’ve got to have registers of ownership, you’ve got to collaborate with the UK Government and you’ve got to ensure that people do not hide their taxes.” And that is what is happening. So when he gets to his feet, he should welcome the fact that huge progress has been made, raising taxes, sorting out the overseas territories and Crown dependencies, closing the tax gap, getting businesses to pay more and providing international leadership on this whole issue—all things that never happened under Labour.
I thank the Prime Minister for that answer. The only problem with it is that the Red Book states that HMRC spending will fall from £3.3 billion to £2.9 billion by 2020. With regard to the UK Crown dependencies and overseas territories, only two days ago the Prime Minister said that he had agreed that they will provide UK law enforcement and tax agencies with full access to information on the beneficial ownership of companies. There seems to be some confusion here, because the Chief Minister of Jersey said:
“This is in response to a need for information without delay where terrorist activities are involved”.
Obviously we welcome the Prime Minister’s commitment to fighting terrorism, but are Jersey and all the other dependencies actually going to provide beneficial ownership information or not?
The short answer to that is, yes they are, and that is what is such a big breakthrough. Look, I totally accept that they are not going as far as us, because we are publishing a register of beneficial ownership. That will happen in June. We will be one of the only countries in the world to do so—I think Norway and Spain are the others. What the overseas territories and Crown dependencies are doing is making sure that we have full access to registers of beneficial ownership to make sure that people are not evading or avoiding their taxes.
In the interests of giving full answers to the right hon. Gentleman’s questions, let me give him the figures for full-time equivalents in HMRC in terms of compliance. The numbers went from 25,000 in 2010 to 26,798 in 2015. It is not how much money you spend on an organisation; it is how many people you can actually have out there collecting the taxes and making sure the forms are properly filled in.
The Prime Minister is quite right: the number of people out there collecting taxes is important, so why has he laid off so many staff at HMRC, who therefore cannot collect those taxes?
In 2013, the Prime Minister demanded that the overseas territories rip aside the “cloak of secrecy” by creating a public register of beneficial ownership information. Will he now make it clear that the beneficial ownership register will be an absolutely public document and transparent, for all to see who really owns these companies and whether they are paying their taxes?
Let me be absolutely clear: for the United Kingdom, we have taken the unprecedented step—never done by Labour, never done previously by Conservatives—of an open beneficial ownership register. The Crown dependencies and overseas territories have to give full access to the registers of beneficial ownership. We did not choose the option of forcing them to have a public register, because we believed that if that was the case, we would get into the situation the right hon. Gentleman spoke about, and some of them might have walked away from this co-operation altogether. That is the point. The question is, are we going to be able to access the information? Yes. Are we going to be able to pursue tax evaders? Yes. Did any of these things happen under a Labour Government? No.
The Prime Minister does talk very tough, and I grant him that. The only problem is that it is not a public register that he is offering us: he is offering us only a private register that some people can see.
It is quite interesting that the Premier of the Cayman Islands, Alden McLaughlin, is today apparently celebrating his victory over the Prime Minister, because he is saying that the information
“certainly will not be available publicly or available directly by any UK or non-Cayman Islands agency.”
The Prime Minister is supposed to be chasing down tax evasion and tax avoidance; he is supposed to be bringing it all into the open. If he cannot even persuade the Premiers of the Cayman Islands or Jersey to open up their books, where is the tough talk bringing the information we need to collect the taxes that should pay for the services that people need?
I think the right hon. Gentleman is misunderstanding what I have said. In terms of the UK, it is an absolute first to have a register of beneficial ownership that is public. He keeps saying it is not public; the British one will be public. Further to that—and I think this is important, because it goes to a question asked by the right hon. Member for Tottenham (Mr Lammy)—we are also saying to foreign companies that have dealings with Britain that they have to declare their properties, and the properties they own, which will remove a huge veil of secrecy from the ownership of, for instance, London property. Now, I am not saying we have completed all this work, but we have more tax information exchange, more registers of beneficial ownership, more chasing down tax evasion and avoidance, and more money recovered from businesses and individuals, and all of these things are things that have happened under this Government. The truth is he is running to catch up because Labour did nothing in 13 years.
Q6. My constituents John and Penny Clough, whose daughter Jane was tragically murdered by her ex-partner while he was out on bail, are campaigning to save Lancashire’s nine women’s refuges, which are currently under threat because Labour-run Lancashire County Council proposes to cut all their funding. Does the Prime Minister agree with the Clough family and me that Labour-run Lancashire County Council should prioritise the victims of domestic violence?
My hon. Friend raises a very moving case, and I know that the whole House will wish to join me in sending our sincere condolences to Mr and Mrs Clough. In terms of making sure that we stop violence against women and girls, no one should be living in fear of these crimes, which is why we committed £80 million of extra funding up to 2020 to tackle violence against women and girls. That includes funding for securing the future of refuges and other accommodation-based services, but it obviously helps if local councils make the right decisions as well.
The United Kingdom and its offshore territories and dependencies collectively sit at the top of the financial secrecy index of the Tax Justice Network. Since the leaking of the Panama papers, France has put Panama on a blacklist of unco-operative tax havens and the Mossack Fonseca offices have been raided by the police in Panama City. What have British authorities done specifically in relation to Mossack Fonseca and Panama since the leak of the Panama papers?
In terms of who is at the top of the pyramid of tax secrecy, I think it is now unfair to say that about our Crown dependencies and overseas territories, because they are going to co-operate with the three things that we have asked them to do in terms of the reporting standard, the exchange of tax information and access to registers of beneficial ownership. Frankly, that is more than we get out of some states in America, like Delaware. We in this House should be tough on all those that facilitate lack of transparency, but we should be accurate in the way we do it.
The right hon. Gentleman asked what we are doing about the Panama papers. We have a £10 million-funded, cross-agency review to get to the bottom of all the relevant information. That would hugely be helped if the newspapers and other investigative journalists now shared that information with tax inspectors so that we can get to the bottom of it.
On the right hon. Gentleman’s final question, we are happy to support blacklists, but we do not think a blacklist should be drawn up solely on the basis of a territory raising a low tax rate. We do not think that is the right approach. It is the approach the French have sometimes taken in the past. In terms of taking action against tax havens, this Government have done more than any previous one.
Some 3,250 Department for Work and Pensions staff have been specifically investigating benefit fraud, while only 300 HMRC staff have been systematically investigating tax evasion. Surely we should care equally about people abusing the tax system and those abusing the benefits system. Why have this Government had 10 times more staff dealing often with the poorest in society abusing benefits than with the super-rich evading their taxes?
I will look carefully at the right hon. Gentleman’s statistics, but they sound to me entirely bogus, for this reason: the predominant job of the DWP is to make sure that people receive their benefits, and the predominant job of HMRC is to make sure that people pay their taxes. All of the 26,000 people I spoke about earlier are making sure that people pay their taxes. The clue is in the title.
Q8. Will and Carol Davies and many other farmers in south Herefordshire are still awaiting their 2015 payments from the Rural Payments Agency, nearly four months after they were due. That follows the failure of the RPA website last year. It is causing great personal and financial distress, and threatens the future of farm businesses. Will the Prime Minister agree to meet farmers to discuss the issue and press the RPA to make these payments by the end of this month, and does he share my view that, at the very least, farmers should receive interest on the amounts overdue? (904332)
I recently met both the National Farmers Union and the Welsh NFU, and I continue to have meetings with farming organisations, including in my own constituency. I know there have been problems with the payment system. The latest figures show that some 87% of all claims have been paid. I believe that the figures for Herefordshire are in line with the national average, but obviously that is no consolation to the 13% that have not received those payments. That is why we have a financial hardship process. We are working with charities. We have made hardship payments amounting to more than £7 million, but we need to make sure that the lessons of how to make the system work better in future years are properly learned.
Q10. Again on Europe, does the Prime Minister agree that the European Union is not just the world’s biggest single market but an ample source of foreign direct investment, providing 50% of the investment that we receive; and an excellent platform for supply chains to thrive and prosper, which gives them the ability to get the skills and the innovation that they need? That, for my constituency, means that Sartorius, Renishaw, Delphi and a whole load of other hi-tech companies thrive and prosper, as they do elsewhere in the United Kingdom. (904334)
I well remember my visit to Renishaw’s with my hon. Friend, where I was shown what I think was a world first: a bicycle that was printed on a 3D printer. I did not get on and give it a try, but it looked as though it would carry even someone of my weight. He is right, because the single market is 500 million people, and it is a great market for our businesses and our services. Increasingly, the market and the supply chain are getting more and more integrated. That is why we should think very carefully before separating ourselves from it.
Q3. Brain tumours are the biggest cancer killer of children and people under 40, but, despite that, research into them receives just over 1% of the UK’s national spend on cancer research. That will be the subject of a debate next Monday in Westminster Hall. Will the Prime Minister have a word with the Secretary of State for Health, so that the Minister who answers that debate might be able to bring with him or her some long-overdue good news of change in this area? (904327)
I am very happy to do exactly as the right hon. Gentleman says. It is an important issue. We invest something like £1.7 billion a year in health research, but there is always this question when it comes to cancer research. The spending has gone up by a third over the last Parliament to nearly £135 million, but there is always the question about whether that is fairly distributed between all the different types of cancer. I will make sure that the Minister can give him a very full reply.
Q11. I have a steel producer at the heart of my constituency, and so I share concerns raised about the future of our steel industry and, more widely, of energy-intensive manufacturing. The north of England still has significant manufacturing, but it is being held back by green taxes, high energy costs and emissions targets. What more can my right hon. Friend do to help energy-intensive industries? (904335)
My hon. Friend raises an important point. The changes that we are making are going to save the steel industry more than £400 million by the end of this Parliament, and that is a good example of the steps that we can take. There was an excellent debate yesterday in the House about this issue. We need to work on everything we can do in terms of procurement. We need to make sure that we are taking action in the EU against dumping, and we are. We need to make sure that we reduce energy costs where we can. We stand by to work with any potential purchaser of the Port Talbot works, which will safeguard steel jobs in other parts of the country, to see how we can help on a commercial basis. I am absolutely satisfied that we are doing everything we possibly can. We cannot totally buck the global trend of this massive overcapacity in steel and massive decline in prices, but those are the key areas—in terms of power, in terms of plant and in terms of procurement—where we can help.
Q4. Research by the Sutton Trust shows that turning schools into academies does not necessarily improve them. Parents at thousands of excellent primary schools want them to continue to be maintained by their local authorities. Why are Ministers planning to overrule parents and force all those schools to become academies? (904328)
All the evidence shows that academies work as part of our education reforms. Let me give the House the evidence. If we look at schools that converted into academies, we see that 88% of them are either outstanding or good schools. If we look at the sponsored academies, which were often failing schools, we see that there has been, on average, a 10% improvement over the first two years. All the evidence is that the results are better, the freedoms lead to improvements and, where there are problems, intervention happens far faster with academies. We have got 1.4 million more children in good or outstanding schools, and I say, “Let’s finish the job.”
Q15. The Prime Minister has met many great people, but I believe he has yet to meet the Vale of Evesham’s very own Gus the “asparagus man”. Would he like to rectify that omission by joining me in the Vale of Evesham for the British asparagus festival, which starts on St George’s day, and show his support for our fantastic farming industry? (904339)
Q5. May I take the Prime Minister back to his response to the hon. Member for Pendle (Andrew Stephenson)? I, too, have met Mr and Mrs Clough, and it was a truly dreadful case. Women’s refuges are facing absolute crisis. The changes that the Government propose to make to housing benefit will force the closure of women’s refuges. The Prime Minister needs urgently to look again at these changes, because unless he makes refuges exempt, they will be closing up and down the country. Will he do it? (904329)
I would say to the hon. Lady that we are doing the same kind of thing with these refuges as we did in the last Parliament with rape crisis centres. That is why the £80 million of funding is so important, and that is why my right hon. Friend the Secretary of State for Communities and Local Government has written to local authorities to explain that this money is available to make sure those refuges are there.
As part of world autism awareness week last week, the National Autistic Society launched its biggest ever awareness campaign, called “Too Much Information”, and young Alex, the star of the film, was here in the House and met many MPs on Monday this week. The society’s research shows that some 50% of autistic people and their families sometimes do not even go out in public because they are afraid of what people think and of the public reaction to them. Will the Prime Minister meet me and the charity to discuss how the Government can support this campaign, and how we can help tackle the social isolation of so many families through this campaign and through Government assistance?
First, let me pay tribute to my right hon. Friend, who has been campaigning and legislating on this issue for many years now, including the landmark legislation that went through in the last Parliament. We have been working closely with the Autism Alliance and have invested some £325,000 since 2014, but she is right that more needs to be done in terms of helping families with autistic children and raising the profile and increasing the understanding of what having an autistic child or being autistic is all about. I think she is absolutely right to do that. Let me put in a plug for “The Curious Incident of the Dog in the Night-Time”, which is still on at the theatre on Whitehall. I took my children the other day. It is absolutely excellent, and will provide a better explanation of autism than perhaps anything we can discuss in this House.
Q7. The authorities in Peru, El Salvador and Panama have raided offices of Mossack Fonseca, seizing documents and computer equipment, but no one has knocked on the door of the law firm’s branch in the UK. While recognising the operational independence of our enforcement agencies, does the Prime Minister share my deep concern that, as we speak, documents are no doubt being shredded and databases being wiped, undermining the opportunity to bring further potential wrongdoing to light? (904331)
The hon. Lady makes an important point, which is that we need to make sure that all the evidence coming out of Panama is properly investigated. That is why we have set up a special cross-agency team—including the National Crime Agency, Her Majesty’s Revenue and Customs and other relevant bodies—to make sure we get to the bottom of what happened. But she is right to reference the fact that these organisations are operationally independent. It would be quite wrong for a Minister or a Prime Minister to order an investigator into a particular building in a particular way. That is not a Rubicon we want to cross in this House. Let us empower the National Crime Agency, empower HMRC, give them the resources and let them get on with the job.
May I draw the Prime Minister’s attention to the tragic death of Ayeeshia Jane Smith in my constituency? Ayeeshia was 21 months old when she was stamped on by her mother so violently that it punctured her heart. The pathologist said her body resembled a “car crash victim”. Yet Ayeeshia had been known to social services since the day she was born. They knew about the violent boyfriends; they knew about the domestic violence; they saw the doors kicked in; they smelt the cannabis; they saw the bruises; they saw the cuts; they saw the fingerprints on her little thighs—and they did nothing.
The Prime Minister will understand that people in Burton want to know how this could have happened. They are concerned to know that the serious case review has on its panel people who are directly involved in the organisations being investigated. Will the Prime Minister look at what we can do to make this and other serious case reviews more independent, so that we can make sure that no other child suffers the life and the death of Ayeeshia Jane Smith?
My hon. Friend is absolutely right to raise this. In the work that we all do, we get to hear about some hideous and horrific incidents, but for anyone watching television that night, and seeing the description of what happened to Ayeeshia, it simply took your breath away that people could behave in such a despicable and disgusting way towards their own children. In my view, no punishment in the world fits that sort of crime carried out by the child’s own parent. As my hon. Friend said, there will be a serious case review. I will look carefully at his suggestions, and I know that my right hon. Friend the Secretary of Education will do so as well. There are criticisms of the way in which these cases are conducted, but in this case, to start with, we must get on with the serious case review because we have got to get to the bottom of what went wrong.
Q9. There are currently more than 7,000 people in the UK who need an organ transplant, including 139 children, and many will die because of the shortage of available organs. The Welsh Labour Government have already introduced groundbreaking legislation for opt-out organ donation in Wales. Will the Prime Minister join me in supporting the “change the law for life” campaign for opt-out organ donation throughout the UK? (904333)
I am always happy to look at this again. I have looked at it before and have not come out in favour of opting out. We debated the matter in the last Parliament and made quite a lot of moves towards making opt in much easier. We found that different hospitals and different areas of the country had very different records for how well they do. My personal position is that we should support and continue to drive opt in, but the House of Commons can vote on this issue from time to time, and on whether it wants to go down the Welsh track rather than the track we are on. Personally, I think let us make opt in work better.
My right hon. Friend will be well aware that our colleague Lord Bates has just started a 2,000 mile walk from Buenos Aires to Rio de Janeiro, arriving in time for the Olympics to raise awareness for the Olympic Truce and money for refugee children. Will my right hon. Friend join me in wishing Lord Bates well on this epic journey, and also commit the Government to upholding the values and principles of the Olympic Truce?
I have already written to Michael Bates to wish him well on this long walk and to support the work that he has done over many years for the Olympic Truce. He leaves me a bit of a hole in the House of Lords, where he has been doing fantastic work for the Home Office on security issues, so we wish him a good walk and a speedy return.
Q12. At Ealing hospital, the technically junior, though highly experienced doctors I met last week are dismayed that the Government’s equality assessment of their new contract finds that it discriminates against women—more than half of them. As the Prime Minister is a self-confessed feminist, leading a progressive Government—[Interruption.] So he says. Will he reverse this blatant injustice, which has no place in 2016? (904336)
I am grateful for the question and backhanded compliment. The contract is actually very pro-women because it involves a 13% basic pay rise, restricts the currently horrendous and unsafe hours that some junior doctors work, and gives greater guarantees about levels of pay and the amount of money that doctors will get. I think that as people start to work on it and with it, they will see that it is very pro-women.
Over 200,000 economic migrants came from the European Union in the period for which we have figures. Yet the propaganda sheet sent out to the British people claims that we maintain control of our borders. Have we withdrawn from the free movement of people, or is that sheet simply untrue?
The truth is this: economic migrants who come to the European Union do not have the right to come to the UK. They are not European nationals. They are nationals of Pakistan, or Morocco, or Turkey. None of those people has that right. That is very important—and frankly that is why it is important that we send information to households: so that they can see the truth about what is proposed. What my hon. Friend has just put forward is a classic scare story. Britain has borders. Britain will keep its borders. We have got the best of both worlds.
Q13. Stirling University in my constituency is Scotland’s university for sporting excellence. Elite sports have been rocked over recent months by an international doping scandal, which threatens to see entire countries thrown out of and banned from major sporting competitions. Does the Prime Minister agree that, in this Olympic year, the World Anti-Doping Agency needs further support, and will he tell me what further action can be taken? (904337)
The hon. Gentleman is right to raise this issue. The World Anti-Doping Agency has made a lot of advances in recent years. The issue is relevant to our anti-corruption summit on 12 May, when we will look at corruption in sport and bring forward new codes of practice that we will adopt in this country and hope others will also adopt. There is also the question of whether doping should be made a specific criminal offence; that is something that we should look at and debate in this House.
Perhaps I can write specifically to my hon. Friend on the clinical standards. What is good is that Bruce Keogh and others within the NHS support the vision of a seven-day NHS. We should of course pay tribute to all the doctors and nurses who work at weekends already—that is a very important point—but we are trying to move towards an NHS in which the individual has access to their family doctor seven days a week and hospitals work more on a seven-day basis, which will save lives and improve care. I will write to my hon. Friend about the specific detail.
Q14. Parent governors play a key role in local schools, supporting their children’s education and performing an important civic duty. Is the Prime Minister aware of the sadness and anger that have resulted from the forced academies announcement because the duty for each school to have parent governors will be removed, and will he urgently review this attack on parents? (904338)
I am absolutely delighted that the hon. Lady asked that question, as I know we will be debating the issue later today. Let me be clear: we support parent governors and think that they have a great role to play, but no school should think that simply by having parent governors it has solved the problem of how to engage with parents. Let me say to her that there is something in the Labour motion for today’s debate that is actually inaccurate and should be withdrawn. It says that the White Paper
“proposes the removal of parent governors from school governing bodies”.
It does no such thing. As well as not getting his tax return in on time, the Leader of the Opposition is bringing forward motions to this House that are simply wrong.
Points of Order
On a point of order, Mr Speaker. On 2 December, during the debate on Syria, the Prime Minister promised that there would be regular quarterly progress reports to this House on the military action against Daesh. The longest a quarter could last is 92 days, but it is now 133 days since that pledge was made. Have you had any indication from the Government as to whether they intend to make that quarterly progress report so that we can see what action is being taken and whether it is effective?
I am grateful to the right hon. Gentleman for his point of order and his courtesy in giving me advance notice of it. The question of how a Government fulfil a commitment to the House is principally a matter for Ministers. Having taken a keen interest in this matter, the right hon. Gentleman will know that a report was presented to the House by the Secretary of State for Foreign and Commonwealth Affairs in December, and that a second report, which I think was billed or tagged as a quarterly report, was provided by the Secretary of State for International Development on 8 February. If memory serves me correctly, it was an oral statement, and it may be that the right hon. Gentleman and some other Members were hoping for—or even expecting—a written report. That is, however, not a matter for the Chair.
To be fair, the Government have made a large number of statements to the House over the past few years—that is a matter not of speculation but of fact. The only point I would make gently is that since the Foreign Secretary had unavoidably to be absent from Foreign Office questions yesterday—that prompted a modicum of comment from his own side although he had done me the courtesy of notifying me beforehand—it might be thought a good idea for a subsequent report to be provided by him to the House. If there is an appetite for that report to be oral, I know that it will be delivered by the Foreign Secretary with great dexterity. It would also have the additional “advantage”—I say that in inverted commas because it is a matter for the House to decide—of pleasing a right hon. Gentleman from the Liberal Democrat Benches.
On a point of order, Mr Speaker. You will be aware of the decision by the Department for Business, Innovation and Skills to close its Sheffield policy office. Despite repeated requests at the BIS Select Committee for the Department to share the figures on which that decision was based, the permanent secretary told the Committee:
“I don’t think I can point you to one specific document which covers specifically the Sheffield issue.”
In answer to a question about costs from my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) at the Public Accounts Committee, he said that the decision was
“not based on individual cost-benefit analysis of a static closure.”
I have had access to a document entitled “BIS 2020—Finance and Headcount outline”, which specifically covers the Sheffield issue and is, in the permanent secretary’s words,
“an individual cost-benefit analysis of a static closure.”
Will you clarify, Mr Speaker, whether the permanent secretary’s words constitute misleading the House, and advise me on how I can get the information in front of the two Committees of the House that have requested it?
I am genuinely grateful to the hon. Gentleman, but my instinctive reaction is that exegesis of what is said by the Government, including permanent secretaries, and adjudication upon it, is not a proper matter for the Chair. I think it is safer to keep out of that. It may well be that it is a subject of some dispute on which the hon. Gentleman is dissatisfied, but I underline that it is for the Committees concerned to press for the information that they require. If they are dissatisfied with what they have or have not received, they should persist, and there are well-established procedures for doing so. I have a feeling, however, that by putting his concerns on the record, the hon. Gentleman may find that the Government are able and inclined to offer the information he requires.
On a point of order, Mr Speaker. I apologise for not giving you advance notice of this point of order, but I had hoped that it would be raised during Prime Minister’s questions. On 28 October 2015 in a letter to my right hon. Friend the Prime Minister, Sir John Chilcot said that the text of the Iraq report would be available in the week commencing 18 April 2016, at which point it would be passed to the security services for checking. Given that that is next Monday, I wonder whether you have received notice from any Minister who intends to make a statement to the House, to update it as to when that process will be finished and the long-awaited report will be available?
The short answer is that I have received no such indication of an imminent statement on the matter. When this issue has been aired in the House, the sense of dissatisfaction across the Chamber has been audible not just to the Chair, but to millions of people throughout the country. It has become exceptionally and excessively protracted. I understand the hon. Gentleman’s frustration. He has put his point on the record again, and I hope that it will have been heard in the appropriate quarters. Have I received an indication of a statement? I am afraid I have not.
Improvement of Rail Passenger Services (Use of Disruption Payments)
Motion for leave to bring in a Bill (Standing Order No. 23)
I beg to move,
That leave be given to bring in a Bill to require Schedule 8 disruption payments between Network Rail and train operating companies to be allocated to specified projects aimed at increasing the quality, value for money or reliability of passengers’ experience of railway travel and associated services; and for connected purposes.
I am grateful for the opportunity to present the Bill to the House today, the purposes of which are threefold. First, the Bill seeks to improve the services on offer to rail commuters across the country. Secondly, it aims to ensure that millions of pounds of taxpayers’ money is directed towards benefiting passengers, rather than lining the pockets of train operating companies. Thirdly, the Bill seeks to shine a light on a part of the rail industry that is bewildering in its complexity, and to open it up to greater public scrutiny and accountability. The Bill would create a responsibility for the regulator to guarantee that any net income made by train operators from schedule 8 payments in totality is used to fund overall passenger benefits on the network. It is important to note that the Bill is not intended to stop or replace current compensation arrangements between train operators and passengers, which reimburse passengers for delays.
Rail commuters in Enfield and throughout the country are getting a raw deal. They are paying sky-high ticket prices for a rock-bottom service. They are currently having to endure the worst performance in terms of train punctuality for almost a decade. In 2014-15, 47 million passenger journeys on the railways were either cancelled or delayed. Members of the public are shocked when they learn that train operators can actually make a profit from Network Rail failures. If trains are delayed or cancelled and the responsibility lies with Network Rail—for instance, when points do not work or power fails—Network Rail makes compensation payments to the train operators. These are known as intra-industry arrangements or schedule 8 disruption payments. However, train operators are not obliged to reinvest any of that money in services for the benefit of passengers.
The payments received from Network Rail bear no relation whatever to the passenger compensation schemes between the train operators and their customers. Indeed, only a fraction of what train operators receive in payments from Network Rail is ever passed on to commuters whose journeys have been disrupted. Passengers are certainly not helped to claim what they are owed for delays, given that train operators make it so difficult for them to access compensation. It is really important that passengers are made more aware of their rights. I applaud the recent work of Which? and its “Make rail refunds easier” campaign, putting pressure on the rail regulator and train operators to make this whole process simpler, fairer and more accessible to commuters.
I call on the Government to bring rail travel within the EU-compliant Consumer Rights Act 2015. The unfairness of the current structure of railway compensation payments is really brought to light when we consider how much money is involved and how poorly passengers are compensated compared with train operators. I commend the recent work of my hon. Friend the Member for Nottingham South (Lilian Greenwood) and the shadow Transport team to expose this issue. Their analysis has shown that between 2010 and 2015 Network Rail paid out £575 million to train operators in schedule 8 payments. Over the same period, train operators provided compensation to passengers to the tune of only £73 million. That is a compensation gap of more than half a billion pounds, a substantial boost to train operating companies’ profit margins.
I accept that train operators should be able to cover the costs of any loss of revenue they incur that arise from the unplanned delays caused by Network Rail. What they should not be able to do, however, is make a profit over and above those costs from train delays and cancellations. That is just plain wrong.
In 2014-15, the Government provided a grant payment to Network Rail of £3.8 billion. Therefore, to add insult to injury, a significant amount of taxpayers’ money flows from Network Rail back to private train operating companies, many of them ultimately owned by foreign Governments, under schedule 8 payments. It is scandalous that a system can be designed in such a way that the very people using the rail network and who are most affected by the poor standard of service on offer—tax-paying commuters—can end up contributing to train operators’ profits out of their own misery! How can this be right? Where is the accountability to the fare-paying, taxpaying public for how this system operates and where this money goes?
The rail expert Christian Wolmar has said:
“In an ideal world, the train operators would only get back the actual money that unexpected delays costs them. However, instead the level is determined by an economic model that only very vaguely reflects the impact of delays felt by passengers. So vaguely, in fact, to be meaningless.”
He went on to say that the current system
“does the railways no credit and creates the perverse incentives that plague the industry.”
I could not agree more; the situation must change. We need a way of linking schedule 8 payments to benefits that improve the customer experience of the railways. This Bill would make that happen.
I want the rail regulator to be given the power to ensure that train operating companies have to provide full disclosure of any net profit they might make from schedule 8 payments. This information should be made available to the public. With rigorous monitoring by the regulator, this money should be put towards improving the customer experience and providing a high-value service. Such measures could include retaining ticket office staff; facilitating easier access to station platforms and trains; free wi-fi on trains; or using the money towards paying for a guarantee that trains will not miss out stops—a particular frustration for a number of my constituents. These are just a few suggestions, and I think that, should this Bill become law, it would be a very good idea to consult passengers on the improvements they want to see to their services.
It is clear from recent evidence that the rail regulator understands many of the issues I am looking to address with this Bill. At the end of last year, the regulator and Network Rail agreed a £4 million rail reparation fund to benefit directly commuters affected by poor performance on routes provided by Thameslink, Southern and the Gatwick Express services. By increasing the number of staff at stations, employing more track workers to deal with disruptions and introducing incident management software to resolve issues on routes more quickly, the regulator sought to “enhance” the services for passengers affected by poor performance.
I want a permanent rather than a temporary scheme in place that can benefit all passengers across the country. However, the rail reparation fund example is an important first step by the regulator. What it has set out to achieve reinforces the fundamental principle that lies at the heart of the Bill before us—that improving rail passengers’ services should be the top priority for Network Rail and train operators. Commuters should not be left waiting on station platforms while train operators pick up big profits from the rail industry’s complex, opaque and unfair compensation arrangements.
I would like to thank colleagues from across the House who have agreed to sponsor my motion today. That support shows the extent to which we all want to see the rail industry reformed for the benefit of passengers—our constituents. It is for all these reasons that I commend this Bill to the House.
Question put and agreed to.
That Joan Ryan, Tom Brake, Julie Elliott, Mrs Louise Ellman, Frank Field, Kelvin Hopkins, Peter Kyle, Caroline Lucas, Siobhain McDonagh, Will Quince, Henry Smith and Mr Charles Walker present the Bill.
Joan Ryan accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 22 April 2016, and to be printed (Bill 160).
Tax Avoidance and Evasion
I beg to move,
That this House notes with concern the revelations contained within the Panama Papers and recognises the widespread public view that individuals and companies should pay their fair share of tax; and calls upon the Government to implement Labour’s Tax Transparency Enforcement Programme which includes: an immediate public inquiry into the revelations in the Panama Papers, HMRC being properly resourced to investigate tax avoidance and evasion, greater public sector transparency to ensure foreign companies wanting to tender for public sector contracts publicly list their beneficial owners, consultation on proposals for foreign companies wanting to own UK property to have their beneficial owners listed publicly, working with banks to provide further information over beneficial ownership for all companies and whom they work for, the swift implementation of full public country-by-country reporting with a fair turnover threshold as well as ensuring robust protection for whistle blowers in this area, ensuring stricter minimum standards of transparency of company and trust ownership for Crown Dependencies and Overseas Territories, consideration of the development of the Ramsey Principle by courts, implementation of an immediate review into the registry of trusts, and the strengthening and extension of the General Anti-Avoidance Rule to cover offshore abuses.
I see that the Chancellor is absent again today. Much as I look forward to seeing the various members of his Treasury team, is there a specific reason why he is not here for this important debate? I am happy to give way. [Interruption.] Is it critical? In respect of his attendance at the International Monetary Fund, he might look at yesterday’s IMF report that downgraded the growth expectations for our economy and think again about the policies he is pursuing, which fail to invest in the infrastructure, skills and new technology that our economy needs to compete in the world market. Perhaps we will send him a letter and he can say hello to the Chamber some time when he happens to be passing through.
We need to move the debate about tax avoidance and evasion on to the issue of the fairness and effectiveness of our tax system, and we need to do so as constructively as we can. The leak of documents from Panama lawyers Mossack Fonseca has provoked an extraordinary public discussion, and an entire hidden world has been brought into the light. What it reveals is profoundly unsettling.
We now know that Mossack Fonseca sat at the centre of a vast web of tax evasion and tax avoidance. The world’s super-rich commissioned its services to hide their income and wealth from the public gaze. Some of them had plainly criminal intentions. Money from the Brink’s-Mat robbery was allegedly laundered through a shell company set up by Mossack Fonseca, while the Mexican drug baron Rafael Caro Quintero held his property through a shell company established by Mossack Fonseca.
Disturbing points have been raised about Putin and the Russian regime. Will the hon. Gentleman confirm whether the shadow Treasury spokesman, his hon. Friend the Member for Leeds East (Richard Burgon), raised any of those points about the Russian Administration when on “Russia Today”?
I thank my hon. Friend for his excellent speech and for bringing this debate to the House. Does he agree that this is a real issue for people in London, particularly in respect of the impact that these shady characters have on our London property market? It is a tragedy that Londoners, who want to remain in London, have to move out because these criminal elements are messing up the international finance system.
That confirms the need for open and public disclosure of beneficiary ownership and beneficiary interests. As my hon. Friend and every London MP knows, speculation on property in this capital city denies many of our constituents a decent roof over their heads.
Let me press on a little, and I shall give way shortly.
Mossack Fonseca exploited the presence of loopholes and entire jurisdictions that favour secrecy and minimal taxation. We can expect further news over the next few weeks and months, as the investigative work continues. Yesterday the Panama headquarters of Mossack Fonseca was raided, but 10 days on since the initial leak, I believe that its UK offices in Hitchin—not far away—have not been, despite the raising of concerns by the firm’s founder about the lack of due diligence performed by the UK office in relation to a company in its charge, and a clear legal precedent for the UK authorities to intervene.
There may be more revelations to come, set to tarnish individual reputations. I put this mildly: the Prime Minister has done himself no favours over the last 10 days. A lesson for the future is that, when asked a straight question, one should answer straightforwardly and straight away. The Prime Minister could and should have come clean about his relationship with Blairmore Holdings far earlier.
Perhaps the hon. Gentleman will give a straight answer to a straight question. Does he regret the support that he gave to the IRA? They are still laundering money and still avoiding taxes in Northern Ireland, and he supported their activities in the past.
I have never given the IRA support in relation to money laundering or any other activity. Let me make it absolutely clear that wherever laundering takes place, it is illegal and should be tackled, and I shall welcome the hon. Gentleman’s future contribution to the establishment of procedures to ensure that that happens.
Having spent 10 years as an aid worker, I am acutely aware of the millions of pounds that are lost to development in poor countries as a result of these tax havens. Does my hon. Friend agree that, before the anti-corruption summit that will take place in London in May, the Prime Minister needs to do far more to reassure the House that he will accelerate his efforts to persuade British overseas territories to mirror the United Kingdom’s welcome move, and establish a transparent public register of beneficial ownership?
The issue of a public register is critical to any measures that are taken in the future, because such a register will enable these kleptocrats to be held to account—particularly in the developing world, where they have denied development resources to the economies of their countries.
Transparency throughout the Crown dependencies and the overseas territories is, of course, crucial. Does not the lack of such transparency further reinforce the message to our constituents that there is one tax rule for the rich and powerful, and another for everyone else?
The shadow Chancellor has called for greater transparency on the part of the Crown dependencies. Can he explain why this is the first time he has made such a call? Why did he not make such calls during the 13 years of the last Labour Government?
May I ask the hon. Gentleman—[Hon. Members: “Answer!”] I am. Calm down.
If the hon. Gentleman looks at my parliamentary record over the last 18 years, he will see that I was one of the first MPs to set up the tax justice meetings in the House that brought the Tax Justice Network here, and to do the necessary research. He will also see that, as shadow Chancellor, I have commissioned a review of HMRC’s activities in terms of the tax base, including those relating to avoidance and evasion. However, I understand his concern. I have worked on this issue on a cross-party basis for a number of years, and have criticised successive Governments for not doing enough.
My hon. Friend has spoken of tax fairness. Does he agree that the Panama papers have revealed a channelling of moneys to the very rich while the poor have to pay their taxes, and that that comes on top of a Budget in which capital gains tax was cut for the top 3% through changes in personal independence payments for the disabled? Does that not show that we are not “all in it together”?
I think that what people found extremely disappointing in the Budget debate was that, as my hon. Friend says, the cut in capital gains tax was being paid for by cuts in benefits for people with disabilities. That did indeed demonstrate very starkly that we were not all in it together. Perhaps these revelations will enable us to take steps towards the establishment of a fair taxation system that will fund our public services effectively.
I thank the shadow Chancellor for being so generous with his time.
Last night, an all-party parliamentary group to which I belong held an excellent meeting with a journalist from The Guardian and the campaigners who exposed the scandal. They informed us that openness and transparency in the overseas territories could be achieved quite simply through an Order in Council from the United Kingdom Government. The achievement of those aims is a matter of will on the UK Government’s part.
My hon. Friend the shadow Leader of the House made that point last week, giving example after example of cases in which Orders in Council had been issued. They have been used very effectively by successive Governments, and it bewilders me that this Government are not taking that opportunity now.
May I press on for a little while? I am only on the third page of my speech. This is getting ridiculous. I will give way to the hon. Gentleman later, but I have already given way a fair amount. As you know, Mr Speaker, I am generous, but I do not want to speak for too long.
Even today, we have not seen the Prime Minister’s full tax return or that of the Chancellor, and it is important that that should happen. The Prime Minister established the principle, which I advocated three months ago, that the Prime Minister, the Chancellor, the Leader of the Opposition and the shadow Chancellor should publish their tax returns—not summaries; their full tax returns—but that has not happened.
However, what confronts us today is an issue far bigger than any individual. At the centre of the allegations is a single issue. The fundamental problem is not tax avoidance by this individual or that company; those are symptoms of the disease. The fundamental issue is the corruption of democracy itself. At the core of our parliamentary system is the idea that those who levy taxes on the people are accountable to the people. If those who make decisions about our taxation system are believed to be avoiding paying their own taxes, that undermines the whole credibility of our system.
I am grateful to the shadow Chancellor. May I hark back to the point about Orders in Council? Was the shadow Chancellor surprised to learn that his friend and leader, the right hon. Member for Islington North (Jeremy Corbyn), once described the use of Orders in Council by the last Labour Government as “extremely undemocratic” and, in fact, “medieval? Does he think that the Leader of the Opposition is a johnny-come-lately on this issue?
I must press on. I will give way to the hon. Gentleman later, if that is okay.
The common understanding is also that those who live here and benefit from public services will make a proportionate contribution towards them. The level of taxation may vary—sometimes it is higher, sometimes lower—but because we have a shared sense of fairness, we expect those with the broadest shoulders to carry the greatest burden in taxes. Over the last 30 years, however, we have witnessed the growth of wealth inequality on such a scale that it has undermined that basic principle of democracy. Figures from Oxfam suggest that the richest 1% own more than the rest of the world combined.
Let me press on for a little while. I will return to the hon. Gentleman, I promise.
Great hoards of assets, in property and in financial wealth, have been built up. According to the best available measures, the levels of income inequality in Britain today are climbing as high as they were at the time of the first world war. The share of income going to the super-rich has risen almost inexorably for three decades. We are returning to the levels of inequality that were experienced before universal suffrage—before women had the vote, and before the development of universal free education and healthcare—in a world that existed before the gains of democracy brought obscene levels of wealth inequality under control, and created a more humane society for the majority.
Let me press on. I will come back to the hon. Gentleman.
The world of the Rockefellers and the robber barons is the one to which we are returning: a world in which there is immense, almost unimaginable wealth for a gilded elite, but insecurity for growing numbers. Much of that wealth is now held offshore in secretive, unaccountable tax havens. According to the most recent estimate, $21 trillion dollars, equivalent to a third of global GDP, is hidden from taxation systems in global tax havens. It is estimated that, if taxed fairly, that wealth would raise $188 billion a year in extra taxation.
This is not about a few families seeking to “minimise their tax bill”, as was claimed by the hon. Member for Gainsborough (Sir Edward Leigh). It is systematic. An offshore world is operating parallel to the world in which the rest of us live. This is not an accident. The offshore world is being constructed, piece by piece, by multinational corporations and the super-rich, aided by shady offshore operations such as Mossack Fonseca, and—we must be honest about this—supposedly reputable accountancy firms here in London are also playing their part. According to the Public Accounts Committee, PwC has aided tax avoidance “on an industrial scale”. Deloitte has advised big businesses on avoiding tax in African countries. Ernst and Young act as tax advisers to Facebook, Apple and Google, and just last month KPMG had one of its tax-avoidance schemes declared illegal by the High Court. Together, the big four accountancy firms in this country earn at least £2 billion annually from their tax operations.
But it is not just them. Banks headquartered and operating in London have been particularly proficient in directing their funds through Mossack Fonseca shell companies. HSBC and its affiliates created more offshore companies through Mossack Fonseca—over 2,300 in total—than any other bank. Coutts, a subsidiary of RBS, created over 500 offshore companies through its subsidiary in Jersey. Supposedly reputable companies are aiding and abetting the systematic abuse of our tax system.
We should be clear: the City of London is being viewed by many as a tax haven in the middle of a dense network of havens created for the super-rich to avoid the taxes the rest of us must pay.
It is not just a matter of tax, is it? It is not just a matter of income tax, either. Of course I recognise those figures, but distributional analysis has been undertaken independently of the Government. Conservative party policy since 2010 has seen some of the biggest losses for the poorest, not the wealthiest. The Women’s Budget Group put together the tax gains, the tax paid, the services cut and the benefit cuts. The poorest 10% will lose 21% of their income annually as a result of this Government’s policy—five times more than the top 10%. The analysis of the Institute for Fiscal Studies clearly shows that this year’s Budget hits the poorest 80% harder than the richest. Eighty per cent. of those cuts fall on whom? It is on women.
I am grateful to the hon. Gentleman for giving way—he is always generous with his time. As well as appreciating the fact that 1% of the highest-income earners pay 28%, would he consider that since 2010 this Government have taken millions out of tax altogether by increasing the tax allowance—it is now £11,500?
Let me deal with the tax threshold issue. The IFS has said that the biggest gains from the shift in the lower tax thresholds come for the higher earners. They are the ones who get the most and they benefit from the tax threshold moves. It describes the shifting of the tax thresholds as
“very much a giveaway to the better off”.
I gave way earlier to the hon. Gentleman. I will press on because I know that others want to speak and I am sure he will want to speak himself.
This is a world that the super-rich inhabit. They live by different rules and it is an alien world for the majority of the rest of us.
Does the hon. Gentleman agree that his party’s opposition to the removal of the family home from the income tax threshold affects those on the lowest incomes in London and the south-east because it will mean that only the wealthy can afford to stay in London when the family home is sold and they have to pay inheritance tax?
The hon. Lady makes an important point. We have supported the increase in tax thresholds to try to take people out of tax altogether, but the benefits overall have actually accrued to the highest earners rather than the lowest and we need a more sophisticated system than that. With regard to inheritance tax, the cut that was made this time around by the Government benefited the top 5% of the population. There must be a better way of ensuring that people can pass on their wealth to their children, rather than just benefiting the super-rich. We have to look at that again. I am happy to do that and meet her to discuss it.
I thank the hon. Gentleman for being extremely generous in giving way, but there are low-income families in London and the south-east whose home’s value has increased beyond recognition. They are now asset rich but income poor. How will the Labour party help them if it does not take them out of inheritance tax?
The important thing now, as my hon. Friend the Member for Bolsover (Mr Skinner) has said, is that we build more homes to house those people. That will be an effective way of reducing prices, too. That will give access to home ownership to thousands more in the capital.
Can we put this discussion on thresholds to bed once and for all? The people who are paying 28% income tax will get a small rise. Every one of us standing here will get a 10% pay rise next year and we will get a much bigger tax threshold rise than the ordinary men and women of this country. That is what they cannot understand. We and the super-rich are getting richer. They keep getting poorer. That is what this debate is about—it is about fairness.
We have to find a better way in our taxation system to benefit those at the lower end of the scale. At the moment, although we are happy with the rise in tax thresholds, there needs to be a way to compensate for that more equitably. Again, it is not us saying this; it is the IFS and many other independent assessors. They are saying that this is not the most effective way of redistributing wealth in this country.
May I go back to my speech? I do not want to try your patience, Mr Speaker.
It is an alien world for the majority of us. It is a world of offshore trusts and legal trickery that would put Byzantium to shame; a world in which it is perfectly normal to buy property in London through a company registered in the British Virgin Islands, managed by lawyers in Panama with offices in Bermuda; a world in which citizenship and attachment to a country are something to pick and to choose depending on price. The scandal of the “non-doms” continues, in which a few super-rich can pay a notional fee instead of the taxes that would otherwise be due from them as residents.
Tucked away in this year’s Budget was an extraordinary clause that wrote off selected non-doms’ entire capital gains tax bill on any gains made before April 2017—a giveaway to the wealthy. This is not the world that most of us live in. Most of us pay our taxes. Contrary to the shocking opinion of the right hon. Member for Rutland and Melton (Sir Alan Duncan), that is not because we live in a country of “low achievers”, as he described them. We do so because we understand that a decent society depends on the contributions all of us make. Without the payment of taxes, we cannot run the public services that are essential to a decent society.
Let me press on. I have given way to the hon. Gentleman once.
We do not have access to the specialist services that Mossack Fonseca and other companies provide. We cannot negotiate with HMRC when and how much to pay in tax. However, for the global elite, tax avoidance is as much a part of their world as the yachts and the mansions. This world is a corrosive influence on our democracy. The more the super-rich can escape the burden of taxation, the more it falls on the rest of us in society.
It is morally wrong that a billionaire oligarch should be paying proportionately less in taxes than the migrant cleaner of his mansion. It is a disgrace that an immense global corporation such as Google should pay no corporation tax for nearly a decade, while small businesses are chased for tiny amounts. It is an affront to the basic principles of our democracy that large corporations should be able to negotiate sweetheart deals with HMRC. [Interruption.] It is also a corrosion of democracy when a revolving door apparently exists between HMRC, charged with collecting taxes—[Interruption.]
Order. It is very unseemly when the shadow Chancellor is addressing the House for there to be a side exchange between a member of the Opposition Front-Bench team and the hon. Member for South Suffolk (James Cartlidge). He must not get into this bad habit. His father-in-law is a distinguished Member. He will tell him how to behave properly, and I will do so as well.
It is always best to keep the in-laws on-side, Mr Speaker.
It is a disgrace that an immense global corporation such as Google should pay no corporation tax for a decade, while small businesses are chased for tiny amounts. It is an affront to the basic principles of our democracy that large corporations should be able to negotiate sweetheart deals with HMRC. It is also a corrosion of democracy when a revolving door apparently exists between HMRC, which is charged with collecting taxes, and major accountancy firms whose business depends on minimising taxes. HMRC’s last director went to work for Deloitte, and now we find that the executive director appointed by HMRC to oversee its inquiry into the Panama leaks is a former adviser to tax havens who believes that tax is a form of “legalised extortion”. The structures of Government are being bent out of shape by tax avoidance. Decisions are warped around the need to protect the interests and wealth of the super-rich and of giant corporations. Democracy becomes corroded.
On party donations, the Conservatives receive more than half their election campaign funding from hedge funds. In public view, here in London, its party leadership has made loud and repeated noises about tax avoidance, yet its MEPs in Brussels have voted six times, on instructions from the Treasury, to block the EU-wide measures against tax avoidance. As we have heard in evidence this week, the Prime Minister lobbied the EU Commission in 2013 to remove offshore trusts from new tighter EU regulations on avoidance. The Conservatives’ own record reveals that people no longer trust them on this issue. Not only have they impeded efforts to clamp down on tax avoidance, but these schemes directly implicate senior figures in the Conservative party. Several Conservative party donors, three former Conservative MPs and six Members of the House of Lords are among those with connections to companies on the books of the offshore law firm Mossack Fonseca.
As the super-rich flee their obligations to society, the burden of taxation is pushed elsewhere. As I have said, independent assessments of the tax and benefit changes introduced since May 2015 show that the poorest 10% are forecast to see their incomes fall by more than 20% by 2020, with 80% of the burden falling on women. It is the poorest and those least able to carry the burden who will suffer the most under this Government. An economic system that allows tax avoidance on this scale is one in which the inventor and the entrepreneur come second to the owner of wealth, the worker comes second to the plutocrat and the taxpayer come second to the tax dodger. It is a system in which inherited wealth and privilege, rather than talent and effort, are rewarded.
There has been criticism of the last Labour Government, and I was not enamoured of all their economic policies, but they did take measures against avoidance. Their measures on corporation tax avoidance are forecast—not by me, but by the Financial Times—to raise 10 times as much revenue as the present Chancellor’s schemes.
The Panama leaks must act as a spur to decisive action. In response to the leaks, the Government have stepped up their rhetoric on tax evasion but much of what has been announced falls short of what is needed or repeats existing announcements. I remind Ministers that page 223 of the Office for Budget Responsibility report that accompanied this year’s Budget outlined a disclosure scheme for companies operating in Jersey, Guernsey and the Isle of Man. The report said that owing to HMRC’s consistent underfunding, it did not have the resources to follow up on the links of the scheme. I again offer some words of advice to those on the Government Front Bench: fewer press releases and more action. It is time to move on and to close down tax havens and clean up this muck of avoidance.
Let us take this step by step. We need an immediate and full public inquiry into the Panama leaks. The Government’s proposed taskforce will report to members of the Government, the Chancellor and the Home Secretary, who are members of a party funded by donors featured in the Panama papers. To have any credibility, the inquiry must be fully independent. We must shine a light on, and start to prise apart, the corrupt networks that operate through tax havens. Part of that will involve creating a proper register of MPs’ interests. Members of this House should not be able to hide behind spurious claims of privacy. We want HMRC to be properly resourced to chase down the tax avoiders, with a new specialist unit dedicated to the task. Foreign firms bidding for Government contracts here should be required to name their owners. Full, public, country-by-country reporting of earnings and ownership by companies and trusts is a necessity if fair amounts of taxation are to be charged.
The measures announced by the EU this week do not go nearly far enough, requiring only partial reporting by companies. The turnover threshold is far too high, and Labour MEPs in Europe will be pushing to get that figure reduced much more to make it more difficult for large corporations to dodge paying their fair share of tax. Banks need to reveal the beneficial ownership of companies and trusts they work with. That means creating a public register of ownership of companies and trusts, and not only of companies, as the Government are currently enforcing. The Prime Minister has a role to play in this, as it was he who lobbied for the exclusion of trusts from the proposed EU measures. Labour will work alongside leading tax experts to lead a review into publishing a public register of the trusts too often used to avoid paying tax and reduce transparency in our tax system.
We must ensure that Crown dependencies and overseas territories enforce far stricter minimum standards of transparency for company and trust ownership. The Government’s current programme for reform is being laughed at by the tax havens. As my right hon. Friend the Leader of the Opposition said today, it was only this week, after signing a new deal on beneficial ownership, that the Cayman Islands Premier Alden McLaughlin celebrated a victory over the UK, saying:
“This is what we wanted, this is what we have been pushing for three years”.
The truth is that the Government are playing into the hands of those who want to abuse the tax system.
Let me press on if I can.
We need serious action on enforcement. We need not central registers but, as Christian Aid and others are calling for, full public registers accessible to all, including journalists and other businesses, if we are going to curb the activities exposed in the Panama papers. This package of measures is Labour’s tax transparency and enforcement programme. We believe that it offers a sound basis to take the first necessary steps against avoidance and towards openness and transparency. We are presenting it today as we want to see immediate effective action.
This is a test of leadership. The leadership of the Conservative party could take this opportunity to correct the series of errors that it has made. It could join us today in taking effective steps towards dealing seriously with avoidance. People want to see the Conservatives take these steps. Otherwise, they will rightly stand accused of siding with the wrong people and of being the party of the tax avoiders. Incidentally, it was not long ago that the Chancellor of the Exchequer appeared on television to give advice on the “pretty clever financial products”, as he described them, that would allow the wealthy to dodge inheritance tax.
Don’t tempt me, Mr Speaker.
Some of the Conservative party’s Back Benchers believe that tax avoidance is a sign of success. The party’s donors are named in the Panama papers, and the Prime Minister himself is a direct beneficiary of a scheme set up in an offshore tax haven through his prior ownership of Blairmore Holdings shares.
The Panama leaks have presented a stark political choice. Do we continue to allow a system of corruption and avoidance, or do we now take the action necessary to restore fairness to our taxation system and to correct the abuse of democracy? That is the challenge, and the choice, ahead of us. I urge the Government and all Members of this House to join us in a serious programme of work to tackle the abuse of our tax system. The Government can make a start by supporting our motion today and adopting Labour’s tax transparency enforcement programme. I commend this motion to the House.
It is a great pleasure, for the second time this week, for the Government to be able to inform the House of how much more we have done than the previous Government to tackle evasion, avoidance and aggressive tax planning and to become a world leader in tax transparency. In 2010, we inherited a situation in which no one could find out who really owned a company in the UK or find out the details of a London property if it was owned by a foreign company. Not only were the international rules governing multinational companies out of date, allowing the tax base to be eroded and profits to be shifted, but there was no attempt to bring those rules up to date. Nor was there any sign that those matters were going to change. Loopholes, secrecy and concealment are the issues that we are sorting out, not only through what we are doing in the UK but through our firm and decisive action overseas.
Let me tell the hon. Gentleman precisely what I just said. In 2010, no one could find out who really owned a company in the United Kingdom. From June, we will be publishing a public register of beneficial ownership. What is more, HMRC could not find out who owned a company based in an overseas territory. As a consequence of the agreements we have reached this week, HMRC will be able to do exactly that. That is evidence of the progress that has been made under this Government, and that was not the case under the previous Government.
As my hon. Friend the Member for Hayes and Harlington (John McDonnell) pointed out, we have had lots of honeyed words from the Government about how they are going to deal with this matter. However, is that not belied by the fact that they appointed someone as the executive chair of HMRC who thinks that taxation is “legalised extortion”? Does that not demonstrate the attitude that exists in this Administration?
It is unfortunate that the hon. Gentleman seeks to smear a public servant who has served Governments of—[Interruption.] Let me make this point. This is someone who has served Governments of both colours and with whom I have worked extensively over six years. He has been and is determined to do everything he can to ensure that our tax laws are properly enforced and deal with avoidance and evasion. I suggest to anyone who throws around one line from an article written in 1999 that they look at the entire thing, because his argument is about properly addressing tax avoidance by ensuring that we get the law right. It is unfortunate when accusations are thrown around about dedicated, impartial public servants.
I pay tribute to my hon. Friend’s work over several years in dealing with some of these issues. Will he comment on the fact that this country now has the smallest gap on record between tax owed and tax paid? That is the real story about this Government’s efficiency in dealing with tax collection and the difficulties in the system.
My hon. Friend is right. The reality is that the tax gap, as a percentage of tax revenues, has fallen considerably over the past six years, which is testimony to the effort put in by not only this Government but HMRC. Bringing the tax gap down involves considerable challenges, such as tax evasion, tax avoidance, and inadvertent error on the part of taxpayers, which does happen from time to time as I am sure all hon. Members will recognise. We are determined to do what we can do improve and strengthen our systems. I am grateful for the opportunity today to make progress on that.
Will the Minister emphasise the point about the tax gap? One of the most relevant measures is the tax gap specifically for those paying corporation tax. It was rising when the coalition Government came to power in 2010 and has fallen by almost 50% over the past six years, which is a major achievement.
I will give way to the hon. Gentleman, but I stand by the point that he has sought, not for the first time, to attack an impartial, dedicated public servant, who cannot answer back, by selectively quoting an article written in 1999. I have set out to the House the context in which that article was written. It is clear that this is someone who believes that the law should be properly enforced and who has a record over many years of doing precisely that.
I am grateful to the hon. Gentleman, but he accused me of smearing this individual when I was actually quoting him word for word. He went on to say that tax is legitimised
“only to the extent of the law.”
If the bar is set too low, fewer people will pay tax and more will be able to avoid it. My point—I stick by it—is that this Government’s attitude towards tax avoidance is lax and their words are more honeyed than their actions.
This is a Government that closes loopholes year in, year out, whose actions led to the OECD work on base erosion and profit shifting, that have given more powers to HMRC, that have seen a significant fall in the tax gap, particularly in the context of avoidance, and that have a proud record on dealing with tax avoidance, tax evasion and with all abuses in the tax system.
I thank the Financial Secretary for giving way. He referred to the Government’s record, but that record also includes changes to the controlled foreign companies rules, which in effect cost Exchequers here and, more importantly, in developing countries.