House of Commons
Tuesday 14 November 2017
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
NHS Trusts: Subsidiary Companies
Local NHS organisations are responsible for deciding the most appropriate structures they need to deliver services to their patients within available resources. Commissioners and regulators are responsible for ensuring that NHS providers act in the best interests of patients and taxpayers. A theme of the 2015 review of performance variability across NHS hospitals, undertaken by the noble Lord Carter of Coles, sought to drive efficiency through sharing administrative functions across NHS bodies in an area. A number of trusts are creating the right structures to do so. NHS Improvement is aware of 39 subsidiaries consolidated within the accounts of foundation trusts as of 31 March 2017.
Does the Minister share my concern that NHS trusts in Yorkshire are now lining up to follow the example of Airedale NHS Foundation Trust, which recently, behind closed doors and as part of a VAT scam, set up a subsidiary company to run many of its activities, which will not only cost the Treasury in lost tax receipts, but mean that new staff, such as hospital porters, will no longer be on NHS terms and conditions?
I can reassure the hon. Gentleman that we have no interest in allowing NHS trusts to avoid their tax responsibilities. Guidance was sent to all trusts in September to ensure that any TUPE transfers of staff would remain subject to NHS pension rules and should not be done for tax avoidance purposes.
What role does the Minister see for the private and voluntary sectors in the provision of NHS services and delivery in the future?
There has been a continuing involvement of private provision of health services since the very origins of the NHS, when GP partnerships came in, as private businesses, to provide their services. Of course, competitive tendering was introduced to NHS contracts by the last Labour Government, and the rate of private provision under that Government grew faster than it has under this Government. According to the last figures, 7.7% of services were provided by the independent sector.
Where a foundation trust or other NHS provider sets up a wholly owned subsidiary within the public sector, would the Minister expect to see all those papers in the public domain?
As I said to the hon. Member for Keighley (John Grogan), the trust, which would consolidate subsidiaries in its accounts, would publish the accounts of subsidiaries as part of its consolidated accounts each year.
On Sunday, the Secretary of State said that
“good public services are the moral purpose of a strong capitalist economy”,
yet trusts are so strapped for cash that they are creating private companies to get around VAT laws. Not only does this take money away from the Exchequer, meaning that other parts of the NHS are effectively subsidising these trusts, but it also removes vital protections for staff, who will find that they no longer work for our national health service. Be in no doubt: this is another step down the road of privatisation. Will the Minister set out, therefore, what protections are in place to prevent any of these companies from being sold off in the future to the highest bidder?
I am afraid that the hon. Gentleman, for whom I have considerable respect, is trying, yet again, the tired old approach of weaponising the NHS by alleging privatisation—seeing privatisation fairies where there are not any. This is about responding to the review of Lord Carter—one of his hon. Friends in the other place, I remind him—of driving efficiency through the NHS, which I know he supports, and about finding the right structures to allow, for example, the back offices of different NHS bodies in an area to be combined. That requires a structure, and a number of foundation trusts are setting up subsidiaries to provide those services to each other.
Shortage of Doctors: Medical Provision
The NHS needs more doctors, which is why last year we announced one of the biggest-ever increases—a 25% increase—in the number of medical school places. Some 500 additional students will start next year and a further 1,000 the year after.
I am pleased to hear that the Department is working on addressing these issues, but can we also look closely at other difficulties specifically facing rural areas? Local patient transport is certainly one of these. With rural bus links thin on the ground and struggling, will the Secretary of State assure us that adequate provision will be made to ensure that patients can always access the services they need?
My hon. Friend is right to raise the question. I visited a GP surgery in Thornbury, in his neighbouring county, on Friday and discussed some of these issues. The NHS has an obligation to make sure that people can access its services, and in certain circumstances people are entitled to funding to help them do that. I thank him for raising the issue, however, and know that he will continue to fight hard on it.
All four witnesses who gave evidence to the Health Committee inquiry into the current workforce crisis last week described the current situation as “unprecedented”. Janet Davies, the head of the Royal College of Nursing, said that if Brexit happened, it would be devastating. Does the Secretary of State accept that if there is no deal next month on the rights of EU nationals, the current stream of EU workers leaving our NHS and social care system will become a flood?
With respect, I do not think it helps to reassure the brilliant NHS professionals from the EU who are working in the system when the right hon. Gentleman asks questions like that. The reality is that those people are staying in the NHS, and I take every opportunity to ensure that they feel welcome. I try to stress how important they are, and how the NHS would fall over without them. The Government continue to make every possible effort to secure a deal for their future, which we are very confident that we will achieve.
Grantham accident and emergency department is very important to my constituents and those of my neighbour, my hon. Friend the Member for Grantham and Stamford (Nick Boles). It is also very important to me, as it saved my husband’s life on two occasions. Last August it was closed overnight because there were not enough doctors to staff it safely. There are enough doctors now, but unfortunately NHS Improvement has interfered to stop its reopening, postponing it by at least a month. Does the Secretary of State agree that it should be reopened in December?
I think I have said to my hon. Friend in the House, and I have certainly said to my hon. Friend the Member for Grantham and Stamford (Nick Boles)—who I am delighted to see back in the Chamber after an incredibly brave battle against cancer—that this was a temporary closure based on difficulties in recruiting doctors, so I will certainly look into the issue very carefully.
Last winter, patients were languishing on trolleys in A&E for up to 12 hours. The Red Cross was called in, and people were leaving A&E before their treatment. Does the Secretary of State recognise that it would be absolutely unacceptable for that to happen again this winter? What steps is he taking to ensure that it will not?
With respect, the Red Cross was not called in. As the hon. Lady well knows—as a doctor working at Tooting hospital—NHS trusts contract with the Red Cross throughout the year. However, she is right to say that what happened last year was not acceptable. We have done a huge amount: perhaps most important is our provision of an extra £1 billion for this year’s social care budget and a further £1 billion for next year’s budget, because that is where particular pressures were, but we have also allocated £100 million to a capital fund to help A&E departments to improve their facilities.
A shortage of nurses has led to the closure of the in-patient ward at Shepton Mallet Community Hospital this winter. What have the Government done to increase the number of nurses available in rural areas such as Somerset, and to encourage the Somerset clinical commissioning group to recommit itself to the hospital’s future as a matter of urgency?
I congratulate my hon. Friend on the close interest that he takes in his local community hospital, which matters so much not just to his constituents but to the NHS, because many people are discharged to it from busy district general hospitals. As he says, there has been a shortage of nurses. That is why we have decided to increase the number of training places by 25%, which is the biggest increase in the history of the NHS.
Would the Secretary of State consider introducing a bursary-type scheme whereby young doctors’ student debt would be wiped out after they had spent five years in general practice in areas with a shortage of doctors?
We have introduced something similar. In areas where it has been difficult to recruit GP trainees for three years or more, we have provided a £20,000 salary supplement to attract people to those areas. It has been very successful, and we have extended it to 200 places this year.
High Weald Lewes Havens clinical commissioning group has undertaken a consultation on closing Rotherfield surgery, which is in my constituency, against the wishes of the community and local councillors. Does my right hon. Friend agree that CCGs have responsibilities and liabilities when it comes to supporting rural practices, and that they should do all that they can to recruit GPs in rural areas?
I do agree. I also know that, although areas such as Wealden are beautiful places in which to live, it is sometimes very difficult to recruit people to become, in particular, new partners in general practices in such areas. We are concerned about that. Nationally, we have a plan to recruit 5,000 more GPs by 2020-21, but we need to ensure that they go to rural areas such as that represented by my hon. Friend.
The Secretary of State will know that there are huge numbers of vacancies across the NHS, particularly in nursing, partly driven by pay restraint. He has said that the pay cap will be scrapped, so does he agree with Simon Stevens, who said that it would be an “own goal” not to fully fund the scrapping of that pay cap in the Budget next week and to expect it to be paid for by productivity gains?
I have been clear about this: the Government are willing to be flexible in terms of funding additional pay beyond the 1% for nurses, but we want some important reforms to the contracts that they operate under. If those negotiations go well—at the moment we have been having very constructive discussions with the Royal College of Nursing—I am hopeful that we can get a deal that everyone will be happy with.
So the Secretary of State does not agree with Simon Stevens. May I ask him about Simon Stevens’s comments last week? He warned that if the underfunding continues, waiting lists will rise from 4 million to 5 million, cancer care will deteriorate, the mental health pledges the Secretary of State has committed to will not be met, and the 18-week target will be permanently abandoned. And is it not the case that if in next week’s Budget the Chancellor does not allocate at least an extra £6 billion a year for the NHS, the right hon. Gentleman will have failed in his responsibility as Secretary of State?
What Simon Stevens noticed, and we all noticed, was that when he came with this plan in 2014 Labour refused to back it, and in the 2015 election they refused to fund it—to the tune of the £5.5 billion more that the Conservatives were prepared to put in, but the hon. Gentleman’s party refused to put in. He is quoting Simon Stevens, who also said that when the British economy sneezes, the NHS catches a cold—it will be far worse than a cold for the NHS if we have Labour’s run on the pound.
GPs: Patient Access
This Government have changed policy so that all NHS patients will be able to book routine GP appointments in the evening and at weekends. That is very important both for NHS patients and to relieve pressure on A&E departments.
In September, Jubilee surgery, Whiteley surgery, Stubbington medical practice and Highlands practice launched a same-day access scheme in Fareham, based at Fareham Community Hospital, which had the honour of welcoming the Secretary of State on a visit last year. It is commission-led and supported by Fareham Community Hospital taskforce. Will my right hon. Friend join me in congratulating the GPs—including Dr Tom Bertram, who has taken the lead on this scheme—and Fareham and Gosport clinical commissioning group, and explain how patients will be able to access a GP in Fareham?
I was honoured to meet them, and Richard Samuel and his team have done a fantastic job in transforming services in a way that reduces pressure on local hospitals, but also improves services for local people. There was a real buzz there. I also note that neighbouring Gosport has made changes that have improved patient satisfaction to 90%, with 60% of issues being dealt with on the same day. So some really exciting things are happening.
Warrington has fewer full time-equivalent GPs than in 2010, despite the growth in its population, and many GPs are now quitting the service because of the pressures. What is the Secretary of State going to do not only to attract more people into the GP service, but to keep those who are already there?
Those are important questions. I had an excellent visit to Warrington hospital towards the end of the summer, and saw some fantastic work there, particularly on sepsis prevention. The hon. Lady is right: the issues are, first, about getting more medical school graduates to go into general practice—this year we think we will get 3,019 medical school graduates to go into general practice, which is a record as the number has never been that high; and this is also about retention and looking at some of the things that frustrate GPs. One of them is the costs of indemnity, their insurance policy, so we have announced that we will move to a national scheme to help control those costs.
One village medical practice in my constituency, in Slaidburn, was under threat a few years ago, but fortunately it was saved. It does tremendous service to the local community. If it was not there, the elderly patients would have to travel over 40 minutes to Clitheroe, and there is no capacity to take any extra people there. Will the Secretary of State ensure that practices like Slaidburn have a future?
It is essential in very rural constituencies such as my hon. Friend’s that we continue to have active GP surgeries; I notice that they sometimes give the best care in the whole NHS, because they know patients and their families and there is continuity of care. They are incredibly important for the local community, so I congratulate my hon. Friend on what he did to save that practice.
Is it right that constituents in Stroud now have to wait weeks to get an ordinary appointment with their GP? The sustainability and transformation partnerships are now saying that there is going to be an acute shortage of GPs. What is the Secretary of State going to do about it?
No one should have to wait weeks for a GP appointment in Stroud or anywhere else. We have a lack of capacity in general practice, which is why we decided to embark on a plan to get 5,000 more doctors working in general practice. That is one of the biggest ever increases in the capacity of general practice. I am afraid that it will take time to feed its way through the system, but we are confident that we will deliver it.
It is me again, Mr Speaker. Every week, we have four claims against the NHS relating to brain-injured babies, and there is still far too much avoidable harm and avoidable death when it comes to our maternity services. That is why I launched an ambition in 2014 to halve the amount of neonatal death, neonatal injury, maternal death and stillbirths.
The Secretary of State has rightly focused on the importance of reducing infant mortality. The police are investigating the unusually high number of baby deaths at the Countess of Chester Hospital. Will he update my constituents on the progress of that investigation and on the measures being taken to ensure safety at the Countess of Chester, which serves the northern part of my constituency?
First, I should like to thank my hon. Friend for her campaigning on maternity safety, which has engendered huge respect on both sides of the House. She will obviously understand that I cannot comment on that particular police investigation. None the less, immediately after the issues surfaced, safety measures were taken so that the hospital does not now provide care for babies born before 32 weeks, and it is implementing 24 recommendations from the Royal College of Paediatrics and Child Health.
The shortfall in midwives and the financial crisis in the NHS are threatening the “safety, quality and sustainability” of midwifery services. Those are the words of the Royal College of Midwives. How will the Secretary of State restore the confidence of the RCM and the other professional bodies?
The hon. Gentleman is right to say that we need more midwives. We have 6,000 midwives in training, and we have 2,000 more midwives than we had in 2010. It is also important to recognise the progress that is being made. Stillbirth rates were down 14% between 2010 and 2015, and neonatal death rates are down 10%, so there is some really important progress happening.
Will my right hon. Friend join me in congratulating my constituents in Group B Strep Support, and the Royal College of Obstetricians and Gynaecologists, on the September update to the green-top clinical guidelines on group B strep infection, which I am sure he will agree are a significant step forward in preventing that wicked and wholly unnecessary neonatal infection?
I am happy to offer my congratulations, because that is an incredibly important area. We have done really well on clostridium difficile and MRSA infections, but the rates of other infections such as group B strep and E. coli are higher than they need to be. In fact, I am speaking at a conference on infection prevention and control this afternoon.
Only 57% of maternity units in England have UNICEF baby-friendly accreditation, compared with 100% in Scotland and Northern Ireland and 79% in Wales. What plans does the Secretary of State have to increase UNICEF baby-friendly accreditation to all maternity units?
Despite the rivalry that sometimes happens between our nations, I actually have a lot of respect for some of the patient safety initiatives in Scotland, and we will certainly look at this. However, we have what we think is the most ambitious plan to improve maternity safety not just in the UK but in Europe. This is one of those areas that the two countries should work together on.
Mental Health Workforce
This is the very last one from me, Mr Speaker. We have one of the most ambitious plans in Europe to expand mental health provision. That means that we need to recruit an extra 21,000 posts over the next three years, and plans are in place to do that.
I thank the Secretary of State for his encouraging answer, but what does that mean specifically for mental health provision and funding in the London Borough of Croydon?
My hon. Friend is right to challenge me on that, because we are asking all clinical commissioning groups to increase their funding for mental health in real terms year in, year out. Some 85% of CCGs are doing that, and an extra half a billion pounds reached the frontline of mental health last year. Regrettably, Croydon is not part of that 85%, so I will take his question away and find out exactly what is happening.
How does the Secretary of State expect to achieve the plans to increase the mental health workforce when only last week the head of NHS England, Simon Stevens, said:
“On the current funding outlook, it is going to be increasingly hard to expand mental health services”?
It has been challenging to expand mental health services over the past seven years due to the financial pressure on the NHS, but we have succeeded. We have 4,300 more people working in mental health trusts and £1.4 billion more is being spent on mental health than three years ago. We have a plan—it is a good one—and we are going to ensure that it happens.
I am sure that the Secretary of State will welcome the fact that cancer survival rates are at a record high, but will he explain how the Government are going to fund the latest technology, so that we can continue to stay ahead of this terrible disease?
I am grateful for my hon. Friend’s question. As he knows, 150 more people are starting cancer treatment every single day compared with 2010, which is why there are 7,000 people alive today who would not have been if we had the cancer survival rates of five years ago. However, we are still behind western European averages, and we want to do something about that. A big investment in capital equipment for cancer is therefore something that we are prioritising.
Constituents in York who have experienced sexual trauma have no clinical pathway to address their psychological support. Will the Secretary of State therefore take action to ensure that we have a national framework to support women in particular, but also the staff who provide that service?
Such issues are much in people’s minds at the moment, and the hon. Lady makes an important point, so I will take that away with me and come back to her with some thoughts once I have looked into it carefully.
Further to the Secretary of State’s response to the question of my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), I feel that the Secretary of State is not being clear with the House. Will the extra money that Simon Stevens asked for be in the Budget or not?
I am afraid that the hon. Lady will have to wait until the Chancellor delivers his Budget. There are huge financial pressures on the NHS. We inherited a financial recession but, if she looks at this Government’s record she will see that, unlike her party, we refused to cut spending on the NHS; we are now increasing it.
Me now, Mr Speaker. Improving care for people with lung disease is crucial to this Government. We do not need reams of new plans or strategies, but continued action to implement existing plans, including the NHS outcomes framework, which details NHS priority areas and includes reducing deaths from respiratory disease as a key indicator. Key initiatives include the implementation of quality standards on idiopathic pulmonary fibrosis, asthma and chronic obstructive pulmonary disease, and a national pilot to improve care of breathlessness.
I thank the Minister for that answer, but I think that more probably still needs to be done. Last month, I launched the British Lung Foundation’s latest report into idiopathic pulmonary fibrosis. Delayed access to diagnosis, support services and care is still commonplace for people with IPF and other lung conditions. Will the Minister agree to meet me and the British Lung Foundation, which is leading a taskforce for lung health, to establish what more can be done to address the issue?
I thank my hon. Friend, who speaks with great passion—I know that she has tragic personal experience. I will be meeting the British Lung Foundation shortly, and I am happy for my hon. Friend to join that discussion or part of it. As I said, one of the NHS’s priority areas, as set out in the outcomes framework, is reducing early deaths from respiratory diseases such as IPF. I understand that the number of cases has risen in recent years, which is rightly a cause for concern. She is right to raise the matter, and I look forward to meeting her.
I have long been a supporter of COPD groups in my constituency in Northern Ireland, but what help is the Minister offering to voluntary groups and families? In particular, what is he offering to the tens of thousands of young children diagnosed as asthmatic to help and assist with their condition?
Respiratory illness affects one in five people in the UK, and it is responsible for around 1 million hospital admissions annually, so it is very much in our interest, as I said to my hon. Friend the Member for Erewash (Maggie Throup), to implement the outcomes framework. I look forward to having further discussions with the hon. Member for East Londonderry (Mr Campbell), and I am happy to meet him if he wishes.
Does the Minister, who cares deeply about these issues, share my concern that lung capacity often never recovers after being damaged in childhood? Is not that a powerful reason why we need to make significant progress on air quality issues?
Absolutely. I have just returned from a meeting of G7 Health Ministers, and one of the subjects under discussion was environmental factors in climate change and its impact on human health. We had challenging discussions on many areas, but air quality and its impact on respiratory disease was not one of them.
I gather the meeting was in Rome. Is that correct?
It is always useful to have a bit of additional information, for which the House is grateful.
Under this Government we have seen lung disease admissions to A&E rise at double the rate of general admissions. That is even more concerning when the bulk of lung disease admissions happen over the winter months, when A&E departments are already under significant pressure. Will the Minister commit today to introducing a lung disease strategy to ensure that we can reverse these worrying trends and this pressure on people’s lives and on our NHS?
The meeting was in Milan, Mr Speaker, but we do not mention football in relation to Italy or Milan any more. I hear it is a touchy subject. [Interruption.] Very topical.
There is no plan for a new national strategy or taskforce, but we work closely with charities like the British Lung Foundation. We have to remain committed to implementing the NHS outcomes framework for 2016-17. As the Secretary of State said, we are better prepared for winter than we have been before, and the hon. Member for Washington and Sunderland West (Mrs Hodgson) is right to raise that point.
Leaving the EU: Health and Social Care
We are fully engaged with the highest level of Government work on Brexit. My right hon. Friend the Secretary of State is a member of the Cabinet Committee on Brexit, and he is engaged on all areas where Brexit may impact the health and social care sector. We are actively considering the Brexit implications for the UK on workforce, medicine and equipment regulation, reciprocal healthcare, life sciences, public health, research, trade and data.[Official Report, 21 November 2017, Vol. 631, c. 5MC .]
Is the Minister aware of the latest figures released this month by the Nursing & Midwifery Council? The figures confirm a clear trend: an 11% increase in the number of UK-trained nurses and midwives leaving the register, alongside an 89% drop in those coming to work in the UK from Europe. Does the Minister agree with the chief executive of the Royal College of Nursing that
“These dramatic figures should set alarm bells ringing in Whitehall and every UK health department”?
It is the case that we have been reliant for much of the increase in clinicians in this country on doctors and nurses coming from the EU, so a reduction in that increase is something we are watching carefully. I gently say to the hon. Gentleman that the last figures we have show that, as of the end of June, there were 3,193 more clinicians working in the NHS in England than there were in June 2016.[Official Report, 21 November 2017, Vol. 631, c. 6MC.]
Brexit may well result in a loss of both rights and funding for people with disabilities, so when will this Government release their full impact assessment of the medical and social care sector?
The hon. Gentleman is looking for answers about social care. The Under-Secretary of State for Health, my hon. Friend the Member for Thurrock (Jackie Doyle-Price), who has responsibility for social care, has made it clear that a paper will be published in due course. I am afraid that the hon. Gentleman will just have to be a bit more patient.
Earlier, my right hon. Friend the Secretary of State made a welcome statement about the contribution of EU citizens to the health and social care sector. Will the Minister kindly advise us on what is being done at a trust level to support overseas workers, both from the EU and elsewhere, to ensure that they feel welcome and are encouraged to stay here as long as possible?
I am grateful to my hon. Friend for giving me the opportunity to reaffirm the commitment of the NHS, from the centre through to every organisation for which EU citizens are working, that these people are welcome here. My right hon. Friend the Secretary of State for Exiting the European Union yesterday made it very clear that we are looking to have a simple, straightforward and cheap means for those who are here at the point of departure to be able to register to stay here. We want to encourage all those who are working for our NHS, wherever they come from, to continue doing so.
During his visit to the hospital in April, the Minister will have seen that Kettering General has a long and proud record of recruiting medical staff from outside the EU, and in numbers. Is it not the case that the NHS has always recruited from outside the EU and will continue to do so after Brexit?
My hon. Friend is right to say that there has been a long-standing tradition of this country welcoming professionals from outside, through various waves of migration that go back several decades. It is important to point out to him that the Secretary of State announced a year ago a 25% increase in the number of doctors in training in this country and earlier this autumn a 25% increase in the number of nurses to be trained in this country, so that we become less reliant on overseas clinicians at a time of a shortage of some 2 million worldwide.
Being a member of the European Medicines Agency has allowed UK patients early access to new drugs, and it also plays a crucial role in quality control and safety monitoring, so what solution has the Department come up with to ensure not only timely access to new drugs after Brexit, but that any complications are spotted early?
As I indicated in response to the hon. Member for Glasgow South West (Chris Stephens), finding an appropriate relationship with the EMA post-Brexit is one of the core strands of work the Department is doing. As the hon. Lady will be aware, next Monday the other EU nations will vote to decide which country will host the new EMA. It is our intent, as we have made clear to the EU negotiators, to seek mutual recognition.
With the World Trade Organisation not having updated its drug list since 2010, all new drugs developed in the past seven years could incur tariffs. What contingency plans have been made to avoid shortages and increased costs in the event of a no-deal Brexit?
As the hon. Lady will be aware, we are looking for a relationship with the EU to ensure that we have tariff-free access to the single market, including for drugs and medicines, because the life sciences industry is such a critical element of our economy. Contingency plans are being put in place for a no deal. She will have to wait, as will the rest of us, to see whether or not that eventuality happens. Of course we do not want it to occur—it is not our intent.
Adult smoking prevalence is now 15.5%, the lowest ever. As the House will be aware, in July we published a tobacco control plan for England, which sets out stretching ambitions to reduce smoking prevalence still further and commits us to a series of actions to deliver those ambitions. Our end goal, as we have made clear, is a smoke-free generation.
I thank my hon. Friend for that answer. Does he agree that one of the most effective ways of helping people to give up smoking is the provision of smoking cessation services? In Harrow, the local unit managed to help 4,000 people attempt to give up smoking, with more than 50% doing so, but the answer from the local council has been to close the unit—that is very ineffective. Will he take action to make sure that this does not happen across the country?
My hon. Friend is right to raise the issue. Local authorities, not Ministers in Whitehall, are best placed to take local spending decisions, but they must be accountable for their decisions. That is why we publish information at local authority level on smoking prevalence and quit numbers, so that local decision makers can be held to account. We also offer them expert support from Public Health England. I have a strong feeling that he will continue to hold those in Harrow to account.
What a fine role model the hon. Gentleman is.
What an offer, Mr Speaker! Sustainability and transformation partnerships in all areas are to draw up local plans across one NHS area, including on the public health prevention agenda. I suggest that the hon. Gentleman volunteers his services to his local STP; I suspect it will take his hand off.
Innovative Treatments and Technologies
On 3 November, we published our response to the accelerated access review. We set out plans to give patients quicker access to life-changing treatments and to make the UK the best place in the world for industry to invest and innovate. We are delighted that Sir Andrew Witty will chair the group overseeing the accelerated access pathway, which will fast-track around five breakthrough products each year and support adoption and uptake of innovation across the NHS.
The technologies used at the neonatal unit at Aberdeen Royal Infirmary are now considered essential by my constituents in Gordon. The unit serves 500,000 people who live within 90 minutes of Aberdeen. What assessment has the Minister made of the importance of proximity of medical innovations to regional communities?
I am pleased to hear that from my hon. Friend. It is good to know that we are on track to achieve our ambition to reduce the rates of stillbirth, neonatal and maternal deaths and perinatal brain injuries by 20% by 2020. Innovations such as those in Aberdeen have contributed to that work. It is important that our regional communities have access to specialist care of the kind my hon. Friend describes, and we hope to deliver more through the accelerated access pathway.
Is the Minister aware that more than 60% of health innovation research funding goes to the “golden triangle” and less than 13% goes to the north? Given that Manchester and the north-west have a life-sciences hub and that the devolution of health provides great opportunities, is it not about time we got our fair share to ensure that we can close the gap in some health outcomes?
I cannot disagree with the hon. Lady’s point. One reason why we set up the accelerated access review and pathway was to make sure that we invest where innovation is taking place. There is no reason why Manchester cannot be a part of that.
I call David “Top Cat” Davies.
My hon. Friend makes a serious point. Health is a devolved matter in Wales. The NHS in England has strict guidelines on the prescription of puberty-blocking and cross-sex hormones for youngsters. Such treatments may be prescribed only with the agreement of a specialist multidisciplinary team and after a very careful assessment of the individual. We keep a watching eye on these matters.
Oh, a Liberal Democrat competition. I call Jo Swinson.
Thank you, Mr Speaker.
A strong UK pharmaceuticals industry is important for ensuring that the NHS can access innovative treatments, but there is uncertainty over whether UK-qualified persons who certify medical products and devices as safe will be able to continue to do so for European countries post-Brexit. This is unwelcome, and risks countries choosing to relocate outside the UK. When will there be clarity about the future European relationships for medical device approval?
I can confirm to the hon. Lady that we have offered mutual recognition. She is right to raise this important subject because it is obviously vital that we maintain safety throughout the NHS, and access to pharmaceuticals is part of that.
Musculoskeletal Services: Greenwich
Ministers have held no such discussions. The procurement of local health services by means of competitive tendering is a matter for the local clinical commissioning group, rather than for Ministers. Greenwich clinical commissioning group is an independent statutory organisation and is responsible for commissioning services for local people in order to ensure the best possible clinical outcomes at the best value to the taxpayers, who are the hon. Gentleman’s constituents.
That is an incredibly complacent response. The cost of the contract, which was allocated to a private provider, has gone up by 14% in six months. It claimed at the Greenwich Overview and Scrutiny Committee that that was due to a 14% increase in the tariff costs of health services, but my local health care trust says that that is about 0.6%. How does the Minister explain that increase and why is the Department not looking into these private companies, which are literally naming their price once they have won the contract?
It is not a complacent answer; it is a factual one. That is an important point to make. The Circle contract has been uplifted by approximately £10 million because of the increases in tariff costs, as the hon. Gentleman rightly says. That increase would have been applied to any provider, not just Circle. I am sorry that he does not support the new MS services across his constituency. My understanding is that, previously, those services were delivered by a number of different providers, with a wide variation in clinical outcomes for his constituents, in costs of care and in-patient experience. This is a step forward.
Contaminated Blood Inquiry
After the Prime Minister announced an independent inquiry into infected blood, the Department of Health consulted on the form of that inquiry. The Cabinet Office updated the House on 3 November, stating that it would be a statutory inquiry under the Inquiries Act 2005, and that the Cabinet Office would be the sponsoring Department. The NHS Business Services Authority started administering the new English infected blood payments support scheme on 1 November.
From April next year, those affected by contaminated blood, including Michael in my constituency of Weaver Vale, could face considerable cuts in their discretionary support as the whole matter is currently under review by the Business Services Authority. Will the Minister give a clear-cut guarantee that absolutely nobody will be left worse off as part of that review?
I can absolutely give the hon. Gentleman that assurance, and that will form part of my statement on the response to the consultation, which we announced earlier. Those discretionary payments will be maintained.
The Minister will be aware that the integrity of blood products is underpinned by a common European agreement on standards. Can she reassure the House that she has spoken to other Ministers across Europe to ensure that, whether or not there is a deal, those standards will be fully maintained subsequent to Brexit?
I can confirm that that is very much part of our current discussions. In truth, those common standards are shared across Europe in any case, and we will continue to abide by them.
This is an incredibly sensitive subject. The report of the expert working group on hormone pregnancy tests will be published tomorrow. There will be a written ministerial statement with a copy of the report. This follows a rigorous review of all the available data on this subject by a panel with expertise in the relevant fields of science and healthcare.
I welcome the Minister’s statement, although there are some questions about the opaqueness of the inquiry and many other concerns. The lives of my constituents Wilma and Kirsteen Ord and many others have been blighted by the hormone pregnancy drug Primodos. Will he appear in front of the Health Committee, look at the way in which that inquiry was conducted and consider a public inquiry into Primodos so that the families can get truth and justice about how they have been affected by this drug?
I thank the hon. Lady for her question. I am open to offers from any Select Committee. It would be premature to consider issues of liability before considering the strength of the evidence and seeing the report, which we will study carefully. The report will conclude whether there is a causal association between the use of HPDs such as Primodos and adverse outcomes of pregnancy. We look forward to seeing its outcomes and its recommendations.
Sustainability and Transformation Partnerships
There is no fixed timetable for sustainability and transformation partnerships to become accountable care systems. Evolution from an STP into one or more ACSs is dependent on an STP demonstrating that it is working in a locally integrated health system. Both commissioners and providers, in partnership with local authorities, will need to choose to assume collective responsibility for resource and public health, and the criteria for that were set out in NHS England’s next steps in the “Five Year Forward View”.
Last week, NHS doctors took out a judicial review against the Secretary of State’s plans to use secondary legislation to enable private companies to run big parts of the accountable care organisations. I think the Government understand that doctors, nurses, patients and the public want an NHS that is run for the public by the public using public funds. Ultimately, will the Minister ensure that we have time in this place for Members to discuss and scrutinise the ACOs, because they are a drastic change to our NHS?
I can honestly say that the best thing the hon. Gentleman can do to understand what STPs are really all about is talk to the recently appointed chair of the Norfolk and Waveney STP, which covers his local area. He will find that the former Labour Secretary of State, Patricia Hewitt, can give him very good advice.
Dental Health Services
NHS England has a duty to commission primary care dental services to meet local need, including for the most deprived groups. Nationally, access continues to grow with 1.9 million more patients seen between 2010 and 2016. The Starting Well programme, of which I am sure the hon. Lady is aware, will work to improve the oral health of children under the age of five in 13 high- needs areas. The dental contract reform programme is also working to improve access and oral health.
Seven people per day in my constituency are going into A&E because of toothache, and the poorest among us are twice as likely to be hospitalised for dental care. Yet there is no mention of dental care in the “Five Year Forward View”, and funding has fallen by 15% since 2010. Why is the Minister leaving my constituents in pain and overburdening A&E by neglecting dental care?
I am interested to hear the hon. Lady say that, because the January to March 2017 GP patient survey results, which were published in July, show that 97% of those trying to get an NHS dental appointment in the Newcastle Gateshead clinical commissioning group area were successful, compared with the 95% England average.
As well as congratulating the Minister for Public Health on being an excellent ambassador for the United Kingdom at the G7 health summit in Milan, I congratulate Colchester Hospital University NHS Foundation Trust on exiting special measures. It is the 21st trust to do so and was in special measures for longer than any other trust. The fact that it got a good rating for compassion, for the effectiveness of its care and for its leadership is a huge tribute to the hard work of staff.
Back in July, Ministers said that the goal was to ensure that patient access to innovative medicine is well protected
“through the strongest regulatory framework and sharing of data.”
Therefore, will the Secretary of State confirm that the UK will definitely be signing up to the new clinical trials regulation system, so that pharmaceutical companies do not have to move trials overseas?
That is absolutely our intention. We have signalled to the EU and to European countries that we want the closest possible relationship post-Brexit. We have made that big and generous offer, and we hope that they accept it.
Sustainability and transformation plan footprints were determined as a result of discussions between local areas, NHS England and NHS Improvement. They reflect a number of factors including patient flow, the location of different organisations in the local health economy and natural geographies. We stated in the next steps of the “Five Year Forward View” that adjusting STP boundaries is open to discussions between us and NHS England when that is collectively requested by local organisations, and we mean that.
Last month, Lloyds announced the closure of 190 community pharmacies. The company’s managing director was very clear that this action was a result of recent cuts to pharmacy budgets. Does the Minister have any idea how many community pharmacies are at risk of closure as a result of Government cuts, and what assessment has he made of the likely impact of these closures directly on patients and the wider NHS? Will he join me in asking the Chancellor adequately to fund this vital service?
The hon. Lady will have to wait for the Budget like everybody else. We continue to monitor the market carefully in the community pharmacies sector. Access to pharmaceutical services is very good in England, with 88% of people falling within a 20-minute walk of a community pharmacy. For areas with fewer pharmacies, our access scheme continues to provide additional protection, and a growing number of internet pharmacies also support access, offering patients greater choice. Pharmacies are a critical part of the primary care infrastructure in this country.
I am happy to do that. I had a very good visit to Medway recently, and Lesley Dwyer and her team are doing a fantastic job there. They had real challenges to turn the trust around, but they succeeded, and the staff did amazingly well. However, the truth is that we still have far too high levels of avoidable harm across the NHS. I want us to be the safest in the world. That is why, in the next few months, we will see campaigns to improve maternity safety, to deal with medication error and to improve transparency when there are avoidable deaths.
The hon. Gentleman raises an issue that is of concern to many women up and down the country, and no one can fail to be moved by some of the horrendous injuries they experience. We now have 18 centres of specialist care that can treat those women. However, the advice we still receive is that, in some very narrow cases of stress incontinence, mesh remains the best possible treatment. The issue will be kept under review, and my noble Friend Lord O'Shaughnessy is due to meet the all-party group on surgical mesh implants to consider it in greater detail.
My hon. Friend makes an important point. We have no plans for legislative changes, but we do want to see closer working between NHS Improvement and NHS England on the ground, so that people working in constituencies and areas such as his get only one set of instructions. We are making good progress.
I am very happy to accept the hon. Lady’s invitation to visit her area, which I will do, but what I know I will see when I go there is that 8,300 more people are being treated within four hours at her local hospital, where there are 42 more doctors and 56 more nurses than in 2010.
I am very happy to do that, and it is very straightforward. We listened hard when local authorities said they needed more support for the social care budget. We put an extra £2 billion into it in this year’s Budget. Spending is going up this year by 8.6%, so all local authorities are expected to play their part in reducing pressure on hospitals.
I met the fellow on 24 June last year. He is a splendid chap.
In principle, I would be delighted to meet the hon. Gentleman’s local vice-chancellor, but I have to tell him that the decision about where the new medical schools will be based will be taken independently of me, because I have a constituency interest in the issue as well.
I am aware that the performance of the East Midlands ambulance service is not what local residents or we would like at present. The strategy that is being adopted is to introduce a new ambulance response programme, and EMAS has an ongoing consultation with staff on introducing new working models to bring that into effect.
The Minister has just said that pharmacies are a critical part of our primary care infrastructure. Does he therefore share my concern that Lloyds Pharmacy has announced 190 branch closures across England due to funding cuts exacerbated by rising drug costs and cash-flow problems? At least two of those are in Hull. Why can 30% of pharmacies in the Health Secretary’s constituency get remedial help under the pharmacy access scheme but only 1.3% of pharmacies in Hull get that help?
The simple answer is that it is because it is a rural constituency. On the Lloyds Pharmacy announcement, when I first heard that news my thought was not to play any politics with it but for the staff who will be affected by it. As I said at the all-party parliamentary group on pharmacy, chaired by the right hon. Member for Rother Valley (Sir Kevin Barron), Lloyds has made a commercial decision. We do not yet know which pharmacies within its portfolio will close, but we do know that 40% of pharmacies are within a 10-minute walk of two or more others.
Consistency personified, Mr Speaker. It is the responsibility of local NHS organisations to make decisions on the commissioning and funding of any healthcare treatments for NHS patients, such as and including homoeopathy. Complementary and alternative medicine treatments can, in principle, feature in a range of services offered by local NHS organisations, including general practitioners.
What safeguards will the Secretary of State put in place to ensure that NHS trusts do not finance the lifting of the pay cap by making staff cuts, downgrading roles or reducing terms and conditions under the guise of reforms?
NHS trusts are under pressure to make very ambitious efficiency savings anyway. We have listened carefully to their case that they would not be able to make further efficiency savings to finance an increase in pay beyond the 1% cap.
Congratulations, Mr Speaker, on noticing that it is actually me behind this extremely impressive facial growth for Movember, which is a serious cause promoting men’s health, particularly this year with the addition of mental health. In 2015, three out of four suicides were young people, and suicide is still the biggest killer in men under 45. Will the Minister commit to renew this Government’s relentless pursuit of parity of esteem between mental health and physical health?
The Mercer moustache is impressive indeed. I am a big supporter of Movember, because it has a positive mindset—it is very honest. As Movember says on its website, one in eight men in the UK have experienced a mental health problem and, tragically, three out of four suicides are men. So we welcome this campaign this month, focusing as it does on raising awareness of prostate cancer and of testicular cancer—“Check your Nuts”, to stay on message. Movember has also built partnerships with mental health services in the NHS and across the charity sector. I wish my hon. Friend well with his growth.
Will the Department urgently review waiting times targets for children to access mental health services? Even if CAMHS—child and adolescent mental health services—in my constituency achieves its targets, on current referral rates more than 100 children will need to wait more than nine weeks for their first appointment.
The hon. Lady is absolutely right; that is totally unacceptable. Anyone who is a parent would say that it is far too long. That is why we decided to have a Green Paper on children’s and adolescents’ mental health, which we are hoping to publish very soon.
In its annual “State of Care” report, the Care Quality Commission has highlighted that there are 4,000 fewer nursing home beds in England than there were in April 2015. What plans does the Secretary of State have to address the workforce and funding issues that lie behind this? Will he meet me to discuss the situation in my constituency and nationally?
I congratulate my hon. Friend on becoming Chair of the Liaison Committee. Of course, I am always happy to meet her, and the issue that she has raised is very important. Our figures show that the number of nursing home beds, as distinct from the number of nursing homes, is broadly stable. There is real pressure in the market, however, and there are real issues about market failure in some parts of the country, so I am more than happy to talk to her about that.
The south Cumbria area is one of the few places in England where patients who need even the least complex radiotherapy treatment must travel for longer than the maximum 45 minutes recommended by the National Radiotherapy Advisory Group. In NHS England’s consultation, which will close on 18 December, will the Secretary of State make sure that access to radiotherapy within 45 minutes is a key criterion in allocating resources so that Westmorland general can be given its much-needed satellite radiotherapy unit?
I am grateful to the hon. Gentleman for raising that point. We are absolutely aware of the need to have more radiographers and sonographers available to support facilities around the country, and we have currently some 200 radiographers in training. I would like him to write to me so that we can follow up the specific point he makes about south Cumbria.
Local A&Es serving my constituents in Kent now have 24/7 mental health services, thanks to this Government’s determination to improve mental healthcare. Can my right hon. Friend assure me that the Government will fulfil their commitment to increase mental health spending by at least £1 billion by 2020?
We are absolutely committed to that. We are spending around £1.4 billion more than we were three years ago, and there is more that we need to invest. I am pleased that my hon. Friend mentioned crisis care, because for people who believe in parity of esteem, ensuring that people can get help in a mental health crisis as quickly as they could go to A&E for a physical health crisis is one of the big gaps that we have to fill.
I know that the Secretary of State will have been impressed by and enjoyed his visit to Whiston and St Helens hospitals. I am very proud of the collaboration between St Helens Council, the CCG and the hospitals, but additional resources are needed. The Secretary of State will see the good use that is made of those resources, but we cannot deliver everything that is required without that additional push of resources. Will he help us, please?
I recognise the picture that the hon. Lady paints. I did have an excellent visit to the hospitals, and they are doing some fantastic work on patient safety. Collaboration between the partners in the local health economy is much better than it has been, but there are financial pressures. We are going to have a million more over-75s in this country in 10 years’ time, and that is why we have committed to increasing the resources going into both the NHS and the social care system.
The NHS sustainability and transformation plan review in my region recently recommended that all acute services be maintained at North Devon District Hospital. That was a very welcome decision and a victory for the community. Will the Minister work with me and local NHS managers to ensure that the clinical need that has been identified can be fully met?
I share my hon. Friend’s ambition. I greatly enjoyed visiting his hospital in Barnstaple during the summer, and I have been impressed by the way in which the four trusts in Devon that provide acute services have decided to come together and provide a collaborative pool of, in particular, emergency department staff to ensure that each hospital is adequately covered and there is continuity of service. I think that is a model that we can adopt elsewhere.
The Health Committee heard that to obtain a diagnosis of autistic spectrum disorder, many struggling children and families face a postcode lottery. Will the Department seek to publish baseline data so that we know where trained clinicians are positioned across NHS England, to ensure that workforce planning is undertaken appropriately?
I give the hon. Lady an assurance that we will be publishing those data in the new year. It is important that we work hard to make sure that people with autism get a timely diagnosis. That means that we are working to get referrals seen more promptly, while recognising that to give a full diagnosis will take some time.
Recruitment and retention is just one reason why United Lincolnshire Hospitals Trust is currently going through the special measures process. Will the Secretary of State join me in paying tribute to the staff in Lincolnshire, and does he agree that part of the challenge that the trust faces on recruitment and retention will be solved by the establishment of a medical school in Lincolnshire?
If I may say so, that question was absolutely beautifully put. I do congratulate the staff. I have met the staff of Lincoln hospital, although I have not been to all the hospitals in the trust, and it is very nice to see the hon. Member for Lincoln (Ms Lee) in her place. Wherever the new medical schools eventually end up, one of the key priorities will be their ability to get more doctors from areas where we are struggling to recruit.
Order. We must now move on.
Registration of Marriage (No. 2)
Presentation and First Reading (Standing Order No. 57)
Dame Caroline Spelman, Frank Field, Tim Farron, Caroline Lucas, Mrs Maria Miller, Edward Argar, Cat Smith, Andrew Selous, Rachel Maclean, Julian Knight, Kevin Foster and Maggie Throup presented a Bill to make provision about the registration of marriages.
Bill read the First time; to be read a Second time on Friday 1 December, and to be printed (Bill 124).
Hospital Car Parking Charges (Abolition)
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 prohibit charging for car parking at NHS hospitals for patients, staff and visitors; and for connected purposes.
The Bill will give peace of mind to patients and visitors when they need it most and support our hard-working doctors, nurses and other NHS staff who are struggling with the cost of living. It is time to end the hospital car parking rip-off once and for all. These parking charges are the bane of people’s lives. No one goes to hospital out of choice; they go because they must. No one chooses to be ill, and we rely on our doctors and nurses to look after us.
The sick and vulnerable are disproportionately hit, particularly those with long-term and severe illnesses that require repeated and lengthy stays in hospital. Research has shown that cancer patients and parents of premature babies face the greatest financial consequences. CLIC Sargent, the UK’s leading cancer charity for children, has told me that some families are spending £50 a week when their child is having treatment. Bliss, the UK’s leading charity for babies born premature or sick, has also carried out research: while some babies stay in the neonatal unit for only a few days, some parents have to pay over £250 if their baby stays in the neonatal unit for eight weeks.
In addition, there is clear public support for the abolition of hospital car parking charges. Over the past few days, a Fair Fuel UK poll has received almost 9,000 responses. It finds that 95.5% of respondents want hospital parking charging scrapped or set at a maximum of £1; only 3.4% want them to remain as they are.
Much of the hospital workforce cannot rely on public transport to get to work, particularly if they are working shifts at unsociable hours. Many have no choice but to use hospital car parks. While all hospitals seem to offer a discounted parking scheme based on pay band or salary, or allocate a limited number of discounted staff places, doctors and nurses are charged to work unsociable hours at a time when everyone is facing economic difficulties.
The hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), who is a sponsor of the Bill, was told by hospital staff that they cannot afford the charges for hospital car parks and are parking on unfit nearby streets, which leaves them vulnerable when leaving work late at night. If we value our hospital staff—the nurses, the porters, the cleaners, the occupational therapists, the doctors, the consultants—we should allow them free parking.
I started the campaign for free hospital parking in 2014, after finding out that hospitals in England were charging staff and visitors up to £500 a week to use onsite parking facilities. There was—sadly, there still is—a postcode lottery on car parking charges, with hospital trusts setting widely different fees. Given that Scottish hospitals offer free parking, these charges seem even more unreasonable.
As a result of my campaign, the Government introduced guidance, for which I condemn—I should say, I commend —Health Ministers. The guidance urges hospitals to cut their parking fees. Among other recommendations, it suggests:
“Concessions, including free or reduced charges or caps, should be available for”
staff working unsociable shifts, blue badge holders and visitors of gravely ill relatives, but none of the guidance is mandatory. The guidance also says:
“Charges should be reasonable for the area.”
So patients and staff living in London and the south-east are charged the most, which encourages the postcode lottery.
Despite the Government’s efforts and that guidance, there has been little improvement. Since the guidance was introduced on 23 August 2014, weekly hospital car parking charges have fallen, but the average cost to park for a week at a hospital in England is still £53.41, and people pay, on average, £1.98 for a one-hour stay. In addition, 47% of hospitals in England have increased their charges per hour since the guidance was introduced. One hospital in Surrey, for example, charges £4 an hour for parking—the highest cost in England. The worst examples of high hospital car parking fees can be found in London and the south-east. The average one-hour cost in London is more than £2, and a trust with hospitals in central London charges more than £260 for a week of parking.
Almost half of hospitals offer no concessions for disabled drivers. Of those hospitals that do offer free parking for blue badge holders, about 40 do so with a condition attached. It may be limited to a number of bays or it may be time limited, as with Conquest Hospital in East Sussex, which offers up to three hours. Blue badge holders have no choice but to park nearby, and almost half of hospitals charge them to do so. The NHS is therefore not free of charge, and the previous guidance has clearly not worked. That is why I am promoting this Bill.
Some hospital trusts do provide free parking, including those in the Northamptonshire Healthcare NHS Foundation Trust and the Leicestershire Partnership NHS Trust, which proves that it is possible to deliver free parking for patients, visitors and staff.
The Government have previously stated:
“Providing free car parking at NHS hospitals would result in some £200 million per year being taken from clinical care budgets to make up the shortfall.”
On the assumption that free hospital car parking would cost £200 million a year, a number of funding options should be considered. Hospitals have immense purchasing power. Lord Carter has found that better procurement would bring in more than £1 billion. Hospitals across the country pay completely different prices for the same goods. The Department of Health financial accounts for 2016-17 show that it underspent its revenue budget last year by £560 million, which is about 0.5% of the total budget. Surely some of that money could go towards covering the parking costs for patients and staff, and better procurement could help raise the money to pay for the car parking charges.
Hospital car parking charges are a stealth tax on the NHS. We cannot say in good faith that the NHS is free at the point of access, paid for by general taxation, if people with cars face extortionate and unfair parking fees to get to their hospital appointments, to go to work at our vital public services or to visit sick relatives. It is wrong to tell one group of people that they have to pay and that everyone else can have something for free. The charges penalise the most vulnerable in our society at a time when they most need support.
I am proud to say that this Bill is supported by Members on both sides of the House, including esteemed colleagues such as my hon. Friends the Members for Telford (Lucy Allan) and for Filton and Bradley Stoke (Jack Lopresti) and others who in 2015 promoted a Bill to abolish parking charges for carers. My Bill has their support because staff should not have to worry about excessive fees if their shift overruns or about the cost of living instead of concentrating on patient care. Visitors should not have to worry about topping up the meter, to stay at the bedside of sick relatives. Most importantly, patients should not have to pay to access the hospital treatment they need.
I rise in trepidation, because this is a popular and, certainly at a superficial level, well-thought-through Bill. However, if one considers it at a deeper level, one finds that it needs to be opposed. I say from the outset, given that we are going to be here until midnight anyway, that I do not think it would be beneficial for the House to divide on it.
I am concerned about the funding stream. My right hon. Friend the Member for Harlow (Robert Halfon) mentions £200 million—it is certainly more than the £162 million mentioned elsewhere—so that funding gap would need to be addressed. If we have £162 million or £200 million extra, we would be better spending it on hospital care rather than hospital parking.
I am concerned that capital expenditure will not be found to provide more parking spaces. There will be no capital expenditure because there is no revenue associated with it. I am concerned about transitional relationships. What happens in cases where existing car parks are being built and a revenue stream is anticipated? I am concerned that this will break the fundamental basic economics of supply and demand: as demand increases, there will be no market mechanism to enable more car parking spaces in the future. The Bill is a popular move—it would be popular with my constituents—but the responsible thing to do is to say, in this House, that the plan is flawed.
Question put and agreed to.
That Robert Halfon, Lucy Allan, Frank Field, Jeremy Lefroy, Martin Vickers, George Freeman, Jack Lopresti, Mrs Pauline Latham, Emma Hardy, Sir Mike Penning and Julie Cooper present the Bill.
Robert Halfon accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 16 March 2018, and to be printed (Bill 125).
Tax Avoidance and Evasion
Emergency debate (Standing Order No. 24)
I beg to move,
That this House has considered the systemic issues enabling tax avoidance and evasion uncovered by the Paradise Papers.
The actions and the culture of powerful large corporations and of the wealthiest in our society, as revealed in the Paradise papers, constitute a national and international disgrace. What we have learned is that tax avoidance is not just a trivial irritant practised by a small number of greedy individuals and global corporations; it is the widely accepted behaviour of too many of those who are rich and influential. It is clearly taking place on an industrial scale and it has become a scourge on our society. The Paradise papers reveal the enormity and scale of the problem and that is what makes this emergency debate on the issue so important.
Our debate is also urgent and timely because the Chancellor, who sadly is not in his place to hear the debate, is putting the finishing touches to his Budget. I hope that he will read very carefully the views expressed today by Members and reflect them in the proposals he brings to us next week.
There is no such thing as a magic money tree: that is what the Prime Minister told a nurse who had not had an increase in eight years. Does my right hon. Friend agree that there is, and that they grow on the Cayman Islands, in Bermuda and Jersey; and that were the ill-gotten gains salted away by tax dodging to be picked and put into our public services, police officers and teachers would not be facing the sack and we would not be facing a crisis in the health service?
I completely agree with my hon. Friend’s remarks, which are very pertinent to what we will be discussing in the debate.
Paying tax is an essential part of the social contract into which we all enter as members of a community. As members of society, we agree to abide by a set of rules and regulations that make all our lives better. One of those rules is that we agree to contribute through taxation into the common pot for the common good.
I would like to ask the right hon. Lady why her family firm, Stemcor, is famous for paying virtually no tax.
I am really pleased the hon. Gentleman has given me the opportunity to explain the circumstances to the House. My father and his cousins were refugees from Germany. My father was then a refugee from Egypt, so he was a double refugee. I remember as a child that he often said to me, “You will never feel safe in this country. Always have your suitcase ready.” He did keep money abroad. When we discovered that after he died, we closed those funds and put them into a charity.
The level of taxation and who pays is decided by us here in Parliament through our democratic processes. That is how we create a system that is democratic and trusted by all. When a minority choose to ignore and deliberately bypass our rules and regulations and get away with it, they undermine confidence in the fairness of the system. Some people and some Members claim that tax avoidance is okay because it is lawful. Indeed, one of the Government’s Ministers from the other place, the noble Lord Bates, said on Monday that tax avoidance
“continues to be part of the international system and we recognise and value it.”—[Official Report, House of Lords, 13 November 2017; Vol. 785, c. 1611.]
He and others are simply wrong, and they misunderstand the issues. Her Majesty’s Revenue and Customs’ own definition of tax avoidance is clear:
“Tax avoidance involves bending the rules of the tax system to gain a tax advantage that Parliament never intended. It often involves operating within the letter, but not the spirit of the law.”
Those are the words of HMRC. Even it says that tax avoidance is wrong.
Does the right hon. Lady agree that a feature of a strong tax system is having a proper network of HMRC offices, and that centralisation and the closure of offices such as the one in my constituency is a disgrace that will do nothing to help the situation?
I agree with the hon. Lady that resourcing HMRC is absolutely central to the fight against tax avoidance and evasion.
Tax avoidance is completely different from tax planning, whereby, for example, Parliament intended to encourage people to save for their pension by introducing ISAs with tax breaks. Tax avoiders, on the other hand, thwart the intention of Parliament. Their action means our collective will is ignored. We should not tolerate it and we must act urgently to eradicate it.
Does my right hon. Friend agree that one of the best ways of trying to deal with this increasingly serious issue is to have openness and transparency in all funds held offshore, so that those who are doing this have to face the legitimate scrutiny of taxpayers in this country?
My hon. Friend makes an absolutely central point to what we will be asking for today.
Not only does the behaviour of a few damage trust in the system as a whole, but it damages the public services our taxes are used to fund. At a time when the NHS is under such pressure, when public sector workers have had their wages held down for years and our schools are struggling to deliver the best start for all our children, for the super-rich and the powerful to think that they can opt out of their duty to contribute fairly through paying taxes is completely and utterly and totally immoral and wrong, and it is our responsibility to put an end to it.
I have been very helpfully provided with some facts that I think should be put to the House. I am told that since 2010 the Government have secured £160 billion from tackling avoidance, evasion and non-compliance and £2.8 billion from offshore tax evaders, and invested £1.8 billion in Her Majesty’s Revenue and Customs to tackle avoidance and evasion. I am very proud of this record. Does the right hon. Lady agree that it is an excellent record from a Conservative Government? How does it compare with the record of the Labour Government that she has always been so keen to support?
I hope that the right hon. Lady will listen to the whole of my speech. I think she will acknowledge, as we move forward, that a little progress has been made but not enough. I agree that the previous Labour Government’s record on tackling tax avoidance was not as good as I would have wanted, but the record and actions of this Government are inadequate and somewhat hypocritical. Their rhetoric is mostly fine, but the reality is badly wanting.
When ordinary people hear the Budget next week and have to think about their taxes against the background of inflation in food prices, will they not wonder why the Members opposite are hellbent on avoiding any inquiry into aggressive tax avoidance?
I agree entirely with my hon. Friend. Indeed, I was about to say that those who pay their taxes are completely fed up. By 8 o’clock this morning, nearly 156,000 people had signed a petition going to the Prime Minister. This is an issue that angers people across the country, men and women, supporters of all political parties, people of all ages and people in every income group.
Obviously the right hon. Lady is making a very good point—everybody wants tax evasion clamped down on—but I, too, have some statistics. The Government have invested £1.8 billion in HMRC to tackle tax avoidance and reduced the tax gap by 2% more than Labour did. We are on the right track.
If the hon. Lady looks at the HMRC figure on the tax gap, which is about £34 billion to £36 billion, and then at the figure that tax campaigners talk about, which is a gap of £120 billion, I think she will share my determination to see much more action to deal with this ill in our society.
I congratulate my right hon. Friend on securing this debate. Does she share my concern about the complacency being shown today? Cutting down on global tax abuse clearly requires international co-operation. As we exit the EU, does she share my concern that this ambition not be damaged by our exit but be strengthened by our actions domestically and internationally?
I completely concur with my hon. Friend’s important remarks.
It is our job, as the elected representatives of those who are angry, to do what we can to put a stop to tax injustice. Tax avoidance should be not an issue that divides us, but one on which we work together in the interests of all taxpayers and in order to protect our public services. The Paradise papers are the latest in a series of leaks unmasked by the international press. I salute the professional investigatory journalists involved in making sense of the millions of documents passed to them, especially those at The Guardian and on “Panorama”, who have been working on the papers for a year, and I salute the public-spirited courage of the whistleblower who first passed the papers to the German newspaper, the Süddeutsche Zeitung. The Paradise papers contain 13.4 million files from just two offshore providers of tax advice and the company registries of 19 tax havens. The scale of the data is what makes the leaks so important.
We have had the Panama papers, the Luxembourg leaks, the Falciani leaks, the so-called Russian and Azerbaijani laundromat revelations on money laundering, and now we have the Paradise papers. We will continue to see new leaks splashed over our papers and filling our television screens until the Government act firmly to clamp down on the avoidance that is so blatant and yet so wrong.
The right hon. Lady has said several things I agree with—for instance, that everybody should pay their fair share into the tax system, which helps fund our vital public services, and that everyone should work together on tax avoidance—but, given that, does she not feel ashamed at her party’s actions to block steps, before the election, that would have reduced tax avoidance?
I am trying not to make this overly partisan, but I feel more ashamed, as a Member of Parliament, at the hon. Lady’s party’s reluctance to adopt the clear and simple measures that could really tackle tax avoidance.
I want to make some progress, because a lot of people want to speak in what is a two-hour debate.
Last week, our papers were filled with scams and scandals concerning celebrities, from the self-appointed philanthropist Bono to the popular actors in “Mrs Brown’s Boys”: stories that tainted the reputation of our much-loved royal family; revelations about establishment figures in politics, such as Lord Ashcroft and Lord Sassoon; and further evidence that corporations such as Apple deliberately establish artificial financial structures that have no other purpose than to avoid tax. I want to focus, however, on the systemic issues that these stories illustrate. It is the systemic issues that we need to consider if we are to make progress.
I will start with two comments arising from what we have learnt from the Paradise papers—observations that help us to understand what is wrong with our system. Appleby, the firm of lawyers at the heart of the Paradise papers, is one of the few offshore law practices that belong to the “offshore magic circle” of service providers. Indeed, Appleby was named offshore firm of the year by “The Legal 500” in 2015. Yet the Paradise papers reveal that the firm was criticised no less than 12 times over a 10-year period in reports issued by regulators in UK tax havens: the British Virgin Islands, the Isle of Man, the Cayman Islands and Bermuda.
Appleby was criticised for its failure to comply with regulations designed to stop the funding of terrorism and prevent money laundering. The reports talked of “persistent failures and deficiencies”, “severe shortcomings” and
“a highly significant weakness in the adequacy of the organisation’s systems and controls and a deficiency in meeting its regulatory requirements.”
Further documents reveal that Appleby simply ignored these critical reports and failed to change its procedures, despite strong words from the regulatory bodies. Even the authorities on the British Virgin Islands found, after an inspection of Appleby, that the firm had
“contravened financial services legislation…the anti-money-laundering code of practice 2008 and the anti-money-laundering regulations 2008”
“severe shortcomings with a majority of the legislation, with prudential standards and good practice requirements not being met.”
Our regulatory frameworks are so weak that law firms can ignore or break the law with complete impunity. It is hopeless having self-regulation, national and international codes of practice and regulatory bodies with legal powers, if in practice they fail to secure compliance and good behaviour. The lawyers clearly just did not give a damn, and nobody held them to account.
The title of this debate is “Tax Avoidance and Evasion”. I thought I understood the distinction between the two, but I feel the line is being blurred. How does the right hon. Lady understand the distinction between avoidance and evasion?
I agree that the line is extremely blurred. Schemes put forward as legitimate tax avoidance are frequently found to be unlawful when HMRC finally catches up with them. It is difficult to make distinctions.
Worse than that, Appleby helped to co-ordinate a well-funded and comprehensive lobby by the International Financial Centres Forum before a G8 summit that David Cameron chaired in 2013. The then Prime Minister had intended to insist that the UK’s tax havens publish public registers of beneficial ownership in their jurisdiction. Had David Cameron had his way, we might not be here today, but the IFCF lobbied fiercely to maintain secrecy. It lobbied the right hon. Member for South West Hertfordshire (Mr Gauke), the then Exchequer Secretary, it lobbied the permanent secretary at the Department for Business, Innovation and Skills, it lobbied the senior official who was then director of the UK’s G8 presidency unit, and it succeeded in weakening David Cameron’s commitment to transparency.
I thank my right hon. Friend and neighbour for giving way. Is not the fact that the vast majority of these tax havens are British overseas territories the key question, and is it not time that this Government—or any other Government in the country—took seriously the fact that those places are not doing what is in the interests of British people all over the world?
It is also not in the interests of the many developing countries that lose more tax through tax avoidance than we do in proportion to their budgets.
The right hon. Lady’s central contention is that those territories should publish open registers of beneficial ownership. First, does she acknowledge that the United Kingdom is now one of the only countries in the world to do so, as a result of action by this Government? That was a huge achievement on the UK’s part. Secondly, in an international context, virtually no other major developed country in the world has done it. The state of Delaware, in which 90% of US corporations are registered—
Order! When I say “order”, the hon. Gentleman must resume his seat. I do not wish to be unkind to him. He is always very fluent, but he usually takes too long, and that was not just too long; it was far too long.
I simply observe that the UK also has responsibility for the overseas territories and Crown dependencies, and I wish that its own tax code did not contain so many harmful elements that encourage tax avoidance.
Appleby’s lobbying illustrates another continuing problem. The Treasury, and other Ministers and Departments, listen only to a very small and exclusive group of tax professionals when making decisions on tax policy. It is one thing for the Government to consult stakeholders on issues, but it is quite another for the Government to be captured by the tax industry at the expense of the wider public interest. Tough and active regulation of the industry to ensure compliance with existing rules is therefore vital. Curtailing the influence of tax professionals on tax policy is essential, and making the advisers accountable for the schemes that they invent and market is central to the campaign to destroy tax avoidance.
The measures in the Finance Act 2017 represent one small step in the right direction of holding advisers to account, but the small print suggests that very few, if any, will be caught by the legislation. The definitions are too narrow, and the penalties too weak. Those measures have been introduced so that the Government can claim that they are acting, but until advisers are really called to account and properly punished for inventing schemes that are purely aimed at avoiding tax, the army of lawyers, accountants and bankers will continue to prosper. If the Government are serious about tackling tax avoidance, they must act strongly to deal with the illegitimate practices of those who make a huge living from peddling tax avoidance advice.
My right hon. Friend is making a powerful case. Does she agree that the approach of the prosecuting authorities in this country must also be improved? It is striking how seldom they proceed with the legislation that we introduce.
I entirely agree. I must now make progress, because otherwise I shall take up too much time.
More than half of the Appleby offices are located in British tax havens. More than half of the entities that were exposed in the Panama papers were incorporated in just one UK tax haven, the British Virgin Islands. Estimates of the wealth held in tax havens are by their nature difficult to verify, but they vary from $7.6 trillion to $32 trillion.
Will my hon. Friend give way?
I will, for the last time.
Does my right hon. Friend agree, in the light of what she has said, that Britain has a unique leadership role? Developing countries lose income amounting to between $100 billion and $160 billion a year. Imagine what we could do to tackle poverty if that money were available.
I completely agree with my hon. Friend’s very powerful point.
Unbelievably huge sums of money are hidden in these jurisdictions. It is impossible to measure accurately how much tax is lost through the presence of tax havens, but it runs into hundreds of millions of pounds every year. We do know that developing countries lose three times as much in tax avoidance as they gain from the global investment in international aid. Our tax havens, acting as secret, low or no-tax jurisdictions, are utterly central to much of the tax avoidance. We cannot continue to pretend that we are leading the international fight against tax avoidance and evasion when, by what we do and what we fail to do, we allow avoidance to prosper; and not just tax avoidance, but money-laundering, corruption, bribery and other financial crimes, which prosper through the secrecy that we allow to prevail. Our failure to tackle our tax havens, our weak regulatory regime and some of our tax rules means that we are now seen as the country of choice for kleptocrats and criminals as well as tax avoiders and evaders, as they seek to hide their money and minimise their tax bills.
We need our Government to hold to the commitments made by the Prime Minister and the Chancellor in 2013 and 2014. They understood that transparency was the key ask. We need public registers of beneficial ownership, showing who owns what and where. That, at a stroke, would undermine so much. Would Bono have invested in tax havens if he had thought that we would all know? Would Lewis Hamilton have created a complex structure of companies to avoid VAT? Would the actors in “Mrs Brown’s Boys” have hidden their earnings in artificial financial structures if they had thought that we would find out? The answer is no.
David Cameron understood that when he told the UK tax havens to rip aside “the cloak of secrecy” in 2013, when he urged them in 2014 to consult on a public register that was
“vital to meeting the urgent challenges of illicit finance and tax evasion”,
and when he proclaimed in 2015 that
“if we want to break the business model of stealing money and hiding it in places where it can’t be seen: transparency is the answer.”
However, in the last two years the Government have fundamentally watered down that commitment to public registers in British tax havens, and now we hear Ministers say that we must wait for other countries to go first. The proper call for international action on transparency has become the lame excuse for inaction in our own territories.
We should lead by example. We should demonstrate that transparency can and does change behaviour. We should compel our overseas territories and Crown dependencies to publish public registers. In the past, a Conservative Government used their powers to outlaw capital punishment in our Crown dependencies and overseas territories, and a Labour Government used the same powers to outlaw discrimination against gay people. Today we should work together to outlaw the secrecy of those jurisdictions, which leads to such massive tax injustices.
The Paradise papers show us that the problems created by secrecy are much bigger and more complex than we ever thought possible, and that is why we need to legislate for transparency in our tax havens. We should help them to transform their economies, so that they stop depending on hidden wealth, unsavoury people, and questionable financial practices. I cannot think of one good reason for us not to do that, and to do it now. Indeed, there is more that we can do, right now: it simply requires the Government to have the necessary political will. They will certainly have the support of the whole House, and the whole country, if they demonstrate by their actions, not their words, that they will work to stamp out tax avoidance.
We can and should now implement the legislation requiring multinational companies to report their activity and profits on a country-by-country basis—legislation successfully steered through Parliament by my right hon. Friend the Member for Don Valley (Caroline Flint). We can and should also introduce immediately the public register of property ownership that was enacted before the general election, promoted by Transparency International and Global Witness and supported by members of the all-party group on anti-corruption. Nobody knows why this legislation has not been implemented; it is a key element in the fight against corruption, avoidance and evasion. We can and should properly resource HMRC now so that it has the capability to pursue all who seek to avoid paying tax, not just the small businesses who form an easy target that can be hounded with little effort. Every £1 invested in HMRC enforcement yields £97 in additional tax revenues. It is a complete no-brainer that we should be strengthening HMRC and reversing some of the cuts.
The Paradise papers have helped place tax avoidance back at the heart of the political agenda and back at the top of the list of public concerns. The Government need to grasp this moment to act. They have an opportunity to do so in next week’s Budget. Britain will never get rich on dirty money, and our public services cannot function if the wealthiest individuals and the most powerful companies deliberately avoid paying their fair share towards the cost of those services. And this Government will not be forgiven if they fail to heed the lessons we can all learn from the Paradise papers. Proper transparency will come. The Government can choose whether they lead the changes needed or whether they want to be dragged kicking and screaming into implementing essential reforms. I hope they will listen, learn and act.
I congratulate the right hon. Member for Barking (Dame Margaret Hodge) on securing this important debate. She has been a vigorous campaigner on these issues over many years, and has certainly been very active in the last week; I responded to an urgent question and there was an Adjournment debate in respect of the Isle of Man last week, and now we have this debate as well.
The right hon. Lady said that tax and tax avoidance was one of those matters that should not divide us. I agree, and it seems to me that in the various iterations of this debate that she and I have held across this Dispatch Box there is a great deal on which we can be united rather than divided; I am thinking not least of the shared view across this House—certainly on my side of the House—that aggressive tax avoidance and evasion are utterly wrong. They are wrong for the reasons that the right hon. Lady has given: those who pay their tax fairly should not be penalised by virtue of the fact that some do not pay their tax fairly.
We also know, as the right hon. Lady pointed out, that tax is necessary to fund our vital public services. It is therefore entirely wrong that those who aggressively evade or avoid tax put pressure on our public services—on our NHS, our doctors and our nurses.
Under the last Government, the former Prime Minister David Cameron appointed an anti-corruption tsar. Who is the anti-corruption tsar under the current Government?
I will get back to the hon. Lady on that.
We know that tax is important for our public services, and we know, as the right hon. Member for Barking rightly stressed, that it is important that the Government act, and be seen to act, when we come across aggressive tax avoidance and evasion. As my hon. Friends on this side of the House have eloquently pointed out, we have a very strong track record in that respect. We have raised £160 billion in additional revenues as a consequence of clamping down on tax avoidance, evasion and non-compliance since 2010. We have also brought in £2.8 billion by tracking down those who have sought to inappropriately hide their finances in overseas tax jurisdictions. We have brought in £28.9 billion in additional compliance yield in the last 12 months alone, too.
The right hon. Lady is rightly critical of the performance of the last Labour Government; she raised that this afternoon and raised the same point in last week’s Adjournment debate. The tax gap is the difference between what we could potentially bring in by way of tax and what we actually bring in, and it currently stands at 6%, which is a historical low—a world-beating figure. If the average tax gap today was the same as under the last Labour Government, there would be £45 billion less in our Exchequer—£45 billion not there for those vital public services that the right hon. Lady is keen to discuss.
On the Government’s record, can the Minister confirm that HMRC informed the Public and Commercial Services Union that in 2017 the equivalent of 17,000 years of staff experience is leaving the department? How will that help the Government’s record going forward in dealing with tax evasion and avoidance?
I am pleased that the hon. Gentleman has raised the issue of investment in HMRC, because we have a very good record in that respect. Some £1.8 billion of additional money has been invested in HMRC since 2010, of which £800 million will relate to the period after 2015, bringing in £7.2 billion by 2020-21. We will also be trebling the number of investigations of the wealthy to ensure they are paying their appropriate level of tax, as a direct consequence of all that additional investment.
Will the Minister please explain to the House why only 420 HMRC staff are engaged in chasing tax avoiders and evaders, yet 10 times that number of civil servants are engaged in addressing benefit fraud in the Department for Work and Pensions?
I challenge those figures: a far larger number than the hon. Gentleman suggests are engaged in clamping down on tax evasion and avoidance. About 50% of the 2,100 largest corporations in this country are under investigation at any one time—not necessarily because they have done anything wrong, but because they have complex tax affairs. So we are investing in that.
Can the Minister confirm to the House that he answered a question to me yesterday by saying that 522 employees were in the high net worth unit on 31 March 2017, and that that compares with 4,045 full-time equivalents in DWP chasing social security fraud?
This Government have an exemplary record on the tax take from the wealthiest in this country. The wealthiest 1% pay about 28% of all income tax. Under the last Labour Government that figure was below 24%, so I will not take any lectures from the Opposition parties on this.
The Minister is right to point out that HMRC does a very good job on the collection of tax in this country, but that does not mean it cannot do better. Does the Minister agree that the tax take is based on what we think should be paid in tax, and it does not deal with the Googles, Amazons, Starbucks and others who hide their tax away and are therefore not computed into the actual tax we should take and therefore the figures for a tax gap?
I am pleased that the right hon. Lady has raised this issue, because the robustness of this tax gap figure is extremely high. The International Monetary Fund says it sets one of the highest standards in the world. The figure is audited and agreed by the National Audit Office and is made public in HMRC’s annual report and accounts.
The Minister rightly talks about the need for the wealthiest to pay their fair share. Does he agree that one of the most obscene things under the last Labour Government was the fact that cleaners were having to pay more tax than the hedge-fund owners who employed them? It was a Conservative Government who closed that so-called Mayfair loophole.
My hon. Friend is entirely right. It is this Government, for example, who raised the personal allowance to £11,500, taking 3 million to 4 million of the lowest paid out of tax altogether. It is this Government who brought in the national living wage, and it is this Government who will go on ensuring that those who have the broadest shoulders pay their fair share of tax.
Does the Minister agree that HMRC would serve the Government and the people of the United Kingdom better by challenging those who bend the rules rather than by fining my law-abiding constituent, Sheila, £1,600 for a £135 yearly tax bill, when all that she had failed to do was to press “enter” at the end of the form?
The hon. Lady raises an important point.
There is an assumption on the Opposition Benches that nothing is being done about these various issues. The right hon. Member for Barking referred to an element of the “Panorama” programme on the Panama papers that described income that had been diverted overseas and then loaned back to individuals. That is known as disguised remuneration. She rightly asked what the Government were doing about such practices. Let me point her in the direction of the Finance Bill that has just gone through this House. On the matter of disguised remuneration, individuals will be given until 2019 to clear up those arrangements. Otherwise, they will pay a penalty. It is as simple as that.
Will the Minister give way?
I want to make just a little more progress, as I am conscious of the time and the shortness of the debate.
In fact, we have brought in 75 measures since 2010 to clamp down on these practices. A further 35 will come in from 2015, raising £18.5 billion by 2020-21. One of the problems is that we have been so active in bringing in so many measures that, unfortunately, not all of them have been noticed. In last week’s debate, the right hon. Member for Barking raised the issue of taking action against those who promote tax avoidance schemes. Once again, she needs only to look at the Finance Bill—all 777 pages of it; it is very technical, and it will probably put her to sleep at night—in which she will find measures to deal with precisely what she was urging us to take action on last week. We have already done it!
I congratulate the Government on the specific changes they have made, but does the Minister agree that the biggest change has been the general anti-abuse rule? That catches a number of these schemes and allows Governments to look not only at tax avoidance, through tax planning, but at what he describes as aggressive avoidance, which therefore becomes evasion, which is illegal.
My hon. Friend is absolutely right. The general anti-avoidance rule has had a significant impact. It was brought in under this Government and it has been very effective. The Opposition profess the importance of all these measures, some of which have already been brought into law while they are calling for them. There is a certain irony in the fact that, when it came to the Third Reading of the Finance Bill that brought these measures in, the Opposition voted against it.
The fact remains, though, that there is at least £30 billion of uncollected avoided or evaded tax; that figure could be as high as £120 billion, if we are to believe the Public and Commercial Services Union. Given that tax officers gain a significant tax return to the Treasury against their salaries, would it not be better to invest in tax officers rather than cutting their numbers, and to go after that multi-billion pound tax gap?
Going after the tax gap is exactly what this Government are doing, and we have an exemplary record. We have the lowest tax gap in the entire world. It is the lowest in history—far lower than it was under the last Labour Government. The hon. Gentleman asked a specific question about tax officers. We need to move towards an HMRC that is ready and equipped for the 21st century. That does not mean a large number of scattered offices; it means hub offices with the necessary staff and technical skills to facilitate the transfer of knowledge and understanding in order to move forward.
I will now make some progress. I am aware that this is just a two-hour debate and that many Members wish to speak.
We have covered the various measures that we have taken, and we have covered the huge investment that we have made in HMRC. Perhaps I can now turn to the international aspects. We all agree that we need to look closely at what is happening in the international sphere. On that, this Government have a record of which we can be proud. Through the OECD, we have been in the vanguard of the base erosion and profit shifting project. We have worked closely with the Crown dependencies and overseas territories.
We have brought in a diverted profits tax, which will raise £1.3 billion by 2019, and common reporting standards to ensure that information is exchanged in relation to around 100 countries. We have introduced a directory of beneficial ownership that is accessible by HMRC, the authority that needs to have that information. All this has happened in the last couple of years, and it is a game changer. Many of the issues arising from the Paradise papers go back very many years, but these measures are in place right now.
I also want to make an important point on transparency. In last week’s debate, I asked the right hon. Member for Barking, in relation to the 13 million files held by the International Consortium of Investigative Journalists, whether she would join me in calling on the ICIJ to release that information to HMRC so that we could go after anyone who, as a consequence of that data release, was thought to be abusing our tax system. Will she support us in that endeavour?
The Minister did raise that point last week, and the House should know that it is not in the gift of either The Guardian or “Panorama” to release those papers. They are not able to do that.
What I actually asked was whether the right hon. Lady would join me in calling for the ICIJ to release that information. [Interruption.] That is a slightly different question, and I am happy to give way again if she will tell us, yes or no, whether she will do that. [Interruption.]
Order. Stop the clock. There is far too much noise in this Chamber. I say gently to the Parliamentary Private Secretary, the hon. Member for Croydon South (Chris Philp): don’t do it! You may think you are being clever, but it does not enhance your reputation as a parliamentarian in the end. Please don’t do it. It is juvenile, the public despise it and I have no patience for it.
I will certainly join the Minister in seeking any documentation that HMRC requires to pursue those who are guilty of avoidance or evasion. I would say to him, however, that when I have given papers to HMRC in the past—whether relating to Google or from other whistleblowers—they have just disappeared and no action ever appears to have been taken.
I am grateful to the right hon. Lady. I will take that as a yes—we can work together to try to ensure that that information is provided to HMRC. I see no reason why that should not happen.
I very much agree with what my right hon. Friend has said. Before he leaves the international dimension, will he confirm that in recent years—well after many of these papers came to light—the three Crown dependencies and the overseas territory of Gibraltar have fully co-operated with the UK in relation to all tax transparency and OECD measures, and that they have the same tax transparency ratings as the United States, Germany, ourselves and other western democracies?
I am grateful to my hon. Friend for that intervention. In relation to corruption inquiries, for example, we have automatic access to our Crown dependencies and overseas territories as a result of that co-operation.
I recognise how important this issue is to the public, and it is of critical importance to the Government as well. The UK’s tax authority now has more information and more power than ever before to clamp down on avoidance and evasion, because of the actions of this Government. The Government of which the right hon. Lady was a member failed to take those actions. I conclude with the words of the right hon. Lady in last week’s Adjournment debate, when she said
“I have never defended the record of the Labour Government in this area”.—[Official Report, 7 November 2017; Vol. 630, c. 1442.]
That speaks directly to the heart of this issue: an apparent legacy of tax abuses going back many years, framed by the inaction of the Labour party. It speaks to the core of Labour’s approach to the world that the opportunity always lies in criticism and derision, rather than in action and justice. This Government are acting and will continue to leave no stone unturned in the pursuit of those who seek to duck their responsibilities at the expense of us all. Whenever and wherever they are found, this Government will continue to bring the avoiders, the evaders and the non-compliant to book.
Order. Characteristically and courteously, both the right hon. Member for Barking (Dame Margaret Hodge) and the Financial Secretary to the Treasury gave way extensively. They are not being criticised for that, but I simply draw attention to the limited time remaining in the debate and ask those speaking from the Front Bench to be extremely sparing in their remarks. The first responsibility for brevity is that of the hon. Member for Bootle (Peter Dowd).
I will try to take that on board as a suggestion rather than a direction, Mr Speaker. The Minister identified what he thinks should be done, but I will tell him what should be done. In our “Tax Transparency and Enforcement Programme” document, Labour calls for an immediate public inquiry into avoidance, greater scrutiny of MPs, the creation of a specialist tax enforcement unit, and the public filing of large company tax returns and of the tax returns of wealthy individuals earning more than £1 million. We want no public contracts for tax avoiders, the repatriation of contracts parked in tax havens, public contract transparency, a register of beneficial ownership of companies and a register of trusts, and our programme would be enforced by working with the banking sector. We also call for a general anti-avoidance rule in principle, strict minimum standards for crown dependencies and overseas territories, the creation of an offshore companies levy and full country-by-country reporting. All that represents a comprehensive proposal from Labour.
Does my hon. Friend agree that there is an army of tax avoidance facilitators that includes, sadly, the four big accountancy firms, which are often based just down the road in the square mile?
My hon. Friend makes an important point. Transparency is at the heart of all this. I experienced a bizarre situation last week when I was on “Newsnight” with the chairman of the Cayman Islands stock exchange. What an insouciant attitude that man had to tax avoidance. He actually said that there had not been any wrongdoing—maybe not—and called for the journalists to be jailed. That is what he did, and that is the position in which we find ourselves.
Will the shadow Minister give way?
I am going to take Mr Speaker’s suggestion and push on, because it will become an admonition otherwise. I will then take some interventions.
I hope that Members across the House will join me in condemning the irresponsible and offensive comments of the chairman of the Cayman Islands stock exchange. All of us owe a debt of gratitude to the journalists involved for their hard work and diligence. They have demonstrated the importance of a free press in holding the wealthiest and most powerful individuals and multinationals to account.
To be clear, we are talking about tax avoidance that covers activities that are within the law but work against its effective application. Most of the people involved in the cases have not broken any laws or acted in a criminal way, but that does not make tax avoidance acceptable or justifiable in the 21st century. After all, as has been identified, tax avoidance costs us all. Every pound avoided is one pound taken away from our children’s education, from our armed forces—the very people who protect us—and from the elderly and disabled. The conservative—and Conservative—figures that the Government have published on tax avoidance show that HMRC recorded from 2010-2015 that £12.8 billion was lost to the Exchequer through tax avoidance. That is unacceptable.
People have a view about what the previous Labour Government did. They think that it was much better than the Tories overall, but I am not going to go there. The question arises—[Interruption.] I refer the hon. Member for Rochford and Southend East (James Duddridge) to the Financial Times. With the greatest of respect, I am not his researcher, and I am sure he is more than capable.
Does the hon. Gentleman accept that if the current tax gap was at the same level that it had been on average under Labour, our deficit would be £12 billion higher?
My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) says, “Move on.” and I think she is absolutely right. I will reaffirm the point that was made in Labour’s tax programme document: we have to push on with this debate. It does no good for the Government to talk about the past; we want to talk about the here and now and the future.
I will give way to the hon. Member for South Suffolk (James Cartlidge).
I had not expected—[Interruption.]
Order. There is no obligation on the hon. Gentleman to speak if he does not want to.
I will ask the shadow Minister a question. The tax gap is now 6%. It averaged 8% under Labour. Does he accept that if the tax gap was 8% now, the deficit would be £12 billion bigger?
The hon. Gentleman can extrapolate all he wants. I could extrapolate all sorts of figures, but I am not going to get into that. We will no doubt come back to the matter in due course at the Budget.
You are looking at me with those eyes and with a smile, Mr Speaker, so I will move on.
While tax avoidance is a global problem, it is also a UK problem. The UK accounts for 17% of the global market for offshore services. We are considered one of the biggest—if not the biggest—players in the global offshore system of tax havens. We account for some of the world’s key tax havens, including Jersey, Guernsey, Isle of Man, Bahamas, British Virgin Islands, Cayman Islands, Bermuda and the Turks and Caicos Islands, all of which are either Crown dependencies or British overseas territories and all of which are afforded the support and the protection of the British Government. Despite our prominence as a country at the heart of a network of offshore tax havens that aids and abets tax avoidance across the globe, the Government refuse to lead the way in global tax transparency. I keep on using that word “transparency” and I will keep on doing so.
Does my hon. Friend agree that the purchasing of a private jet at nearly £17 million and then setting up an offshore leasing company with the sole aim of saving £3 million in VAT is an affront to our public services?
My hon. Friend is quite right. That is shocking.
Government Members’ denial about their record on tax avoidance is not new. In 2013, while the G8 was pushing ahead with stricter rules that would clamp down on tax avoidance, the then Conservative Prime Minister, David Cameron, was busy undermining them, writing to the President of the European Council demanding that offshore trusts were excluded. The Government’s record on tackling tax avoidance is not all that they would like it to be.
The shadow Minister is being generous with his time. We all agree that this matter should be a priority, and the shadow Minister is focusing on our record, but why did the Labour party block the three measures that we brought forward in the wash-up that would have been worth £8.6 billion—vital for all the public services that he listed earlier? It is a joint priority, and we need both sides to work on this.
I am more than happy to give the hon. Gentleman the narrative of the wash-up proceedings. If he wants, I am happy to talk to him outside, because the information that he has been getting from his Front-Bench team is nonsense.
I am going to conclude to give others the opportunity to speak. First we had the Panama papers and now we have the Paradise papers; how many more tax avoidance leaks will there need to be before the Government act? It is clear that we desperately need a public inquiry into tax avoidance and the use of offshore trusts and tax havens. The Government should listen to the Opposition and, perhaps more importantly, to people outside the House and act by introducing a public register of offshore trusts and publishing the information already provided from overseas territories. They should also stop cuts to HMRC and ensure that HMRC has the staff and resources it needs to tackle tax avoidance at its core.
If the Government continue to ignore the problem and fail to act, I reassure the House that a Labour Government will act.
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
I congratulate the right hon. Member for Barking (Dame Margaret Hodge) on securing this debate. She brings great expertise and authority on these matters, not least from her time on the Public Accounts Committee.
The most important point for the House to focus on this afternoon is that this is absolutely not a party political issue. Although the right hon. Lady raised some criticisms of this Government, she also raised criticisms of the Government of which she was a member. In my judgment, the only plausible criticism that can be made of the current Government is that they need to speed up some of the initiatives they have already implemented. They have not done so in respect of the overseas territories because, obviously, we would rather those havens took action themselves—to be fair, to some extent they have already started to do so.
On the actions taken by the Government, David Cameron and George Osborne led the international effort at the G8 to clamp down on such matters, particularly tax avoidance and evasion. The UK introduced publicly accessible registers of people with significant control, abolished bearer or anonymous shares and, importantly, introduced unexplained wealth orders. The anti-bribery law, work on which first started under John Major in Paris in 1995, was finally introduced in this country by David Cameron in 2011, after 13 years of Labour government.
On this Government’s record, let us be clear that they have been taking action and have raised an immense amount of extra tax as a result. However, the time has come—this is my third debate on this issue—to insist on the same levels of openness and transparency for the overseas territories as we have in this country. The territories gain hugely from their relationship with the United Kingdom and, as the Government made clear in 2012,
“As a matter of constitutional law the UK Parliament has unlimited power to legislate for the Territories.”
The right hon. Gentleman will know from his considerable expertise on international development that the abuse of such offshore schemes not only harms British taxpayers but disadvantages some of the world’s poorest people. That is why the Government must act to introduce greater transparency in Crown dependencies and overseas territories.
I am coming on to precisely that point.
Like many Members, I have been visited by senior Ministers of almost all the overseas territories, and the position of the territories is best summed up by the prayer of St Augustine: “Oh Lord, make me chaste—but not yet.” The territories put two specific arguments. I call the first the Dutch Antilles argument, which is that if the territories have open registers, the hot money will head off to the Dutch Antilles. There is momentum around the world, thanks to David Cameron and George Osborne, to attack such ills and unfairnesses. Havens that embrace an open register will get an advantage from being at the front of opening up to billions of pounds of legitimate business.
The second argument—in a way, this is the one we have to address head-on—is that the territories’ private registers are already available to lawmakers and regulators, such as HMRC. The territories proudly say that they will turn round inquiries from HMRC within a matter of hours, which is good, but it completely misses the point, as the recent release of information shows. Registers must be open to the media, to journalists, to non-governmental organisations and to those who can join up the dots. The regulatory authorities, with the best will in the world, are not in that business. Narrow questions, drawn from regulatory authorities, simply do not begin to suffice.
I refer to my declaration in the Register of Members’ Financial Interests. My right hon. Friend makes a fair point. Does he also accept that it is fair that we should not lump all the overseas territories into one basket? Some are much more compliant than others, Gibraltar being one.
My hon. Friend makes a good point. I specifically exclude Gibraltar from what I am saying because it is not an example of what we are talking about.
Time is short. My final point is that the United Kingdom led on the 0.7% target. Around the world, the United Kingdom is looked to for leadership on international development. International development is part of this Parliament’s identity, it is who we are and it is part of global Britain. We have an obligation, not least to our own taxpayers, to champion transparency and openness and to have zero tolerance towards corruption.
When we first came into government in 2010, the Department for International Development led the way with its transparency guarantee. We openly published all expenditure above £500 on the internet. It may be a cliché, but sunlight really is the best disinfectant. That is at the heart of what we are talking about today.
I support what my right hon. Friend is saying. Does he agree that the future market for financial services is huge and that jurisdictions with that level of transparency will attract vast amounts of business precisely for that reason?
My hon. Friend is absolutely right. The first of my two points was about trying to tackle head-on the counter-arguments that are sometimes made by some territories.
On tackling and having zero tolerance towards corruption, in 2010, when I had responsibility for international development, we targeted funding specifically at the City of London police, which has expertise on pursuing and recovering stolen funds. We should do as much of that as possible.
I agree with a great deal of what my right hon. Friend says. Given that the majority of the economy of the British Virgin Islands, in particular, is in financial services and the islands have recently been completely devastated by hurricanes, is now the right time to be imposing on the islanders rather than working with them?
My hon. Friend makes a fair point in view of the humanitarian crisis that is afflicting the BVI, which are of course one of the most transparent of these havens. What I hope will be a temporary crisis in the BVI following the hurricane damage should not in any way detract from my argument that, in a defined, perhaps short, period of time, these open registers are essential.
Will the right hon. Gentleman correct the record? He said earlier that the UK led on the 0.7% target, but the UK was 40 or 45 years late. The 0.7% target was agreed in 1970, and the UK reached it decades behind the Scandinavians. I do not see that as leadership. Does he want to come back on that?
The hon. Gentleman cannot get away with such a narrow, partisan comment. Britain was the first G8 country to stand by its commitment to the poorest people in the world, and we are very proud that it was this Government who did it.
The highly respected Africa Progress Panel, in a recent study on the Democratic Republic of the Congo, made it clear that stolen funds and stolen taxes cost that country £1.5 billion, which is more than it spends on health and education. It is a deep irony that some of the world’s poorest people live on top of some of the richest real estate, as is clear in the DRC. Credible World Bank studies make it clear that the money stolen from the people of Africa through unpaid taxes or concealment dwarfs all the foreign direct investment and international development money that flows into Africa each year.
We know a lot of that money ends up not in the overseas territories but in places like Dubai. Does my right hon. Friend agree that we also need to engage with other partners around the world, particularly in places like Dubai, where a lot of this money is to be found?
My right hon. Friend makes a good point; the key point on all of this is transparency and openness. Let all these matters be published in the way they are published through the open register in Britain. That is the way in which we make progress.
We look to the Government to advance this agenda, probably in the Finance Bill. We hope that those on the Treasury Bench will hear clearly the will of the House on this matter today and that progress will indeed now be made.
I ask the SNP spokesperson not to exceed 10 minutes, in the interests of facilitating others, but we are in her hands.
Thank you, Mr Speaker. It is not common for me to exceed 10 minutes, so I will try to stick to that. Let me start by thanking you for granting this debate under Standing Order No. 24, as I very much appreciate that, and the right hon. Member for Barking (Dame Margaret Hodge) for securing it. I also wish to thank all the journalists who have done all the work on the Paradise papers. They have done a huge amount of work in investigating this, exposing the issues and bringing them to the attention of the international media as well as this House. They deserve to be thanked for that.
I normally have quite a lot of time for the Minister—I find him to be often wrong but generally reasonable—but the speech he made today was badly pitched. The one made by the right hon. Member for Sutton Coldfield (Mr Mitchell) was much better, in that he talked not only about resting on the laurels of all the great things the Government have done, but about what the Government were going to do and could to in the future. [Interruption.] And should do, absolutely. I hope the Minister listens to the voices from across the House and what they are calling for. As has been said, this is not a party political issue. I do not have a huge amount of respect for the actions of either the Labour Government or the Conservative Government on tax avoidance and evasion. I do not think either party has done a particularly good job on that. A huge amount more can be done, as Members from across the House would agree.
Transparency International looked into companies dodging tax and found 766 UK companies that were involved in corruption and money laundering, to the tune of £80 billion. A quarter of those companies that were investigated by Transparency International are still active—the UK Government could take action on those organisations. The UK Government are making a number of incredibly ill-advised and not great decisions at the moment, on things such as closing HMRC offices and their continued pursuance of austerity. The only reason the Government are tackling Scottish limited partnerships is the work done by a number of journalists, as well as colleagues from my side of the House. I appreciate that the Government have taken action on that, but it took a very long time for them to be convinced by MPs such as Roger Mullin to make any move on it.
As I said, not only this UK Government but previous ones have successively failed to crack down on this. The UK tax code is out of hand and requires simplification. The changes the UK Government are making, in conjunction with the Office of Tax Simplification, have not gone far enough. It still requires a van to carry the tax code; people can no longer carry it, because it is so significant. The potential for loopholes and for people to dodge things as a result of that incredibly complicated tax code is ridiculous. The hon. Member for Bootle (Peter Dowd), the shadow Minister, talked about the UK Government previously calling for the EU’s sanctions around tax dodging to be watered down. That was grim action for them to take, particularly in the wake of the Paradise papers, when this call came. The UK Government should be leading by example. They should not just be saying, “Oh, we’ve got the tax gap down to 6%.” They should be saying, “The tax gap is still 6%. We have a huge amount of work to do to crack down on that final 6%.” The UK has the opportunity to lead the world in this regard and it should do so.
Does the hon. Lady think the introduction of further tax bands and thus further complication by the SNP Administration in Edinburgh is an additional complication or a simplification of the UK tax code?
The hon. Gentleman is confusing income tax with a number of other types of tax. What has happened in Scotland in relation to the paper that has been produced, which sets out a number of options and their effects, and then consults on them, is way more transparent than any action that any UK Government take in advance of any Budget, where they pull rabbits out of hats. The Scottish Government have entered into dialogue with the other parties, which have the opportunity to take that chance to criticise or to praise. They should do that, as he should. The Scottish Government and the SNP have called for this area to be devolved to Scotland because we think we would do a better job.
As everyone knows, tax evasion is illegal, but the Paradise papers highlighted that tax avoidance is immoral.
On the Paradise papers, does my hon. Friend share my concern at seeing the Duchy of Lancaster’s investment in BrightHouse, a company that exploits constituents in vulnerable areas such as mine with extortionate annual percentage rates of 70%? Does she find that immoral as well?
I agree with my hon. Friend on that, as I, too, have constituents who are exploited by organisations such as BrightHouse. It is not a company that anyone reputable should be investing in.
It is not that difficult for people to pay the tax that they owe; it is not that difficult to say to a financial adviser—this is for those who have bags of cash—“I would like my money to grow, but I wouldn’t like it to grow by avoiding the tax that I owe.” It would be easy for people to say that. It is clear that some people lack a moral compass. Where they are taking decisions to engage in aggressive tax avoidance, the Government must legislate so that they can no longer do so—to provide that moral compass for people and make sure that the tax is paid when it is owed. We must have the best possible tax rules in place. We must simplify the tax code. We must crack down on evasion, and we must legislate to reduce avoidance. The Government are in an untenable position: they cannot continue to implement austerity while leaving a tax gap.
We note that many of the tax avoiders do not avoid using our roads, our schools and our hospitals, and they certainly do not avoid using the police to look after their lumps of money, here, there and everywhere.
I absolutely agree with my hon. Friend from the Western Isles. People, however much they are earning and however much tax they are paying, are using public services. Our party aspires to have brilliant public services. We aspire to have people working in our public services who are paid a reasonable amount and do not have to face a pay cap. The only way we can provide the public services and benefits system we want is by having a system where people pay the tax they owe. We continue to call for this to be devolved to Scotland because we think we would take better decisions. In the absence of devolution, we would like the UK Government to take actual action, rather than just saying, “Look how great we are.”
On account of the number of people wishing to contribute, there will be, with immediate effect, a six-minute limit on Back-Bench speeches. I call Mr David Morris.
Thank you very much, Mr Speaker. I did not expect to be called so early.
I am a little at a loss about what we are trying to achieve here: is this about tax evasion or is it about offshore companies? The reality is that offshore companies are legal entities, and a lot of them, especially across the Commonwealth countries and the overseas territories, have been set up using HMRC guidelines. That has to be clarified here and now: is this about tax avoidance per se or is it about overseas territories having tax advantages? What is it about? Yesterday, when the debate was being granted, I was standing to the side of you, Mr Speaker, and I was absolutely of the mind that this was about overseas territories or tax evasion under certain forms of tax advantages in certain countries. The UK can do its bit, as it is doing and as this Government have done.
The Labour Government did very little for 13 years, to be quite frank. Now, it is about the perception of who pays the taxes in this country. I can give the House a basic economic argument. It is like a piggy bank. Someone earns their money and puts it in an offshore piggy bank, and they pay tax on it at source and when they take it back into this country. So there is really no tax evasion there.
I can remember the Leader of the Opposition talking about the Isle of Man Government. I have lot of time for the Isle of Man Government and they have a lot of links to my constituency. The problem I have is that the Isle of Man is the most highly regulated offshore tax haven, if we want to call it that, in the whole world.
The Isle of Man Government told me:
“Amongst other things, the Customs and Excise Agreement removes the need for customs barriers between the Isle of Man, the UK and the EU”—
even the EU is loth to draft any legislation on this matter—
“and makes the Island part of the European VAT territory. The Agreement also makes provision for the Revenue Sharing Agreement (RSA), the agreed formula by which VAT and most other indirect tax revenues are split between the UK and the Isle of Man.”
On the subject of private jets, the Isle of Man Government told me:
“Since 2011, Isle of Man Customs and Excise has raised more than 30 assessments for under-declared or over-claimed VAT against businesses in the aircraft leasing sector, protecting approximately £4.7million of VAT”
for the Exchequer. So what are we arguing about? Are we arguing about reforming tax laws or reforming tax havens? I might add that most tax havens in overseas territories have been sorted out by this House.
I shall keep it short, Mr Speaker, but I think that this debate is a grand waste of time. More to the point, it is confusing to the public.
Having listened to the hon. Member for Morecambe and Lunesdale (David Morris), I am dismayed. What we are talking about is openness and transparency about tax. The right hon. Member for Sutton Coldfield (Mr Mitchell) set the tone for this debate, along with my right hon. Friend the Member for Barking (Dame Margaret Hodge). This is an important cross-party issue, and I agree with nearly every word—in fact, every word—that the right hon. Gentleman said. Tax avoidance and evasion harms countries around the world, including developing countries. It hits taxpayers in our constituencies because the wealthiest people and large corporations find ways to reduce their tax bills or to avoid paying tax completely.
Will the hon. Lady give way?
I wish to make some progress, please.
I congratulate my right hon. Friend the Member for Barking on securing this debate, and I congratulate the International Consortium of Investigative Journalists, “Panorama” and The Guardian for shining a light on what has come out of the Panama papers. The Public Accounts Committee has been shining a light on aggressive tax avoidance for some years. I pay tribute to my right hon. Friend, my predecessor as its Chair, for the work that she led us through when I served as a member of the Committee. It is thanks to the Committee’s work under my right hon. Friend that some of the worst excesses of avoidance came to light. International action—it has to be international—has led to real change at a faster pace than we have seen under any Government for many decades, by making public more information about corporations’ tax arrangements.
We continue to pursue this issue, and with political will, we can make progress. In December last year, the Public Accounts Committee held an international tax transparency conference. We had imagined, in our own humble way, that we might get people from some European Union countries to come along; we were amazed that representatives from countries around the world came. More than 20 of them signed up to our pledge on international tax transparency, to fight for our citizens and through our Parliaments to press our Governments to be bolder and faster, as the right hon. Member for Sutton Coldfield said. There are the beginnings of some political will, but we are not moving at the right pace.
The release of these papers and this information is staggering to our constituents, who just pay their taxes and have no idea how hard the wealthiest work to avoid paying tax that would help our country, particularly in this time of austerity and pay dampening. Public country-by-country reporting for large corporations is something that the Government could do right now. My right hon. Friend the Member for Don Valley (Caroline Flint) has been a champion on that issue and managed to work with the Government to change the law. The Paradise papers show that the tax arrangements we are discussing come to light only when the information is in the public domain. We need to see fast change. The establishment of offshore trusts that then buy homes, wine and cars for the beneficiary, without tax being paid, or the paying of money into offshore trusts that then make loans to individuals that are never repaid—these things cannot be right, and although they may be legal, I doubt whether they are in some cases.
The Panama papers were released in April 2016. According to the representatives from HMRC who appeared before the Select Committee last week, 66 criminal or civil investigations are currently under way, four people have been arrested and a further six have been interviewed under caution. Even with that haul, HMRC only expects an additional tax yield from the Panama papers of £100 million. That is not to be sniffed at, but it is small fry in relation to the official tax gap. That just demonstrates the lengths to which people will go to hide their money and the importance of making sure that HMRC has the resources required to pursue this matter.
We need public country-by-country reporting to be enacted. Yes, it needs to be done internationally, but if international players will not lead the way, let the UK Government take us forward. Let us be bold and brave and make sure that we set the tone and the standard for the world. The Select Committee has urged HMRC to consider a wealth tax for wealthy individuals, as they have in Japan and Australia, to make it easier to track down where people hold their wealth and where they are paying tax.
We need continued parliamentary and public pressure, so that businesses voluntarily move towards more openness. The fair tax mark has already been taken up by 30 companies, and we hope that it will be taken up by many more. I would like to see HMRC take forward more prosecutions to set an example to those who seek to avoid tax and to make sure that people question the highly paid tax advisers they recruit, because it is no longer good enough to say, “I didn’t know what was going on; I just paid someone else to do it.” Everyone needs to take responsibility for their actions, whether they are corporations or wealthy individuals.
As I said, we need to give HMRC the resources to tackle tax avoidance and evasion. As my right hon. Friend the Member for Barking said, there is a very high return rate for every pound of taxpayers’ money invested in HMRC’s investigatory arms. It is important that the Exchequer sees that benefit and ramps up the money that is available. An arbitrary target of 100 prosecutions annually has now been set. That seems an odd figure to have plucked out of a hat. We are pressing HMRC to explain where that figure has come from out of the blue. We need to make sure that the right number of prosecutions take place, not just set an arbitrary target.
My constituents pay their taxes and they deserve better. Tax is paid for the common good, and my Committee works hard to make sure that tax money is spent by the Government efficiently, effectively and economically. We need to speed up on the measures to crack down on aggressive tax avoidance and, obviously, tax evasion. We need to move towards a world in which the impact of someone not paying their fair share of taxes is recognised as something that is plainly wrong.
It is a pleasure to follow the hon. Member for Hackney South and Shoreditch (Meg Hillier), and I join in the congratulations to the right hon. Member for Barking (Dame Margaret Hodge) on her securing this important debate. I absolutely agree with the conclusions she came to, but I probably took a slightly different route to get to them.
I should start, though, by saying that I do not think it is fair to say that over the past 15 years or so, HMRC, the previous Labour Government and the current Conservative Government have not tried to tackle aggressive avoidance. Look at the number of measures that have been introduced, ranging from disclosure rules for artificial schemes through to more recent measures. Look at a Finance Bill and count up how many targeted anti-avoidance rules have now been added. We have been trying everything we possibly can to tackle the most outrageous behaviour. Many of the schemes that 15 years ago used to be possible or, indeed, quite widespread just cannot be done in the UK at all now.
Does the hon. Gentleman agree that there is a cultural issue and a whole machinery that enables and facilitates these sorts of arrangements, which the 99% of us have nothing to do with, and that we have to be very aggressive in tackling that 1%?
I agree with the hon. Lady exactly, but the point I was trying to make was that I do not think that the size of the tax gap is down to a lack of effort or attempts to introduce new rules or measures. The problem is that the avoiders and evaders are perhaps one step ahead and move on to different things. That is why the Panama papers and the Paradise papers show that people are now just going offshore, or finding artificial ways to go offshore, rather than trying to do artificial domestic planning to get around the rules.
Is it not the case that the problem lies in our tactics of applying these complicated rules and regulations and in the fact that expensive minds—the accountants—can devise a way around them? Should we not be looking at a general principle, because people cannot get around a principle?
I agree with that view. The Government did introduce the general anti-abuse rule. It was quite a large step for them to take, as it said that HMRC can effectively ignore what is written in the law and apply what should have been written in the law. There is scope to extend that and to improve behaviour. It is right that we now expect large businesses to publish their tax strategy. It means that we can get the board to say that it does not condone such behaviour, it does not engage with it and it does not want its tax advisers to do such a thing. That is the way that we change the behaviour and the culture. We have seen advisers changing their codes of conduct, which is welcome. Some now say that artificial and aggressive abuse will not be committed under their management, but, clearly, there is still a long way to go.
Before I talk about the various measures that we could take, I should be clear that we will not be able to close the whole of the tax gap by tackling aggressive avoidance by the rich and the large multinationals. Obviously, we should narrow the gap by as much as we can, but the fact is that it is the small and medium-sized enterprises that form the largest group of companies not paying tax. Of a tax gap of £38 billion, £15.5 billion can be attributed to SMEs. The single biggest reason for the tax gap is not aggressive avoidance, which accounts for only £3 billion, but failure to take reasonable care. Therefore we cannot look at the whole tax gap of £38 billion and say that that is all being lost to us because of the awful behaviour of large corporates. Sadly, it is much more to do with individuals in the UK who are working and not declaring VAT, or who are working in the hidden economy. It is not quite fair to say that this is not about ordinary people, because, sadly, quite a lot of it is. We need to find ways of tackling that issue as well.
What has been exposed by these papers is a crisis of confidence. We need our tax system to be fair and our financial system to be legally compliant and as clean as we can make it. There are some further measures that the Government can take to improve the reputation of our financial system and to increase the confidence of our constituents in the tax regime. The good news is that most of these issues are Government policy already. It is just a matter of bringing them forward and perhaps finding some implementation dates. Let us get country-by-country reporting by multinationals in the public domain so that we can all see how much profit they are making and in which territory and compare that information with their turnover there, how many employees they have and what assets they have. That is perfectly fair information. It is not greatly enhanced disclosure.
If we look at the accounts of large plcs, we will see that they are required to disclose segmental information and tax reconciliation from their profits down to what tax they are paying. We want that information made available in a meaningful and useful way, so that we can work out how they are not paying the right amount of tax. That measure is on the statute book. Let us have a date when we require that information to be put in the public domain. It does not have to be tomorrow, or even next year. Let us have a date in 2019 so that we can see that information.
The other issue of transparency is related to who is buying the very expensive properties in the UK. We need to know who they are and how they have raised the money to buy those properties. It cannot be right that someone can buy a property here for £15 million or £50 million and not live in it and we have no idea where they got the money from to do that. Let us go ahead with the promise we made to have a transparent register of overseas owners of very expensive property in the UK. That will help to show that we are not encouraging kleptocrats or Russian oligarchs or people who have stolen from developing countries to put their money here in a safe UK asset.
Let me turn now to the overseas territories. The papers revealed some really shocking behaviour. For example, when Apple, one of the world’s largest and most reputable companies, was being chased by the EU through Ireland, it chose to try to move its affairs to Jersey to avoid the tax we all think it owes. Again, that shows why we need to get transparency into those territories of ours so that we know who is operating there and where their money has actually come from. Those territories have a right to exist, a right to choose their own tax rates and a right to be competitive, but they do not have a right to hide money that has been stolen from elsewhere in the world or to move profits that are not being earned there and try to give them a beneficial rate.
If we get transparency in the territories and we show who is operating there and where the money is coming from, those territories can show how clean they are and whether their claims are true. They can then compete on their reputation. They do not need to compete on being closed and dirty. They all assure us that they are not after dirty, corrupt, illegal and laundered money but are after real business. If they go ahead with that transparency, they will get a competitive advantage. As a country with so many territories, we cannot say that we will follow the herd; we are the herd, so let us set an example.
It is a pleasure to follow the hon. Member for Amber Valley (Nigel Mills) and to congratulate him on securing a Westminster Hall debate next week on the subject of public country-by-country reporting. I hope that Members from all parts of the House will support that debate.
It was just over a year ago, in September 2016, when a non-Government amendment to the Finance Bill, which had cross-party support, was successfully passed. It gave the Government the power to require multinationals to publish tax information in all countries in which they operate, known as public country-by-country reporting. This is an important measure—not the only measure—on how we tackle some of the scandals that have emerged through the Panama papers and, more recently, the Paradise papers. Openness on this issue means that we can see where large companies pay their tax and discourage tax avoidance, which will help us all.
In the extractive and finance sectors, a form of public country-by-country reporting is already in place. Increasingly, investors want to see more of that. Why is that so? They are getting more and more worried by these public disclosures and by the reputational damage to them of putting money into good enterprises which, however, at the end of the day compromise their investment and their sense of the ethics behind the contribution they want to make towards creating wealth. We all want to create wealth, because that creates the opportunities to tax and provide for public services.
It is clear from the Panama papers, and now the Paradise papers, that companies with a mandate to deliver a return to shareholders and investors seem to be under huge pressure to find ways to cut their tax bills, despite the large profits they make. That is why Governments have a duty to ensure that their domestic tax laws are as watertight as possible. Importantly, we need to make sure that we provide even greater transparency.
We know, and we have always known, that big companies and very wealthy individuals can easily move their revenue around the world, out of the reach of Governments, and find whatever loophole they can to become richer. Corporate tax avoidance is not only unfair but damaging to economies and societies. At home and overseas, it means less money for stretched public services. Earlier, a colleague said that it is estimated that developing countries lose at least $100 billion every year. That would be enough to educate 12 million children, who are currently missing schooling, and to provide healthcare that could save the lives of 6 million children.
Paying tax responsibly is an issue of right and wrong. If those with accountants and lawyers seek to avoid paying tax, preferring instead a world of hidden havens and shell companies, trust breaks down and in the end we all lose out. Last year, the then Treasury Minister, now the Secretary of State for Work and Pensions, said that although the Government were keen on a multilateral deal on public country-by-country reporting, if we did not make progress in a year, we would have to revisit the issue. In fact, in answer to a question to the Prime Minister on this very subject, she admitted that little progress had been made. One year on, the EU proposal, which is flawed, has stalled.
The time has now come for the Government to have the courage of their convictions to introduce public reporting requirements and then seek to build a coalition of the willing. Transparency is one sure way to rebuild trust. I hope that the Minister will consider this and meet a cross-party delegation to discuss it further. I look forward to the debate secured by the hon. Member for Amber Valley in Westminster Hall next week, but I say to Members: rest assured; when it comes to the next Finance Bill, a cross-party group will seek to amend it to set a deadline for when the power to introduce public country-by-country reporting will become a reality.
I will speak relatively briefly. Slightly earlier, I had the pleasure of intervening on the shadow spokesman. In fact, I had a unique pleasure in that he allowed me a second intervention; I think it is called a BOGOF.
There is no obligation on the hon. Gentleman to speak any further if he does not feel inclined to do so. It will be difficult, but we will probably manage without him. If he does want to speak further, he may.