Tax Loopholes

Chancellor of the Exchequer – in the House of Commons at 2:30 pm on 6th December 2011.

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Photo of Valerie Vaz Valerie Vaz Labour, Walsall South 2:30 pm, 6th December 2011

What steps he is taking to close tax loopholes.

Photo of David Gauke David Gauke The Exchequer Secretary

The Government have set out a strategic approach to tackling tax avoidance, with an emphasis on preventing avoidance before it can occur. Measures introduced in the Finance Act 2011 will bring in an additional £1 billion a year over the course of this Parliament and protect further revenues. The Government will carefully consider Graham Aaronson’s report on a general anti-avoidance rule and engage formally with interested parties to establish whether that could further reduce tax avoidance.

Photo of Valerie Vaz Valerie Vaz Labour, Walsall South

I thank the Minister for attempting to answer my question before I have asked it. Hard-working and hard-paying taxpayers demand fairness, but the stamp duty loophole cost the Treasury almost £1 billion. The Minister spoke earlier about redeploying staff; will he confirm that he will put more resources into enforcing tax evasion?

Photo of David Gauke David Gauke The Exchequer Secretary

We are putting more resources into dealing with tax evasion and avoidance. Just this morning we have announced proposals that will extend the disclosure of tax-avoidance schemes to stamp duty land tax. The biggest measure we have taken in tackling tax avoidance was on disguised remuneration in the last Finance Bill. Unfortunately, Labour Members did not support us.

Photo of Stephen Williams Stephen Williams Liberal Democrat, Bristol West

Only today my hon. Friend the Minister has had to table written statements blocking tax-avoidance schemes in derivatives, loan relationships and capital allowances and many other measures. A general anti-avoidance rule would back up the plethora of anti-avoidance measures that this and previous Governments have had to introduce. The coalition agreement provided for a study of a general anti-avoidance rule. The Treasury now has that study; will my hon. Friend give me an assurance that it is under urgent consideration for implementation at the earliest opportunity?

Photo of David Gauke David Gauke The Exchequer Secretary

I can give the hon. Member that assurance. We are grateful to Graham Aaronson and his distinguished panel for studying this issue. We are looking at it. It is important to consult properly, but we are giving urgent consideration to the matter.

Photo of Owen Smith Owen Smith Labour, Pontypridd

The Government said in August that the deal between the UK and Switzerland would close other tax loopholes and net the Exchequer an additional £4 billion to £7 billion in revenue. Will the Minister explain why the Office for Budget Responsibility described the deal last week as a “fiscal risk”, declined to validate the Government’s numbers, citing “significant uncertainties”, and discounted the revenues from its central projection for receipts?

Photo of David Gauke David Gauke The Exchequer Secretary

The agreement has not been ratified as yet; it is yet to go through the parliamentary process in this country or, indeed, in Switzerland. The OBR is rightly cautious, but even the £4 billion is likely to be greater than the amount we would have received from privatising Lloyds Banking Group and RBS. That is not an insubstantial sum of money which Members on both sides of the House should welcome. It will put an end to tax evasion through people putting their money into Switzerland.