HMRC published its latest tax gap estimates on
Last week in the autumn statement, the Chancellor announced plans to address tax avoidance. If he and the Treasury are serious about that, why did they vote down an amendment that said that the quoted eurobond—I am sorry, but I cannot quite remember the words. They did not support that amendment, costing this country £500 million per year.
The reason we have not pursued that policy is that, having looked at it carefully, we do not believe that it would raise anything like the revenue that has been suggested, nor that it would do anything for the UK’s competitiveness. The Government have consistently taken action on tax avoidance, tax evasion and aggressive tax planning. I would happily list the measures, Mr Speaker, but I suspect that you would not allow me the time to do so. By 2015-16, we believe that those measures will be bringing in £7.6 billion a year.
I thank the Minister for his answers to Question 5 and to these questions. Will he explain why I am fighting against funding cuts for families in crisis in Rotherham because the council does not have enough Government funding to support them, while some big companies are getting away with not paying a penny in corporation tax?
Very difficult decisions have had to be made to deal with the deficit that we inherited. On the contribution from larger companies, as we have heard, the tax take from large companies through corporation tax has continued to rise and we have continued to take measures to deal with tax avoidance. As I have said, just last week, we announced that we would operate the diverted profits tax, the details of which will be set out tomorrow. That is an example of where the Government are taking tough, practical action to ensure that everybody pays what is required under the law.
Will my hon. Friend confirm that, as a result of the investment and effort that have been put into tackling tax avoidance and evasion since the general election, a record number of people are being prosecuted, with 2,600 people having been prosecuted in this Parliament alone?
Yes, my hon. Friend is correct—we have substantially increased the number of prosecutions in that area. The yield brought in by HMRC as a consequence of its enforcement action has also increased substantially, and in the autumn statement it was announced that that yield is anticipated to be £26 billion in 2014-15—around £9 billion more than when we came to office.
It is the case that tax receipts were revised down, but so was expenditure on debt interest payments. This country continues to face the major challenge of living within our means, and it is important to have a Government who stick to the long-term economic plan that delivers that.
The Minister gave a very partial answer because he did not mention the fact that the Institute for Fiscal Studies has said that tax receipts have been revised down by £25 billion by 2018-19. Is one key reason for that the fact that wage growth has been revised down again, and that the Government’s failure to raise living standards for working people is why they have also failed to meet their promise to balance the books by next year?
The answer to increasing wage growth is not just to observe that it would be nice if wages went up but to have no policies to do that. If we want wage growth, we need investment in the UK, which we are getting. We want more people in jobs, and a record number of people are in jobs. We want to improve our training and education system, and record numbers of people are taking up apprenticeships. We want to improve our transport infrastructure, and the Government have committed to the biggest road building programme since the 1970s. If we want wage growth, we must stick to the long-term economic plan.