Making Tax Digital for VAT (Economic Affairs Committee Report) - Motion to Take Note

Part of the debate – in the House of Lords at 5:18 pm on 29th April 2019.

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Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Chair, Economic Affairs Committee, Chair, Finance Bill Sub-Committee 5:18 pm, 29th April 2019

My Lords, those last few remarks from my noble friend are extremely reassuring. My noble friend Lord Bates gave him a bit of a hospital pass; had the debate not been deferred, it would have been answered by him. In fact, his formal response is an example of why the committee felt that we needed to look rather more strategically and fundamentally at the basis on which HMRC is held to account. That is not to say that the committee was entirely critical of HMRC. Some of the criticism arises from legislation which has been passed by Parliament. If my noble friend had come at the invitation of the committee and had listened to our points, I think we would have made considerably more progress.

We have had a fantastic debate, with a brilliant speech by my noble friend Lady Noakes not just on the nomenclature of customers but on the real issues here, which are illustrated by some of the problems. My noble friend Lord Tugendhat rightly pointed to the difficulties which HMRC has.

One gets the impression that Mr Osborne said to HMRC: “I need the money. Get it in”, but, at the same time, “Cut the numbers”. Therefore, perhaps some corners have been cut, to disadvantage. My noble friend Lord Trenchard pointed out the basic and fundamental conflict of interest in HMRC, which brings me to the issues pointed out in a very telling speech by the noble and learned Lord, Lord Judge. Honestly, in this House, if he says it is wrong, it usually is. I am grateful that my noble friend has decided to discuss this with the Chancellor.

I think we will lose the noble Lord, Lord Kerr, from our committee because of the turnover rule. He made a fantastic contribution and asked the three questions which I hope my noble friend will be putting to the Chancellor. I also thank the noble Baroness, Lady Kramer, who has updated us on the work being done by the All-Party Group on the Loan Charge. What has happened is very worrying. The path to hell is paved with good intentions. I have no doubt that the loan charge legislation was implemented with good intentions, but it has proved to be a path to hell for far too many people, not least those working in the public sector.

The noble Baroness, Lady Kramer, mentioned the BBC. I have read in a newspaper—we did not receive any evidence—that it appears that it will pick up the tab for all its employees. One way or another, it seems that this requires further work.

The noble Lord, Lord Davies, was right to highlight the pressures on the Inland Revenue, and I was very grateful for his commitment that the Opposition would change the legislation if they got the chance—which may very well encourage colleagues to bring forward amendments at a later date in the other place.

Most of all, I am grateful to my noble friend for the way in which he has answered what has been a powerful debate and undertaken to take it back to discuss it with colleagues. One thing that we have changed on the Economic Affairs Committee is that when we produce reports, we do not just move on to the next issue but come back to them to review what progress has been made. I am sure that there will be further work on the loan charge. We look forward to seeing the Government’s response. I am most grateful.

Motion agreed.