Clause 8

Part of National Insurance Contributions Bill – in a Public Bill Committee at 9:15 am on 9th December 2010.

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Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North 9:15 am, 9th December 2010

I rise to support the amendment proposed by my hon. Friend the Member for Nottingham East. I am not convinced by the Minister’s suggestion that this will not have much of a resource implication for HMRC. I am plainly in the minority, but I am concerned about the cut in HMRC’s headcount given that we have such a vast tax gap and that a substantial number of billions of pounds have simply not been collected because of a lack of resources.

In recent weeks I have spoken to the representative of the senior officers of HMRC in the Palace—I have to declare an interest, although not a pecuniary interest, because I am a member of the Public and Commercial Services Union support group within the House. I believe that there must be a resource implication, and I do not think that is a bad thing. This is a good scheme and it should be resourced.

One suggestion that I have, which I made at the public evidence session, is that increasing the number of tax inspectors would be a tremendous benefit in bringing in more revenue. Tax inspectors collect many times their own salary. It depends on the tax: for VAT it is relatively low at only five times their salary, but for income tax, and particularly for corporation tax, we are talking many millions of pounds and a multiple of many times the salary of an individual tax officer. An increase in the number of tax officers would bring in more revenue, which would more than cover the additional resource cost of the scheme and which could be used in other areas of public spending.

The Minister has twice said that he is pleased that I am in favour of a tax-cutting scheme. I am one of those people who want to see employment generated, and, unusually, this is a scheme designed specifically to generate employment. So, in that sense, it is very good. Given £1 billion to spend, however, I would want to find a way to maximise the employment generation potential of that sum, and it might be that some other scheme would promote more employment. I want to see not either/or, but both. For the benefit of the economy and of us all, we need to generate much more employment—unemployment is now at 2.5 million.

If we bring down unemployment, all of our problems will begin to disappear, particularly the deficit problem about which the Government are so concerned. I am primarily concerned about unemployment, and this scheme is about reducing unemployment. My suggestion for increasing the number of tax officers would also reduce unemployment, both directly, because more tax officers are appointed, and indirectly, because it would make possible the generation of employment elsewhere in the economy.