Clause 81 - Excise Duty: Penalties

Part of Finance (No. 2) Bill – in a Public Bill Committee at 6:15 pm on 5 January 2022.

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Photo of Abena Oppong-Asare Abena Oppong-Asare Shadow Exchequer Secretary (Treasury) 6:15, 5 January 2022

I thank the Minister for her explanation of the clause, which applies the excise wrongdoing penalty regime to freeports. We do not oppose this measure; indeed, Labour Members have repeatedly raised concerns that freeports may increase the risk of tax evasion and smuggling, as well as potentially undermining workers’ rights. We are also concerned that HMRC, which is already overstretched, is not well placed to manage these new risks.

The Government have introduced a number of different tax reliefs and other measures that will operate in freeports, and it is important that they are monitored closely. There is evidence from around the world that freeports have increased illicit activity. I have a couple of questions for the Minister about the steps the Government are taking to prevent tax avoidance and other illegal activity in freeports.

First, will the Minister update us on how many of the eight English freeports are now operational? What checks were done prior to those freeports opening to ensure that they will not inadvertently allow illicit activity within their borders? Secondly, will she set out the process HMRC and Border Force will use to monitor and ensure compliance in freeports? Finally, will she commit to update Parliament regularly on the operation of freeports, which should include any compliance issues that have been identified, the action that was taken and an estimate of the economic impact of freeports, both in the area they operate in and on a wider scale?