HMRC. Photograph by 401(K)
I have three points to make, but I begin by expressing my anger at companies who take us and the Government for fools. We have a fairly united view about welfare abuse. I should like the Government to enact measures that reflect the sense of urgency the country feels about people who similarly abuse their tax position.
The Government’s fiscal crisis is of long standing. In the vast majority of the 60 years since 1948, Government accounts have been in deficit. We have developed a habit whereby Governments are elected to implement programmes for which they have no intention of raising the necessary tax revenue. In only a handful of the years since ’48 have Government budgets been in surplus; for the rest of the time they have been in deficit, and under Tory periods the deficit was twice as large as during Labour years.
We habitually have real difficulties in raising revenue to support the level of expenditure taxpayers would like to see. We know that the position will get worse in the future, and I shall give two examples of where it will harden. Let us look at long-term trends in revenue in relation to the tax on fuel. We know that thanks to more efficient fuel use, the revenue gained by the Exchequer from tax on fuel will fall dramatically. At the same time, there will be pressure on Government budgets from demands for the health service and pensions, and it is not impossible to envisage that by 2060 they could be taking half of the total.
We hold this debate at a time of crisis, but not the immediate crisis about the deficit with which the Government are trying to grapple. There is a longer term crisis, because as a nation we have grown accustomed to demand far more than we are prepared to pay in tax. I have three suggestions for the Government about what they could do to convince taxpayers, as well as the House, that they are as serious about clamping down on tax abuse as they are about clamping down on other forms of abuse in our public finances.
The first suggestion is that we issue kitemarks to companies that Her Majesty’s Revenue and Customs believes have paid their fair share of taxes. We would then develop a “white list” of companies with which we know it is safe to trade, and would have warnings about those with which it is not safe to trade, or would know that if we did trade with them, we were aiding and abetting the crimes that they were committing against the commonwealth of taxpayers in this country.
Secondly, I make this plea: why cannot the Revenue be more bold in exposing companies that it believes are abusing their position and fiddling their tax rates? Might not that threat, certainly if carried out, concentrate the mind of many companies and get them to start behaving better, to the good of taxpayers?
My third suggestion relates to a point on which I do not agree with Ian Swales, whom I congratulate on his contribution; I do not think that we have the time to wait for groups of countries to behave, let alone to get the European Union to agree on a common stance. Let us look at those who are outside the European Union. Norway, for example, has to pay to trade within the European Union. Why cannot we say to companies such as those that the hon. Gentleman listed, “If you wish to trade in this country, you have to pay a fee, which will be more than we would gain from you in taxes if you paid corporation tax honestly”?
We might start with companies—coffee houses and so on—that could well find that other companies could substitute for them. There would be no diminution of the public good if we could not go to Starbucks. The country would not come to a standstill. We would not have breakdowns if we could not buy Starbucks coffee—there are plenty of alternatives—and we might begin to turn the tide in favour of honest taxpayers and against those who are taking us to the cleaners. I would be greatly interested to hear how, if the Government wish to be taken seriously on the subject, they will respond to those proposals, and other proposals that I know right hon. and hon. Members wish to put to the Government in this debate.
Ed’s note: This is an edited extract from Labour MP Frank Field’s comments in the House of Commons (Hansard Source)
