28/06/2016 House of Commons

Speaker! Order.

Finance Bill. We begin with Government amendment

114 to clause 140 four. With which, we will take the other amendments,

clauses, schedules and new clauses on the Amendment paper. Before I

call the Minister to move Government amendment 114, for the sake of

clarity, he has the permission of the chair and the sympathy of the

House in his requirement to stand throughout proceedings. Or, indeed,

to be in whichever position suits him, in order that he can spend

several hours at the dispatch box with his current disability. He has

a sympathy of the house and the prime minister will do as he sees

fit. Mr David Gauke. Thank you and can I begin by

expressing my gratitude for your dispensation? I will be taking

interventions but I think it will not disconcert members of the house

if I remain standing at the dispatch box whilst doing so. I beg to move

that clauses 144-154, schedules 18-20 two and the amendments stay

part of the bill. There is a great deal to cover and a large of

amendments from right honourable members opposite, which I will have

to cover briefly at this point. Let me try to cover as much information

as I can at this point. As quickly as I can, and respond to any points

majoring because of the debate. I would like to open the debate by

discussing clauses 144 to 146, which make administrative changes to the

procedure, and introduce a new penalty for those who enter into

certain tax arrangements. Close 144 allows HMRC to make a provisional

counteraction, where they believe the tax is due but the time limits

are about to expire. Clause 145 is an admin change to strengthen the

procedural efficiency. Currently, the procedure requires each user of

the same type of tax avoidance and to be referred to separately to the

advisory panel. This is a use of the panels resources and clause 145

correct this. Clause one 46 introduces a new penalty of 60% for

taxpayers who enter into abusive tax arrangements, which are counteracted

under the GAAR. The Government has tabled 84 amendments to clause one

44-146, making minor changes to ensure the legislation works as

intended. I would like to respond to new clause for Mac and amendment

format, which relate to the GAAR clauses I have outlined. We ask that

the Government conduct a review of the GAAR in eight years' time. The

GAAR advisory panel are required to a non-eyes reports of the cases they

consider. It is difficult to see how this new clause could provide a

better insight into GAAR cases than this. Amendment four proposes a

penalty of 100% is introduced for the GAAR. Under the existing penalty

rules, a penalty of 70-100% will be charged usually in cases of fraud.

It is right the penalty sits just below this. Under the new measures

of tax avoidance, it can be charged under the existing penalty rules and

the GAAR penalty to a maximum of 100%. As such, the Amendment is

little more than what we are already suggesting. I therefore urge the

House to reject them. Let me turn to clause 147. A new

threshold condition for the existing pool tasks regime introduced by

clause 140 eight. The new serial avoidance regime will tackle those

tax avoidance, multiple tax avoidance schemes. It will put

avoiders on notice. If they use further schemes and HMRC defeat

them, they will face serious and ex-collating sanctions including a

penalty starting at 20% of tax understated and reaching 60% for a

third scheme defeat well under notice. Clause 148 introduces a new

threshold condition so that promoters who have promoted three

schemes that have been defeated by HMRC over an eight-year period risk

entering the pool tasks regime. The government has made 28 amendments.

The amendments to schedule a team provide for those who try to avoid

tax through companies which they own or partnerships to be brought within

the scope of the new regime. Amendments to clause 148 involves

put us were tax avoidance is promoted through associated persons.

The schemes will work as it is intended. Clause 149 introduces a

new requirement for a large businesses to publisher attack

strategies ensuring greater transparency about the tax approach

to HMRC, tax holders and the public. It promotes good tax compliance well

it provides a fair and stable environment to do business. The

strategy published by businesses must cover of the area is published

in publication and remain accessible. A penalty may be payable

if the strategy is not published or the information contained does not

meet the requirements of the legislation. The government is also

committed to tackling cases of aggressive tax planning, schedule 19

introduces a new special measures process which will apply sanctions

to large businesses which persistently undertake aggressive

tax planning or refuse to work with HMRC in a collaborative and

transparent way, taken together clause 149 and schedule 19 will

reduce the appetite for aggressive tax planning. I would like to

respond to the amendments lead by the opposition. Amendments 5-18

would collectively to choose a requirement for directors of a

business to be personally, jointly and severally joined -- responsible.

Rising to a monthly charge of ?25,000 per month after the initial

12 months have passed. Amendments 9-14 and 18 propose that the said

named directors should not be re-burst and impose further

penalties. These amendments we believe are disproportionate and go

against the principle of encouraging a behavioural change across

businesses, whilst making any collective responsible to in the

businesses and their tax strategy is no exception. This government

believes that any penalty is a business responsibility, not one to

be pursued over a group of directors. In summary, these

amendments would result in less clarity around any sanctions and not

more. I urge the House to reject. I would like to respond to the

amendments to clause 149, tabled by the right honourable member of the

Don Valley. To publish a country by country report on their activities

within their published tax strategy. As I have set out, this government

fully shares her aims of increasing transparency and clamping down on

avoidance and evasion wherever it occurs. Indeed, this government has

led the way in calling at an international level for public

country by country reports. However the amendments that she has brought

forward I do not believe would help achieve the objectives that we all

share. The amendment has been put forward, that has been put forward

as technically flawed and as a consequence does not achieve the

state of transparency or pro business objectives that we all

hold. She has said that her amendment would mean that

multinational businesses like Google will be forced to publish headline

information about where they do business, the money they make and

the tax they pay. But that is not the case. Government legal advice is

that in practice the amendment would only play is a requirement on UK

headquarters multinationals. Foreign headquartered multinationals like

Google would not be involved at all. That underlies the transmitter and

seek objective of the amendments. Cashback transparency. It would

impose reporting requirement that does not apply to foreign

competitors operating in the same market. So to give an example, the

amendment would result in a company headquartered in the UK, whether it

be in the mainland or Northern Ireland, having to file these public

reports. Whereas a company headquartered in the Republic of

Ireland or indeed pretty much anywhere else, would not be in that

position. I think this does go against the level playing field

objective that the right honourable member has emphasised the importance

of. At this time of it -- increased uncertainty, we should be aware of

imposing further commitment on businesses. I will first give way to

the right member from barking. I am grateful to the minister for giving

way. Can I understand from him, he said in his contribution, that the

amendment moved by my honourable friend was flawed. That is not the

advice she has received. It seems to me that the real motivation is that

the government appears to be more driven by its ideas about tax

competition. Will he confirm that that is right. I would argue with

them that it is more important to have transparency, particularly for

the British people, and that any global company that chooses to leave

the UK simply because of the demands of transparency and a man is to be

fair tax, it'll be a rear occurrence and should it occur, it may well be

that it is the sort of company we do not want to have here in the UK.

There are some issues in terms of the timing of this, how this would

operate. But I do also want to highlight this issue that the only

company to be clear the only companies that would fall in the

scope of this amendment would be UK headquartered companies. So the

Googles of this world would be unaffected. We believe that the way

to progress this is on a multilateral basis. Considerable

progress has been made. It was slightly unfortunate timing to bring

this to your notice, the relevant Commissioner in the EU was seeing

that we were on the cusp of a deal as an -- to an EU level that he was

hoping that he was hoping this would be concluded in the course of the

Slovakian presidency, so in the second half of this year. And the UK

has been leading the way in terms of that debate. Indeed we have been

calling for the commission to toughen up. I want to complete this

point, I am being bombarded by the Right Honourable members. We do

believe that this is right. I would make this point. If you are... We

know that sometimes the debate in terms of corporation tax tends to

focus on sales of a company. Corporation tax is not based on

Sills, it is based on activity. If you do a lot of activity in the UK

and seals and another juror districts -- jurisdiction, you will

not pay a lot of tax in jurisdictions where there is little

or no activity for quite a lot of sales. If the UK is the only

jurisdiction that is putting this information out or is requiring is

companies to put this information, there will be a lot of of UK

companies in -- and foreign jurisdictions, not being a lot of

tax, but honourable to criticism. I think it would be a lot easier for

all businesses to build to say, we can point to an Italian company and

German company and French, Swedish company, whatever you will, that is

in the same position but has a lot of activity in its own jurisdiction,

a lot of sales and another juror restriction, it is being tax with

its activity is and not the sills. The UK is unilaterally doing this. I

think it is unfair and reputational damage to a business is something

that can damage the commercial interests as the honourable member

knows very well. I will give way to the honourable member of the Don

Valley. The problem here is that so much about what we're finding about

companies and where they do their business and profits is coming

through leaks. There is massive reputational damage to businesses.

This gives us a chance they put it on a better footing, in providing

information, but the baseline headlines about where they do

business, whether trade and whether profits are. Surely that is

something we can read on? I think principle and the destination is

pretty clear. We are moving in the direction of companies publishing

this information. My view is that the UK should be leading the way. In

working out a multilateral deal whereas were lots of come countries

impose a essentially the same requirements, I think that would in

help improve transparency. I want to stress I do not think the UK should

be the last move here by any means. I think the US is some way away from

moving in this direction and I do not think we should be waiting for

the US. I think there is a very strong case for saying that we

should be the before the US. But I think particularly given such good

progress is being made on a European level, and we remain members of the

European Union, and there is appetite in other European states,

let us deliver this. If in two years' time no progress has been

made, I have no doubt that they will be coming back thing, why has this

not happened? I think her case would be strengthened. Until we give that

a fair wind, I think it would be premature for us to go in

unilaterally. I thank the Minister. He has a perfectly justified and

good reputation for being sympathetic and driving this agenda

forward and he will recall the discussions we had both an

opposition and back in 2010 on precisely the point addressed in

this amendment. It is agreed amongst all of us that companies should pay

tax whether profits are earned. He will be as aware as I am some of the

Brewers people in the world, they live on some of the realist --

itches relisted. Taxes should be paid and were those profits are

earned. Can I ask them to respond very fully to the point that the

right Honourable Lady from the Don Valley is making. If he says that

her clause is defective in some way, will he give a commitment that the

government will look at those defects and see whether they can

frame a clause which will address the first part of what she has said,

which as I understood from his Commons, he understood Wes? To

address this issue most fully, the Finance Bill is not the ideal place

in which to do this. This is an issue that would... There is no

criticism of the right Honourable member of the Don Valley who has

shown much ingenuity to get this clause, this amendment in order. But

this is issue eventually an issue for company Lee Law and would be

best placed in that area. That would be the best way of doing it. I will

respond to my honourable friend. If I may. We are keen to plummet public

country by country reporting. We want to do it on a multilateral

basis. As I have said to the House, if there was a lack of progress on

this, then there is clearly something that is a government we

want to return to, given the concerns and I think I hold all

sides in all parts of the House. I think we will all agree that the

best result would be a position where we can move forward on a

multilateral basis. I thank the Minister giving way. It is clear

that the Minister has some sympathy with the motion put forward by my

honourable friend and most of the public accounts can have members of

many parties. Will he commit, rather than requiring my friend to come

back in the future, the government will look at this multilaterally. Or

will he go further today and agreed a sunrise close to add to what my

honourable friend and I and others have put forward so that this comes

into action if the multi lateral action does not come to fruition?

We are in a fast-moving area, and the progress in the recent months

has been considerable. Just at the beginning of this year, a deal did

not look possible and now the EU looks to be moving in that

direction. The EU commissioner said something was likely by the end of

this year. I think what I can certainly say, and I suppose only

with the caveat that we will have a new Prime Minister and so on, but my

view is that if we have not made progress by this time next year. ...

On multilateral agreements, we need to look carefully at this issue once

again. I do not want to make a full commitment because it may not be me

standing desperately at this dispatch box whilst I can. It may

not be me as a source of support. I might not be in that position so I

make that caveat. I think, looking at it, there is every chance that,

given we are likely to make progress, and would be disappointed

if we did not, in that event, which I hope is unlikely, we would need to

look at this again. I stress that I suspect there is some agreement

between us here that it would be better if we could get a

multilateral agreement and if we went off alone.

I have heard the Minister say, I think, there will not be a

multilateral agreement with the United States... We do not want to

act unilaterally for the UK but will act unilaterally within the EU, or

even if we are not in it, even the EU itself this 20% of the world's

multinationals. It does not need to be multilateral but EU - lateral.

I do not think it has to be universal but I think there are

disadvantages for the UK, if the UK is the only country to do it. It

comes down to this. It is the sense that UK companies would be looked at

and criticised for failing to pay very much tax in jurisdictions where

it did not have activities but had many sales. I think it would be

easier, and comes back to the point about educating the public about how

corporation tax works, I think it would be easier if there were a few

other examples. It is not need to be every other country but if you could

say, you know, Germany, France, Italy, they have it sadly the same

type of -- essentially the same type of system... Every time a UK company

is criticised, then we could say, what about the French or Italian

company? What I would say to my honourable friend is, we do not have

to move at the paste of the slowest but an isolated position here I

think runs some reputation risks for the UK. -- the pace of the slowest.

We do not need to... Given that there is good progress on this, I

would urge as not to accept this but look to implement it, I would hope,

over the next few months. On that point, it's the pens which

multinationals are in which segment of the competition. -- it depends

on. As long as two or three other countries were to do this, the UK

would join in? A precise number... It is a

threshold and depends on which countries it would be. I would have

to say, if I thought there were three or four significant economies

going in the same direction, then the case for doing it is much

stronger. Put it in reverse, if I were standing here next year and two

or three other countries had gone down that route, the concerns I have

been expressing clearly carry less weight than they do today.

Minister, I sent an open letter on behalf of the Public Accounts

Committee to European finance chairs or the equivalent, and to date, as

you may have picked up, it has been signed by the cheers of the

parliamentary finance committees of Germany, Hungary, Finland, Norway

and Slovakia, as well as senior MPs in the Netherlands, Czech Republic

and Bulgaria. And we know the finance minister in France is doing

interesting work in this area as are many others. Does this give help to

helping the Minister, to push in the right direction to make a bit more

than offer? It supports my optimism and we are

on the cusp of a multilateral deal. In those circumstances, that, I

think, enables us to work out the legislation in the most

comprehensive and effective way. As I say, I think having looked at

this, our preference would be to do this through company law rather than

through a Finance Bill. But that supports the point I made earlier

about the relevant EU Commissioner making comments at a meeting in

Luxembourg 11 days ago, which is that he is optimistic that we will

reach agreements by the end of the year. By the end of the calendar

year, that is. If that is the case, that is hugely encouraging. What the

honourable friend points out I think supports that position.

If you are willing to channel the leadership enthusiasm on profits

tax, where we chose to go alone and not wait for international

agreements, and introduced a whole new tax with compliance burdens and

penalties. I suspect that is a bigger deal than requiring companies

to disclose what they already disclosed but in a slightly

different format. That is the right way to go.

He is right to highlight that we went ahead, although that was

clearly consistent with the direction of the process. That also

brought in significant revenue to the UK. I think that has been very

helpful. The point I would make is that, if we want to... If we want to

reach the point that I think all of us want, that there is much greater

transparency, it is right to focus on international efforts on public

reporting, and in order to get fraud information on foreign multinational

entities and their activities, a multilateral agreement is required.

We need conference comprehensive rules with the widest possible

scale. A multilateral approach which applies consistently across UK and

foreign multilateral entities, we must get this right, so when it is

introduced into UK law, it is enforceable. We will continue to

support and drive this multilateral change following the result of the

referendum. I shared the determination that we cannot move at

the pace of the slowest. I will give way one more time. I am conscious

I'm taking up a lot of time in what was to be a short debate.

The Minister has been generous in giving way. A final point on this. I

am sure we agree with him it should be done multilaterally. There is

nothing between us on that. It is helpful to his aim that he can

demonstrate there is strong support across the House of Commons in

support of this when he is dealing with international partners. As a

suggestion, hopefully a helpful one, he might consider asking his

officials to draft a clause that would not be defective, for public

discussion, which you can print to his colleagues multilaterally as a

clause they might wish to include in their parliamentary legislation.

I'm grateful to my honourable friend. Let me take away that

suggestion, because there are a number of ways in which this could

potentially be done. We would want to consider it but I stress that I

do think this debate this afternoon is helpful to parliamentary and

governmental colleagues in other jurisdictions, looking at this

issue, to demonstrate the determination, the cross-party

determination to make progress on this. We are committed to acting

swiftly to implement international agreement, as we have done with the

OECD recommendations on country by country reporting. We are committed

to improving the transparency of multinational tax affairs. But we

support and effective, multilateral approach, at this time of increased

uncertainty, a domestic measure would, I fear, disadvantage UK

business for reasons I have outlined. Therefore, I look forward

to hearing the contribution of the right honourable member for Don

Valley, but I hope she is satisfied with the assurances I have provided

today. Clause 150 and schedule 20 create penalties for those who have

deliberately assisted taxpayers to evade inheritance tax, capital gains

tax or income taxed by offshore means. The legislation introduces a

financial penalty of up to 100% of evaded tax and public naming most

serious cases. Now amendments 19 and 20, made by the opposition. The

intentions of amendments 19 are twofold. The first is to ensure it

is considered a Labour to act as an introducer. Sir Roger, schedule 20

already covers this, so this part of the amendment is unnecessary. The

second empty is to set a test that if it appears the advisers should

have known the advice would enable offshore tax evasion, they would be

an enabler. This test would introduce uncertainty, meaning it is

unclear which due diligence should be completed. Amendment 20 similarly

suggests that if the adviser failed to make enquiries, the reasonable

and honest person would have made. Sir Roger, the court recognises that

knowledge includes a blind eye knowledge, so-called, where a person

has suspicion and deliberately decides not to find out more. This

means an enabler cannot bury their head in the sand if they have

reasons to think they are assisting evasion, failing to make proper

enquiries, and they will be penalised under the schedule as it

currently stands. Given the restrictions and uncertainty to the

amendments 19 and 20, I urge honourable members to reject them.

Let me turn to clauses 151-153, schedule 21 and 22, which

strengthens civil sanctions levied on offshore tax evaders themselves.

Close 151 will increase penalties for offshore tax evasion to 30% of

tax due. The current minimum penalty is 20% and maximum penalty will

remain up to 300% of tax due. Close 151 while seeking to minimise or

register penalty, in to provide more information about evading abilities

in cooperation with company Mac. Clause 152 says they should be named

and less on offshore evader comes forward to HMR see voluntarily and

makes a full disclosure. Clause 152 allows HMRC to name the individual

who controls the country, which has participated in offshore tax

evasion. Clause 153 introduces a new asset based penalty. This applies to

the most serious cases of deliberate offshore tax evasion, where the tax

loss exceeds ?25,000, and will levy a penalty of up to 10% of the value

of the asset connected to the evasion. This could include physical

property, intellectual property, shares and bank accounts. This

asset-based penalty will be levied in addition to other penalties and

interest is due. Taken together, these measures are applied HMRC with

a greater understanding of tax evasion, while significantly

increasing penalties and tax evaders and those who help them. Sir Roger,

I would like to respond to five and six, which are concerned with

reporting the number of tax evaders who have been named by HMRC and the

number of asset based penalties levied. The asset-based penalty is

expected to apply from 2016-17 tax year, would have drinks and naming

provisions exposure to apply with the following year. -- it is

expected the provisions will apply. As such, they will be no time for

the activities covered by the amendments to have happened by the

deadlines set for the Government to report. Sir Roger, this Government

is taking action to further increase penalties on offshore tax evaders

and those who enable them. However, it remains a consistent minority of

taxpayers who continue to evade UK tax in this way. To tackle this

minority, clause 154 introduces a new criminal offence for persistent

offshore tax evasion. Crucially, the offence does not require prosecutors

to insure the taxpayer intended to avoid tax offshore, increasing our

ability to prosecute offshore tax evaders. A successful conviction can

result in a fine of prison sentence of 26 months. Those who continue to

break the rules it should face tougher sentence and this new

offence will help ensure they do. I would like to briefly respond to new

clauses seven, eight and nine. New course seven makes it required to

publish a report on the new criminal offence in the year it is past. New

criminal offences like this are expected to come in in 2017-18,

beyond the deadline set out in the new clause so this new clause is

redundant. New clause eight proposes to deal

with the financial services industry. HMRC received over 125,000

pieces of information from the public. The actions are subject to

the independent scrutiny of the office of the surveillance

Commissioner. I am satisfied this gives me good assurance it is

working in this area and highly effective. We do not believe this is

necessary and urgent members to reject this clause. As I read

this can... In the end he could not leave his job, that is not good

enough and I would honestly urge the Minister to think again about this

and institute a review. I note the comments, we have discussed this

before and I point her in the direction of Sir Andrew Parks's

review of those settlements and the conclusions he reached in those

respects. He will discuss this before and again and we will not

reach agreement on that. I'm conscious this is a relatively short

debate and I'm taking up a large proportion of it. I'm not yet quite

done. I will take a short intervention. Surely from the back

and of the NHS, where whistle-blowers have suffered the

same detriment and the government is trying to change their attitude, I

don't understand why we would not want to support whistle-blowers

within the industry when we know we've had one scandal after another

for the last decade. I think we should make the point to heard that

the sheer scale of the level of information provided to HMRC, by no

means are all of those whistle-blowers, but certainly, HMRC

does receive substantial amounts of information from whistle-blowers

which is very helpful to it. In terms of how that works and the

contribution to HMRC's activities, the existing provisions regarding

whistle-blowers, these matters are always kept under review and I

thought there was a strong case for returning to this issue I would

certainly be interested in doing so but I'm certainly not hearing that

at present. The Right Honourable member for Barking has waited very

patiently before I turn to the new clause, number nine, which would

require the government to estimate the impact on the tax gap.

I don't believe this would be effective in achieving its aims, it

would focus on trading levels in the UK. As the Prime Minister announced

at the recent anti-corruption Summit last month, the Crown dependency and

overseas territory will look at all companies in their jurisdiction.

They will sheer this information with HMRC and law enforcement

agencies. Our authorities will see who owns and controls companies. I

understand the aims of this new clause. It will be less effective

than the steps we've already taken. We will hear from the Right

Honourable gentleman but I am not persuaded by it. I won't take up any

more time with the committee, I've tried to the as clear as I could,

but I hope the amendments can stand part of the bill. The question is

government amendment 114 be made to the house. I will try to be brief

but there is a lot to get through. I know the chamber has many members

but particularly today we have a profligacy of right honourable

members with us, particularly on the opposition benches. Those listening,

I will need to be brief. Labour does not pause clause 100 44. Clause 145,

would like some assurance from the Minister that there are enough staff

to deal with this. I realised the government has gone into reverse

gear. Each MRC was significantly underperforming through being

understaffed. I should like some reassurance on that. One clause 146,

penalties for the anti-abuse rule. The child institute of taxation, who

have been helpful to all members, particularly opposition front bench,

they are concerned on the penalties referred to in 146, and that someone

will be punished for an error of judgment. I understand they found it

was to do with Customs and Excise rather than income tax. Perhaps the

Minister could clarify. On clause 146, amendment four, the deal with

raising the penalty from 60% to 100%. I am concerned that the

penalties would not be sufficient, a range of penalties available to

change behaviour and encourage socially acceptable compliance

behaviour, which I think is what all of us want to see. In terms of

serial tax avoidance, the chartered as two of taxation is concerned

here, and I understand their point, but this clause might effectively

introduce a double penalty for an individual. Generally we tried to

avoid double penalties. Perhaps the Minister could clarify that there is

no such double penalty. If the Minister could give an indication,

and these things are difficult, of how many non-taxpayers the

government thinks the system, how many of them will mend their ways.

Again, there is the funding. In terms of 148, tax avoidance schemes,

the Labour front bench supports this. In terms of clause 149, which

deals with special measures, the Labour front bench supports that. We

have put forward some amendments, 5-18, to which the Minister referred

when speaking earlier. Those amendments deal with increasing the

penalty and for joint and several liability. The Minister said, and I

found this strange, he said, the government was in the business of

encouraging behavioural change. So are we. Having higher penalties

could encourage behavioural change. Someone not indulging in bad

behaviour but filing the reports and so on. All directors would be aware

and similarly, in terms of the penalties in which, if they were

levied, would not be reimbursable. Too often the case that companies

simply reimburse their staff when they have engaged in non-criminal

wrongdoing. With 149 comes amendment one. My right honourable friend will

be speaking on amendment one. I will say a couple of things briefly. He

said it is technically flawed. That may be the case but I need to say to

the Minister, this is amendment number one. There are almost 200

amendments. If the government supported it they could have

corrected any technical flaws. I think the government is being timid.

I do not see the these as leading to disadvantage to UK headquartered

companies. Quite the reverse. In the United Kingdom, whether the minister

likes it or not, the reputation of Google was adversely affected in the

United Kingdom because of attacks deal done with the UK authorities

which was not transparent. If there had been more transparency then

perhaps their reputation would not have been at firstly affected. I

would say, I cannot resist saying this, he's a good minister. In our

society, talking the talk, can I urge him to do it. Support amendment

one. Sort out the technicalities. In terms of clause 150, this is a bit

of a gallop, I apologise, in terms of this clause and schedule 20, I

heard what the Minister said about 19 and 20. I defer to his superior

knowledge. What was proposed in amendment 19, already covered in the

schedule, he referred to in relation to amendment 20 what he called blind

eye knowledge. That is a new one to me. It seems to be introducing civil

penalties now, not criminal ones. This brings me on to 151, to do with

offshore transfers. The Labour front bench support that. In 152,

publishing details of deliberate tax falters, the explanatory notes say

this will amend the finance act to allow HMRC the power to publish

details of anyone charged with deliberate failure to notice by --

notify HMRC of a change in tax. This must involve an offshore transfer.

This would be HMRC publishing details of knotty taxpayers or

naughty non-taxpayers. Can I urge the government to think when HMRC,

not under control of the government, to look again at the issue of

taxpayer confident shallot tea and went deals are being done, with

large companies as opposed to individuals, that those deals

include within them as part of HMRC's bargaining a waiver of

confidentiality on the deal. On the notorious Google tax deal, where the

Chancellor of the Exchequer said he could not tell us how he got to the

deal cause it was confidential, it was true because each MRC failed --

HMRC field to insert a waiver of confidentiality. That should be in

those kind of settlements, such as should have been within the

appalling settlement under a Labour government, I'm ashamed to say, with

Ford phone. In terms of clause 152, new clause

four, tabled by my honourable friend, relates to this, a report of

the general anti-abuse rule. I am sorry the Government is apparently

not going to accept that. I understand, in that connection, what

the Government has said about new clauses, five, six, and seven, that

the time frames within those would be meaningless because the reports

would be... Would have to be done before the measures of which they

were reporting being implemented. I understand that but did not

understand the Minister putting that in relation to new clause four, but

if you did, perhaps you could clarify in the summing up that this

is not a deadline issue as it was with five, six, and also seven.

Perhaps he will confirm the Government will support four, unless

there is that deadline issue. Clause 153, quite interesting, for those of

us on these benches who like to try to think widely on tax measures.

Because it is a small step towards a wealth tax. That may not be the

governmental intention and I am not saying that is the Labour bench's

proposal on taxes. We are looking at things broadly but this is because

there are asset-based penalties for offshore in accuracy is and Phil

yours introduced via clause 153 and schedule 22. -- they'll years. In

that connection, I would like to raise an issue that was raised with

me by the Law Society of England and Wales. --. I am a member in good

standing of that organisation as I suspect the Minister is and the rays

that. If we're talking about asset-based penalties, how does one

value the asset in terms of the mechanism for its valuation, but

also for assets which fluctuate in value? Moving on to clause 154,

Labour supports this clause. Offences relating to offshore income

assets and activities, in this clause. The Minister has already

responded to 147 which will be coupled with 154, where he points

out the deadlines would not marry up when the report comes in effect. I

apologise to the House for not spotting that. I think that brings

me on, having done 154, two amendment tabled by the Right

honourable member for Barking, the amendment clause nine, which the

Labour bench supports. I will let the right honourable member, if she

catches your eye, Sir Roger, explain to the house the necessity and

desirability of that new clause. Thank you, Sir Roger. In light of

the debate we are having this morning, I think an appropriate

opening remark, that I believe that in the next few hours, next one hour

perhaps of what is left, we are debating the most important part of

the Finance Bill this year. There has been a lot of amendments talked

about already this morning. I'm sure you will forgive me I make my

remarks very brief and focused only on three matters. I shall focus on

the appropriate changes as discussed in amendment one, in the name of the

right honourable member from Don Valley and others. New clause eight

and new clause nine in the name of the rate honourable member for

barking and others. -- right honourable member. The SNP supports

both of the amendments and new clauses being moved. I will be brief

because I want to allow more time for the honourable members to

present their case as fully as they are able. If I can say something

generally, while you are concerned about this, we all know there is a

concern amongst the public about tax evasion and hidden wealth. It was a

growing concern before the release of the Panama Papers. Are member

discussing this myself in the first week of February in this house. -- I

remember. It has been fuelled by concerns as people become more aware

of the hiding of money in tax havens by individuals, corporations and

trusts. Let us but this debate into some broader context. According to

the London School of economics' representative, tax havens- one

sixth of the world's total Private wealth. The estimated that around

$20 trillion. -- yes the major as that. Whether that is accurate, all

members will agree that the amount of money is staggering in scale.

Indeed, the Panama Papers of Mossad Fonseca are just the tip of the

iceberg of what we face in the world today. There are many issues which

require addressing and neither in this debate nor in all the proposed

amendments and new clauses are all the issues addressed. But they are a

start and I must say I have been disappointed by some of the

Minister's reasoning around, particularly, amendment one. It

struck me that he started to redefine at least three times in

different ways what he meant by multinational. First of all, it

seemed too, in my view, have been speaking that it was global and then

became EU specific and then became noticed in new countries in relation

to that. It struck me that it is not that amendment one has not been

thought through but that the Government response to amendment one

has not been thought through as thoroughly as we might have

expected. I certainly would be encouraging if the Right honourable

lady proposes to press it to a vote we will these be following into the

lobbies. We know there are many groups involved in this. These

amendments referred specifically to corporations but there is more than

corporations that are involved. Indeed, if we end up putting in own

amendments. -- if we had put in amendments they would have been

broader in nature to encompass trust, for example. Being

reasonable, we have to put ourselves reasonable, we have to put ourselves

in a position where we make the first step. Sometimes somebody needs

to make the first step. When the Minister was talking, you amended me

of the days when I used to trod through the library at Stirling

University, taking some students and join them back copies of Hansard.

There you can get back copies of Hansard from the 18th and

19th-century, and the subject which rose more than any other debate in

that house was slavery. One of the arguments continually used against

doing something to make a slavery illegal was precisely because it

wouldn't create a level playing field. Somebody, on some occasions,

has to be first. This is not just about finance and technical

considerations but fundamental ethical considerations involved in

this, and it is because of the ethical considerations that we

believe these matters hopefully will be pressed of the vote and we will

support the right honourable ladies in doing so.

He has right that somebody has to go first. The only thought I had is

that this country -- his country relies heavily on the oil industry.

Is he certain it is right to impose something on Shell and BP that the

Italian Government might impose on BMI and the French Government want

impose on the other company? What is his view on that?

I think... I think, in these matters, going beyond and taking a

look at all large corporations that operate internationally. I can

understand the point being made and I understand the point being made by

the Minister. Sure, there might be occasions where creating the first

step appears to put people at some short-term commercial disadvantage,

but I also think it puts them at a reputational advantage. If they are

seen to lead the way... I don't think it is as simple as saying you

are necessarily currying commercial disadvantage. For those reasons, I

would say we would welcome these clauses. As they would apply, we are

very aware they will apply to important sectors of the Scottish

economy as well. If I briefly say something about whistle-blowing, the

amendment which the SNP made. I was grateful for the intervention by the

Right honourable lady from Barking. And the way in which she asked the

minister about this situation and why he was not supportive of this

clause. Indeed, as she spoke, I thought what might be best is if,

rather than as pushing this new clause to a vote here, what we may

do is engage in cross-party discussions as to how best we could

construct a thorough way forward. Because I agree wholeheartedly with

her. When we look at the number of cases taken to court, that have been

about taking the whistle-blowers to court, a person wonders about the

way in which the balance and the skills of justice lie at the moment.

-- the scales of justice. I do recognise there have been changes

made to the requirements of whistle-blowing, and some come into

effect this September. But when you look at the requirements in place,

the requirements are obligations on companies to do things like appoint

your own champion of whistle-blowers. Report to your own

board of a company about the amount of whistle-blowing that is going on.

These things require a culture within companies willing to do that.

If the will is not there, the current processes will have next to

no effect. We are not saying we know precisely the best way in which we

can secure effective whistle-blowing, and that is why I

think it would be useful to have some cross-party discussions about

this, which I am sure the right honourable lady would be happy to

engage in. Although we believe in this clause, we will, in this

spirit, not press that to a vote but look forward to supporting the those

led by the two right honourable ladies.

Thank you, Sir Roger, and I beg to support amendment one in my name and

in those of my honourable friends, the members for Hackney South and

Shoreditch, Sunderland South, and Amber Valley Southport and Edinburgh

North and Leith. I am grateful for the support from six other members

of the Public Accounts Committee who signed this amendment, namely the

members for Bristol South and Berwick-upon-Tweed, South Norfolk,

Peterborough and Warrington South. In total, I think 77 names of right

honourable members have signed the amendment. It is a pleasure to

follow the honourable member for Kirkaldy. Apart from my own party

support for which I am extremely great for, particularly from my

honourable friend from Wolverhampton South West, who has been fantastic

in his liaison and advice. The SDLP, Plaid Cymru, the Green Party, Ukip

and SNP honourable members, alongside a number of Conservative

members and the independent honourable member for North Down.

There is truly cross-party support across this has and I'm grateful to

all those members of all those parties for their support. It also

has the welcome support of the business led fair attacks mark and

the tax Justice network, and support development charity such as Oxfam,

action aid, the one campaign and save the children. It is

understandable, given the momentous events of recent days, creating

ripples that reach all corners of the nations and across parties, if

numbers of this House are distracted from the business we are debating

today. Let me be clear what is at stake. If this amendment is passed,

the Government requirement that accompanies public their group tax

strategy on their website will include for large multinational

enterprises with a base in the UK, headline details required on their

revenues and taxes paid in accordance with the OECD

requirements for country by country reporting. This is the parliament's

Google moment. I would like to clarify something. Everything this

amendment requires by being published is already what is

required by the Government to be reported to HMRC. Yes, I agree with

the minister that it does not require and achieve worldwide

reporting for any multinational enterprise but -- but also those

that are over a certain size and have a turnover of over ?600 million

per year. She did say the company would need

to produce the tax on the website. What ever company does not have a

website? Is that a potential loophole? I hope the companies we

are talking about would be good enough -- big enough to have a

website but if not, we might get an opportunity to discuss that later.

But if they did not have a website, they are on a hiding to nothing. It

seems to me. It's very important because the Minister tried to

suggest this would only be for UK-based companies. It is in line

with the guidance from HMRC already effectively reporting strategies. It

includes those over a certain turnover. We are working with the

grain of where the government has proceeded on these very important

areas. We know there is widespread concern in a house across parties

that multinationals operate. The greatest weapon of the multinational

enterprise is tax arrangements being shrouded in secrecy. The problem is,

in the world we live in, as leaks emerge, it is death by a thousand

cuts. This is about saying, let's get the businesses back contract.

This is not just good for businesses but about making sure they have a

chance to set out their claim and what they are doing in a very public

way. We know that governments across the world face a very particular

problem with these multinationals. The problem is the shifting to areas

with no corporate tax rates. Why in 2010 Deborah Meaden have profit but

were equivalent -- why did Bermuda... Is there something odd

about a company, for example Google, with huge numbers of staff in one

country but all the revenue in another. It would not be surprising

to find the revenues were in a country with 12.5% tax rate as

opposed to the UK. We can agree this is unethical manipulation of tax

rules. As has been pointed out, the impact creates unfair competition

with these multinational Enterprises transfer profits to the tax

dominions to gain an advantage over a rival. We want to lower that --

level that playing field. The whole house supported the Chancellor's

legislation to require financial reporting for UK-based

internationals and UK unit where the parent company is in a country where

the country does not agree to country by country reporting. This

would include showing each tax jurisdiction the amount of revenue,

profit before income tax and income tax paid and accrued and their total

employment capital retained earnings and intangible assets. They'll also

be required to identify each entity within the group doing business in a

particular tax jurisdiction and provide an indication of business

activities within a selection of broad areas which each entity

engages in. This information is already required to be provided to

HMRC. We are saying, let's go public. I want HMRC to be armed with

the necessary information. We need more than HMRC to have a

confidential look. We deserve to see the bigger picture. Publishing is

one way to persuade these companies to restore the corporate reputation.

Was it because of the extraordinary focus on Google that Facebook

announced a welcome change to the recording of its profits in the UK?

I believe so. The company is reporting profits in tax havens

rarely have a PO box and the nameplate, but we want to know that?

Let's follow our convictions, do what we know to be right, Shine a

light on the activities of these large multinationals who run rings

around Revenue and Customs authorities around the world. Let's

not flinch or play for time and hope that some international agreement

will be reached eventually. I would remind members but so often we heard

a lot from both sides about our Parliament's sovereignty, and our

power to make laws. This is the test. As Britain is still a leader

or are we followers? This amendment is a pro-business measure. It would

be Parliament saying every business must play by the same set of rules.

The tide of opinion is changing in the business world. This week I've

received support from SSE for the principal. I'm delighted major firms

sign up to the fair tax mark and pledge never to use tax havens.

Since 2014, a quarter of the FTSE 100 companies have published

information about their tax arrangements and long-standing

British firms like Barclays are among them. I commend the Minister

for the steps taken in the last six years to improve the level of

transparency and the clamp-down on the secretive tax deals. Don't we

know what the googles of this world will be hoping? We will demand more

openness. This house knows what those who want via taxes I like that

are like. Every right honourable member knows what their constituents

would say about these firms. Let's spare a thought for developing

countries who lose as much in lost tax revenue as they receive in

welfare. That cannot be right. In February the Chancellor said we

should be moving to country by country reporting. The UK will seek

to promote this internationally. I hear what the Minister is saying but

there comes a point when we need to show leadership and much of the

rules covering the tax and other rules affecting companies are not

applied worldwide, they are British, home-grown rules that seek to

provide fairness as well as, edition. Whilst I welcome the news,

that is another debate for another day. The truth is, unfortunately the

present state of the European Union does not tackle the problems of

those developing countries that lose out. They've not publish the

information on the activities that countries, what companies do in

those countries. I say to the Minister and the Chancellor, this

will be part of your legacy, a chance to lead were other come --

countries will follow. I humbly request a division on this amendment

and I urge the Minister to join the members of nine parties in the lobby

with me to make a historic change. In years to come we will be

wondering why we did not do this earlier. Let's see the British

Parliament rower. I urge this house to support the amendment. To follow

the honourable lady and support the amendment I will not seek to repeat

the arguments she made so eloquently but I'd like to make a few separate

points. Those of us who regard the UK as a great place to do business,

want to attract businesses and encourage businesses in the UK to go

overseas, need to recognise we need the sort of business climate where

people can feel confident to compete here and we have a respected

financial system, tax system, respected market where people

operating here are seen to be behaving properly. I don't think

from what we've gone through the last few years, when we keep finding

a large multinational companies have been misbehaving, then those

companies get hauled through the press and Parliamentary committees,

is not since early -- necessarily the right way of improving business

climate. We need to show the companies that are based and operate

here are following the rules and the ones not following the rules will

get caught and dealt with. It will be strongly encouraged to change

your behaviour. Running and hiding will not help, it is us who have

been in the lead on this. We've been making these countries change their

behaviour. It will not work because we are one of the main global

financial centres. We have a need to set an example and say, if you want

to be based here we want you to behave ethically. I've no problem

with UK-based companies trading in low tax jurisdictions. If they have

assets and employees there that is their right. But we need to make

sure they are actually doing that so we can see what they are doing, what

they are reporting, not just trying to hide profit. I welcome this

measure and this transparency. I don't believe some of the bleak

competition warnings. This will only apply to companies with turnover of

more than 750 million euros. I would not like to guess what that was in

sterling. I will be surprised if many companies that size have major

trading activities in other developed countries. Like having a

subsidiary. If they do that, I suspect they will be public so

people will know the turnover. They will know what the tax is that is

being reported and the activities are. You need to have this analysis

which shows where you're operating in the world. We are not creating a

new set of disclosures that don't exist, we are trying to enhance the

ones we have and make them work. If you look at the major sectors, you

find one. The idea was we got some of this disclosure so we knew who

was operating where. I don't believe for these very large companies we

are talking about, the vast majority of which are trading ethically, that

this will be much of a hardship for them. It will put it into one

document where people can read it and see it and discuss it

transparently. If you are in the UK and you make a few sales, everyone

will understand there is no reason you should pay French corporation

tax. There is no reason why anyone selling to hear from France would be

UK corporation tax. We can make that clear. What we want to know is those

companies that have a very large amount of turnover and very few

assets and employees, so we can work out whether they are doing that

legally. It might be that they are. It might be that somebody in and C

has invented a product and is taking in royalties. That is fair enough. I

suspect there are not many of those period to the amount of money in

those jurisdictions. The least when we have it transparent they can

defend themselves. We will know when they are misbehaving and whether we

can buy from them or not. This is something we should do. It is not

quite the perfect way of doing it. I'd urge the government to come

forward with a bill that would do something. It will not be perfect,

perhaps we will not be completely assured, we will need to make sure

they have not missed off a few territories. I suspect there will be

penalties for not publishing the full statement but not what is

published in this. Maybe if we are getting the same thing there will

need to be more transparency. We could make this better. It would be

better if we had this EU wide. Perhaps I'm the only person in the

chamber welcoming this. Tax was always meant to be a member state

capacity. If we want to wait a short period to have it done in some

consistent format across the whole of Europe I don't mind if the

publication of this is 2018. We could at least have a clause that

says the UK will do this, we will do this from 2018 unless the EU does

something that applies here before that, in which case we could repeal

that clause. That's not where we are. We have a choice. We can pass

it or do nothing and wait and hope that somewhere else, someone will

take the lead on something we have been leading on. Our government has

introduced new tax to stop corporations abusing this. I'm not

sure these are as displacing as the new tax was so I'm not sure why we

are being cautious. Right way forward here is to be united behind

this and the government to say, on reflection, we will bring forward a

clause which achieves this in the right way. I hope the Minister

thinks that is the right way forward. Can show us that we are

behind the policy. If we cannot do that I will be supporting the

clause. Thank you for calling me. I am

grateful that the amendment, is supported by MPs across the Chamber

and by a range of charities and voluntary organisations. I think the

way in which she has preferred this has been excellent. I wish I had

done this as well but I was a little distracted by other issues. Because

in my name and others would require the Chancellor to publish the impact

of levels of tax avoidance and evasion and extending the current

report requirement on UK-based companies to publish information to

companies in Corporation in Crown dependencies and overseas

territories which have significant levels of trading activity in the

UK. The purpose of this clause is to take forward the commitment of the

Prime Minister to have publicly available registers of beneficial

ownership for all of the Crown dependencies and overseas

territories. It is very difficult to estimate the amount of money held in

tax havens, as other people have said. Some estimates have put

private financial wealth in tax havens between 21 billion and 32

billion, untaxed or very likely tax. The French by Minister estimated

that last year, $7.6 trillion of money was held offshore, which is

the equivalent of the US budget for two years, and the OECD has

estimated tax havens might cost in developing countries are some of up

to three times the global aid budget. We are talking big, big, big

sums. We also saw from the Panama Papers how much of the money that is

held offshore is held in UK tax havens. Of the 214,000 British bank

accounts exposed in the Panama Papers over half were registered in

the British Virgin Islands. I call on members of the House, your

attention to another interesting piece of data you can get hold of

this year the role of tax havens and overseas territories. A World Bank

review which looked at a corruption cases over a 30 year period from

1982-2010... We are leaving the House of Commons to go live to the

Scottish Parliament were First Minister Nicola Sturgeon will make a

statement on the UK referendum on the EU. I would ask any member who

wishes to speak against the motion to press request to speak button now

and I call on Joe Fitzpatrick to move the motion. No member