Alexander announces major clampdown on tax avoidance and evasion
Sun, 19 Sep 2010
"Today I can announce that the Chancellor and I have agreed a package of new measures to crack down on tax avoidance and evasion. We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra."
Liberal Democrat Chief Secretary to the Treasury Danny Alexander today announced a £900m attack on tax avoidance and evasion.
The additional investment is expected to raise an extra £7bn each year by 2014/15 from those who currently avoid paying their fair share of tax.
HMRC will use the extra funding for:
- A more robust criminal deterrent against tax evasion
- The creation of a new dedicated team of investigators to crackdown on offshore evasion
- The creation of bespoke cyber crime teams and online specialists
- More investment in freight and detection technology to prevent alcohol and tobacco smuggling
Danny Alexander made the announcement in his speech to Liberal Democrat Autumn Conference:
Check against delivery
Our party has a long history. And we have never taken the easy road.
When the entire parliamentary party could fit into the back of a taxi, they didn’t keep the torch of liberalism burning because it was easy, but because it was right.
In this great City of Liverpool, when Chris Rennard and campaigners led the long march to take power from Labour, they did so not because it was the easy, but because it was right.
When Charles Kennedy was a lone voice in Parliament against the war in Iraq.
When he was shouted down by hundreds of MPs.
He did it not because it was easy, but because it was right.
In May this year our party faced the toughest decision of its life.
We chose to reject the ease of opposition to govern this country in coalition with the Conservatives.
Taking responsibility for Britain’s future at one of the most difficult times in our economic history.
Not because it would be easy, but because we knew it was right.
Conference, I have never been so proud to be a Liberal Democrat.
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And I am proud of the agreement we negotiated.
One party at war with itself has been replaced with two parties working together in the interests of our nation.
Of course we have disagreements – and we give as a good as we get.
But we get on a great deal better than the last lot did, and as a result we will achieve a great deal more.
Already, Liberal Democrats in government are delivering on our manifesto commitments.
We have increased capital gains tax.
We have introduced a substantial bank levy.
We have restored the earnings link to pensions.
And next year 900,000 low income workers won’t pay a penny of income tax.
A major step towards our manifesto pledge to make the first £10,000 you earn tax free.
These measures make our country substantially and permanently fairer.
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Labour had 13 years to make these changes – they chose not to.
We made them in 13 weeks.
We will take no lectures on fairness from them.
Gordon Brown was very generous. With other people’s money.
He ran the British economy like the drunk in the pub who says ‘lend me a tenner and I’ll buy you a drink.’
Labour were irresponsible.
They ignored the warnings, years in advance, of the impending financial crisis.
Vince Cable warned them that the bankers’ greed and the bubble it was fuelling, threatened our economy. They lived in denial.
They were reckless. They allowed Britain to build up the largest budget deficit in Europe with no plan for tackling it.
Shamefully, they made expensive promises to communities across the country, weeks before the election when they knew full well there was no money left.
Until Labour apologises for that cynical attempt to bribe the British people with bouncing cheques it will never be fit to govern this country again.
Until they apologise for their disastrous economic legacy…
… and until they set out, in detail, how they would tackle the deficit, the people of Britain will know that Labour cannot be trusted with the economy.
Meanwhile, we have to clean up their mess.
Last year alone Labour spent 150 billion pounds more than we paid in tax.
150 billion.
That’s more than on education, defence and transport combined.
For every £4 Labour spent, £1 had to be borrowed.
Would you run your business or home like that?
It simply wouldn’t be possible.
You would have 3 choices.
Take responsibility.
Let the bank force you.
Or wait for the bailiffs to come knocking.
And so it is with countries.
When we came to office, we faced a choice:
Were we prepared to have the same questions asked of us as were then being asked of other countries with large deficits – with devastating consequences for their economies.
Or were we willing to put in place a credible plan to fix this problem?
I am proud of the answer we gave.
I am proud that two parties were willing to come together, to take responsibility for our economy in this time of crisis.
Some say this was a Conservative judgement that Liberal Democrats just went along with.
Not true.
This was a coalition judgement, shared equally by two parties.
In our manifesto, we set out honestly the urgent need to stop the government spending money it doesn’t have.
We set out in detail some of the measures we would take.
And most importantly we made clear that economic evidence would drive our decision-making, not political dogma.
The eurozone crisis during the election campaign provided a sharp reminder of the consequences of failing to act.
Our country needed a firmer, faster and more credible plan to tackle the deficit.
The G20 said "those countries with serious fiscal challenges need to accelerate the pace of consolidation"
Who do you thinking they were talking to?
We inherited a country in the danger zone.
We have taken it to the safe zone.
We have to keep it there.
Labour would have imposed more cuts than we have to, because they lacked the political courage to get on with the job.
More prolonged pain, for more people, and more debt that takes longer to pay off.
There is nothing progressive about leaving the burden of paying the debt to the next generation.
That would be the least progressive choice of all.
Our plan is credible. It is already supporting economic growth.
Since the election our long term interest rates have fallen - helping jobs and growth.
There is not a choice between balancing the books and economic growth. The two go together.
Labour allowed political convenience to trump economic necessity once too often –
We will not make that mistake.
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I didn’t come into politics to cut public spending.
But it has to be done.
I know we, Liberal Democrats, have the courage to see the task through.
Not because it is easy, but because it is right.
The size of the cuts we have to make is unavoidable, but we do have a choice about how those reductions are made.
So I want to set out the principles – the Liberal Democrat principles - on which I will base our decisions in the spending review.
Tackling waste.
Investing in growth – which Vince will speak about on Wednesday.
Fairness.
Radical reform of public services.
Government has a duty to spend your money carefully. As if borrowed from a friend.
So we will be ruthless in rooting out wasteful or unnecessary spending.
Before we ask frontline services to face tough choices, we are ensuring that we have rooted every penny of savings from the back office.
Of course efficiency savings alone will not pay off the deficit.
Under Labour welfare spending ballooned. To almost £200bn.
Under Labour, 2.5 million people on incapacity benefit were simply left.
Millions more on out of work benefits, trapped in dependency.
Labour’s grim social legacy.
Where they failed, we will reform.
Our principles: work for those who can work, proper support for those who cannot, money for those who need it most.
A welfare system that lifts people out of poverty, not one that traps them there.
There are difficult decisions to be made.
And there are critics that may question our motives. They are wrong. But we must never allow the fear of those accusations to stop us doing the right thing.
We need a welfare system fit for our times.
So we have to look hard at all benefits.
Support for those who need it, work for those who can.
So that more can be invested in future success, not wasted on social failure.
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Just as it is right to ensure that every benefit claim is fully justified, so we must ensure that every tax bill is paid – in full.
There are some people who seem to believe that not paying their fair share of tax is a lifestyle choice that is socially acceptable.
Not true.
Just like the benefit cheat, they take resources from those who need them most.
Tax avoidance and evasion are unacceptable in the best of times but in today’s circumstances it is morally indefensible.
Today I can announce that the Chancellor and I have agreed a package of new measures to crack down on tax avoidance and evasion.
We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra.
This will mean:
A crackdown on those hiding money offshore
A fivefold increase in prosecutions against those who evade tax.
And rooting out 50p rate tax dodgers.
By the end of the parliament, this package will bring in an extra £7 billion in tax.
That’s equivalent to the total income tax and national insurance paid by more than 1 million working people on median incomes.
To those who think the taxman will never come knocking.
To those who hire accountants to dream up a clever new tax dodge.
I say this:
Think again.
We really are all in this together – and that means you, too.
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We are embarking on radical reforms to public services.
Some people say that at a time of spending cuts we cannot afford to reform our public services.
I say we cannot afford not to.
Radical reform is the only way to ensure better outcomes for people as resources are cut.
Through those reforms, we will do our best to protect the most vulnerable, to ensure every child has the chance to make the best of their lives.
There will be tough decisions.
But I can guarantee that fairness, our Liberal Democrat belief in fairness will be in my mind every step of the way.
While Labour tied public servants up in reams of targets, guidelines and red tape we will scrap that mess of costly and useless bureaucracy.
We will give you transparent information and the power to act on it.
We will give patients the power to choose the treatment they want.
And we will empower disadvantaged children to improve their life chances through a pupil premium.
No government has ever given away power the way we will.
The spending review will kick start this radical programme of decentralisation- a cause for which we as Liberal Democrats have long campaigned.
We believe that outcomes for people will be better when those same people have the power.
For local authorities there will be less money, yes; but a lot more freedom.
More freedom too, for those who work in the public sector.
And I would like to say one thing to nurses, teachers, police officers, civil servants.
Thank you.
Your ideas, your effort, your commitment are essential to helping people get the best from the services you provide.
The next few years will be tough, very tough for some.
But I also believe that the changes we make - empowering you, trusting you, listening to you – will make the public services a more rewarding place to work.
I know there are a minority in the trade unions who will deliberately misrepresent what this government stands for because they are spoiling for a fight.
Please don’t allow their political motivations to push you into doing the wrong thing for the country.
We do not want to take you on. We want to take you with us.
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Conference, I won’t forget 2010 in a hurry. The best moment?
Sitting in a room overlooking the House of Commons, late one night in May, engaged in delicate, drawn out negotiations...
...with my wife. About how long I had to wait for another go holding our lovely newborn daughter Isla.
Isla was born just a few days after our coalition was formed.
In the next few weeks, we will have to take some of the most difficult decisions of our lives.
Forget the political impact, those decisions will have consequences for every single person in this country.
But we, Liberal Democrats, know it has to be done.
I will make the best decisions I can, guided by the values that we share as Liberal Democrats.
These are our decisions, our reforms, our new ideas, and – yes – our cuts too.
We are committed to seeing those choices through - not because it is easy, but because it is right.
Whatever flak we take, in 5 years time the British people will see we did the right thing, for the right reasons.
The whole country is playing its part to get us through the tough times.
The prosperity that results must be shared fairly.
Our values, Liberal Democrat values, will be even more important as we approach the light at the end of the tunnel. And the country will be stronger, fairer and more prosperous as a result.
Together, we will make it happen.
Ends
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