My hon. Friend raises a very important point. I have tabled several parliamentary questions to the Minister on that subject, and I look forward to his response outlining what action the Government are taking, alongside HMRC, to ensure that it not only collects tax throughout the country but ensures that employers abide by the national minimum wage legislation to ensure that employees do not fall short despite the fact that they are working. It is imperative that HMRC has the Government’s support and also has the correct resources to ensure that workers are not
exploited in the way that my hon. Friend suggests is prevalent in his part of the country and which I have no doubt is a phenomenon that impacts on hard-working people countrywide.
Despite the headlines suggesting that everybody is avoiding tax, we are generally a tax-compliant nation—I believe the current figure is approximately 93%. Of course, it is the 7% for which HMRC needs extra support and resources to get the returns. The Association of Revenue and Customs estimates that a senior tax official earning £50,000 a year can expect to generate additional yield of at least £1.5 million a year—a return 30 times greater than the cost of their salary. That is a good investment, I think most would agree.
4 pm
When the Chancellor announced a further £11.5 billion of cuts to public expenditure, what did that mean for HMRC, a department already faced with a net reduction in funding of £2 billion over this Parliament and the loss of an additional 10,000 staff? Well, the right hon. Gentleman announced that HMRC’s target for additional revenues raised, including from tax avoidance and evasion, would be increased to £24.5 billion in 2015-16—£1 billion more than the 2014-15 target and £10 billion than the 2010-11 target. According to the spending round report, HMRC will be required to contribute
“to deficit reduction through the collection of an additional £95 million in tax credit debt on an innovative payment by results funding basis.”
However, under the funding settlement announced by the Chancellor last week, at the same time as it is required to bring in those additional revenues, HMRC must cut its costs by a further 5% in 2015-16, on top of the significant efficiency savings and cuts it has already been expected to make. Can the Minister confirm, for the benefit of the House and as part of the review for which we are calling, precisely how much funding will have been cut from HMRC between the coalition coming to power in 2010 and the end of financial year 2015-16? A clear picture of the figures would be useful. Also, will he confirm the total number of HMRC posts that are expected to have been lost during that period?