I will not give way for two reasons. First, the hon. Gentleman can seek to catch the Deputy Speaker’s eye later. Secondly, as I have said, I do not
propose to get drawn into a debate on this issue. I support my sisters in the Labour party and around the House, and they are more capable than I am of putting forward the reasons behind the measure being proposed by my hon. Friend the Member for Dewsbury. They are more than capable. They do not need me to do it, and I shall say no more than I have already done.
New clause 10 seeks to place a statutory requirement on the Government to produce a report, within two years of the passing of the legislation, on the effects of clause 47 and schedule 8. In lay terms, clause 47 and schedule 8 will—with safeguards—allow HMRC to nick money out of our bank accounts without a court order.
Of course, under these provisions HMRC would not, in any legal sense, be stealing money from a bank account. Were it to do so, that would be covered by section 1 of the Theft Act 1968—I am not a criminal lawyer, but that is my recollection of it. What HMRC would be doing is something that other people cannot do: it would, with safeguards, be removing money from a debtor’s bank account without a court order and without the agreement of that debtor. That is a very big step forward for our society to agree to, refracted through clause 47. In Committee, the Labour Members tried to persuade the Government not to press ahead with the clause, as did other organisations, but we failed on that. We are not trying that again tonight directly, but we are saying that we take cognisance of the safeguards the Government have introduced and beefed up as a result of representations, and that a report should be produced within two years to see how they are working.
Before I deal with the safeguards, I wish to remind the House of why clause 47, allowing HMRC to go into people’s bank accounts without a court order, has been introduced. One major driver is HMRC’s fears about revenue loss through non-compliance. In an earlier Budget speech, the Chancellor said:
“I am increasing the budget of Her Majesty’s Revenue and Customs to tackle non-compliance.”—[Official Report, 19 March 2014; Vol. 577, c. 785.]
That was welcome: there is too much non-compliance going on, some of it blatant, some of it immoral avoidance but not illegal evasion, such as large corporations squirreling away money in tax havens and in places such as Luxembourg; and there are people who owe money to HMRC but fail to pay, and so HMRC has to take steps to recover that money.
Another major reason given by HMRC, which might trouble the hon. Member for Stone (Sir William Cash), was as follows:
“The current processes for recovering debts…can be costly”.
That was said on page 2 of the consultation document, which contains an introduction by the Financial Secretary to the Treasury—the words I read out were not his but they were contained in a document whose preface he wrote. Paragraph 2.31 on page 9 goes on to say that
“a county court judgment…can be a slow and expensive process.”
In clause 47, the Government are therefore saying, “We find the court system a bit slow and a bit costly, so we are going to have our own system to take money out of people’s bank accounts, with safeguards.” That is echoed in clause 48.
Where someone wins at court, there is a calculation to be made as to how much they are owed on a debt. I believe the basis for calculating what is known as the
judgment debt rate goes back to about 1837, but the Government are not having that either in clause 48. Under the interest rate provision in clause 48, and in clause 47 on HMRC taking money out of bank accounts without a court order, we have one rule for them and one rule for the rest of us. We have to ask ourselves: are they right about the court system? Is it a slow and expensive process? I have not practised law for almost 15 years, but I try to keep up with it and I think the process is getting slower and more “costly”. That is because it has been starved of money by this Government and their predecessor Conservative-led Government.
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Many observers will feel uneasy about this system. The approach being taken is, “The rules aren’t quite working for everybody, because the court system is not quite working for loads of people.” But instead of dealing with the cause and sorting out the court system, which may require an injection of money, which is worth it, as long as it is done wisely, for justice and access to justice in our country, what the Government do in clause 47 is say, “The system is not working, we are going to deal with the symptom by having our own new system, which you cannot have.” If the Minister owes me money—of course he never would—I cannot say, “Here are a load of safeguards, I’ll have some money out of your bank account.” I have to go through a court process if he is denying that he owes me money. I have to prove it before a judge and then I have to use the enforcement processes of the court—not those of a couple of men with baseball bats. It is a bit slow and a bit costly, but rather than have one rule for them and one rule for the rest of us, the Government ought to sort out the court system—then they would not need clause 47 and schedule 8.
As ever, Labour Members are reasonable people. We are saying, “Let us have new clause 10 and let us look at the safeguards.” I shall set them out, and I am sure the Minister will correct me if I miss some out. They are quite good: the debt has to be more than £1,000; the alleged debtor has to be seen face to face by an HMRC official; an assessment has to be made by HMRC as to whether that debtor is vulnerable—the Government have acceded to requests that such an assessment should be not only made, but recorded in writing, which is good; HMRC has to be satisfied, as it should be before it embarks on this action, that there is sufficient money in the bank account and the debtor is knowingly refusing to settle their debt to HMRC; the debtor has to get a warning notice, with 30 days before it is, “pay up or we might take it out of your bank account”; HMRC must ensure that, having taken the debt, at least £5,000 remains in the bank account; and the debtor, or alleged debtor will be able—presumably this would often happen during the 30-day warning period—to appeal to a county court.
On the Government’s figures, the average amount owing will be £9,000—I believe the estimate was that the measure will bring in about £100 million a year from about 11,000 cases. I understand that the estimates will be in round terms.