Loan Charge

I beg to move,

That this House expresses its serious concern at the 2019 Loan Charge which applies from 5 April 2019; expresses deep concern and regret about the effect of the mental and emotional impact on people facing the Loan Charge; is further concerned about suicides of people facing the Loan Charge and the identified suicide risk, which was reported to HMRC; believes that the Loan Charge is fundamentally unfair and undermines the principle of the rule of law by overriding statutory taxpayer protections; expresses disappointment at the lack of notice served by HMRC and the delays in communication with those now facing the Loan Charge, which has further increased anxiety of individuals and families; is concerned about the nature and accuracy of the information circulated by HMRC with regard to the Loan Charge; further regrets the inadequate impact assessment originally conducted; understands that many individuals have received miscalculated settlement information; calls for an immediate suspension of the Loan Charge for a period of six months and for all related settlements to be put on hold; and further calls for an independent inquiry into the Loan Charge to be conducted by a party that is not connected with either the Government or HMRC.

I want to thank the Backbench Business Committee for agreeing to bring forward this important debate. I also want to thank the members of the all-party parliamentary loan charge group for all their work and the many colleagues who have added their names to the motion before us today. The urgency of today’s debate cannot be overstated. As of tomorrow, tens of thousands of people and their families will face the huge cost, both physical and emotional, of the loan charge. HMRC has yet to show any regard to the enormous pain that this legislation has already inflicted on thousands of people across the country.

I represent Aberdeen South, which is Europe’s energy hub and the very heart of the UK’s oil and gas industry, and my surgeries have been inundated with people who are concerned about the damage that the loan charge will have on their financial security. Many of my constituents working in the oil and gas industry were actively encouraged by their companies and professional advisers to enter into these schemes, without a single peep from HMRC, and some did so for many years. The oil and gas industry is just one of many that has long relied on the hard work of contractors as a crucial element of its supply chains. These contractors provide a hugely valuable workforce, and concerns over the loan charge have driven away many of those who have worked in the industry and will deter people from contracting in the future. HMRC should be in no doubt this will be bad for business, bad for public finances and bad for the country.

I echo my hon. Friend’s praise for the good work of the all-party parliamentary group on this. I am sure that he will come on to talk about retrospection. When my constituents approach me about this, the strongest point they make is that HMRC allowed these schemes to run for very many years and then disallowed them retrospectively, all the way back to the beginning, which is why the potential losses are so great. Does he agree that that is one of the worst aspects of what is happening?

I could not have worded it better myself. Having been part of the all-party parliamentary group’s inquiry, and having looked into the retrospective effect of the legislation, I am even more convinced that what is happening is wrong. People coming into my surgeries are quite happy that the Government legislate to change things if they believe them to be wrong, but they are concerned that the Government are going back in history in this way, as am I.

I congratulate my hon. Friend on securing this debate. The Financial Secretary to the Treasury, my right hon. Friend the Member for Central Devon (Mel Stride), is always meticulously courteous in his replies, and the Treasury has consistently taken the view that this is technically not retrospective. However, our constituents do not live in a technical world; they live in the real world, and this is causing them real distress.

I endorse what my right hon. Friend says about our Minister and good friend on the Treasury Bench, but he is right to say that our constituents have real concerns about the way in which HMRC has behaved, and about its tone and attitude. I will say more about that in my speech.

The Minister has today sent us some warm words about the lengths to which HMRC is going to accommodate those who have fallen foul of these arrangements, but today in The Times there is a report of tax inspectors putting pressure on people to pay up ahead of time, even beyond the arrangements that have been agreed.

My right hon. Friend is right. The all-party parliamentary group’s inquiry took a lot of evidence on the impact that the policy will have. The behaviour of some, particularly on the Government side, is making people feel like criminals, and this has driven them to a place where they feel broken, mentally and emotionally. I am glad that this is being reported, and we need to continue to highlight it.

I commend the hon. Gentleman for securing this important debate. Many of my constituents have got in touch and met me personally to express their distress and concern about the impact of the loan charge. Given that the inquiry by the APPG, of which he is a member, found that more than two thirds of those affected feared that their family relationships were breaking down, does he agree that the Minister must assure our constituents today that HMRC will support them with manageable repayments so that no one needs to be made bankrupt? Does he also agree that it is absolutely ridiculous that Her Majesty’s Treasury has downgraded the promised review of the loan charge to a report, as provisionally agreed by the House?

I thank the hon. Gentleman. I am sure that his constituents will be grateful to him for raising their concerns in the Chamber. I will refer to some of my constituents later on, because this matter is causing genuine concern, and I hope that those on the Treasury Bench will be listening to the various cases throughout the debate.

I will take one more intervention before I make a little more progress.

I congratulate my hon. Friend on securing this important debate. In normal times, I think it would be considered even more important and taken even more seriously than it is being taken today. Does he share my concern that some of HMRC’s language seems totally tone deaf? Its factsheet says that it has

“no desire to make things difficult for taxpayers, and will always take a fair and even-handed approach to those who genuinely want to settle their affairs.”

That is the opposite of the experience of some of my constituents who, based on good faith and professional advice, are being punished retrospectively and face utter ruin.

I could not agree more. My hon. Friend sums the situation up well. This is not just about HMRC being tone deaf, because I have found through my interactions with constituents that it has also been tin eared. I must admit that I am deeply concerned by some of the tactics that have been employed and how some normal people have been made to feel. It is not right at all.

Will my hon. Friend give way?

I will make a little more progress, but I am keen to take as many interventions as possible.

Nobody should be in any doubt that the loan charge has left people living in genuine fear of losing their homes, being unable to care for their families, and seeing their life’s work reduced to less than nothing. As we debate this matter, it should not be lost on us that many of those affected and their families will be watching this Chamber today, and they will listen closely to the Government’s response.

I want to put it on the record at this point that we live in a time when politics is heated and is becoming more personal than ever before, and we have seen some disturbing consequences for some colleagues in this House as a result. However, I must make it clear that I have found the Financial Secretary to the Treasury incredibly helpful, supportive, engaging, and willing to listen to my concerns.

This debate has come about following the efforts of Members from across the House and the many campaigners fighting this injustice. The all-party parliamentary loan charge group recently launched a report following a long inquiry, and I commend it to Members because it contains truly worrying, emotional and harrowing responses.

My hon. Friend is making some good points, which I do have sympathy with having met people in this situation. However, we must remember that if anyone using one of these schemes had gone to hospital, they would have expected not to wait any longer or less than anybody else who pays their taxes. These schemes were taken up because people wanted to reduce the tax they were paying. We must remember all the other taxpayers who pay their taxes legitimately without this kind of professional advice.