Closing the tax gap and ensuring that everyone is paying the tax they owe is one of the Government’s top priorities. The autumn Budget marked a step change to close the tax gap with the most ambitious package ever. The Government built on that in the spring statement, taking the total additional gross tax revenue raised per year to £7.5 billion by 2029-30.
The UK tax gap grew by a shocking £5 billion in 2023, in the dying days of the Conservatives, and former Chancellor Nadhim Zahawi was sacked for failing to declare an investigation by His Majesty’s Revenue and Customs into his tax affairs. I welcome the Treasury’s crackdown on tax avoidance. Does my hon. Friend agree that Labour’s prudence with a purpose will be shown by investing those taxes in the child poverty strategy this summer?
I thank my hon. Friend for his remarks. He is right to say that the £7.5 billion of additional revenue from closing the tax gap is a huge boost to the public finances, which enables us responsibly to fund public services and deliver key priorities. Those priorities include free breakfast clubs at all primary schools in England. The first 750 of them are beginning this month via our early adopters scheme, which is worth £450 to parents and carers. To go further the Government will bring forward their comprehensive child poverty strategy as soon as possible.
What steps are the Government taking to address the concerns of overseas companies that are evading VAT and online sales by fraudulently registering UK addresses?
At the spring statement the hon. Gentleman will have seen the Government set out progress on measures in the autumn Budget to tackle a range of sources of tax avoidance and the tax gap. That includes prosecuting more fraudsters, introducing a new HMRC reward scheme for informants, tackling phoenixism and tackling the offshore non-compliance tax gap.
Growth is the No.1 priority of this Government. That is why in the autumn Budget and the spring statement we unlocked an additional £113 billion for capital spending, compared with the plans that we inherited from the previous Government. Yesterday we announced significant support for the automotive sector and life sciences, and ahead of the spending review in June we have announced the roll-out of an additional 60,000 places in construction skills so that we can build the homes and infrastructure that our country desperately needs.
To drive progress on our growth mission and get the most out of taxpayers’ money, it is vital that Departments work collaboratively and not at odds with each other. Will the Chancellor outline how she is promoting cross-departmental working and planning as part of the spending review?
The Chief Secretary to the Treasury is working closely in a constructive way to bring together clusters of colleagues to discuss some of the pressing issues that span Departments and that no one Department can address on its own, whether that is reform of special educational needs and disabilities provision for early years, or tackling issues around homelessness and the cost of temporary accommodation. We are working cross-Government to address some of those cross-cutting issues.
The Chancellor is right to focus on increasing economic growth, so will she please explain why my office is still waiting for a response on behalf of a small business to a letter that I sent on 12 December, asking her to look into the impacts of her national insurance rise on small businesses? We asked for an update on 11 February, I raised a point of order on 10 March, and I still have not had a response. Will she please get a response to me as soon as possible?
I will follow up on that issue. The smallest businesses—those that employ the equivalent of four people on the national living wage—will be paying no national insurance at all from this April. Up to 1 million of the smallest businesses will be paying less or the same national insurance as they were paying previously.
Since the spring statement the world has been rocked by the announcements by President Trump on tariffs last week. It is an event as significant as the financial crisis of 2008, or perhaps as covid, and in those instances the state unleashed everything it could to try to resolve those issues. Is the Chancellor considering changing any of her rules to ensure that everything that the state can throw at this problem is being done?
It is incredibly important to retain cool heads at this moment. The tariffs have been imposed, and we are working closely with our friends and counterparts in the United States to reduce the impact from those, not just in the UK but around the world as well. As I said in my opening remarks, at the same time we are looking to secure better trading relationships with some of our biggest trading partners around the world. Of course, as we did yesterday, we are looking at some of the sectoral responses, including on life sciences, automotives and steel, but the fiscal rules are very important for giving our country the stability it needs. We saw what happened when the previous Government lost control of the public finances: it resulted in interest rates going through the roof, meaning higher costs for businesses and for working families. We will not make those mistakes. That is why the fiscal rules are non-negotiable and stability for this Government is sacrosanct.
Is now not the right time to start trying to make our own luck? In that light, would it not also be the right time for the Chancellor to give the green light to the upgrade of the A66 between Penrith and Scotch Corner? Some 25% of traffic on that A road is freight, which is twice the average for A roads across the country, and it is outrageous that so much of the road is single carriageway. Would it not be great for the economy, as well as save lives, if the Chancellor gave the upgrade the green light today?
Impressive. We will be considering all such schemes as part of the spending review, but I agree with the hon. Gentleman that we need to go further and faster to grow our economy. That is why we are spending £113 billion more on capital investment in this Parliament, compared to the plans that we inherited, which means that we can upgrade more roads, rail lines and energy infrastructure, and build the 1.5 million homes our country needs too.