Tax Evasion (Hansard, 13 May 1976)

§ 9. Mr. MacGregor
asked the Chancellor of the Exchequer what evidence he has of revenue lost each year both to Her Majesty's Customs and Excise and the Inland Revenue through evasion of tax.

§ Mr. Robert Sheldon
It is impossible to make precise estimates of revenue lost through evasion which escapes detection.

§ Mr. MacGregor
I recognise that, but does the hon. Gentleman agree that the Chairman of the Board of the Inland Revenue said in a recent interview that tax avoidance certainly and tax evasion probably were on the increase, and that it was the high marginal rates of tax—I would add high marginal rates for all taxpayers—that were causing it? Does the hon. Gentleman agree that it would be better for the Government to concentrate on reducing the marginal levels of tax and to spend rather less time on tax avoidance and evasion, which uses an enormous amount of unproductive labour on all sides which does not help the country?

§ Mr. Sheldon
No one can dispute for a moment that high rates of tax are more profitable to the evader. That has always been so, and presumably it is always likely to be so. But that is no reason for our not being concerned with ensuring by appropriate measures that evasion is reduced to the minimum whenever the appropriate measures can be introduced.

§ Mr. Cryer
Does my hon. Friend agree that the cost of tax evasion each year must run to millions of pounds? Will he contrast the concern of Conservative 660 Members about tax evaders with their savage attacks on the tiny number of people who abuse the social security system, and their attempts to bring an excellent welfare system into disrepute by their constantly repeated attacks?

§ Mr. Sheldon
I must say that I totally agree with everything that my hon. Friend has just said. There is a need for a comparison between the ability of small limited sections of our community to evade their responsibility and the need, as my hon. Friend said, to get into perspective some of the abuses that take place on a smaller scale and involving much smaller amounts. I think that the need for balance should be recognised by the whole House.

§ Mr. Alan Clark
The Minister's views on tax evasion are always of interest, but will he tell the House of his reaction to the practice of civil servants, or sabbatical civil servants, who express their own highly divisive opinions on this topic to the Press in interviews? I quote—

§ Mr. Speaker
Order.

§ Mr. Clark
He refers to "our boys" being granted an opportunity which has been denied them for so long and says that people who squeal are doing so only because they have something to hide. What are the hon. Gentleman's comments on the propriety of that?

§ Mr. Sheldon
I must confess that I find it difficult to understand the burden of the hon. Gentleman's comments. However, if he will kindly let me have a copy, or, more appropriately, supply a copy to my hon. Friend the Minister of State, Civil Service Department, it will be looked at. The problem of evasion is one that the whole House must recognise. It is an obvious difficulty. We are faced with a need to reduce evasion and at the same time to maintain the liberties which we have held for so long. There is the problem of achieving the right sort of balance, bearing in mind the responsibilities that we all have.