HC Deb 30 April 1981 vol 3 c903
19. Mr. Canavan

asked the Chancellor of the Exchequer what is his estimate of the annual loss of revenue to the Treasury by (a) tax evasion and (b) tax avoidance.

Mr. Peter Rees

I refer the hon. Gentleman to the reply I gave to the hon. Member for Newham, North-West (Mr. Lewis) on 27 April.

Mr. Canavan

As some reliable estimates put the total amount lost through tax dodging at as much as the entire public sector borrowing requirement, is it not plain that the recent Vestey scandal is merely the tip of the iceberg? Are not such people the real scroungers in society today? Does the Government's reluctance to deal adequately with the position have any connection with the fact that the Minister is an accomplished expert on advising tax dodgers?

Mr. Rees

I shall ignore the unwarranted and absurd personal attack by the hon. Gentleman and confine my remarks to the more serious part of his supplementary question. He is obviously unaware of the contents of the Finance Bill, which deals with the points disclosed by the Vestey case.

Mr. Bill Walker

Does my hon. and learned Friend agree that the Government's policy of shifting tax from direct to indirect taxation is the best way to catch those who try to avoid their tax commitments?

Mr. Rees

That is an interesting suggestion. It is true that indirect taxation is, on the whole, easier to collect than direct taxation. However, I am not wholly persuaded that the black economy does not represent a degree of evasion of VAT.