City MP Stephen Morgan has said Labour’s new plans to crack down on tax dodgers will put much-needed money into Portsmouth schools and hospitals.
The Portsmouth MP made the comments after Shadow Chancellor Rachel Reeves pledged today (9 April) to raise over £5 billion a year to fund Labour’s pledges for the NHS and breakfast clubs.
Under the Conservatives, the gap between the amount of tax owed and what the government collects was a staggering £36 billion in 2021/22, whilst the number of civil investigations opened by HM Revenue & Customs’ (HMRC) fraud unit has fallen by more than half in five years.
The head of the National Audit Office has recently said that there is £6 billion a year that could be recovered through a concerted effort on tax avoidance. However, under the Conservatives’ plans only £1 billion a year in outstanding tax debt will be recovered.
Speaking ahead of a visit to a hospital in Manchester with the Shadow Health Secretary Wes Streeting, Rachel Reeves will vow to “take on the tax dodgers because if you make your home and do your business in Britain, then you should pay your taxes here too.”
The Shadow Chancellor will announce a new target to raise £5.1 billion per year by the end of the next Parliament through Labour’s new plan to slash the tax gap. Under the invest-to-save plan, up to £555 million of additional funding will go to HMRC each year to boost tax income by:
- Bolstering the number of compliance officers working out of the tax office by up to 5,000 to increase the number of investigations, tackle fraud and ensure tax owed is collected.
- Investing in digitisation of the tax office to improve compliance rates and customer services, and free up resources to focus on more complex cases.
- Working with businesses, the tax profession and digital service providers to bring a new focus to HMRC’s modernisation, including greater use of AI – learning from industry and best practice overseas to make sure its scope is ambitious, whilst having new, achievable timescales for delivery.
The plan outlines legal and regulatory changes that a future Labour government would consider introducing to tackle tax avoidance too, including requiring a wider range of tax schemes to be reported to HMRC under the disclosure of tax avoidance schemes regime.
The plan would raise a net £0.7 billion in 2025/26, rising to £5.1 billion a year by the end of the parliament. Labour will also announce today plans to raise £2.6 billion over the course of the next Parliament – including a £1 billion in year one – by closing the loopholes in Rishi Sunak’s non-dom plan.
Reeves will confirm today that £2 billion of the funding raised each year from these plans will go towards Labour’s commitments to tackle NHS waiting lists and extra dental appointments, and funding free school breakfast clubs for every primary school pupil.
Commenting on Labour’s plan to close the tax gap, Portsmouth MP Stephen Morgan said:
“At a time when our NHS is in crisis, it is criminal that the Conservatives are doing so little to tackle tax avoidance – with the National Audit Office saying £6 billion a year could be recovered with a stronger effort by the government.
“Labour won’t make the same mistakes as the current government on this. We will take on the tax dodgers, so if you live and work in Britain you’ll pay your taxes here too.
“Instead of that money going into tax dodgers pockets, under Labour it will be used to fund more appointments in Portsmouth hospitals and dentists, as well as free breakfast clubs for all primary school pupils, so they all can start their school day the right way.”
Rachel Reeves, Labour’s Shadow Chancellor of the Exchequer, said:
“At a time when working people in Britain are being asked to pay more in tax because of the Conservatives’ economic failures, it is wrong that a minority continue to avoid paying what they owe.
“After fourteen years in power, the Conservatives have failed to tackle this issue and the tax gap remains unacceptable high. With Labour, things will change. We will take on the tax dodgers because if you make your home and do your business in Britain, then you should pay your taxes here too.
“The plan we are announcing today will give HMRC the resource it needs to go after those who are avoiding or evading tax, and to modernise the tax office so we have a system that is fit for purpose.”
On funding Labour’s commitments to the NHS and breakfast clubs, she added:
“I have been clear that everything in our manifesto will be fully costed and fully funded. There will be no exceptions. That is why last month I promised to go through all the government documents in an orderly way to identify the funding streams to honour our commitments to the NHS and schools.
“That process is now complete and the funding a future Labour government will raise from taking on the tax dodgers will fund more appointments in NHS hospitals, new scanners, extra dentist appointments and free breakfast clubs for all primary school pupils.
“Our schools and our hospitals are the British people’s priorities – and they are Labour’s priorities too.”
