“Treasury acting in bad faith and the Prime Minister must now intervene and delay the Loan Charge before more lives are damaged”
Ross Thomson MP (Conservative MP for Aberdeen South), a Vice-Chair of The All-Party Parliamentary Group on the Loan Charge, has today raised the Loan Charge at Prime Minister’s Questions. He shared the APPG’s feeling that the Treasury were acting in “bad faith” and that the Prime Minister must now personally intervene and delay the Loan Charge before thousands of lives are damaged.
Ross Thomson noted that at the second evidence session of the Loan Charge Inquiry on 27th February, the APPG heard from the family members of a man facing the Loan Charge who committed suicide. Many thousands of individuals and families are now facing bankruptcy, losing their homes, and are experiencing mental breakdown. Further people have been identified as being at risk of suicide.
In January, the Government was forced to accept a cross-party amendment by the Loan Charge APPG Chair, Sir Ed Davey MP. MPs and peers understood that this would lead to a review of the Loan Charge. However the Loan Charge APPG have now been told, in writing and in a meeting, that there is no such review and that the Treasury will merely publish a report, largely written by HMRC. Any changes to the controversial Loan Charge have already been ruled out, despite the risk to the health and wellbeing of thousands of people affected.
The APPG have accused the Treasury of acting in bad faith and misleading MPs, many of whom are on the record as supporting a genuine review into the Loan Charge. Other Conservative MPs have also called on the Treasury to conduct a proper and independent review, including taking external submissions. This has all been ignored by the Treasury and HMRC who are pressing ahead with the Loan Charge regardless. A letter from 55 Conservative MPs to the Chancellor calling for an immediate delay to the Loan Charge was sent on Friday (1st March).
Ross Thomson asked on the floor of the House:
“Last week, MPs heard a harrowing testimony from family members of a man who tragically committed suicide because he faced the Loan Charge, a twenty-year retrospective tax facing thousands of families in my constituency and across the UK. Mr Speaker, the Prime Minister said on 9th January, “The Government accepted the review into the Loan Charge”, yet the Loan Charge APPG was only advised this week by the Treasury that there is no such review. Mr Speaker, the Treasury have acted in bad faith, so will my right honourable friend now personally intervene to ensure a genuine review and an urgent delay into the Loan Charge so that this review, as promised, can be carried out?”
The Prime Minister responded by saying that she will ask the Treasury to write to him, something already rejected by Conservative MPs and APPG members, who are calling on her to intervene personally.
The Loan Charge is a retrospective charge that comes in in April this year and overrides existing statutory protections. It allows HMRC to go back and demand tax for arrangements that were legal, including closed tax years, where HMRC failed to raise any concerns at the time and missed the statutory time limits in which to challenge tax returns. The Loan Charge was passed into law in 2016/17 with scant parliamentary scrutiny, a flawed impact assessment and with the Treasury ignoring many submissions expressing grave concern about the measure.
On Monday the Loan Charge APPG criticised the Treasury and HMRC for refusing to appear before the Group’s Loan Charge Inquiry, which is currently underway. Both the Minister, Mel Stride MP, and HMRC were invited to attend the third and final oral evidence session but both declined to do so. The Inquiry has already had over 500 submissions as well as the two oral evidence sessions and the report is planned to be completed and published mid-March.
There are also increasing concerns amongst Parliamentarians about the accuracy of statements made by both HMRC and also the Minister. The APPG has already criticised them for making misleading statements about the reality of court cases and prosecutions relating to the Loan Charge. The Minister, Mel Stride, also refused to appear before the House of Lords Economic Affairs Committee who published a damning report on HMRC’s behaviour and of the Loan Charge itself. The Committee report specifically criticised Mr Stride for his refusal to appear before the Committee.
Ross Thomson MP, Vice-Chair of the Loan Charge APPG (Conservative) said:
“I’m sorry to say but it is now clear that the Treasury have acted in bad faith over the Loan Charge review. The Prime Minister herself said that there would be a review and MPs from all sides of the House welcomed that, believing there would be a genuine review open to the possibility of changing the draconian Loan Charge. Now we know this is not the case and MPs will be rightly angry they have been duped.
“I called upon the Prime Minister herself to intervene, she must now do that personally. Asking the Treasury, who are losing credibility over this issue, to write is of no help whatsoever. She needs to realise that the Loan Charge is going to be a disaster for many families and something that will cause a crisis for the Government if they don’t listen. So with many other colleagues, I urge her to act and delay the Loan Charge, scrap the April 5th date and then allow for a genuine, independent review not a Treasury and HMRC whitewash”.
Sir Ed Davey MP, Chair of the Loan Charge APPG (Liberal Democrat) said:
“As I made clear in my speech in the House of Commons when I secured the cross-party amendment, we were asking for a real review into the Loan Charge and MPs across the House of Commons will be dismayed to discover that this is not happening and that instead all we have is a ‘report’ which won’t even consider changing the Loan Charge, something that undermines the rule of law. There must now be a delay before lives are seriously damaged and there must then be a proper independent review and one that will consider changing this awful piece of legislation.
“The case for delaying the introduction of the loan charge is overwhelming. This has been so badly handled by the Government and is causing such misery, it has to be reviewed properly.”
Ruth Cadbury MP, Vice-Chair of the Loan Charge APPG (Labour) said:
“The All-Party Loan Charge Group were horrified to realise that in actual fact, there was not a review being undertaken into the Loan Charge. The Government has acted in bad faith and it’s also clear that HMRC are pulling the strings over this issue and that in itself needs proper investigation.
“As part of our Loan Charge Inquiry, we have heard deeply worrying testimonies from people who are facing ruin as a result of the retrospective Loan Charge, including of one person who has already taken their own life. The Government simply cannot recklessly carry on and ignore this and they must now announce a delay for a proper consideration of this policy, before it is too late”.
Notes to Editors
- The full PMQ and reply are here:
Ross Thompson MP: Last week, MPs heard a harrowing testimony from family members of a man who tragically committed suicide because he faced the Loan Charge, a 20 year retrospective tax facing thousands of families in my constituency and across the UK. Mr speaker, the Prime Minister said on 9th January “the Government accepted the review into the loan charge”, yet the Loan Charge APPG was only advised this week by the Treasury that there is no such review. Mr Speaker, the treasury have acted in bad faith so will my right honourable friend now personally intervene to ensure a genuine review and an urgent delay into the loan charge so that this review, as promised, can be carried out.
Prime Minister: Can I thank my Honourable friend for his question and obviously he has raised the issue which is of concern to not only his constituency but others across the house. I will ensure that he receive a response from Treasury that sets out exactly what is being done in the review that is being taking place.
- The All-Party Parliamentary Loan Charge Group (Loan Charge APPG) has been created to bring together parliamentarians of all parties from both Houses of Parliament who have concerns about the nature and impact of the ‘2019 Loan Charge’ which will come in to force on the 5th of April 2019 and also concerns about the wider context of fairness of tax legislation and HMRC’s conduct in enforcing it. See loanchargeappg.co.uk and Twitter @LoanChargeAPPG. The Loan Charge APPG is an officially registered Parliamentary Group, as described on the UK Parliament website www.parliament.uk/about/mps-and-lords/members/apg/.
- The Officers of the Loan Charge APPG are as follows:
- Rt Hon. Sir Ed Davey MP, Chair, MP for Kingston and Surbiton (Liberal Democrat)
- Ruth Cadbury MP, Vice-Chair, MP for Brentford and Isleworth (Labour)
- Ross Thomson MP, Vice Chair, MP for Aberdeen South, (Conservative)
- Hon. Baroness Kramer, Vice-Chair , (Liberal Democrat)
- Liz Twist MP, Vice-Chair, MP for Blaydon (Labour)