Question proposed, That the clause stand part of the Bill.

The clause would amend schedule 36 to the Finance Act 2012, which gave statutory effect to the terms and principles of the UK-Swiss Confederation taxation co-operation agreement, which was signed on 6 October 2011 and has been effective since 1 January 2013. The clause clarifies that certain transfers made to HMRC under the agreement will not give rise to a taxable remittance. The stated purpose of the UK-Swiss agreement is to provide for bilateral co-operation between the UK and Switzerland to ensure the effective taxation in the UK of individuals who have financial assets in Switzerland.

On announcing the agreement in 2011, the Government said:

“The agreement will resolve the long-standing abuse of Swiss banking secrecy by those who seek to conceal the proceeds of tax evasion and is expected to secure billions of pounds of unpaid tax for the UK Exchequer from 2013.”

The Committee that considered last year’s Finance Bill had a passionate debate on the agreement, the principles behind which the Opposition, of course, support. However, the Minister will recall our concern that the agreement is riddled with loopholes and exemptions that could seriously undermine its potential to yield anything near what the Treasury has said it will.

Would one of the loopholes be the one that was exposed in the case of John Mills, whom the Labour party was advising on avoidance? Will the hon. Lady confirm that no Swiss shares were transferred, as well as UK shares?

The hon. Gentleman is grasping at straws.

The agreement allows individuals to hide money in their Swiss bank accounts and maintain anonymity.

Will the hon. Lady confirm that, if the shares involved are indeed Swiss, the Labour party will repay the sum—I think it is in the region of £724,710—to the Exchequer?

I cannot confirm either way the hon. Lady’s question about “Swissness”.

The interventions somewhat undermine the seriousness of the issue, which is how important it is that the agreement should have the intended effect. Hon. Members who served on last year’s Committee will remember the concerns expressed—that the agreement covers only accounts held by individuals, and that the UK is permitted to request the details of only 500 individual Swiss accounts a year, half the number that was agreed with Germany. We also expressed concerns about the limited involvement of HMRC in identifying accounts and the significant lead-in time between the agreement being announced—October 2011—and its coming into force in January 2013, which gave many account holders the opportunity to switch the location of their funds.

In light of those concerns, and the debate we had last year, I am keen for the Minister to update us on how the agreement is operating and what its impact has been. In January 2013, the Chancellor announced that a down payment of £340 million, or 500 million Swiss francs, had been paid to the UK as part of a one-off levy contained in the agreement. Will the Minister inform the Committee when the next instalment of money is due to be received from the Swiss and how much he anticipates?

The Minister has previously stated that, overall, the agreement will deliver around £5 billion of previously unpaid tax to the UK. Has there been any change to that anticipated figure? From how many individual Swiss bank accounts has the UK requested details since January? We have a limit of 500 per year; does he believe that that limit will need to be increased, and, if so, is there any mechanism for doing so? Are the Government aware of any evidence of people moving their accounts from Switzerland to other secretive jurisdictions between the time the announcement was made and the time the agreement came into force? What is the UK doing to encourage international action in respect of countries to which funds previously held in Swiss bank accounts may have been moved? Updates on those matters will be useful to the Committee.

The clause amends legislation introduced in the previous Finance Bill to implement the UK-Swiss tax co-operation agreement, and will ensure that the policy objectives behind the agreement are delivered in full. Specifically, it removes an unintended effect, so that the levies paid by non-UK domiciled individuals to HMRC under the agreement will not be treated as taxable remittances where those individuals use their foreign income and gains to pay them.

The agreement was signed on 6 October 2011 by the UK and the Swiss Confederation, and is expected to yield more than £5 billion over the next six years. It came into force on 1 January 2013 and, as we have heard, a down payment of over £300 million has already been received from the Swiss banks. The agreement gives UK residents two choices: to suffer a withholding tax or to disclose their Swiss accounts to HMRC.

Schedule 36 to the Finance Act 2012 was introduced to bring into effect changes to UK law that would allow the agreement to be implemented. Under the existing rules, where an individual who is taxed on the remittance basis makes a payment under the agreement using their untaxed foreign income and gains, that payment will itself be treated as a taxable remittance. That was never the intention. The clause will amend the rules as they apply to remittance basis taxpayers who are subject to the agreement. It will ensure that, where levies are made under the terms of the agreement, those levies are not themselves treated as remittances for UK tax purposes. The changes made by the clause are estimated to have a negligible Exchequer cost.

I suspect the Minister will not want to be drawn into commenting on specific cases, but by way of illustration, I will raise the case of Andrew Rosenfeld, who returned after five years of exile in Switzerland and who I believe is the biggest donor to the Labour party, specifically to the Labour  leader, donating well over £1 million. Will the clause be relevant to and impact on Mr Andrew Rosenfeld? [ Interruption. ]

Order. Before the Minister responds, one or two private conversations are going on that are distracting various Members.

My hon. Friend is right to say that I would not want to be drawn into commenting on individual cases. Let me say simply that the arrangements would be applicable only if somebody had not declared income properly to HMRC. I would like to think that proper checks are undertaken by the Labour party on any of its donors, but of course it is not for me to comment, even though that particular case involves someone who lived in Switzerland for all those years.

I do not want to draw the Minister into a position in which he is responsible for Labour party activity. However, I will, if I may, be critical of him and say that he is responsible for HMRC. Will he be able to review the matter from an HMRC perspective?

Of course I cannot direct HMRC on individual cases; it has complete operational independence. If anyone from the Opposition wishes to comment on the tax affairs of Labour donors, I for one would not want to stop them.

I can see that the Minister would not want to be drawn into discussing individual cases. Perhaps he could look not at individual cases but at everyone who has returned from Switzerland and donated more than £1 million to a political party. He could also look at the Electoral Commission and see whether it wants to review the individual case rather than the more generic position.

I think I should say that my hon. Friend has thoughtfully put his point on the record and leave it there. It may be that the debate goes further in that direction. We will see what the hon. Member for Newcastle upon Tyne North has to say about that.

At the time the agreement with Switzerland was signed, we said that we wanted to make the world a smaller place for tax evaders. As was announced at the last Budget, we have taken steps to make it more difficult for evaders to hide money offshore and signed agreements with the Isle of Man, Guernsey and Jersey for disclosure facilities. We also agreed to exchange a wide range of tax information with them. Those agreements are expected to raise up to £1 billion over the next five years. We have also agreed to much greater information exchange with the British overseas territories. Additionally, we have made great progress in embedding a new global standard in the automatic exchange of tax information, receiving support on that agenda at the G7, G20 and the European Council in May. That has also been a part of our G8 agenda.

Let me turn to the questions raised by the hon. Member for Newcastle upon Tyne North. Essentially, she was asking how the agreement was operating and what has been the impact to date. As I have said, we  received an initial payment and, under the detailed terms of the agreement, expect subsequent payments to be received over the coming year. The estimate remains as announced at the autumn statement in 2012. That indicated that we would receive £3 billion by June next year. It is also worth pointing out that this is the largest tax evasion settlement in our history, and the estimates for revenue raised have been approved as being a central estimate by the independent Office of Budget Responsibility.

As for the question of evidence of individuals moving accounts between the announcement and the legislation coming into force, under the terms of the agreement the Swiss will inform us of locations where funds are being moved to in order to avoid the agreement.

We also have to point out that given the progress that has been made in terms of the automatic exchange of information and the Foreign Accounts Tax Compliance Act standards becoming new worldwide standards, the options—for those who have evaded tax, who have previously had a Swiss bank account and who have moved to other jurisdictions—become increasingly unattractive. I hope that the hon. Lady will take some comfort from that.

The hon. Lady asked how many accounts had been identified since January. The Swiss banks are currently identifying accounts owned by UK residents. In the meantime, a number of UK residents are coming forward directly to sort out their affairs.

The clause itself ensures that the policy objectives behind the original agreement are fully delivered. The agreement was an historic milestone, but it should be noted that the progress that we continue to make on closing the net on tax evaders is very significant. It is a significant achievement for the Government—something of which we can be proud. I hope that this clause, which it appears is not controversial, can stand part of the Bill.

Question put and agreed to.

Clause 218 accordingly ordered to stand part of the Bill.