Clause 218 - Agreement between UK and Switzerland

Part of Finance Bill – in a Public Bill Committee am 12:30 pm ar 20 Mehefin 2013.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of David Gauke David Gauke The Exchequer Secretary 12:30, 20 Mehefin 2013

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.