Philip Hammond commends Jesse Norman for dismissing MPs’ Loan Charge concerns

Jesse Norman has used his first Treasury Questions to answer away concerns about Loan Charge 2019, drawing him criticism from MPs but praise from Philip Hammond.

In fact, the new Treasury minister received a visible “well done” from the chancellor, once he sat down yesterday, having dismissively batted away questions on the charge from five MPs.

By contrast, cross-party MPs on the Loan Charge APPG called Mr Norman’s answers “appalling”, “shocking” and “sad,” saying that they demonstrated a “callous attitude.”

‘Misstating’

The minister’s answers also sounded like personal attacks, such as when he accused Justine Greening MP of “misstating the case”, when she said some taxpayers were mis-sold products.

Similarly, David Davis MP, once tipped as a Tory leader, was insinuated to be a hypocrite, in return for asking about the Treasury’s assessment of the charge’s impact on mental health.

“May I put on record, my surprise that a former chairman of the Public Accounts Committee,  with its concern of the public finances, should be taking this view,” stabbed Mr Norman.

‘Terrible trap’

The Loan Charge APPG reflected on Twitter: “Shocking to see Jesse Norman respond to David Davis’s question about known loan charge suicides by first ignoring the question, and secondly trying to embarrass him into backing it due to being a member of the PAC.”

Even MPs whose questions Mr Norman decided to group together, and to whom he gave only half-answers to, were not spared the new Treasury minister’s ‘support HMRC’ rhetoric.

For saying “innocent working people are caught in a terrible trap,” Jamie Stone MP was told that “he should be protective of the tax bases more widely” when he speaks about the charge.

Mr Norman added: “He [Mr Stone] should also be perfectly clear that a very large number of people have been using this systematic means to avoid paying tax. The amount potentially payable is over £3billion.”

‘Untrue statements’

This figure is disputed by the Loan Charge APPG, which claims the potential sum payable is nearer £0.8bn, but it warns that Mr Norman is simply repeating HMT’s “untrue statements.”

Other numbers Mr Norman cited, which have also already been discredited or had their context muddied, include “100 promoters under civil enquiry” and ‘six individuals arrested on suspicion of promoting fraudulent loan charge arrangements.’ 

Yet it is a number from the Conservatives’ Mr Davis with more tragic connotations that was either overlooked by the new financial secretary to the Treasury yesterday, or ignored. 

“The Loan Charge APPG claims evidence of four suicides -- related to the loan charge,” the Tory backbencher said.

“So could the minister now tell us what effect the Treasury believes their policy has had on the mental health of all the people subject to [HMRC] pursuit now, in both the public and private sectors?”

‘Very adversely affected’

The most relevant part of Mr Norman’s response to Mr Davis was: “There are some people who may have been very adversely affected in mental health terms and we must protect them at all times and with all the measures that we properly can.”

In the same breath however, the minister added: “HMRC is attempting to do that, [but] there is a much wider and larger number of people who are simply seeking to avoid paying tax due.”

The Loan Charge APPG tweeted: “So sad that…[Mr] Norman shows a callous attitude to the fact that thousands of people are facing anguish over the Loan Charge and ignores questions raising the known suicides. We will send him the testimony from the family of one victim.”

‘Signs were there’

Towards the end of his questions, Mr Norman was asked twice to give the Loan Charge a “fresh look”, including by Labour’s Nic Dakin, but the MP was not given a straight answer.

The Treasury’s Mr Norman would only say: “May I just also remind the gentleman, that there were other signs that indicated to people they were in these tax avoidance schemes, for example a very low or relatively low effective rate of tax.”

“The signs were there” he added, to the agreeing nods of Mr Hammond sitting behind him. “People would have been right to pick up on them, and even if they were mis-sold that does not bear on the question of whether tax is now due.”

‘Scrap the retrospective’

A downbeat Loan Charge APPG reflected: “More misinformation on the Loan Charge from Jesse Norman [because] HM Treasury never made clear that the schemes didn’t work at the time.”

Yet also online, a resolute-sounding Mr Davis reacted last night: “Today I asked Jesse Norman what impact HM Treasury believes the Loan Charge is having on people's mental health.

“It's time the Treasury takes seriously the impact this policy is having on those ordinary citizens affected and scrap the retrospective Loan Charge altogether.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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