I will not, because I am going to make some more progress.
Thirdly, we have said that we will prevent hedge funds that are avoiding stamp duty on shares from being able to do so. Hedge funds currently avoid stamp duty by not buying the shares directly; instead, they get intermediaries to buy them on their behalf. Those intermediaries are investment banks, which benefit from tax relief on stamp duty. The hedge funds then enter into a contract for difference with the banks, which means that they benefit from changes in the share prices without holding the shares directly. That is an exploitation of intermediaries’ relief by hedge funds.
We have had a great deal of discussion about hedge funds in the past few days. I note, in particular, that during Prime Minister’s Question Time today, the Prime Minister did not address the point of the relief that is being abused. He wanted to get involved in a debate about who had introduced the relief, rather than about the fact that it is currently being abused by hedge funds. We have said that we will stop the practice, but we hear nothing from the Government about what they intend to do about an issue of which they too are fully aware.
Fourthly, we will take forward proposals that we were developing in government to deem construction workers to be employed for tax purposes if they meet criteria that most people would regard as obvious signs of employment. That would reverse the Government’s decision to abandon these measures, thereby dealing with a major cause of avoidance in the construction sector.
Finally, we would scrap the Government’s shares-for-rights scheme, which allows individuals to trade key employment rights for shares in a company. The policy has received widespread criticism. Writing in the Financial Times, Paul Johnson of the Institute for Fiscal Studies has said that,
“just as concern over tax avoidance is at its highest in living memory, just as government ministers are falling over themselves to condemn such behaviour, that same government is trumpeting a new tax policy that looks like it will foster a whole new avoidance industry. Its own fiscal watchdog seems to suggest that the policy could cost a staggering £1 billion a year, and that a large portion of that could arise from ‘tax planning’.”
Labour will scrap the shares-for-rights scheme and redeploy HMRC resources to other areas where they are greatly needed.