Tax rate could be slashed by 2p if wealthy were to pay up says Treasury chief

The Treasury Chief Secretary said everyone else had to pick up the tab when the wealthy avoided their obligations.

But he also delivered a thinly-veiled rebuke to David Cameron for wading into the row over comedian Jimmy Carr’s use of a tax avoidance scheme.

Mr Alexander said: “As a Treasury Minister I would not get into the details of any individual’s tax affairs. We have taxpayer confidentiality in this country.

“But what is very important and what I very strongly agree with the Prime Minister about... is that the kind of aggressive tax avoidance that has been well reported over the course of the week, the Government has been dealing with since we came to office, is something that has to be cracked down on.”

He went on: “We have to make sure that everybody, especially the rich and famous, are paying their fair share of tax.

“These sorts of schemes that save wealthy people potentially tens of millions of pounds in tax, they are paid for by everybody else.

“If we could narrow the tax gap in this country by a quarter we could reduce income tax for every basic rate payer by 2p in the pound.”

The Government faces a further tax problem today as more than 50,000 Revenue and Customs workers go on strike in protest at “massive cuts” they claim undermined efforts to clamp down on tax avoidance schemes.

Members of the Public and Commercial Services union (PCS) will take action across the UK, warning that the walkout will close offices and leave telephone calls unanswered.

The union said 30,000 jobs have been axed since 2005 and a further 10,000 are set to go, “undermining” efforts to investigate schemes.

The PCS said an estimated £120 billion was lost every year because of tax evasion and avoidance, claiming that HMRC did not have enough resources to tackle the problem.

The strike is also in opposition to “creeping privatisation” in the department, which is currently trialling the use of private firms to handle tax credit inquiries.

The strike will be followed by other forms of action such as a ban on overtime.