Alexander in warning to tax dodgers

Corporate tax dodgers will be banned from competing for government contracts under plans being drawn up by the Treasury and Cabinet Office, Danny Alexander has said.

The Treasury Chief Secretary said "if you want to work for us, you should play by our rules" as he revealed officials were working on a way of making sure firms were not avoiding tax.

In his keynote speech to the Liberal Democrat conference in Brighton, Mr Alexander stressed that he would continue to push for a mansion tax to hit wealthy homeowners but indicated that further welfare cuts would have to form part of the coalition's future spending plans.

Earlier this year Mr Alexander announced changes to the rules to prevent public servants being "off the payroll" after it emerged Student Loans Company boss Ed Lester was paid through a company without tax being deducted.

But Mr Alexander said there were no such measures in place to prevent companies exploiting loopholes to limit their tax liabilities. He said: "There are thousands of large firms that receive taxpayers' money to deliver a service - they do a good job helping to deliver public services.

"But I have discovered that there is nothing that prevents the very small minority of firms that don't play by the rules from winning government contracts. That is not right. That is not fair. And I am determined that it comes to an end.

"If you want to work for us, you should play by our rules. Taxpayers' money should not be funding tax dodgers. So I have tasked HMRC and the Cabinet Office to come up with a workable solution to this problem and we will set out more details later this year."

The Lib Dems are committed to a mansion tax on properties worth more than £2 million, but have been frustrated by the Tories' refusal to accept the policy.

Mr Alexander said: "In this country, we tax work, effort and income too highly, and unearned wealth far too little. You can move your money off shore but you can't move your mansion. That's why we want a mansion tax. It's simple, it's fair, it's unavoidable. An extra levy on high value property would get more money from those who can afford it. We will continue to argue for it within government."

Mr Alexander, who received a muted response to his speech in the conference hall, insisted that he would not allow the party to be tied into detailed spending plans with the Conservatives beyond 2015/16, saying: "We have to set a detailed budget for government for the year 2015/16 because we will be in government for the first five weeks of it, at least."