Schedule 26 — Repeals

Part of Deferred Divisions – in the House of Commons at 7:13 pm on 5 July 2006.

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Photo of David Gauke David Gauke Conservative, South West Hertfordshire 7:13, 5 July 2006

Unlike my right hon. Friend Sir George Young, this was my first experience of the Finance Bill, and I want to make one or two observations. [ Interruption. ] I know that hon. Members are keen to watch France play Portugal.

As we have progressed through the Bill, I have been surprised by how frequently the European Union has cropped up. On Second Reading I addressed the question of why we are substantially changing group relief as a consequence of a European Court of Justice judgment. That is usually an important issue, yet the UK Government have little scope for manoeuvre given the existing constitutional position. Several times during the Bill's passage—for example, when we attempted to tackle missing trader intra-community fraud, leasing rules or film taxation—we found that the motivation for changing the law was that it was required by an ECJ judgment or potential judgment.

I echo the remarks made by my right hon. Friend the Member for North-West Hampshire as regards the sheer complexity of the tax system and, as a consequence, the need for outside expert advice. [ Interruption. ] The Economic Secretary anticipates my point. An error or oversight by Treasury officials was spotted by an eagle-eyed professional adviser—[Hon. Members: "Name her!"] Her name is Mrs. Rachel Gauke, a lawyer at Travis Smith. It would be fair to say that other errors have been spotted by professional advisers who are not necessarily as eagle-eyed as my wife.

The Government got themselves in a bit of a muddle on their initial drafting with regard to trusts. They attempted to tackle it without consultation, so that professional advisers were unable to provide their input, although they did when the draft Bill was published. To be fair, I must add that the Government have made a substantial number of amendments in that area, for which I am grateful. We now have a better Bill than we did initially—better, but not good enough. The complexity in the tax system remains considerable. Speaking as a non-tax lawyer, it is always difficult to grasp even the relatively small elements that we cover in the course of a Finance Bill.

As my right hon. Friend the Member for North-West Hampshire said, we live in a globalised world where capital flows from one jurisdiction to another, and we have to be careful to ensure that we have a fair system that not only deals with evasion but is manageable for individuals and for businesses. Conservative Members are deeply concerned that that balance is increasingly being got wrong, which is of major concern for the long-term competitiveness of the British economy.