(Except Clauses 1, 4, 5, 9, 14, 22, 42, 56, 57, 124, 130 to 135, 138, 139, 148 and 184 and Schedules 5, 6, 19 and 25, and any new Clauses and Schedules tabled by Friday 9th May 2003 relating to excise duty on spirits or RÿD tax credits for oil exploration.) - Schedule 22 - Employee securities and options
Finance Bill
2:45 pm
Mr George Osborne (Tatton, Conservative)
I have a specific interest, in that a family business, for which I do not work, is involved in a management buy-out. I believe that the schedule will have an impact on management buy-outs.
In general, before speaking to the amendments, I wish to say that I share the concern expressed by all Opposition Members—Conservatives and Liberal Democrats—at the sheer complexity of the provisions. The Paymaster General should take serious note of the concerns that have been expressed by organisations such as the Institute of Chartered Accountants and the Law Society. Frankly, when they say that something is totally unintelligible and very hard to follow, one really must sit up and pay attention. They deal with documents that are unintelligible and hard to follow, so they must know what they are talking about. If tax law is difficult even for qualified accountants to follow, let alone lay members of the community—ordinary people—one has to question whether it is bad law.
My second point was also raised by my hon. Friend the Member for Arundel and South Downs. The House has just gone through an entire rewrite project. I remember the admirable speech by my hon. Friend the Member for Eddisbury on the tax rewrite provisions. I believe that he went on for more than an hour, explaining to the House of Commons exactly why the project was important. It is striking that only 10 days after the Income Tax (Earnings and Pensions) Act 2003 came into force we had in the Budget and now in the Finance Bill a huge rewrite of the rewrite. As various professional organisations have pointed out, the Bill does not use the same language, it is inconsistent and it seems to defeat many of the objectives of the rewrite. The various people and organisations that spent so much time on that process rightly ask whether it was worth all the effort when, less than a fortnight later, the Government introduced all sorts of changes that undermined the whole purpose of the exercise.
The third concern that I would flag up is the lack of consultation. The changes are substantial and
important. As the Institute of Chartered Accountants points out, there was no prior consultation. Surely such important and complex matters should have been discussed with the tax accounting industry if no one else. It was not evident from the press releases issued on the day of the Budget that the Government were envisaging such far-reaching changes.
The amendments under discussion, which were tabled by my hon. Friend the Member for Arundel and South Downs, and those we will debate later this afternoon attempt to tackle some of those problems. The Government have already tabled 17 amendments to the schedule, which tells us what a rushed job it has been. It is poorly drafted, it increases the complexity of tax law and it is contrary to what the whole rewrite was supposed to achieve. The Paymaster General owes us an explanation.