Clause 146
Finance (No. 2) Bill
4:30 pm

Mark Francois (Shadow Minister, Treasury; Rayleigh, Conservative)

We come to the end of our odyssey on REITs, because this is the last clause of part 4 of the Bill. It deals with commencement. It says, in essence, that the REIT regime will come into force on 1 January 2007. If you will indulge me, Mr. Benton, I have a few remarks to make at the end of the debate on this part of the Bill.

For the record, we have gone beyond the scheduled time this afternoon and finished later than we would have done. That is a tribute to the determination of Members from all parts of the Committee to make sure that the REIT regime is scrutinised in detail. I hope that we have done good service.

We touched on a number of important issues. The issue of listing on AIM cropped up again in a number of guises, this time in the context of the balance between commercial and residential property in the REIT regime. Considerable concern was expressed throughout the Committee about the residential element of the REIT regime. We are grateful for the Minister’s commitment that the issue would be reviewed both in the run-up to commencement under clause 146 and afterwards. We will see how that pans out in practice. There are genuine problems that need to be addressed. We hope to return to the issue of AIM-listing on Report.

Under clauses 116 and 130, we amended the clause 106 conditions and turned two of them from red cards to yellow cards. For reasons I will not repeat, that was right. Under clause 125 we kept the Government Whip on his toes and made sure that we pressed the Government on an important matter on which, I hope, they will still listen. On clause 143, with a bit of cross-partisan co-operation we managed to delete an unnecessary clause from the Bill.

I have one last remark. As a personal valedictory, I pay tribute to my old college friend Mr. Michael Halcrow, who was the tax manager at Hammerson plc a few years ago. Like others, such as the British Property Federation, he provided me with a great deal of detailed briefing and advice. These are complicated matters and it is thanks largely to him that I have, I hope, managed to navigate them. I place that on the record.

We look forward to seeing how the regime operates in practice.

Edward Balls (Economic Secretary, HM Treasury; Normanton, Labour)

I shall be brief so that we can move on. As the hon. Gentleman said, our aims were debated at length and I set out our position clearly. I also said that it was our intention to ensure that residential as well as commercial property was central to the REITs regime. I did not say that there would be a review; a review can often mean an e-mail address, a consultation document, a team and an office. I said that I would keep the matter closely under review, and that is what I shall do. Just to be clear about it, in discussions today with the hon. Member for Rayleigh and the right hon. Member for North-West Hampshire, I made clear our determination to ensure that the regime works as we all agree it must.

I end by saying that our debates on these clauses have been constructive. First, there were few difficult or contentious issues, which is substantially the result of the excellent consultation conducted by HMRC and the industry; a number of issues had already been dealt with, and the Government were therefore able to respond to concerns before they came before the Committee. Secondly, whether or not it was the result of using outside experts, the Opposition’s amendments did not need to be withdrawn simply because they had no substantive basis; they often pointed to issues that the Government had already been able to address or that we shall address in guidance. I urge the Committee to let the clause stand part of the Bill, so that we can look forward to having a well-functioning UK REITs regime.

Joe Benton (Bootle, Labour)

I take this opportunity to remind the Committee that our proceedings will take place in Committee Room 12 next Tuesday morning; we are there only for the one sitting, and we return to this room in the afternoon.

Further consideration adjourned.—[Mr. Heppell.]