Clause 37
Finance Bill
12:30 pm
Edward Balls (Economic Secretary, HM Treasury; Normanton, Labour)
The hon. Gentleman is right to refer to simplification. I wish to preview the schedule a little. We shall be discussing the amendments in a moment but, as he said, schedule 7 contains a series of measures to simplify complex legislation substantially. It is based on technical consultation that started last May. Under current law, five similar, separate consultations are needed to calculate the profits or losses arising through the insurance company from its pensions business, its overseas life insurance business, its life reinsurance business, its individual savings accounts business and its child trust fund business. A result of having five separate computations is that, when a computation results in a loss in one category, it cannot be set against profits in other categories.
By introducing schedule 7, the clause will merge those five categories of life insurance business into a single new class of business called gross roll-up business. Instead of five separate computations, only one will be required. That means that losses can be offset from one old category and set automatically against profits in another.