Mr. J. Enoch Powell:
I beg to move amendment No. 25, in page 33, line 17, leave out 'in Great Britain'.
Clause 32 deals with relief for VAT in case of bad debts, and subsection (3) defines insolvency for the purposes of that VAT relief. There are two alternative headings of the definition in paragraphs (a) and (b). An attentive reader — or, in the case of Northern Ireland, even an unattentive reader—would notice that, whereas definition (a) of liquidation relates to the United Kingdom and the Isle of Man, definition (b) relates only to Great Britain. That throws up the question whether the relief from VAT in case of a bad debt that is provided by subsection (3)(b) is not to be available in the case of a company in Northern Ireland and a claim for the repayment of VAT arising out of transactions with that company.
My hon. Friends and I would have been doing less than our duty had we not drawn attention to an apparent inequity. Indeed, a number of constituents have written to us expressing their anxiety that this relief is apparently to be denied in the Province.
Seeing it to be so blatant, however, and following the general proposition that there is usually some explanation for everything, I communicated with the Financial Secretary to the Treasury and relied upon the rules of the ex-FST club, only to receive, to my delight, a lengthy and helpful reply from the Minister of State. If I understand it correctly, the position roughly is that the circumstances defined in paragraph (b) — which is confined to Great Britain — arise under the provisions of the Insolvency Bill, which has not yet received Royal Assent. Well and good so far! However, the relevant provisions of the Insolvency Bill do not apply to Northern Ireland. Consequently, until an Order in Council is made which applies those provisions to Northern Ireland, there is nothing upon which the relief provided by this paragraph can bite for a company in Northern Ireland.
However, I am not entirely content to leave it with the right hon. Gentleman's concluding assurance:
In the meanwhile … VAT bad debt relief is still available in Northern Ireland where a company enters into a compulsory or creditors' voluntary liquidation.
It is quite clear that there are circumstances in which relief will be provided in other parts of the United Kingdom which will not be available in Northern Ireland until the corresponding Northern Ireland legislation is made.
I have two complaints on that score. The first is one with which the House in its midnight hours has become very familiar — the complaint of my hon. Friends and myself that for no sufficient reason the law is made in the Province not by Act of Parliament but by Order in Council. That is a delightful example of the difficulties and injustices that we get into when we legislate by different methods for different parts of the United Kingdom.
Those difficulties and injustices would not be so great if the different methods of legislation were simultaneously applied in both parts of the kingdom. But in this case it is quite clear that there is to be a time lapse before the legislation comes into effect. I understand that it will come into effect in Great Britain early next year, but we do not yet have a date on which the legislation, for which proposals for a draft Order in Council have not yet been made, will come into effect in Northern Ireland. There is, therefore, a gap of injustice between those concerned in Northern Ireland and those relieved in the rest of the United Kingdom.
The Treasury is the last Department of State that I would hold guilty of the current absurdity of legislation in Northern Ireland by Order in Council. To find the culprits in that respect, one must look to other Departments of State. But I have a friendly and helpful hint to offer to the Treasury. It is that, in its endless pursuit of savings of public expenditure, it would find a rich field if it proceeded to eliminate the duplication of effort, staff and work — not only in this House but elsewhere in the public service—caused by the two concurrent forms of legislation for Great Britain and Northern Ireland.
That is a good tip for the Minister of State, for which I hope he and his Department will be duly grateful — although, when I offered it to an earlier Minister at the Treasury, at a less advanced stage of political affairs in Northern Ireland, though gratefully received, it was by no means acted upon.
There is something, however, that the Minister of State could do which would be of practical help in existing circumstances, and I am sorry that the proposition I have to make is not one that I had time to put him in advance of the debate. I shall therefore understand if he responds to my suggestion simply by undertaking to examine it. That is the most in the circumstances that I could expect.
It is admitted that there will be a gap of time between the availability of this relief in Northern Ireland and its availability in the rest of the United Kingdom. My suggestion is that the Government could undertake that, by concession, the same relief will be afforded in Northern Ireland during that interval as will be available in Great Britain and will, in due course, be available statutorily in Northern Ireland.
I hope that I am not asking something which is too libidinous from the Customs and Excise by suggesting that there should be an extra-statutory concession in this respect. After all, we have the Government's assurance that legislation in these precise terms is intended. It seems only reasonable, that being so and there being an inequitable gap between the application in two parts of the kingdom, that the inequity should be removed by extra-statutory action. I hope that the Minister will undertake to consider benevolently the suggestion that I have made.
As my right hon. Friend the Member for South Down (Mr. Powell) rightly said, this is a clear and even dramatic example of the disadvantage suffered by Northern Ireland under the system which is more accurately called colonial rule than direct rule.
I shall give an example because it is important that the Treasury should understand the whole iniquity of that which we suffer. That is the example of the measure that was processed through the House to remedy the defects in Orlit houses. On the day it was announced, I sought an assurance from the Minister for Housing and Construction that Northern Ireland would receive the benefits simultaneously with the rest of the United Kingdom. The Minister expressed the hope that there would be — he was in favour of—simultaneous application, but, lo and behold, when the rats got at it, we were told that that was not possible and that we should need lengthy discussions on the same topic dealing with the same problem. It was nearly two years before the Order in Council dealing with the same problem came before the House.
Only last week Her Majesty's Government and Her Majesty's Opposition showed clearly that they were at least willing to consider the possibility of radical change to that unacceptable system. My right hon. Friend the Member for South Down has properly shown that, when the Insolvency Bill receives Royal Assent, Northern Ireland will not automatically benefit. We shall have the same charade once again. We shall be told that the sacred Stormont statute book must be thumbed over until the powers that be satisfy themselves that no dot or comma has been accidentally omitted. After a period of nonsensical consultations—they are nonsensical, considering that all citizens of the United Kingdom have an opportunity to comment on legislation before the House—and possibly 18 months to two years after the Insolvency Bill receives Royal Assent, we shall be privileged to debate in the middle of the night a parallel, ditto measure in the form of a Northern Ireland Order in Council to deal with the same problem.
Therefore, I reinforce the plea made by my right hon. Friend that Treasury Ministers give thought to providing some flexibility and relief in what will be a temporary period of 18 months to two years. People in Northern Ireland will find it difficult to understand why the law will not confer benefits upon them and why the Finance Bill will be applied in a different form in two separate parts of the same United Kingdom.
The right hon. Members for South Down (Mr. Powell) and for Lagan Valley (Mr. Molyneaux) have correctly identified the problem as the provisions of the Insolvency Bill rather than those of the Finance Bill. I can only confirm that that is so and that the reason for the Finance Bill being drafted as it is is the present provisions of the Insolvency Bill, which is going through the House.
I reinforce what I said in the letter to the right hon. Member for South Down. As soon as legislation is brought in to extend the Insolvency Bill's provisions to Northern Ireland, the Government will extend those bad debt relief provisions concurrently. The Insolvency Bill provisions will be extended to Northern Ireland by statutory instrument. I note what has been said about the criticisms of those procedures. I can give the undertaking that, once that extension is made and once the Insolvency Bill point has been dealt with, Customs and Excise will extend the relief by concession until an amendment can be made in the next Finance Bill. There is no administrative problem in giving VAT relief to creditors in Northern Ireland as soon as practicable.
Mr. J. Enoch Powell:
Perhaps the right hon. Gentleman has not fully appreciated the nature of the concession for which I was asking. I appreciate that before the Finance Bill is amended the relief will be granted as soon as the Northern Ireland law is brought into congruence with the Insolvency Bill, as it still is. What I was asking for was something more—that, in the period between the coming into force of this legislation and the coming into force of the Northern Ireland Order in Council, there should be an extra-statutory concession to fill that gap.
If the right hon. Gentleman had contained himself for a moment, he would have found that I was just about to address myself to the very courteous request that he put to me. I was going to preface my comments by saying that the information available to me is that only 12 receiverships occurred in the Province of Northern Ireland during 1984, out of 1,600 in the whole of the United Kingdom. The number of receiverships is therefore small. Four of the 12 went into liquidation. Because of this, there was an almost immediate entitlement to relief. The area in which the temporary concession is being requested is very small.
I gather that there is some problem with the issue of certificates. This means that I must take up the suggestion of the right hon. Member for South Down that I should undertake to examine his request sympathetically. I gladly undertake to do that.