Phasing Out of Relief for Profit-Related Pay

Part of Orders of the Day — Finance Bill – in the House of Commons at 7:15 pm on 22 January 1997.

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Photo of Dawn Primarolo Dawn Primarolo Shadow Spokesperson (Treasury) 7:15, 22 January 1997

That was a rapid speech from the Financial Secretary. I think that he was spoken to about the length of the answers that he was giving. It is a shame that he could not be a little more forthcoming about the Government's assessment of the success of the profit-related pay scheme. It was breathtaking to hear him say that the Government balk at spending £150,000 on a report, when they have just spent £4 billion on a scheme that did not work. Let me add, just in case anyone thinks that that is a spending commitment, that we think that it could be done with the current resources.

There are genuine schemes. I am sorry that the Financial Secretary could not be more helpful to his hon. Friend the Member for Eltham (Mr. Bottomley), who made some very fair points about how we could assist in the future and continue to pursue the Government's stated objective. We have supported that objective—enabling employees to share in the profitability of the companies that employ them, which would encourage greater participation and more understanding of those companies.

We entirely agree with the Government that they could not and should not continue to preside over a scheme that was being so widely abused, but we are entitled to a fuller explanation of the likely impact of the removal of the relief than "The Chancellor believes that it will be OK". I think that—to quote the Chancellor—hell will freeze over before we believe what the Chancellor has to tell us, if it is not substantiated.

The Financial Secretary has behaved in a cavalier fashion this evening. There is a substantial amount of expenditure that he is not prepared to justify. The Government were prepared to squander taxpayers' resources without explaining why. The scheme that we are discussing was a clear abuse—an abuse that they knew was going on—and they have now left 3.7 million people high and dry in schemes that are to be wound up.

We will pursue the matter on another occasion; but, as the Committee wants to make progress, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 62 ordered to stand part of the Bill.