Finance Bill (Programme) (No. 3)

– in the House of Commons at 12:44 pm on 13th May 2003.

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Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury) 12:44 pm, 13th May 2003

I beg to move,

That in accordance with the Resolution of the Programming Committee of 12th May and pursuant to the Programme Order of 6th May relating to the Finance Bill (proceedings in Committee), as amended by the Order of 8th May.

(1) proceedings in Committee of the whole House shall be taken on each of the two days allowed by the Order as shown in the second column of the following Table, and shall be taken in the order so shown;

(2) proceedings on the first day shall be brought to a conclusion six and a half hours after the commencement of proceedings on the motion for this Order or, if earlier, at the conclusion of the proceedings set down for that day; and

(3) proceedings on the second day shall (so far as not previously concluded) be brought to a conclusion six and a half hours after the commencement of proceedings on the Bill.

TABLE
Day Proceedings
First day Clauses 1, 4, 5, 9, 14, 22, 42 and 56, Schedule 5, Clause 57, Schedule 6, Clause 124, Schedule 19
Second day Clauses 130 to 135, 138, 139 and 148, Schedule 25, Clause 184, new Clauses tabled by Friday 9th May 2003 relating to excise duty on spirits or R&D tax credits for oil exploration

The programme motion sets out the clauses and schedules to be considered in the Committee of the whole House, the days to be spent on consideration, and the day on which the Bill will be reported from Standing Committee. Two days have been allocated for debate. All the measures tabled for consideration in the Committee of the whole House have been selected by the Opposition parties. Six debates have been selected by the minority parties and 14 by Her Majesty's Opposition, the Conservative party. The Government have not added any new topics for discussion. As you will see, Mr. Deputy Speaker, the proceedings also include two new clauses specifically requested by one of the minority parties; unfortunately, none of its representatives is yet present in the Chamber.

To ensure that the time for debate is not curtailed by other business of the House in the two days allocated, the motion guarantees six and a half hours of business each day even if the start of the debate is delayed. Without such provision, the debate would usually finish at 7 pm each day. That facilitates the discussion of topics requested by all the Opposition parties in the days agreed through the usual channels for the Committee of the whole House.

Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary to the Treasury 12:45 pm, 13th May 2003

It has been my privilege over the past three years to participate in the consideration of Finance Bills. While the Opposition did not agree with a number of the measures previously introduced, they were properly considered and proper opportunity and sufficient time were given for the Opposition to express the views and criticisms raised by various outside professional bodies. Furthermore, on more than one occasion, I have complimented the Paymaster General as having been, during the time in which I have been interested in politics, more on top of the Revenue and tax law than any of her predecessors.

I am therefore extremely disappointed about what seems to have happened this year. The Bill seems poorly drafted and a number of crucial changes have been made without proper consultation and by an unacceptable and authoritarian railroading through Parliament. The major tax changes self-evidently relate to the stamp duty land tax, employee securities and options, approved share schemes and a considerable number of VAT and other anti-avoidance measures.

This is the fourth longest Finance Bill on record. It has 447 pages and there are 659 pages of explanatory notes, at least one of which was so badly drafted that it contained the wrong figure for the basic rate of income tax. Seven days and 14 sittings in Standing Committee are wholly inadequate to consider a Bill of such complexity and volume. As to the Floor of the House, the Conservative Opposition requested that we discuss a number of key introductory clauses in order to debate the principles that they involve, and not the accompanying schedules, after checking with the Public Bill Office that that was constitutionally appropriate. The Government agreed to withdraw schedules 21 and 22—some 80 pages of legislation—and I understand that they now realise that they will have to rewrite part of schedule 21, but we are left with schedules 5, 6 and 25. Together with the other items to be taken on the Floor of the House, they are too much to allow a proper debate and a full airing of the issues raised.

The Government's growing disregard—nay, contempt—for Parliament is widely recognised. Many people will have heard the comments made on the radio this morning by my right hon. and learned Friend Mr. Clarke, who criticised the Government's abuse of Parliament and expressed alarm about the state of Parliament.

The Government's decision to cut short debate on the Finance Bill means that there is a danger that shortcomings in the Bill as it stands will pass into law. The Bill includes 180 pages of provisions rewriting and completely changing the nature of stamp duty land tax, including the new tax on leases, without any proper calculation or estimate of the additional tax that is likely to be raised. The extent of the changes was not made clear in the Budget speech. Clauses 1, 3, 8 and 9, with their accompanying schedules, introduce, again without warning, badly drafted rewrites of tax law relating to employee securities and options and approved share schemes, that, as the comments submitted by the professionals show, are full of mistakes and unintended consequences and will leave many genuine share schemes in a complete mess. Such a total overhaul of complex legislation that has not been subject to thorough consultation merits detailed debate and consideration in Parliament.

Photo of George Osborne George Osborne Opposition Whip (Commons)

Is my hon. Friend aware that the Government are already amending the Bill just days after its Second Reading? That amply illustrates his point.

Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary to the Treasury

I thank my hon. Friend for his comments. I referred to just one aspect of the Government amendments of which I am aware, but I expect many more.

The legal and accounting professions contribute to the proper scrutiny of such legislation by considering the detailed drafting and passing on their proposals for improvements and the correction of mistakes, and those representations are considered in Committee. If that process is curtailed, the chance of mistakes increases, and they will surface only when it is too late and the Bill has passed into law. Of crucial importance, of course, is the fact that a Finance Bill does not receive the secondary scrutiny of the other place. In our view, a quite insufficient and unacceptable amount of time is being given to the Committee stage, which will result in bad law, damage to business and damage to jobs.

There has been widespread professional criticism both of the Bill and of the lack of adequate consultation. The Law Society produced comment running to 130 pages, with 90 pages of draft amendments. The Chartered Institute of Taxation provided 44 pages of detailed problem issues that the Bill raises. The tax faculty of the Institute of Chartered Accountants produced 31 closely printed pages of critical issues. If I may, Mr. Deputy Speaker, I shall quote a few of the comments that were made by those professional bodies. The Law Society notes:

"In 2002 we welcomed the fact that much of the Finance Bill had been circulated in draft prior to publication. This year a very significant proportion of the bill consists of complex legislation which had not been previously published. This might not have been a concern, had agreed policy intentions been translated into clearly worded statutory drafting. Regrettably, this appears not to be the case in many areas. These failings are compounded by the extremely limited time available for consideration, both by professionals and by Parliament and the poor quality of many of the Explanatory Notes."

The institute—

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. I am sorry to interrupt the hon. Gentleman. I have been generous in allowing him the general remarks that he has made until now, but I have to remind him that the motion relates only to the content of the two days' debate in Committee of the whole House.

Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary to the Treasury

Thank you, Mr. Deputy Speaker.

We have of course selected clauses from the whole Bill for the two days' debate on the Floor of the House. The key point that I made at the beginning is that we will end up with three key schedules being debated on the Floor of the House. If I may crave your indulgence, Mr. Deputy Speaker, the programme motion gives rise to a grave problem in that the most important item that we will discuss on the Floor of the House is our amendment to schedule 19, which proposes a further year for full consultation and consideration of the changes to stamp duty and the new stamp duty land tax. There is a risk that we may not reach that important amendment today, and if we do not, we will have little chance to debate it later on in the course of our very limited timetable. That issue arises again in the context of the first tranche of Standing Committee proceedings, where the two most important amendments, Nos. 21 and 22, are to be debated at the end, so we will face a major problem if there is insufficient time.

In short, we see no good reason why the Bill has been given insufficient time overall. We selected clauses for debate on the Floor of the House with the intent that there would be sufficient time to do so, but the adding of the schedules renders that impossible. If there is a means of doing so, we ask the Government seriously to consider giving schedules 5, 6 and 25 sufficient time for debate, if not on the Floor of the House, in Standing Committee.

My main point is that the process of debate on the Floor of the House and in Committee affords consideration of the comments, criticisms and proposed changes of the professionals and of those who act for the businesses who will have to work with the new legislation. If that process is not given sufficient time, we will end up with bad legislation that is bad for individuals, bad for business and bad for jobs.

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons) 12:56 pm, 13th May 2003

I wish to follow my hon. Friend's comments with a couple of short points.

Yesterday, we heard an important announcement—that is the only way to describe it—from the Secretary of State for Northern Ireland, who told us that one reason why the House of Commons could have only one day to debate a Bill was that the House of Lords needed two days to debate it, and the elected Chamber had to take second place in preference to the other place. The Finance Bill does not face that hurdle because it does not have to be reviewed in another place. That is why it is so essential that it receive proper and adequate scrutiny in the House of Commons.

As my hon. Friend Mr. Flight said, we are embarked upon debating over a very short period one of the largest Finance Bills to have passed through the House. I know, Mr. Deputy Speaker, that you said that we must only refer to the debates that will take place today and tomorrow, but in so doing, we will consider only the parts of the Bill that have been selected for debate on the Floor of the House, and we have been able to select for consideration only a very small proportion of a hugely complicated and complex Bill. It is unacceptable that we should not get adequate time to scrutinise the Bill in its entirety.

One has only to look at the programme motion, which says that on the second day we will debate

"new Clauses tabled by Friday 9th May".

How is it possible to get the right kind of consultation when the Government table amendments so late in the day? Such matters naturally have to be considered by many people outside who have to add detail to the facts of those late amendments. It is unacceptable for the Government to table amendments as late as Friday 9 May for consideration some four days later. It is yet another example of the sheer and utter contempt—

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

If the hon. Gentleman would cast his mind back—I know that it is a long way—to the time when his party was in government, he may recall how many Government amendments they tabled to the Finance Bill.

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

I seem to remember that the 1997 election slogan was, "Things can only get better". Perhaps we should add, "apart from in the House of Commons," where they get more contemptible. The Paymaster General referred to Conservative Finance Bills, which were not subject to the rigorous guillotining that happens nowadays. I cannot remember another Finance Bill that had 14 sittings in Committee. That is ridiculous, as is the programme motion, which clearly shows the absolute contempt for this place of which we heard yesterday in the resignation speech of the former Secretary of State for International Development.

Several hon. Members rose

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. For the assistance of hon. Members who seek to catch my eye, I must clarify that we are discussing the motion on the Order Paper. I do not wish to hear comments that go beyond that.

Photo of David Wilshire David Wilshire Conservative, Spelthorne 1:00 pm, 13th May 2003

I shall confine myself to the motion because I believe that it is wrong. When discussions take place between the usual channels about the number of days for discussion on the Floor of the House, an agreement is reached that is usually inadequate for the Opposition and excessive for the Government. The Opposition parties are asked to submit what they want to tackle on the Floor of the House. That process was followed on this occasion. Business was proposed to and accepted by the Government. I am content with that; indeed, I am grateful to them because I was involved in the process.

The trouble started immediately afterwards because the Order Paper contained not only the items for which we asked but additional items. The Government argued that if we requested clause x, whatever they believed appropriate should be tagged on, but that is technically unnecessary. I shall say thank you again to the Government because when we protested, a couple of items were removed for consideration in Standing Committee. However, the trouble centres on some items that were not removed.

We had an understanding that there would be two days on the Floor of the House. We presented our proposals and the Government added to them. Today and tomorrow, we shall therefore consider more business than we requested, more than can be justified and more than we can tackle in the time. That is the nub of the problem. I have a simple question for the Paymaster General. If we do not have time to deal with the extra items that the Government have included and refused to remove, will she give hon. Members an absolute undertaking that a motion will be tabled to enable us to deal with the business Upstairs in Standing Committee? It would be helpful if the Paymaster General listened rather than holding a conversation.

Will the right hon. Lady give us a simple, clear undertaking now that any business that is not concluded today and tomorrow, especially business that the Government tabled and for which we did not ask, will go Upstairs to allow scrutiny? That is essential, especially given that the other place has no opportunity to consider the measure. If she agrees to the request, I shall say thank you for a third time. If not, it is a disgraceful abuse of a Government's power to try to railroad through this place unconsidered legislation that could have dire consequences for the country's economy.

The question is simple. Will the Paymaster General ensure that, whatever happens today and tomorrow, scrutiny takes place? 1.4 pm

Photo of Andrew Mitchell Andrew Mitchell Conservative, Sutton Coldfield

I do not wish to detain the House for too long. I draw hon. Members' attention to my entry in the Register of Members' Interests. In perusing the motion, I wonder whether the Paymaster General, who has a good reputation for listening both inside and outside the House, can be proud of it. I served on Committees that considered Finance Bills from 1988 to 1992, and I remember no precedent for behaving in such a cavalier way. Nor do I remember the Government whom I supported tabling such motions.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

How many days were allocated for a Committee of the whole House to consider the Finance Bills to which the hon. Gentleman refers? Does he recollect that the answer is two days?

Photo of Andrew Mitchell Andrew Mitchell Conservative, Sutton Coldfield

With great respect to the Paymaster General, she is missing the point. In those four years when I served on Finance Bill Committees, there was agreement between both sides. There is no such agreement today. The right hon. Lady should pay greater heed to tradition, whereby such motions were tabled with agreement and did not cause debates. If she looks back at the record, she will find that no debate such as today's took place in those years. I am worried by the operation of the motion and the way in which it will facilitate railroading an enormous Bill through in a short time.

The Paymaster General will be acutely conscious that serious professionals outside the House, who are engaged in the City or the financial service industry, have reservations about the way in which we conduct our scrutiny of the Finance Bill. She will be familiar with the tax rewrite committee and the work of Lord Howe's committee on more effective scrutiny of such legislation, of which Ross Cranston and I are members. I hope that the Paymaster General accepts that serious professionals outside this place are worried about the quality and extent of our scrutiny. The motion will not assuage their doubts about the proper scrutiny by the House of Commons. The Paymaster General fully understands that some of the subjects that are tabled for debate today may not set pulses racing, but they are vital to industry, business and commerce and they deserve proper scrutiny.

It will not have escaped the right hon. Lady's notice that, apart from the Front-Bench spokesman, the two other Conservative Members who have spoken are the deputy Chief Whip and the Whip responsible for the Finance Bill. Both made cogent points about why the motion allows too short a time and is excessively hard on the House of Commons. I hope the right hon. Lady will take cognisance of that.

The Paymaster General should bear in mind the important point that there is no scrutiny in the Lords. She will have witnessed the great anxiety, which was expressed recently in another place, about timetabling the Communications Bill. She knows about the trouble that the Government are experiencing. If they had listened to representations from Conservative Members about making more time available, they would not have got into such difficulties with the Communications Bill.

Parliamentary scrutiny and the effectiveness with which we discharge such duties are under intense outside observation. Such oppressive timetabling will have the opposite effect from what the Government hope. It will not mean that their measures receive greater acceptance or go through more quickly. We need a legislators' revolt against the Executive—a modern-day peasants' revolt. I hope that one of its first victories will be the prevention of unfair timetabling such as we have today.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon 1:09 pm, 13th May 2003

It is a pleasure to speak in my first Finance Bill Committee and I declare my entry in the Register of Members' Interests.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

On a point of order, Mr. Deputy Speaker. It is my understanding from the guidance that has been issued to Members of Parliament that it is not sufficient for a Member simply to say, "I declare my interest as registered."

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

That is not a matter for a Chair. It is for the hon. Member to be sure that he or she satisfies the requirements of the House.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

Thank you, Mr. Deputy Speaker.

When I first had sight of this draft legislation, I was shocked at the two days that had been allocated for the discussion of this stage of the Bill. I know that I am not allowed to talk about the other 14 measly days, but even in these two days, we are being asked to review some 20 clauses that deal with an enormous raft of legislation and, indeed, a whole new tax—and an extremely complicated one, at that. I fully support my hon. Friends in saying that we have not been given enough time to debate these issues. As my hon. Friend Mr. Flight mentioned, we are not the only people saying that. In the last few days, my hon. Friends and I have received a host of letters from professionals, business people, retailers and property business people, complaining about the lack of consultation and their inability to get their heads round what is going on here, in terms of the time being allowed for discussion of these matters.

To my mind, less consultation means that more time is required at this stage, rather than less. The worst example of that relates to the stamp duty land tax, which will be discussed over the next two days. I have received an enormous number of complaints about the clause dealing with that provision, and a flood of articles has appeared in the press over recent days. I shall mention one that came in this morning—it was probably written last night—from the tax law committee of the Law Society, which states:

"significant amounts of the draft legislation included in the Finance Bill have not been reviewed as part of that process".

The committee goes on to say:

"Whatever date is chosen, we recommend that detailed guidance is made available" and that

"A new tax should not be introduced in such an incomplete form".

There are very serious issues involved here. This stamp duty involves some £8 billion of revenue. Surely that deserves more time for discussion.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury) 1:12 pm, 13th May 2003

It has been the practice to allocate two days for the discussion of Finance Bills by the Committee of the whole House for a very long time. I have checked the record as far back as I could while in the Chamber, and two days has been the allocated period for at least the last eight Finance Bills, if not more. The Committee of the whole House sits on a Finance Bill for two days. That was agreed through the usual channels. The next procedure is that the Opposition parties are invited to propose the issues that they wish to debate in those two days. The Government have no control over that. As the House will see, the Opposition parties have picked a rather large range of issues, but that is entirely up to them. The internal record shows that the sitting of the Committee that discussed this programme motion for the Committee of the whole House lasted for only two minutes, and that there was no Division on the matter.

As some hon. Members have said in this short debate, it has always been my practice to ensure that there is ample time and thorough debate within the proceedings of the House for the discussion of the Finance Bill. Indeed, the Opposition approached me as a Minister and explained that there were two particular schedules to which they wished to table a large number of amendments. Those schedules were then moved back into Committee. I am therefore rather at a loss. When in government, the Conservatives allowed two days for the debates involving the Committee of the whole House. This Government also allow two days, as is the practice of the House. The Opposition parties were fully aware that two days were to be allocated, and they are fully aware of the decision of the House on programme motions. None the less, they advanced a very large number of subjects for debate during these two days. It seems to me that they are actually complaining about their own judgment at having proposed so many subjects for discussion, or perhaps they were trying to use up time so as to give their Members time to get from their luncheon clubs for the vote.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

No, I will not.

The fact of the matter is that this was done with agreement, in discussion—

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

No, I will not give way to the hon. Gentleman.

The programme motion is before the House. The record is clear. The discussions have been held, and the two days—

Photo of David Wilshire David Wilshire Conservative, Spelthorne

On a point of order, Mr. Deputy Speaker. Is it in order to say that something was done with agreement when it patently was not done with agreement?

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

That is a matter for debate, not a point of order.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

I said, with regard to the internal record, that there was no Division on this matter. The agreement was that there would be two days, and that was my understanding in all the discussions that I have had with the Opposition parties.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

No, I will not give way.

The programme motion has been discussed, and the two days have been allocated. The Opposition parties themselves—not the Government—chose the debates. Of course, they are absolutely right to say that it is the Government's responsibility—and my responsibility as a Minister on this Bill—to ensure that, within the procedures of the House, there is proper time to discuss the Finance Bill. I intend to ensure that that happens, and I therefore move the programme motion only for the two days' debate on the Floor of the House. The programme motion for other business will be discussed elsewhere at the appropriate time.

Question put:—

The House divided: Ayes 244, Noes 137.

Division number 188 Finance Bill (Programme) (No. 3)

Aye: 244 MPs

No: 137 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly agreed to.