Finance Bill

Part of the debate – in the House of Lords at 9:41 pm on 3 July 2003.

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Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage) 9:41, 3 July 2003

My Lords, I beg the noble Earl's pardon. I misheard him. We continue to consult on that and other complex commercial transactions, in order to make the tax fair. I hope that I have covered some of the detailed points made on stamp duty land tax.

I shall comment on the missing trader fraud issue, which surprised my noble friend Lord Sheldon, among others. My noble friend asked whether the amount of fraud could be as great as £1.7 billion to £2.75 billion. The fact that, as I said, we have discovered only today a fraud of £120 million shows the seriousness of the problem.

The question raised by the committee chaired by my noble friend Lord Peston was about safeguards to protect legitimate businesses. Those safeguards include the right to appeal Customs decisions to the VAT and duties tribunal; and a requirement for Customs to prove that the business knew or had reasonable grounds to suspect that VAT had gone unpaid or that evasion was likely to take place. Those legal safeguards are backed up with statements of practice that set out clearly how and in what circumstances the measures will be applied. There have been representations about a two-stage review but we do not want a delay that will allow fraudsters to continue in their fraud; we want to crack down on those frauds as quickly as possible.

It has been suggested that it is difficult for legitimate businesses to recognise a dodgy deal. One example was that of mobile telephones. Those who trade in those sectors are surely aware of market prices from day to day. In most cases of fraud, transactions take place significantly below market value. That is similar to buying cigarettes on the street, as one can near where I live in north London, for significantly less than one pays in the shops. One entertains the fond delusion that one is not buying smuggled cigarettes but all those selling and buying them know that smuggled cigarettes are involved. If businesses have a legitimate low-price deal, they can produce evidence of it and the disputes will be considered by an independent tribunal.

Few comments were made on the electronic VAT issue, although the noble Lord, Lord Freeman, referred to it. However, even he was not particularly critical of the Budget's proposals.

I have given much consideration to the matters raised by the Select Committee. I turn to the wider issues, the first of which is that of parliamentary scrutiny. Several noble Lords—even such experienced people as the noble and learned Lord, Lord Howe of Aberavon—described parliamentary scrutiny of the Finance Bill in another place as a disgrace or as having seriously deteriorated. The total time available for scrutiny of the Bill this year has been comparable with that for Finance Bills over many years under governments of both parties. When there was a complaint about that this year, further Standing Committee time was allocated. Within the total time, the allocation was agreed by the usual channels and I am not aware that there was a particular dispute about that because the Opposition always lead in deciding which issues are to be scrutinised.

On stamp duty land tax, twelve and a half hours were spent on it in Standing Committee and two and a half hours on Report. That is a substantial amount of time. The noble Lord, Lord Higgins, and others, who raised criticisms in that regard, seemed to think that something sinister had been going on in the House of Commons. I do not believe that that is the case. The freedom within a fixed allocation for the opposition parties to decide what they want to debate is the right way to proceed, given that the Government have embarked on programming of government business. It is not for me in this House—or, I suggest, for anyone else—to criticise that.