(Except Clauses 4, 19, 23, 26 to 29, 87 to 92, 131 and 134 and Schedules 1, 5 and 38)

Finance Bill – in a Public Bill Committee at 10:30 am on 14th May 2002.

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Photo of Roger Gale Roger Gale Vice-Chair, Conservative Party 10:30 am, 14th May 2002

Order. Before we start, there are a couple of housekeeping matters. First, hon. Members who have not already done so may, while I am in the Chair, remove their jackets. I cannot speak for Mr. Benton, who will decide whether to afford the Committee the same concession.

Secondly, would hon. members please switch off their mobile phones when they take their seats? It would be helpful if they did not ring during our proceedings.

Thirdly, there is no timetable motion, but I am reliably informed that we may complete our proceedings in time to enjoy the summer. However, there is a sittings motion and I call the Minister to move it.

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

I beg to move,

That, during proceedings on the Finance Bill (except Clauses 4, 19, 23, 26 to 29, 87 to 92, 131 and 134 and Schedules 1, 5 and 38), the Committee do meet on Tuesdays at half-past Ten o'clock and half-past Four o'clock and on Thursdays at half-past Nine o'clock and half-past Two o'clock.

Good morning, Mr. Gale. I welcome you to the Chair. I speak for the whole Committee in saying that we welcome your expertise and know that you will keep us on the straight and narrow while not allowing us, however much we may be tempted, to stray on to matters that are not strictly relevant. I know that you and Mr. Benton will have a light touch so long as the Committee conforms to required conduct.

I welcome the hon. Member for Buckingham (Mr. Bercow), who will lead for the Opposition. I know that he relishes the opportunity of scrutinising Government business and I look forward to the many ways in which he explains, describes and challenges it with his vast vocabulary. I know that my right hon. Friend the Financial Secretary, too, is looking forward to those discussions.

I also welcome the right hon. Member for Fylde (Mr. Jack), who is an experienced member of the Committee, having been Financial Secretary and having participated in most of our Finance Bills since 1997. I look forward to thoughtful and challenging debates with him.

Photo of Roger Gale Roger Gale Vice-Chair, Conservative Party

Order. We cannot have people who are not Members in the body of the kirk. The Rope delineates the body of the Committee and perhaps the person concerned would take a seat.

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

I note that the hon. Member for Aylesbury (Mr. Lidington) has escaped the pleasure of being a member of the Committee and I put on record

our congratulations on his new appointment as rural affairs spokesperson for the Opposition. It is his loss that he will not experience the thrilling detail of debate in this Committee.

This my sixth Finance Bill as a Minister. They run into one another and I think that I have taken part in eight—two as an Opposition Treasury spokesperson. The hon. Member for Arundel and South Downs (Mr. Flight) has participated in three and the way in which he has conducted business in the past—usually in good humour, but not always—bodes well for the Committee and our debate on the details of the Bill. I welcome the hon. Member for Kingston and Surbiton (Mr. Davey), who has been on every Finance Bill since 1997; he is an expert on many of the issues and is gathering further expertise quickly.

I welcome the many talented, able and excellent Labour Members, who I know will support the Government and ensure that we are properly scrutinised. I also welcome Opposition Members who have already proven themselves in debates on the Floor of the House. I am indebted to my right hon. Friend the Financial Secretary and my hon. Friend the Economic Secretary for making progress for the Government as the ministerial team leading the Finance Bill.

It is a good idea to get off to the right start, so may I welcome the Whips? My hon. Friends the Members for Basildon (Angela Smith) and for Bradford, South (Mr. Sutcliffe) will keep us in order. I welcome the hon. Member for Mid-Worcestershire (Mr. Luff), who is the Opposition Whip; he enjoys Finance Bills so much that he cannot remember whether he has been on three or four because each of them has been such an ecstatic experience. I welcome the police officers, the Hansard writers and the Clerks, who will ensure that we keep to the business.

Let me quickly address a few details in the motion. The Committee will proceed from clause 1 through the Bill in an orderly fashion. The motion suggests that there should be some movement of clauses to facilitate debate—I hope that Opposition Members agree to that. Clause 36 follows clause 33 because it is a consequential clause on minor benefits and employer-subsidised bus services. Clause 39 will follow clause 37—

Photo of Roger Gale Roger Gale Vice-Chair, Conservative Party

Order. I am sorry to have to interrupt the Minister again, but she is moving on to the order of consideration, which is to be debated shortly, and away from the sittings motion.

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

Thank you, Mr. Gale. In my desire to conclude this part of the business, I have got ahead of myself.

As we begin consideration of the Finance Bill, I should like to echo your point, Mr. Gale: I hope that we do it in an orderly fashion, but in a way that will ensure that we see some of the English summer. I welcome you, Mr. Gale, and members of the Committee.

Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury

It is a pleasure to join the Paymaster General in supporting the sittings motion.

I should like to begin my remarks, as she began hers, with a warm welcome to you, Mr. Gale. From past experience, many hon. Members will be able to testify that the Committee will be chaired with a combination of firmness, discretion and humour, which are the guarantors of good progress and a harmonious atmosphere. I am also pleased to return what I shall choose to interpret as a compliment from the Paymaster General. It is a pleasure to joust with her. We spoke earlier about how many Finance Bills she had been involved with—they number no fewer than eight. I can honestly say—I speak for my hon. Friend the Member for Arundel and South Downs as well—that the hon. Lady has built up a formidable reputation as somebody who knows her onions and does her homework. We treat that with respect and consideration.

The fact that the hon. Lady and I go back some way should not remain a state secret, as it is important to put to rest any uncertainty about the matter. I fought the Bristol, South constituency in 1992, long before the consideration of the sittings motion. From my point of view, the downside was that the constituency of Bristol, South fought back. The hon. Lady converted a marginal Labour seat into a safe Labour seat, and I had to pursue my parliamentary peregrinations elsewhere. I believe that I can safely say that things have moved on somewhat since that time. The hon. Lady and I enjoy better relations now than we did in those days, because I am marginally more civilised than I was then, although I emphasise the word ''marginally.''

It is also a pleasure to debate the Bill with the Financial Secretary and other Committee members. I wish to echo what the Paymaster General said about the importance in the process of the respective Whips. My Whip for this Committee, my hon. Friend the Member for Mid-Worcestershire, is decent, considerate and keen that we make proper progress. I know that the same can be said of the hon. Members for Bradford, South and for Basildon. The hon. Member for Bradford, South is one of the true gentlemen of the Government Whip's office. I do not wish to wreck his future prospects in making the observation that he commands respect and, indeed, affection among many Conservative Members. I hope that that is also true among Liberal Democrats and members of other parties. I have regularly jousted with the hon. Member for Basildon. I believe that her political activities before she entered the House fully justify my innocent observation that, in addition to all her other qualities, she is renowned as a foxy lady.

The Bill is lengthy—it is 488 pages long and consists of two volumes—and 604 pages of explanatory notes accompany it. There are many important issues to consider, and there is scope for considerable and, perhaps, extensive discussion. However, we want to enjoy the summer months. We do not want to take excessive time if it is not necessary, which is why I join the Paymaster General in underlining the commitment to make timeous progress. I am sure that when you, Mr. Gale, are not here, Mr. Benton will also chair the Committee with consummate skill.

My final observation is that I am joined by an admirable team on the Conservative Benches. I single out my right hon. Friend the Member for Fylde, who is a distinguished former Financial Secretary to the Treasury. His contributions in Finance Bill Committees carry weight and are listened to with respect. There will be many occasions in the next few weeks when we on the Conservative Benches will be the better for his guidance, and I look forward to the benefit of it.

I am also assisted by my hon. Friend the Member for Arundel and South Downs. Many will know not only of his experience with Finance Bills but of his day-to-day involvement in the work of many of the institutions that are the subject of parts of the legislation. In other words, my right hon. Friend is not merely a theorist but someone with practical know-how that is born of his commercial acumen and the track record that goes with it.

I am delighted to be assisted as well by a former Minister, my hon. Friend the Member for Christchurch (Mr. Chope), and by my hon. Friends the Members for Cities of London and Westminster (Mr. Field), for Epsom and Ewell (Chris Grayling) and for Fareham (Mr. Hoban). The Finance Bill Committee is an enticing prospect. We should now proceed without delay to consideration of the clauses.

Photo of Edward Davey Edward Davey Shadow Chief Secretary to the Treasury, Shadow Minister (Olympics and London), Liberal Democrat Spokesperson (Olympics and London), Liberal Democrat Spokesperson (Chief Secretary to the Treasury)

I do not wish to disappoint the hon. Member for Buckingham, but I wish to add a few remarks before we proceed to the next motion. I begin by welcoming you, Mr. Gale, to the Chair. We look forward to the next six—possibly seven or eight—weeks of Committee sittings under your guidance and the guidance of your fellow Chairman, Mr. Benton. We hope that he will be as generous as you have already been in allowing us to remove our jackets when appropriate.

I welcome all hon. Members to the Committee. The danger of a sittings motion is that the Committee can turn into an Oscar night in which thanks become welcomes, and I will therefore not single out too many individuals. However, I particularly welcome the Paymaster General to the Committee. She and I are possibly the only members of the Committee, and certainly the only members on the Front Benches, who have served on every Finance Bill Committee since the 1997 election. Unlike her, I was not on Finance Bill Committees before that, but I acted as a researcher for my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) on Finance Bills between 1989 and 1993. If I add those four Finance Bills to the six in the past Parliament, I have a pedigree, or perhaps a sentence, to declare.

I welcome the Conservative Front Benchers led by the hon. Member for Buckingham, who will, I hope, be present in many of our meetings. I look forward both to jousting with him and to enjoying his jousts with others. I am sure that he will joust in a way that excites and interests the listener. When I listen to him I always think that he ought to apply to appear on ''Just a Minute'', as he is the Member of Parliament most

qualified to speak in the way required by that wonderful radio programme. I would be happy to act as his referee if he were looking for another job.

I welcome my hon. Friend the Member for Torridge and West Devon (Mr. Burnett), who brings to the Committee his expertise as a former tax lawyer. I have enjoyed his pertinent contributions in previous Finance Bill Committees.

I look forward to many contributions from Labour Members. I am sure that they will want not only to extol the virtues of the Government's legislation, but to join the Opposition in trying to find the problems that lie therein. I am sure that the Whips will give them leave to speak for as long and as often as they want.

It strikes me that prior to some of our morning proceedings a few football matches will take place. We shall see whether or not the World cup enters into our discussions, but I am sure that a few pagers will be vibrating with results.

It is worth making a serious point in this short debate. I shall not make a long point because the Paymaster General is well aware of my thoughts on this subject. Accountants, tax lawyers, tax advisers and business people look to Parliament to improve the way in which we develop tax law. One of their observations is that the proceedings of the Finance Bill Committee often do not help them when they are considering the interpretation of the law and trying to apply it. We have an onerous task, and we should recall the number of people who will trawl through our speeches—especially those by Treasury Ministers—to see the original intention behind the many words added to the statute book. Our proceedings are serious, and I hope that we can do better than many of our predecessors.

Photo of Michael Jack Michael Jack Conservative, Fylde 10:45 am, 14th May 2002

I rise, first, to salute your chairmanship of the Committee, Mr. Gale, and that of Mr. Benton, and I appreciate the kind words from both Government and Opposition Front Benchers.

In furtherance of the agenda laid out in the Finance Bill, the Government will undoubtedly get particular help from the hon. Member for Glasgow, Maryhill (Ann McKechin). When we discussed oil taxation in the House, I was struck by her willingness to join in and justify increases in tax. There are rising stars on the Back Benches, as well as established stars on the Front Benches.

In all seriousness, I hope that much of the Bill touches upon matters connected with business. When Opposition Members ask for detail and justification on how numbers, rates of tax and effects of tax have been arrived at, I hope that we shall have the benefit of full and cogent explanations from the now veteran performer, the Paymaster General. As she rightly said, she has undertaken many Finance Bills. If there were medals of honour going, I think she would be first in line to receive a long service medal for such Bills.

If the going gets tough, I note with interest that the hon. Member for Basildon is one of the Government

Whips. I have had the pleasure of competing with her, but from another dimension—the front wheel of a saloon racing car. In spite of the rigours of the Lords v. Commons race at Donnington, she proved capable of conducting herself with aplomb under pressure. If there are any pressures during the Bill, we will look to her to guide our proceedings.

Question put and agreed to.

Resolved,

That, during proceedings on the Finance Bill (except Clauses 4, 19, 23, 26 to 29, 87 to 92, 131 and 134 and Schedules 1, 5 and 38), the Committee do meet on Tuesdays at half-past Ten o'clock and half-past Four o'clock and on Thursdays at half-past Nine o'clock and half-past Two o'clock.—[Dawn Primarolo.]

Photo of Roger Gale Roger Gale Vice-Chair, Conservative Party

I am grateful to all right hon. and hon. Members for their kind remarks. Looking around, I am absolutely certain that the Committee will proceed with the customary courtesy and good humour.

I have several announcements before we proceed. Copies of the Ways and Means and money resolutions agreed to by the House, on which the Bill is founded, are available on the Dais behind me. In view of the resolutions of the House relating to the declaration of interests, right hon. and hon. Members are required to declare relevant interests when they table amendments as well as when they speak to them. Copies of those rules are available from the Clerk. As usual, because of the quantity of paperwork on the Bill, boxes are available to store papers between sittings. Members making use of that facility should note that the filing cabinet that contains the boxes will be locked when the Committee is not sitting.

I draw attention to the fact that adequate notice of amendments must be given. As a rule, neither Mr. Benton nor I shall call starred amendments, including any that may be reached during an afternoon sitting. I have already mentioned, but will remind right hon. and hon. Members again, that they should turn off mobile phones and other noisy electronic equipment prior to taking their seats.

Finally, to avoid any further confusion and embarrassment, the Bar of the Committee Room is the Rope in front of me. The area beyond that is for the use of the general public and the area on this side of the Rope is the Committee Room. Members will notice that there are only two Officers of the House and that there are three Doors. It would be helpful if Members could use the central Door, with the broadcasting light over it, and avoid clambering round the Rope to speak to assistants or research staff beyond. If Members wish to make contact with their assistants, will they please be kind enough to use the central Door and have their discussions outside the Room? That will enable the Officers of the House to maintain proper order and security at both ends of the Room.

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

I beg to move,

That the Order in which proceedings in Standing Committee on the Finance Bill are to be taken shall be Clauses 1 to 3, Clause 5, Schedule 2, Clause 6, Schedule 3, Clauses 7 to 12, Schedule 4, Clauses 13 to 18, Clauses 20 to 22, Clauses 24 and 25, Clauses 30 to 33, Clause 36, Clauses 34 and 35, Clause 37, Schedule 6, Clause 39, Clause 38, Clauses 40 to 42, Schedule 7, Clause 43, Schedule 8,

Clause 44, Schedule 9, Clauses 45 and 46, Schedule 10, Clauses 47 to 50, Schedule 11, Clause 51, Clause 117, Clause 52, Schedule 12, Clause 53, Schedules 13 and 14, Clauses 54 and 55, Schedule 15, Clause 56, Schedules 16 and 17, Clause 57, Schedule 18, Clause 58, Schedule 19, Clauses 59 and 60, Schedule 20, Clauses 61 and 62, Schedule 21, Clause 63, Schedule 22, Clauses 64 to 66, Clause 101, Clauses 67 to 78, Schedule 23, Clause 79, Schedule 24, Clauses 80 and 81, Schedule 25, Clause 82, Schedules 26 to 28, Clauses 102 and 103, Clause 105, Clause 83, Schedules 29 and 30, Clause 104, Clause 84, Schedule 31, Clause 85, Schedule 32, Clause 86, Clauses 93 to 100, Clauses 106 and 107, Schedule 33, Clauses 108 and 109, Schedule 34, Clauses 110 and 111, Schedule 35, Clauses 112 to 114, Schedule 36, Clauses 115 and 116, Clauses 118 to 129, Schedule 37, Clause 130, Clauses 132 and 133, Clauses 135 to 140, New Clauses, New Schedules, Schedule 39.

I shall explain the pasting together of some clauses for the convenience of the Committee. As the Bill is currently laid out, if we proceeded through it from clause 1, we would find that some clauses dealing with the same issues are in different places. To facilitate discussion and to debate the same issues in one go, the order of consideration makes the following suggestions, which I hope the Committee will accept.

Clause 36 will follow clause 33, so consequential and minor benefits will be in the same debate as the employer-subsidised bus service. Clause 39 will follow clause 37. Those clauses are on minor amendments to the Schedule E charge and to the employee share ownership plans, prior to the tax law rewrite projects work on Schedule E.

Clause 117 will follow clause 51, which covers the same issues about variations of dispositions taking effect on death, with regard to capital gains tax and inheritance tax. Debate on clause 101 follows debate on clauses 63 to 66. Those refer to accounting practice, periods of account and tax accounting change. It makes sense to deal with those debates in one go. Clauses 102, 103 and 105 will follow clauses 68 to 82. Those relate to discounted securities, financial trading stock, banks in compulsory liquidation and forex and loan relationships. That will also enable us to deal with the debates in one go. Clause 104 follows clause 83. Those cover valuation trading stock on transfer with trade and intangibles.

That process will help Committee members to focus specifically on those debates at the most convenient time and ensure that our consideration runs as smoothly as possible.

Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury

The proposed order of consideration as outlined by the Paymaster General seems sensible and, on behalf of the Opposition, I commend it to the Committee.

Question put and agreed to.

Resolved,

That the Bill be considered in the following order, namely, Clauses 1 to 3, Clause 5, Schedule 2, Clause 6, Schedule 3, Clauses 7 to 12, Schedule 4, Clauses 13 to 18, Clauses 20 to 22, Clauses 24 and 25, Clauses 30 to 33, Clause 36, Clauses 34 and 35, Clause 37, Schedule 6, Clause 39, Clause 38, Clauses 40 to 42, Schedule 7, Clause 43, Schedule 8, Clause 44, Schedule 9, Clauses 45 and 46, Schedule 10, Clauses 47 to 50, Schedule 11, Clause 51, Clause 117, Clause 52, Schedule 12, Clause 53, Schedules 13 and 14, Clauses 54 and 55, Schedule 15, Clause 56, Schedules 16 and 17, Clause 57, Schedule 18, Clause 58, Schedule 19, Clauses 59 and 60, Schedule 20, Clauses 61 and 62, Schedule 21, Clause 63, Schedule 22, Clauses 64 to 66, Clause 101, Clauses 67 to 78, Schedule 23, Clause 79, Schedule 24, Clauses 80 and 81, Schedule 25, Clause 82, Schedules 26 to 28, Clauses 102 and 103, Clause 105, Clause 83, Schedules 29 and 30,

Clause 104, Clause 84, Schedule 31, Clause 85, Schedule 32, Clause 86, Clauses 93 to 100, Clauses 106 and 107, Schedule 33, Clauses 108 and 109, Schedule 34, Clauses 110 and 111, Schedule 35, Clauses 112 to 114, Schedule 36, Clauses 115 and 116, Clauses 118 to 129, Schedule 37, Clause 130, Clauses 132 and 133, Clauses 135 to 140, New Clauses, New Schedules, Schedule 39.—[Dawn Primarolo.]