As I come to the last clause that I shall be dealing with before the Whitsun recess, I will be sharing a sigh of relief with all the other Committee members.
The clause gives the Treasury power to make regulations rewriting the tax treatment of overseas life insurance companies. It also applies to overseas life insurance companies the new rules on the treatment of permanent establishments contained in clauses 147 to 153 and schedules 26 and 27. The matter is of great concern. Some people have even argued that it is unacceptable to have the whole code by which overseas life insurance companies are taxed rewritten without adequate parliamentary scrutiny. The clause does not permit any consideration of the regulations by Parliament. It does not even contain any guidance as to the nature of the changes that might be made.
As a matter of principle, it would normally be my position, and that of Her Majesty's official Opposition, to consider voting against the clause in such circumstances, because that is critical, particularly when there is a code that affects a whole sector of business and when there has not been the necessary scrutiny, including sight of the general guidance and consideration of the regulations. However, I hope that the Paymaster General will provide an explanation, so I shall reserve my position until I have heard what she has to say.
I, too, was disturbed to read the clause, which is quite extraordinary. Not only will the regulations not have any parliamentary scrutiny, but some of them will be deemed to have had effect as from 1 January 2003. The Liberal Democrats also wait with baited breath to hear what the Paymaster General has to say. We hope that our quite justified fears will be allayed.
There has been special legislation for overseas life insurance companies since 1915. There was a major reform of the legislation in 1993. Members of the Committee will not be surprised to hear that that legislation was long and complicated. Soon after its introduction, whether by coincidence or design, the number of overseas life insurance companies carrying on business in the United Kingdom declined rapidly. Now, the number of pages of legislation dealing with overseas life insurance companies is many times the number of the companies to which it applies. In the circumstances, I thought it sensible that the new rules for the non-resident companies in clauses 147 to 154 should be made to apply to the overseas life insurance companies, with all the necessary modification done in secondary legislation.
I entirely understand the point made by the hon. Members for Eddisbury and for Torridge and West Devon. On 16 April, the Inland Revenue published a draft of the regulations that will be made under the clause when it passes into law. The draft regulations are currently the subject of consultation with interested parties. I understand that there are currently six companies that will be affected. Once the consultation has been completed, although the regulations are subject to negative procedure, they will be considered in a Committee on Delegated Legislation. If the hon. Members for Torridge and West Devon and for Eddisbury have not received a copy of the draft regulations but would like one for bed-time reading, or if any member of the Committee would like a copy, I will ensure that copies are sent.
Given the difficulties that have existed in this area, I thought it best to proceed on the basis of consultation and agreement with the interested parties, of which there is a small number compared with other areas of taxation. At present, the regulations are being discussed with them. I would be happy to let members of the Committee know those organisations' views on the regulations.
I take note of the right hon. Gentleman's comments. Perhaps the information on the clause could have more specifically explained the situation. I am sure that he, better than anyone else in the Committee, knows that none of us can put our hand on our heart and say that the vast amounts of information that have to be made available are perfect. However, with hindsight, we might have done things slightly differently.
I hope that the explanation that I have given members of the Committee satisfies them. They will know that I take very seriously the matter of proper scrutiny by the House.
I believe that the answer is no. It is a very specialised area, but I am confident that I am not misleading the hon. Gentleman or the Committee. However, I shall check and, if I am not correct, I shall write to the hon. Gentleman. My understanding is that there are no implications for UK taxpayers.
I am genuinely grateful to the Paymaster General for setting that out and for recognising—it probably came as no surprise to her—that I was not aware of a consultation process with the interested parties. I believe that six companies are involved. The draft regulations have been published within a discrete net of interested parties but have not been placed in the Library, so they were not available to me. Therefore, I am glad that the matter has been raised.
I hope that the Paymaster General respects the fact that I indicated that I was not minded to vote against clause stand part if there was a satisfactory explanation. Therefore, I shall urge my hon. Friends not to vote against it, in the light of her commitment to letting us know the result of the consultation. It would be helpful if the draft regulations were placed in the Library, and she might wish to provide copies, dependent on what the rest of the Committee indicate to her, perhaps informally. I would have thought that the spokesmen for the parties would be interested in having a look at the regulations at this stage. I shall try to include them in my day-time rather than bed-time reading.
The answer that the Paymaster General gave to my right hon. Friend the Member for Fylde recognised their shared experience of office in their respective times. She said that it was wrong to criticise a deficiency in providing information, but the fact that it will now be remedied is helpful and respected. We shall not hold up progress, and will be happy to agree to stand part.
Question put and agreed to.
Clause 155 ordered to stand part of the Bill.
I am sure that I speak for the whole Committee when I congratulate the hon. Member for Eddisbury on the marathon that he has undertaken. I wish him a restful Whitsun recess. Those remarks apply to the Economic Secretary, who has also undertaken a strenuous marathon.Clause 163 Avoidance affecting proceeds of balancing event