Clause 169 - Insurance companies

Part of Finance Bill – in a Public Bill Committee at 7:45 pm on 20 May 2003.

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Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary to the Treasury 7:45, 20 May 2003

I begin by congratulating my right hon. Friend the Member for Fylde because part of the changes embodies that for which he has been arguing for many years in relation to the capital tax gains regime for insurance companies.

Before we get into the detail of schedule 33, regarding which I have received extensive representations, it has struck me that there is more complexity in the provisions. There are some little bits of stealth tax here and there. The insurance industry is hardly in a state ripe for picking in terms of extra taxation, and what has emerged in the Bill is not what the industry had entirely expected from the preceding consultations. The deduction for policyholder tax is obviously welcome. There is a lot of strong feeling that amounts that would not be taxed under normal savings principles will now be taxed as for a life assurer, which is unreasonable. The treatment of normal transfers to shareholders has also attracted a great deal of criticism.

May I flag in advance that most of the amendments are probing amendments, but that amendments Nos. 133 and 134, which I would describe as the Scottish Widows and Friends Provident point, are the most important? I hope that the Government will have some good news for us on that front.

Question put and agreed to.

Clause 169 ordered to stand part of the Bill.