Clause 67 - Transfer in consequence of reorganisation of parliamentary constituencies

Finance Bill – in a Public Bill Committee at 10:45 am on 10th June 2003.

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Photo of Adam Price Adam Price Plaid Cymru, Carmarthen East and Dinefwr 10:45 am, 10th June 2003

I beg to move amendment No. 285, in

clause 67, page 47, line 21, after 'constituencies', insert—

'(ab) ''parliamentary constituency'' includes Assembly constituencies as defined in Schedule 1(1) of the Government of Wales Act 1998 (c.38) and Scottish Parliament constituencies as defined in Schedule 1(1) of the Scotland Act 1998 (c.46).'.

The clause will exempt transfers of land between local constituency organisations of political parties if the transfers occur merely as a result of boundary changes. It is based on existing stamp duty relief provisions in the Finance (No. 2) Act 1983. Some might legitimately interpret that as politicians looking after their own at a time of dwindling public trust in the political process, which would be unfortunate. However, there is a justifiable rationale for the provisions. After all, boundary changes are beyond the control of political parties—at least, one hopes so—and they would have no financial gain from such a transfer. It would simply be a shifting of ownership from one unit of the party in question to another. The exemption is analogous to that offered under schedule 7 to subsidiary companies of the same group.

The amendment seeks to clarify whether the proposed relief will be available to constituency parties organised on Scottish parliamentary or Welsh Assembly boundaries. Currently, seats in Westminster and in the devolved Administrations are coterminous in Wales and Scotland, but as the Chancellor is doubtless keenly aware—although he may view the changes with a good deal more equanimity than some—the boundary commission proposed changes in February 2002. Perhaps the hon. Member for Glasgow, Maryhill (Ann McKechin) can confirm that.

The number of Scottish MPs at Westminster will be cut from 72 to 59. It had been anticipated in some quarters that that might lead to an equivalent cut in the number of Members of the Scottish Parliament, but the Secretary of State for Scotland decided to maintain the existing number. Boundaries for Westminster and Holyrood constituencies will no longer be coterminous. Many parties in Scotland will choose to organise themselves principally on Scottish

parliamentary constituencies. I think of my hon. Friends in the Scottish National party, the Scottish Socialist party, the Scottish Green party and other parties that exist exclusively in Scotland.

Photo of Adam Price Adam Price Plaid Cymru, Carmarthen East and Dinefwr

I was referring to the SNP. I do not have many hon. Friends in the House, and I want to hang on to them. I have many friends, but not many hon. Friends.

It would seem wrong and against the spirit of the provision to discriminate against political parties that wish to structure themselves along devolved Administration boundaries. Part of the problem is that the clause is based on a similar provision in section 15 of the Finance (No. 2) Act 1983—from the pre-devolutionary era. Section 15(1) refers to Orders in Council made under section 3 of the House of Commons (Redistribution of Seats) Act 1949. If it had referred instead to Orders in Council made under section 4 of the Parliamentary Constituencies Act 1986, the problem would not have arisen, because that Act has been extended by the Scotland Act 1998 and the Government of Wales Act 1998 to include boundary changes for the devolved Administrations.

As I am relatively uninitiated in parliamentary procedure, imagine my surprise when I found, on looking at Butterworths' database—I was aided in doing so by the Committee Clerk—that the 1986 Act repealed the Redistribution of Seats Act 1949, as the Chief Secretary to the Treasury confirmed in a letter to me. I am no expert in procedural matters but I believe it is impossible to make an Order in Council under an Act that has been repealed. As drafted, the clause is null and void, although I understand that the Government intend to table an amendment on Report. Will the Chief Secretary confirm that if such an amendment refers to the 1986 Act, it will automatically include the devolved Administrations in Wales, Scotland and Northern Ireland for exemption purposes?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I thank the hon. Gentleman for his care and attention to the provision. I commend his diligence and I am grateful to him for bringing to light an inappropriate reference, which will need to be changed. We shall table an appropriate amendment on Report.

Clause 67, to which the amendment relates, exempts from SDLT transfers of land between parliamentary constituencies that are undertaken between constituency associations where those transfers are undertaken following parliamentary boundary changes. An amendment would include references to the devolved Administrations so that when the boundaries change and transfers take place they are similarly exempt. The clause reflects the current stamp duty provisions by granting relief from stamp duty land tax on the transfer of property between constituency associations when the transfers take place following boundary changes. In extending the relief to Scotland and Wales, I reassure the hon. Gentleman and the Committee that we intend the relief as drafted to apply throughout the United Kingdom. I am sympathetic to the amendment's

objectives and I shall consult the relevant public bodies to see whether anything else is needed to ensure that the proposal applies in the devolved Administrations, as it does in the national Parliament. [Interruption.]

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

Order. Someone has switched on an electronic device. The Chief Secretary does not need a musical accompaniment.

Photo of George Osborne George Osborne Opposition Whip (Commons), Shadow Minister (Treasury)

The point made by the hon. Member for East Carmarthen and Dinefwr was that the clause refers to an Order in Council made under an Act of Parliament that does not exist. Rather than asking the Committee to agree to a clause that is completely meaningless in law, the Government should withdraw the provision and table a clause on Report that is better drafted and incorporates the points made by the hon. Gentleman.

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

Order. We have not reached the clause stand part debate, and because of the way that the Committee is proceeding, we are unlikely to do so.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I am sure that the hon. Gentleman is trying to be helpful. I would prefer to proceed as I indicated to the hon. Member for East Carmarthen and Dinefwr, whose diligence and care drew the matter to the Committee's attention, rather than as suggested by the hon. Gentleman, who attempted to jump on the bandwagon in a rather unbecoming way. He should apply himself with the same diligence as the hon. Member for East Carmarthen and Dinefwr.

Photo of George Osborne George Osborne Opposition Whip (Commons), Shadow Minister (Treasury) 11:00 am, 10th June 2003

While he is talking about diligence, could the Chief Secretary confirm that he has brought before the House a clause that refers to an Order in Council under an Act that has been repealed?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I have responded directly and clearly to the hon. Member for East Carmarthen and Dinefwr, who made that good point. The reference was inappropriate and we shall revisit it on Report. I know that the hon. Member for Tatton (Mr. Osborne) has to justify his existence, but there must surely be a way of doing it other than by jumping on the excellent point that the hon. Member for East Carmarthen and Dinefwr made, which I have wholeheartedly accepted and for which I have thanked him.

Photo of Adam Price Adam Price Plaid Cymru, Carmarthen East and Dinefwr

Given the assurance that the Chief Secretary has offered, I am prepared to withdraw the amendment. I am also impressed to see a touch of humility in his formidable repertoire of skills, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn

Photo of Michael Jack Michael Jack Conservative, Fylde

On a point of order, Mr. McWilliam. You remarked a moment or two ago that we had not yet reached clause stand part. Could you guide me on whether it would be in order for the Government not to move that the clause stand part of the Bill at this stage?

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

No, it would not. If the Government moved an amendment to the clause on Report, that would be exactly the same as tabling an amended clause on Report. The clause is necessary in other respects. I put the question on the clause, and I was about to do that when the hon. Gentleman stood up.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

Further to that point of order, Mr. McWilliam. It strikes me that the entire clause is, as everyone admits, based on an Act that does not exist. In any contractual law and under any interpretation the clause is surely void ab initio.

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

Order. I can cope with the Latin—I went to grammar school as well.

The point is exactly as I have said. The Committee will dispose of the clause, having regard to undertakings already given.

Clause 67 ordered to stand part of the Bill.

Clause 68 ordered to stand part of the Bill.