With this it will be convenient to discuss the following:
Amendment No. 214, in
schedule 23, page 324, line 2, after 'company', insert 'or another group company'.
Amendment No. 216, in
schedule 23, page 324, line 22, after 'business', insert
', or the part of the business'.
Amendment No. 220, in
schedule 23, page 324, line 23, after 'company', insert
'or by a group company'.
Amendment No. 217, in
schedule 23, page 324, line 25, after 'A', insert 'part of a'.
Amendment No. 218, in
schedule 23, page 324, line 25, leave out
'or to the extent that,'.
Amendment No. 219, in
schedule 23, page 324, line 27, leave out 'the business' and insert 'that part'.
Amendment No. 221, in
schedule 23, page 325, line 11, leave out 'parent' and insert 'group'.
Amendment No. 222, in
schedule 23, page 326, line 40, leave out 'parent' and insert 'group'.
The schedule is very long. On their first reading of it, I am sure that all members of the Committee found it extremely complex. Members of the Committee should bear in mind that amendments Nos. 213, 214, 220, 221 and 222 relate to a similar point and that the same arguments apply across them. Amendments Nos. 216, 217, 218 and 219 concern a separate point.
The amendments are probing amendments, but they are not exclusively so and we may press certain of them to a vote depending on the response from the Paymaster General. The amendments are designed to probe the intention behind the legislation and to explore the extent to which it will operate. In particular, I am interested in how the legislation interacts with clause 139 and schedule 22, which were ably dealt with in Committee by my hon. Friend the Member for Arundel and South Downs (Mr. Flight).
The amendments address the following points, which I shall list to avoid our becoming bogged
down: the availability of a deduction to a group of companies; the clarification of a situation in which only part of a business is within the charged corporation tax; the nature of the shares acquired; takeovers; the interaction with anti-avoidance legislation; the interaction with accounting requirements, particularly international accounting standards; the cancellation of options; transfer pricing; definitional issues; and commencement clarification. That is the headline to the group of amendments.
I shall start by addressing amendments Nos. 213 and 214, which would extend the ambit of the relief to match the world as it is for group companies. I note that the Law Society is keen to make a submission on the matter. Like me, it considers that where an employee works for a company that is not their actual employer, relief should be available to that company if the other conditions of the schedule are satisfied. I am sure that I am not unique in Committee in having worked for a company that sits within a group of companies.
May I ask the hon. Gentleman to clarify that point? We are discussing share schemes given to employees by the companies for which they work in order to ensure that they share in the benefits. Why would we give relief to employees who have shares in companies with which they are not connected? If I have misunderstood his point, perhaps he will clarify it. The point of share schemes is that people receive shares in the company or group for which they work. How can it be an employee share scheme if the shares are in a company that is totally unconnected with the company or group for which someone works?
I am grateful to the Paymaster General for raising that point, which graphically illustrates my point. I shall delve into my personal experience: if one is employed by a plc listed on the FTSE 100, that plc is patently one's direct employer, in which case it would be perfectly normal to be issued with plc shares as part of one's share options. A large international group often has an operating subsidiary company within the control of the plc, which has a majority holding. Across continental Europe, however, family members often retain a minority shareholding. A valuation is therefore often placed on the progress of the operating subsidiary to calculate the value of the family minority shareholding properly without necessarily relating it to the plc.
There is also the case of a joint venture—I know that the Paymaster General wants to intervene, but perhaps I can finish the example to see whether we can achieve a meeting of minds. Consider a subsidiary with operations in Northern Ireland, which would be inside the scope of both the United Kingdom and the legislation. Some 98 per cent. of it is owned by a plc and 2 per cent. of it is owned by a family member, who has retained their shares since the company was bought out. For the purposes of valuation, the plc will often have a direct interest in the executive management and should therefore be incentivised to
increase the value of the subsidiary company in Northern Ireland. If shares are issued for the Northern Ireland company or the plc company, there are two group companies in which the incentivisation to the employee, which is the legislation's purpose, matches their work.
I am grateful to the hon. Gentleman for giving way again because he wants me to answer his point. His point is that the family already holds the shares. He suggests that the share schemes should be extended. The basic rule of share schemes is that participants work for the company. I think that he is suggesting that as a reward the employer should be able to give employees shares in any company and expect to get the relief. That is not the basis of the share scheme legislation.
Perhaps I can try again. Let us imagine—this is based on my personal experience—that I am the executive director responsible for the management, growth, performance and accountability of a company called X Trading Company Northern Ireland Ltd., which is 97 per cent. owned by X plc. As the senior executive employee of the operating subsidiary in Northern Ireland, I would properly expect as part of the total group management to receive share options in the plc. Therefore, we are considering an attempt to ensure that the ambit of the relief extends to ensuring that a key employee in building X Trading Northern Ireland Ltd. as an operating, totally clear majority held subsidiary of X plc has the incentivisation as part of the total group effort to receive shares in X plc rather than the shares of their employing company, which is X Trading Northern Ireland Ltd., to which they are contracted. Is that helpful?
I hope that the issue at stake is on the record very clearly. The contract of employment will be with the operating subsidiary—rightly so, because that is where the identity of interest is. There are also jurisdictional considerations, not least in Northern Ireland. Many UK laws apply equally in Northern Ireland as in England and Wales, but some specific laws and regulations are unique to Northern Ireland. Therefore, it is important if one were resident in Northern Ireland not necessarily to be considered to be an employee of the plc, which would have other consequences.
I am very grateful to the hon. Gentleman for giving way, because I am trying to get to grips with what he is saying. Let me summarise it. If I work for the subsidiary, I qualify for shares in the plc. I believe that that is correct.
I was questioning the hon. Gentleman on the basis that one cannot have shares in a company that is not connected with the company for which one works, because that would break the scheme. I believe that he is talking about a group relationship, which I shall deal with in my reply. I am very grateful to him for ensuring that I understood that complex point.
I am equally grateful to the Paymaster General. I hope that she recognises that the amendments are designed to deal with the specific
point on which we have now come to a common understanding.
My other point is that that can work in reverse. I believe that the explanation has been helpful, because I had started by explaining that position but then moved to the opposite end. One can be an employee of the plc but have options in X Trading Northern Ireland Ltd. because it needs to have an identity of interest with co-management workers in the Northern Ireland subsidiary as that company grows, which could have an independent value if there were a very small residual family shareholding. For valuation, earn-out or fiscal purposes, it could be necessary to keep it at a separate valuation, although, of course, within broad plc accounting, normal consolidation under accounts principles would apply. However, in terms of valuation of the share options, there is nothing to stop the application of the valuation to a particular company's shares in the subsidiary operation. I hope that that more graphic example has been helpful.
Amendments Nos. 213 and 214 are basically designed to say that if the employee works for a company that is not his actual employer but, as the Paymaster General put it in her own words, is part of a continuing group relationship, relief should be available to the company if—this is an absolutely key requirement—the other conditions of the schedule are satisfied.
Amendment No. 220 follows the same argument. As I said earlier, the amendments are related. Amendment No. 220 would make relief available if the business were carried on by another company in the same group. The structure of the schedule is that relief is given to the employing company and that the business for the purposes for which the award is made must be carried on by the employing company. As in our previous discussion, that seems unnecessarily restrictive, particularly when matched against the genuine circumstances in the world of work, motivation and increasingly globalised business, in which there will necessarily be group operations, not least for fiscal purposes.
In many group situations, a dedicated group employer will employ all the staff and make their services available to other companies in the group. It is also common for staff to perform duties for more than one company in the group. It is frequently the case in a multinational group that a UK employee is actually employed by a company not within the charge to corporation tax but seconded to a UK trading company and receiving an award of shares or grant of option by reason of his work for that company. In such a situation, relief would appear to be restricted or lost. That relief should be available if the business for the purposes of which the award is made is carried on by another company in the same group.
I can best illustrate that with a simple example, and without straying too far into the overseas issue or the issue of companies that may not be chargeable in whole or part to corporation tax. As it happens, the matter arose in a rather amusing way during the course of the Eddisbury by-election in July 1999. Seeing that there was a by-election, Labour understandably put an enormous amount of effort
into researching the background of the Conservative candidate. Suddenly there was potentially a major story about why that candidate had 273 directorships listed at Companies House. It was seen as a massive opportunity to accuse the Conservative candidate of sleaze.
However, anybody who understands business recognises that in a plc it would be an absolute outrage to the shareholders, the customers, and all the stakeholders in the business, and the most inefficient use of management time and money, to have a company secretary for each of the 273 operating subsidiaries of that group company. In my case, the company was called Redland Secretaries Ltd. I was the chairman and director, and the assistant company secretary at group level, employed by Redland plc, was the other director. So, quite rightly, that person was secretary, under law, to all the operating subsidiaries. Naturally, I was therefore a director of 273 companies. When The Guardian was about to write the story, at the behest of Labour, I said, ''Please print.'' Unfortunately, because I was so keen for it to be printed, the story was withdrawn and the writer recognised that he had not understood business and nor had those who had been briefing him. That is the important issue.
Is my hon. Friend aware whether the Labour party employee who dressed as a fox and pursued him around the constituency of Eddisbury for a month was on a share incentive scheme of any kind?
I am most grateful for your guidance, Sir Nicholas. I am fond of the memories, not least because neither the corporate accusations, nor the fox were able to take away from the fact that 500 MPs, desperately working to ensure that I did not arrive, none the less had to suffer my maiden speech. Although the example is personal, it ably demonstrates what we are discussing. My employer could have said, ''In order to make your administration of our group much more efficient, I want to give you an incentive by giving you shares in a company further down the chain than the plc.'' That would have given me a great incentive if the company could have been measured and valued in that way. There were plenty of opportunities, but, as it happens, I was granted plc share options. Sadly, they were under water, and I never benefited.
On amendment No. 221, the same issue comes up. The categories of companies whose shares can be acquired seem unduly restrictive, given the categories of companies set out in paragraph 4. It seems strange to extend the categories of companies whose shares can be acquired to consortiums, but to prevent shares from being acquired from the subsidiary of a listed parent, unless that subsidiary is the actual employer or a parent of the employer. The Law Society considers that any company in the same group as the employing company should qualify.
I have dealt with amendment No. 222. Amendments Nos. 213, 214, 220, and 221 all relate
to the same argument. I hope that it has been sufficiently demonstrated, and I look forward to the Paymaster General's response.
The hon. Gentleman is developing quite an interesting and important argument in the light of the way in which modern business works. Can he perceive any asymmetry, in relation to how the Finance Bill might be amended, between allowing people to trade up through a group and to have shares in the group, and people trading down into quite small entities in the group that might be divorced from the interests of that part of the group in which the employee works.
Obviously, that intervention was based on the hon. Gentleman's understanding of the way in which business works. I suspect that there may be some asymmetry in that the more that shares are granted down the chain, the more the areas in which any value creation or performance can be measured are restricted. The important point about share options is to harness key employees' incentivisation to the growth of shareholder value and the satisfaction of customers who produce that in a broad economic and commercial sense. The hon. Gentleman's point would have a negative effect on the argument only if one was looking to provide incentivisation at a more micro level within the group operating structure and if a fiscal benefit could be achieved by a company lower down the chain than at the plc, thus making the overall measurement of post-tax shareholder value more interesting at a geared and leveraged point relative to the performance and input of that key employee.
There may be that potential, but given that the overall group performance is where the shareholder value is measured, it is most likely to work in the other direction to maximise the contributory value of any subsidiary company operation into the overall consolidated accounts and thus the plc valuation. I hope that he recognises that my arguments on the nature of modern business, when there are often earn-outs with continuing residual family or former owner shareholdings and it could be important to create that value, or when there is a partial overseas operation and so often a tax grouping is available—for example, in Holland—which is not available here, it would be sensible to ensure that that was accessed if it could be done properly on a trade account basis to allow that measurement to be made.
I am grateful for the hon. Gentleman's question. I have put my answer on the record and if there are any wrinkles, they can be explored. I suspect that his anxiety is much assuaged by the motivation, which is to achieve maximum shareholder value, which is why share options are broadly seen to be an important part of today's remuneration package for key employees.
Amendments Nos. 216, 217, 218 and 219 would clarify the position when only part of a business is subject to corporation tax. The amendments speak for themselves, but we presume that when only part of the business carried on by the employing company is within that charge to corporation tax, the award or grant must be made for the purposes of that part of the
business carried on by the employing company, which is within the charge to corporation tax. If that is the intention, paragraph 3 should be clarified to make that clear, and that is supported by the Law Society. That is the purpose of the amendments.
KPMG is concerned about how the paragraph will operate in practice and equally concerned that many companies have mobile work forces with employees who may be seconded to work for overseas subsidiaries. It will not always be possible to assess whether the award is made for the purpose of the UK business or that of an overseas subsidiary. KPMG would appreciate clearer drafting or additional guidance to determine how companies will apply the rule as it envisages it causing considerable administrative inconvenience for companies with a mobile work force.
I hope that that approach is straightforward and deals with this group of amendments, albeit from two planks of argument. I look forward hearing the Paymaster General's response.
In responding to this large group of amendments, which were helpfully and clearly laid out by the hon. Member for Eddisbury, I shall first make a few points about the purpose of the schedule. I will then be able to put his questions and amendments into that context.
Schedule 23 introduces a generous new corporation tax relief for the cost of employee share acquisitions and is deliberately targeted at shares that give employees a real stake in the business that they have worked for, encouraging productivity and growth. That does not extend to the use of shares in subsidiaries or unquoted companies or to non-commercial transactions that artificially manipulate the value of the shares. Those are characteristics of the avoidance scheme, which schedules 22 and 24 are aimed at. We have had that discussion already. Through that scheme, remuneration of £1.4 billion a year is channelled. I am sure that the hon. Gentleman would agree that it would be wrong to give statutory relief for avoidance schemes when the purpose of the schedules is to deal with them.
The draft legislation was published at the end of 2002, following informal consultation with the industry, and the new relief was widely welcomed as a set of clear, well-written rules that work effectively to deliver what companies want. As the Employee Share Ownership Centre puts it, it will deliver a major fillip to employee share ownership.
Schedule 23 matches relief for the employing company in tying in the amount with the taxation of the employee. That gives companies certainty against a background of uncertain accounting treatment. They told us during consultation that that was what they wanted above all else. It also provides a level playing field between the use of cash and shares as remuneration, and between large and small companies. It gives relief to the employing company in a group scenario, irrespective of the group company in which the employee works day to day, making for simplicity of operation. It will also enable companies
to do away with the complex and costly trust structures previously needed, benefiting smaller companies in particular.
It is expected that up to 5,000 companies will benefit and save a considerable amount of money. That has all been carefully drafted in consultation with the industry. It is important that we ensure that double relief cannot arise and that, wherever possible, it is not open to abuse. That incorporates a number of improvements suggested following publication of the pre-Budget report.
I begin by saying to the hon. Gentleman something that will be a theme as I proceed to respond during the debates. Taken in toto, the amendments that he tabled carry a cost of £2 billion. That should show him the scale of the avoidance or mischief that some, unfortunately, seek to achieve. I want to deal particularly with some of the hon. Gentleman's points.
During the introduction of the amendments, I had a very useful exchange with the Paymaster General to clarify the aims of the amendments. They purely concern group operations. In relation to the mischief, she suggests that the amendments would cost £2 billion. First, it would be helpful if she could confirm whether that assessment is based on her original understanding or has been made in the light of our exchange. Secondly, does the £2 billion have an analysis attached to it? If so, it would be extremely helpful to see that so that I can ensure that my understanding of the source of the mischief is right, given that I still think that the amendments are an attempt to address the way in which real business works in the real world. We should not penalise those for whom incentives and remuneration are important.
I want to stress, as I do not want any misunderstanding, that I am not suggesting for a minute that the hon. Gentleman is seeking to provide for mischief. I am referring to the total group of amendments—the whole debate on this schedule—because there are separate issues under these amendments, and I shall explain at each point where the possible double or triple relief would occur. I want to use that to underline the importance of striking the right balance between incentivising employees, providing relief for employers and delivering the policy objective for the company in which the employee works.
As I have already explained, the objective of the schedule is to simplify the corporation tax treatment of employee share schemes. Amendments Nos. 213 and 214 seek to remove the link between the employee and the employing company. They would make relief available to a company if an employee of a group company acquired shares by reason of employment with any company in the group. However, the relief is targeted at the employing company as the company with responsibility to maintain records for PAYE. That therefore minimises any additional administration resulting from the introduction of the relief, and makes it clear which company qualifies for the relief. We are talking there about the company that qualifies for the relief.
It is true that some respondents have voiced concern that the relief—I think that this is the point that the hon. Gentleman touched on—may not be available where employees move around a group, between options being granted and exercised, to acquire the shares. I can confirm that where that happens, relief is still available to the employing company that granted the option because that is the company that provides the shares. Although the amendments would not change the availability of the relief, they would lead—inadvertently, I am sure—to additional administration costs because groups would need to decide which company should qualify for the relief and ensure that the others did not incorrectly claim the relief as well.
Amendments Nos. 216, 217, 218 and 219 seek to change the rules requiring that the business awarding the shares is chargeable for corporation tax. I think that that arises from uncertainty about the meaning of ''business'' in the context of schedule 23. If that is the case, I can assure the hon. Gentleman on how the new rules will work, and say that the Inland Revenue will provide clarity on the rule in its guidance material. ''Business'' in this context refers to the trading and/or other activity of the company that is subject to corporation tax, not to the commercial activities of the company more generally. Because of that, the concept of part of a business does not exist. A trade, property-letting business or other activity is either taxable in its entirety in the UK, or it is not. If it is a UK taxable business, relief is available. If it is not, relief is not available. This is a sensible proposition about the UK tax system and encouraging growth in productivity and business that benefits the UK in terms of tax, productivity growth, jobs and future developments.
The amendments add nothing to the meaning of the rules. Amendment No. 218 may lead to excessive relief in the case of UK branches of a foreign-controlled company carrying on part of that company's trade in the UK. Amendment No. 220 seeks to expand the rule that requires business for the purposes of which the shares are awarded to be within the charge to corporation tax so that businesses can be the employing company or any other group company.
I am still not clear about the amendment's purpose. It might result from the need to make changes consequential on two other amendments, but it is more likely to arise from a misunderstanding of the way in which the legislation operates. The hon. Gentleman and I had an exchange as he was introducing it, where he raised the issues of service companies.
Officials in the Inland Revenue have received—this may be where the amendment comes from—a number of representations that relief will not be available if all employees in a group are employed by what is termed a service company. In such circumstances, rules would allow that service company to obtain relief. That is because it is the employing company, and its business is that of providing a work force to the rest of the group, for which it makes management charges. The amendment adds nothing to the way the relief works.
Amendments Nos. 221 and 222 seek to change the type of company whose shares, when acquired by employees, give rise to relief from corporation tax for the employing company. The new relief is designed to provide a corporation tax deduction for the costs of awarding shares that give employees a stake in the business, which is crucial to all the arguments on the amendments. It achieves that by allowing shares in the employing company, its parent company or a company above that in a group or consortium structure to be used. While the amendments make what appears to be a minor change by replacing ''parent'' with ''group'', the effect would be to allow shares in subsidiaries of employing companies or fellow subsidiaries in the group to qualify for relief.
I try to make it clear that the relief goes to the company that the employee works for. It is about where the relief goes, not necessarily where the shares are.
The Paymaster General is relying on the idea that the relief is targeted and available to the company for which the employee works. Does that also mean, and is it intended to mean, that is the company with which the employee has their contract of employment? It is clearly possible to have a contract of employment with one company and also to work and devote one's services to another company within the operating group.
Yes, it is the contract. That is precisely the point on service companies. I already answered that point for the hon. Gentleman about his fears about service companies. With regard to the change of parent or group, we do not consider that shares in fellow subsidiaries in a group structure or in subsidiaries of the employing company provide employees with a real stake in the business for which they work. The relief will work as designed, and will protect the Exchequer from loss of tax. The debate has been about clarification of the operation of the schedule. I believe that the hon. Gentleman moved his amendment on that basis. Where clarification of the practical use of the new rules is needed, that will be included in the Revenue guidance that is being prepared. That will be published in time to be of assistance to companies that are compiling their first self-assessment tax return for the accounting period starting on or after 1 January 2003.
We will pay particular attention to some of the points that the hon. Gentleman made this morning when we draft that guidance. I have given a long response to a large group of amendments, which go to the heart of the operation of the schedule. I hope that the hon. Gentleman feels satisfied. Should he seek to press the amendments, I will ask my hon. Friends to oppose them.
I am grateful, Sir Nicholas, for your ensuring that I chart my amendments through arcane waters in which you have expertise beyond any that I am ever likely to have. Had amendment No. 220 been the lead amendment, it would have been fit to withdraw it in the light of the assurance given by the Paymaster General that the Inland Revenue intends to offer clarity on the definition of business.
The issues are genuinely complex. The Paymaster General made the valid point that there has been a helpful exploration of the broad thrust of the schedule. I am happy to postpone further consideration to another time. In the light of what is now on the record, others will be able to read our exchanges, and there may be further representations to Government and to us. It is possible that we will return to some aspects of this matter on Report, either on issues of definition or clarification. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
I beg to move amendment No. 215, in
schedule 23, page 324, line 7, leave out
'the company mentioned in subparagraph (1)'
'the company by whom the employee is employed or if that company is not the company for which the employee actually works, the company for which he actually works.'.
I am grateful, Sir Nicholas, for your kind words—and I am sure that the Paymaster General shares my gratitude. It is rather concerning when one finds that people have been paying attention; they may have been listening too carefully on a subject that is always difficult to understand.
Amendment No. 215 seeks to extend the ambit of the relief. The point was raised with the Opposition—possibly with all Members of the Committee—by the Law Society, which considers that when the employee works for a company that is not his employer, relief should be available to that company if the other conditions of the schedule are satisfied. That point relates to points raised in the previous debate. I look forward to a brief response from the Paymaster General.
The hon. Gentleman said that amendment No. 215 stems from a concern about how the relief will work when employees move around within a group. I hope that the amendment was moved merely to elicit clarification. We touched briefly on the subject in the previous debate.
Schedule 23 is designed to provide relief to the employing company when employees acquire qualifying shares, irrespective of where within the group the employees are working at the relevant time.
Relief is provided to the employing company rather than to another company in the group, because the employing company is responsible for operating PAYE. To fulfil that responsibility, the employing company keeps employees' remuneration records, which will also be needed to determine the timing and amount of relief available under schedule 23. Providing the relief to the employing company will therefore help to keep the administrative burden to a minimum.
The amendment would lead to an increased administrative burden, and to uncertainty about how the rules should apply. For instance, when an employee, such as a senior manager, is mobile within a group and works regularly at a number of different companies, the current rules provide relief to the employing company. However, the changes proposed in the amendment would mean the relief being apportioned to each and every company at which the employee worked; that would significantly increase administration and record-keeping requirements. That answers the hon. Gentleman's query about why we are keeping the relief in one place. We have married that provision with the PAYE obligations in order to produce simplicity of record keeping for the employing company.
I am grateful to the Paymaster General. Her explanation has added to the clarification that she gave on the previous group of amendments.
Only one point remains. The employing company receives the relief irrespective of where the employee is working within the group. My residual concern is that although I recognise both for companies and for the Revenue of the genuine administrative efficiency to be gained from ensuring that PAYE administration is kept at one company, the real issue is whether there is any potential distortion about which company should grant the options. My query is whether that is a PAYE administrative issue, or whether one should be trying to align the employees' incentives—as part of their remuneration package—to the true companies in a group that are the value creators for the shareholders, customers and all other stakeholders.
Relief is given to the employer company to recognise the benefits of share ownership and to keep administration to a minimum. The hon. Gentleman touched on losses. If losses arise, group relief allows the group as a whole to retain the relief. At each point of its operation, we are trying to keep record keeping for the group as simple as possible, given the obligations on companies to report the issue of shares to the Inland Revenue.
That was helpful. There is no question about the need to be administratively efficient in record keeping and in the normal consolidation procedure, both in accounting and, in relation to the reliefs, in the fiscal consolidation that enables tax buffers to be calculated, to try to get a steadier stream of earnings—which will then give greater confidence to shareholders, and greater value—given that there will be flexibility and, inevitably, volatility between markets where an international group of companies
is involved. All that is perfectly understood, and the Paymaster General's explanation was helpful.
All that I leave on the record is the need to ensure, as people reflect on our debate and consider whether there are other points that they wish us to address before or on Report, that there is no potential distortion caused by the administrative efficiency driver. That driver may not necessarily enable companies in the future to align incentivisation to the group company that is most likely to be creating shareholder value, which will be a greater company, with more sustainable job prospects.
I wish that I did not have to intervene on my hon. Friend. In his remarks, he teased from the Paymaster General a very brief, passing observation about company losses in connection with the reliefs to which the amendment refers. I was going to explore whether in a loss situation there is any roll-over for the reliefs related to the granting of the shares. Has my hon. Friend explored that intriguing point?
I am grateful to my right hon. Friend for having placed the point on the record. In the normal operation of such matters, and where losses can be consolidated, there is a natural, in-built, roll-over provision in one sense because share option plans have a time period. However, that is primarily connected with reliefs, according to the fiscal accounting rules applicable to each company. I am sure that, by placing his point on the record, my right hon. Friend, too, has enlisted a future response. If it is worthy of a letter, I dare say that he will find one winging its way to him from either the Revenue or the Paymaster General. I am grateful to him.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
I do not want to try to Committee's patience, or upset any agreement reached by the usual channels. I do not want to get on the wrong side of my hon. Friend the Member for Spelthorne (Mr. Wilshire)—I can see him looking a little surprised and concerned that I have got to my feet. However, I have a couple of concerns over why the Committee is being asked to adjourn at this stage, a full hour before we expected to, at considerable inconvenience to the diaries of many Committee members. I assume that the explanation is that there are Treasury questions in the House.
I see that one Treasury Minister is busy swotting up on his questions. Surely he should know the old adage given to schoolchildren: do not swot for exams at the last moment. I would have assumed that the Treasury Ministers had done their homework and spent many hours thinking of the careful and measured responses that they would give to Members' questions. It is really extraordinary that the Committee is being asked to adjourn to give Ministers a little extra preparation time.
There is of course another possible explanation.
As the hon. Gentleman says, it is a nervous day for junior Ministers. We understand the pain that they are going through. Their minds may not be entirely focused on the job, because they may not have one this afternoon, or they may have another job. I know that the Ministers will be keen to head off and sit by their telephones waiting for that all-important call. That is not an entirely proper reason to adjourn the Committee, but it is an entirely human one. I am prepared to consider the request.
My hon. Friend the Member for Tatton (Mr. Osborne) has put his arguments on a certain basis. One of the very few things that we in the Opposition have, although it is frustratingly not sufficiently cogent in terms of the political firmament, is that Ministers cannot be sure which questions we shall ask. I hope that the swotting up is extensive.
The most important thing that we need to address is that the proceedings this morning will be foreshortened by 55 minutes. I am conscious of the fact that it is in the interest of the Committee and the House to seek to ensure that we cover the provisional selection of amendments by the conclusion of the Committee's proceedings intended at 5 pm on Tuesday 17 June. Taking any time to debate this sitting takes more time from our proceedings.
I cannot see how we are going to cover this schedule, which the Paymaster General accepts is not uncomplex. It requires a proper exploration. We understand what the Government are driving at, but it is proper that we should give it full scrutiny. I place on the record that we may need an extra sitting to get through the schedule. I hope that that will be part of the discussion that is going on.
I may be able to shorten the debate somewhat. This is not an unusual step; those who have been on the Finance Bill Committee before have seen such clashes occur, and they have been accommodated on previous occasions. To answer the hon. Gentleman's point, we are looking at extra time to replace the hour lost this morning.
I am most grateful, and welcome that. Once we get through schedule 23, I expect that we should be able to make rapid progress. It is important that we cover the whole Bill if we can.
I admit to being taken aback at the fact that we have been invited to end. Just as we were limbering up to our task this morning, we are stopped
in our tracks. There is an important point of principle at stake. The adjournment appears to be connected to Treasury questions, but that date was known when the original timetable for the Committee's proceedings was decided. If we are to adjourn in future, and there may be good reasons why an adjournment has to be sought, such things should be taken into account in the timetable. As a Committee picks up its own pace and rhythm and hon. Members can follow arguments, as my hon. Friend the Member for Eddisbury said, on complex, inter-connected amendments, one needs continuity of discussion and cerebral engagement. However, here we are being cut off—perhaps not at the head but at least at the knees. I can understand that, but I hope that the usual channels will reflect on it. The hon. Member for Bradford, South (Mr. Sutcliffe) said that there have been clashes. This is not a clash; it is a civilised discussion of an important motion.
I shall resist the temptation to speak until 25 minutes past 11. In my more mischievous, youthful days, I might have succumbed to that temptation. All I want to say is that I am grateful to my opposite number, the hon. Member for Bradford, South, for giving me notice of the motion. Our willingness not to fight this as a matter of principle is based on the offer of an extra hour in replacement. On that basis and that basis alone, Conservative Members are willing to accept the motion. It leaves open the other issue of whether, in principle, there is enough time for the whole Bill, but that is not the subject of this argument.
Unfortunately the decision about the length of the Committee stage has been made by the House, but at all times I seek to represent the best interests of Back Benchers and all members of the Committee. Clearly, I am reassured by the Government Whip's assurance.
However, I give notice that, inevitably, as we are varying the decision taken by the Committee in respect of the motion to adjourn and the Government Whip has given us the assurance that we will have an extra hour, there will have to be a meeting of the Programming Sub-Committee. It is hoped that that will take place five minutes before our 2.30 pm sitting. I hope that those who are members of the Sub-Committee will take note of that and be here.
Question put and agreed to.
Adjourned accordingly at twenty-five minutes to Eleven o'clock till this day at half-past Two o'clock.