Clause 51

Finance Bill – in a Public Bill Committee at 6:15 pm on 22nd May 2007.

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Real Estate Investment Trusts

Question proposed, That the clause stand part of the Bill.

Photo of Edward Balls Edward Balls The Economic Secretary to the Treasury

With your permission, Mr. Illsley, it might be possible to discuss our amendments to schedule 17 while we debate clause 51, as it introduces the schedule. I will be guided by you.

Photo of Mark Francois Mark Francois Shadow Paymaster General

For procedural reasons that will become apparent, I would rather do clause 51 first and then come on to the amendments.

Photo of Eric Illsley Eric Illsley Labour, Barnsley Central

We will start with clause stand part and take it piece by piece.

Photo of Mark Francois Mark Francois Shadow Paymaster General

I hope my reasons will become apparent, and I welcome you to the Chair, Mr. Illsley.

Last year, during the Finance Bill, I debated with the Economic Secretary the introduction of the new regime of real estate investment trusts, which subsequently went live in the United Kingdom on 1 January 2007. Since that time, the Government have had the opportunity to consider the initial operation of the scheme. Via clause 51 and the associated schedule 17, they have introduced what might be characterised as a number of tweaks to the regime, designed to improve its operation. Unfortunately, some important issues have still not been addressed.

Clause 51, which introduces the schedule, allows some of the changes contained therein to be backdated to the introduction of the introduction of the REIT regime on 1 January. Moreover, the changes proposed in schedule 17 include relaxing some of the qualifying conditions that must be met in order to achieve REIT status. That the Government are still tweaking the REIT regime is evidenced by the fact that schedule 17 is now being amended by 20 Government amendments—amendments Nos. 138 to 158—which in practice all relate to demergers and are largely corrective. In other words, they represent a further tweaking of the tweak.

I have relatively little to say about the Government’s drafting amendments to schedule 17, aside from an important procedural point that I shall come to when we get there. However, I want to give you notice, Mr. Illsley, that when we come to schedule 17 stand part, I want to raise several points about the schedule and how it effects the REIT regime to date and in the future.

Question put and agreed to.

Clause 51 ordered to stand part of the Bill.