This is an important issue, but I will try to be relatively brief. Clause 24 sets out the criteria for a range of issues in relation to landfill tax, and to determining material to be subject to a lower rate of that tax. My only complaint about the clause is that it gives the Treasury considerable leeway in determining those issues. Proposed new subsection 4 sets out the Treasury responsibilities in determining which material is to be listed under the clause:
“(4) The Treasury must—
(a) set criteria to be considered in determining from time to time what material is to be listed,
(b) keep those criteria under review, and
(c) revise them whenever they consider they should be revised.”
There is nothing at all about formal consultation with any interested parties about what could be a major change to the Treasury’s responsibilities. Amendment 10 proposes to add to the proposed new subsection two new paragraphs, (d) and (e). All that we are trying to do is to ensure that those who are interested are formally consulted and that, post that period of consultation, we know, collectively, what they have said.
Amendment 11 is, from my perspective, a probing one, about how much notice the Treasury should give of the changes that it could make in the listing of criteria for determination at a lower rate. The amendment states that six months’ notice be given, but my interest in doing that is to find out how much notice the Treasury intends to give if it does make changes to the listing. We need clarity, so that changes will not be made overnight that cause difficulty to those people whose daily business—or indeed any other matters—will be affected by the clause.
The final amendment in the group is amendment 14. Again, far be it from me to worry that the Treasury might have wide-ranging powers that it can do what it wishes with and not refer back to the House of Commons, because those are important matters of state. However, we need to look at them in detail. Clause 24(6), which I will read for the benefit of the Committee, states:
“In determining from time to time what material is to be listed, the Treasury must have regard to—
(a) the criteria (or revised criteria) published under subsection (5), and
(b) any other factors they consider relevant.”
That simply says to the Treasury that it can go away and make any changes that it likes because it considers the factors to be relevant. It does not clarify what factors the Treasury might consider relevant, why the Treasury have considered those factors to be relevant, and how people who are affected by any changes the Treasury bring forward know that those factors were relevant. It gives the Treasury a free hand to make changes without reference to any other individual.
Amendment 14 adds that any factors the Treasury consider relevant
“must be published at the time of listing.’.”
It simply says that if the Treasury makes changes under subsection (6) (b), it must, at the time of listing, publish what those factors are. That is in the interest of transparency, so that the Treasury is not accused of doing things in its dark recesses without consultation or public transparency on those issues.
I welcome the Minister’s view on those comments. I hope that he will accept consultation and the publication of consultation responses, and that he will ensure that there is transparency in clause 24 over and above what the clause currently outlines.
Clause 24 brings greater clarity to the process by which the Treasury determines the materials that receive the lower rate of landfill tax. The Opposition amendments suggest yet further transparency and clarity is needed, and furthermore suggest that additional primary legislation is required to achieve that. However, as the right hon. Member for Delyn is aware, the proposals on better tax policy making that the Government published at the Budget make clear that we are already committed to ensuring that all tax changes are subject to a full process of consultation and scrutiny that goes well beyond what the amendments would achieve.
To reiterate, the Government have committed to consult at each identifiable stage for all tax changes; to give weight to simplicity in the tax system, alongside other policy objectives; to examine the case for further rationalisation of the dates on which tax changes are announced and come into effect; to apply the same principles and disciplines as are applied to the Finance Bill, wherever secondary legislation makes a substantive change to the tax code, including publishing the legislation in draft for scrutiny; and to institute a minimum of four weeks’ consultation on tax changes by secondary legislation. Those overarching principles will serve the cause of transparency and accountability far more effectively than the proposed amendments.
Amendment 10 seeks that the Treasury should consult interested parties and publish their responses. I must emphasise that the clause we are introducing is the result of a lengthy consultation process and itself brings greater transparency to the process by which the materials listed in the lower rate order are decided. Indeed, the changes that we will make next year to the list of lower-rated wastes set out in the Treasury order as a result of this clause and the publication of the criteria are the first changes to the order in 14 years. The Treasury’s decisions on the materials to be listed in the lower rate order will not be taken in isolation, but will take into account the advice and guidance from the Department for Environment, Food and Rural Affairs, the devolved Administrations and the environment agencies, and I hope that the right hon. Gentleman is reassured by those comments. Amendment 10 is therefore not necessary.
Amendment 11 would require the Treasury to give six months’ notice before any changes are made. The revised order will be laid before Parliament before the end of 2010. The right hon. Gentleman asked specifically about that. It will come into force on 1 April 2011. The landfill industry is already well informed of the changes and laying the order well in advance will give that industry the certainty that it requires. The Government also intend to provide certainty on tax changes, and therefore this amendment is not necessary.
On amendment 14, which seeks to make public any factor that the Treasury considers relevant when determining the materials to be listed, two important points must be considered. First, the amendment supposes that the clause, as it stands, gives undue scope to the Treasury to change materials that are listed in the lower rate order, but that does not fully understand the nature of the clause. The Committee should note that the clause states that the Treasury is compelled first to have regard to the published criteria under subsection (5) and then to two other relevant factors. I reassure the Committee that it is not a matter of giving the Treasury any real discretion when listing the materials, but the arrangement will ensure that the criteria that we publish, while providing greater clarity on how the lower rate is decided, will not be unduly restrictive and prevent wider issues from being taken into account. It provides for the possibility that other indirect environmental or even non-environmental factors may become important to delivery of the landfill tax’s primary objectives in the future.
Secondly, to address the fundamental issue raised by amendment 14, it is simply not possible to publish every factor that the Treasury considers when introducing a taxation change. Such decisions are made as part of the normal Budget process, when all taxes can be taken into consideration as past of an overall fiscal judgment. Therefore, amendment 14 is not necessary and not practical.
In conclusion, these amendments, although clearly tabled with the best of intentions and rightly probing our thinking in this matter, would add to the complexity of the tax codes. In addition, one of them is technically deficient, and another would be unfeasible to fulfil in practice. Moreover, they are unnecessary in the light of the more efficient, overarching changes that we have publicly committed to make to the entire tax policy making process. I therefore urge the right hon. Gentleman to withdraw those amendments.
I will withdraw the amendments, Mr Caton, but I want to test the Minister still further. On amendment 11, I have heard what the Minister has said about orders being laid before the House and all those issues, but clause 24(1) gives the following powers to the Treasury:
“(6) In determining from time to time what material is to be listed, the Treasury must have regard to—
While subsection (2) states:
“The amendment made by this section has effect in relation to disposals made, or treated as made, on or after 1 April 2011.”
I want it to be clear. When clause 24 states “from time to time”, what notice will be given, not this time, but in future times, in relation to any changes that are made? Will the Minister give an indication of what the likely time scale will be for any changes that are made under this wide-ranging clause, which gives the Minister and the Treasury powers to make such changes, and how much notice will be given? The reason that I have simply put “six months’ notice” is to test how long the Treasury will give in the event of further changes being made by the Minister.
I am grateful to the right hon. Gentleman for confirming that he will withdraw his amendments. As to whether the criteria that we have set out in the clause will be reviewed and revised, we will look at that each year as part of the normal Budget process. I would also highlight, as I mentioned in my earlier remarks, the commitment the Government have made to greater consultation to ensure that those affected by possible changes, whether in regulations or primary legislation, receive proper notice of them. For example there will be a minimum of four weeks’ consultation on tax changes by secondary legislation. By raising these matters he has enabled me to put on record our desire to ensure that we do not have surprises for those people who will be affected by changes when determining which material is subject to the lower rate, that there is proper engagement with the industry and that there is an opportunity for the industry to consider and adapt to changes that are made under these powers.
I am grateful to the Minister. I hope that he treats our amendments in the spirit in which we proposed them and ensures that we do have some discussion because clause 24 gives significant powers to the Treasury to revise the criteria for listing in due course. I wanted to test what the time frame would be, what the consultation would be and how individuals who are interested in those matters could contribute. The Minister has put those issues on the record and so I beg to ask leave to withdraw the amendment.