I do not intend to delay the Committee for too long. The Opposition support the clause, which enables the Treasury to provide certainty on the tax treatment of transactions made by investment trusts by providing that they are not treated as trading transactions. The only reason why I wish to comment on the clause is that representations on clauses 49 and 50 were made to me by the Association of Investment Companies.
The association, like me, recommends that the clauses are accepted without amendment. However, I am intrigued to note that it said in its letter:
“There are still further details to work on in the regulations of the Bill. However, given the very constructive engagement between the Government and industry to date, the AIC is confident that an optimum result will be achieved.”
Will the Minister give an indication of what further work is required and what discussions he has had with the association? I naively presumed that the clause was the completed article and that all such discussions would have been finalised before the Government brought the provision to Committee, yet the association indicates that further work is to be done on regulations. Perhaps the Minister can help. Is this the final version, or is there further work to be done?
As the right hon. Gentleman will be aware, the clause is perfectly formed. It simply gives the power to make regulations but does not set out the details. However, a draft set of regulations has been published. As my hon. Friend the Exchequer Secretary said earlier, we seek to consult and engage with the industry on the fine detail of regulations to ensure that they work. We are going through that process now.
We published a draft of the regulations before consultation, but we need to work with those of our colleagues in BIS who have responsibility for company law to ensure that we get the drafting right so that they meet the needs of investment trust companies and fit within the framework of company law. I assure the right hon. Gentleman that work is proceeding; we have put the regulations out to consultation, and are working with the Association of Investment Companies and with BIS to get the detail right.
I am grateful for the Minister’s response, but I would welcome confirmation that his answer to the question that I asked about clause 49 applies also to clause 50—that the Treasury’s regulations, made under proposed new section 622A(1), will use the affirmative resolution procedure.
The Minister has indicated that the draft resolution guidelines are not yet finalised—I was aware of that—and that there is still some work to be done, but how does he intend bringing them forward and, just for clarity, when does he intend placing them before the House following Royal Assent?
I thought that I had answered the right hon. Gentleman’s question about process when dealing with clause 49. He will see from proposed new section 622A(3) that the first regulations made under these powers will be subject to the affirmative resolution procedure—that is fairly standard practice—and that under subsection (4) subsequent regulations would use the negative procedure. As I said earlier, we will publish the final guidelines in October.
The right hon. Gentleman has experience as a Minister, as he reminds us from time to time, and I am sure that he will recognise that the wording of subsections (3) and (4) is fairly standard for the positive and negative procedures. He may wish to raise the matter with the Modernisation Committee, suggesting that other language should be used. However, I believe that we should stick with tradition, as those two subsections demonstrate from their meaning that they refer to the positive and negative procedures.