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Broadcasting
Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committee on Statutory Instruments, &c.) That the draft Broadcasting (Independent Productions) Order 1991, which was laid before this House on 8th May, be approved.-- [Mr. Boswell.]
Question agreed to.
Members (Resettlement Grant)
9.17 pm
The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor) : I beg to move
That in the opinion of this House, on the dissolution of the present or any future Parliament--
(1) A grant should be payable to any person who is a Member of this House immediately before the dissolution and at the general election consequent upon the dissolution either does not stand for election to this House or, if he does, is not elected.
(2) The amount of the grant in the case of any such person should be equal to the relevant percentage of a year's salary at the highest rate payable to Members of this House immediately before the dissolution, the relevant percentage for this purpose being that shown in the following Table in relation to--
(a) his age at the dissolution ; and
(b) the number of years for which he has served as a Member of this House before the dissolution.
Column 1033
1990-91
Estimated outturn
£ billion
|England |Wales |Scotland|Great |Northern
|Britain |Ireland
------------------------------------------------------------------------------------------------------------
Gross community charge income |12.3 |0.5 |1.1 |13.9 |-
Community charge benefit |1.9 |0.1 |0.2 |2.2 |-
Transitional relief |0.3 |<1>- |<1>- |0.4 |-
Net community charge income/domestic rate income |10.2 |0.4 |0.9 |11.4
|0.1
Non-domestic rate payments |10.7 |0.4 |1.3 |12.5
<1>Less than £ 50 million.
1991-92
Forecast
£ billion
|England |Wales |Scotland|Great |Northern
|Britain |Ireland
Gross community charge income |8.5 |0.2 |0.9 |9.8 |-
Community charge reduction scheme/transitional relief |1.1 |0.1 |0.1 |1.4 |-
Community charge benefit |1.1 |<1>- |0.1 |1.2 |-
Net community charge income/domestic rate income |6.4 |0.2 |0.7 |7.2
|0.1
Non-domestic rate payments |12.1 |0.5 |1.4 |14.1
Note: community charge grant |4.8 |0.3 |0.5 |5.6 |-
<1>Less than £ 50 million.
Under 50 50 50 50 50 50 50 50
50 50 50 52 54 56 58 60
51 50 52 55 58 62 65 68
52 50 54 58 63 67 72 76
53 50 56 62 67 73 78 84
54 50 58 65 72 78 85 92
55 to 64 50 60 68 76 84 92 100
65 50 58 65 72 78 85 92
66 50 56 62 67 73 78 84
67 50 54 58 63 67 72 76
68 50 52 55 58 62 65 68
69 50 50 52 54 56 58 60
70 or over 50 50 50 50 50 50 50
(3) In calculating for the purposes of paragraph (2) the number of years for which a person has served as a Member of this House before the dissolution, there should be disregarded--
(a) any fraction of a year for which he has so served ; and (
(b) if a grant was payable to him under this Resolution or any of the former resettlement grant Resolutions on any previous occasion, any period of service which was taken into account or disregarded on that occasion ;
and in this paragraph the former resettlement grant Resolutions' means the second Resolution of 20th December 1971, the fourth Resolution of 4th March 1980 and the third Resolution of 19th July 1983.
We had a full debate on resettlement grants for older Members of Parliament on 31 January. I agreed then to put the issue to the Top Salaries Review Body. The motion before the House implements in full the proposals contained in the TSRB report that was made available to the House on 29 April. Since then I have found widespread acceptance of the TSRB's recommendations. I am sure that the whole House will wish me to place on record our
Column 1034
gratitude to the chairman and members of the TSRB, both for the speed with which they responded and for the skill with which they have addressed the issue. I believe, therefore, that we have been able to meet very speedily the clear wishes of the House, as expressed both in an early-day motion and in the debate on 31 January. I commend the motion to the House.9.18 pm
Mr. Stanley Orme (Salford, East) : May I, on behalf of the Opposition, say that we support the motion and the decision of the Top Salaries Review Body. After extensive consultation, we believe that it has made a positive and reasonable proposal that will be in the interests of many Members of Parliament. It will be within the recollection of hon. Members that previous proposals covered deceased Members of Parliament and their families--younger Members of Parliament benefited from the
Column 1035
changes that the Government introduced, with our support. This is a limited but positive step forward. On behalf of the Opposition, I welcome the proposals.9.19 pm
Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak) : The Top Salaries Review Body arrives at some incredible proposals for hon. Members and I do not welcome the proposal for a grant in the same way as some people. I have managed to scratch a few bob together and at this stage I am not concerned about my interest in the matter. A Member of Parliament who loses his seat, especially in his earlier years, faces real problems. Judges can retire on a full pension after 15 years because people think that they come to that job late in life. For the sake of the country, God forbid that we should get many 25-year-old hon. Members, who have done nothing before coming to this talking shop. Such people would have to be in the House for 33 years before qualifying for a full pension, and that is entirely wrong.
My argument follows the line of what an MP should do. The most unemployable person in the world is an ex-MP who entered the House at the age of 25 or 30 and lost his seat after 15 years. Give or take a few bob, he will receive £15,000 under the current resettlement process. I do not object to changing the system for the golden oldies. Someone of 70 who leaves this place full of years and honour and, I hope, full of pension will get exactly the same, £15,000, as someone under the age of 50.
A miner, an office worker or a worker in heavy steel can leave his job at 30 and become an MP. If he loses his seat he can go back to his former job and start again. When I was senior partner in my business 12 years ago I prided myself on the fact that I could do every job in my office. Now I am a consultant in that business and, because of mechanisation in the office, there is no way that I could run that business in the way that I did 12 years ago. Things move on and that applies to office and manual jobs.
An ex-Chancellor, an ex-Prime Minister or an ex-Secretary of State for Trade and Industry can sell our secrets and themselves for huge sums or they can sell their memoirs or get jobs in banks. They are all right, but the ordinary infantry, the Back Bencher, is what Parliament is all about. It is not about those who hold great office. They are part of the system, but the Back Bencher is part of the freedom of Parliament. If he has a family, a person of 50 is at the most expensive time of his life. He may still be paying off a mortgage or have kids at school and, even if they are not at fee-paying schools, we all know what children cost. He does not pay for a holiday just for Mutt and Jeff ; he has to pay for four or five people. To lose one's seat at a time of such expenses is no laughing matter. [Interruption.] I welcome some of the proposed money going to the hon. Member for Ashfield (Mr. Haynes). I know that hon. Members are keen to get away, but this is a serious issue. I have no genuine interest to declare except that I want to encourage people to come to this place, not just to seek high office but to play the insecure role of Back Benchers. This is an insecure job and if anyone thinks that those who leave here are highly desirable, he does not know some hon. Members as I know them. Some have fallen on very difficult times and the idea that they must go to a charity commission, which, I have no doubt, looks upon them kindly, is wrong.
Column 1036
I am not saying that hon. Members should be paid much more per se, but if they stick to their guns and stick by an honourable attitude to the job of a Back-Bench Member of Parliament or if they lose their seat or feel honour-bound to leave the House, they should not find themselves in such a ghastly disadvantaged position.I do not think that people would begrudge the idea that the younger Members of Parliament--those under 55--should be dealt with more fairly. I know that some people have done their best with this resolution, but what they have done is typical of the civil servant top salary review cosy position. They have considered what they thought right, but they should consider what a Member of Parliament's job is. Members of Parliament should possibly be honoured more in the leaving than when they are here.
Hon. Members are not always equal--some have safe seats where the votes are weighed, not counted, and some have seats with small majorities, so it is a roulette wheel. I urge the House to consider the type of people that we need. We need those who are willing to stand up for principles and to take enough risks to come here in the first place. The resolution does nothing towards that. It helps those who are older, which is a good thing, but it does damn all for the younger hon. Member. Although we honour those going into the sunset, the sunrise of Parliament lies with the young, not with the retiring.
9.26 pm
Mr. MacGregor : The short answer to my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) is that we are not making changes to the existing system of resettlement grants for those leaving at a general election and who are under 65 because no one suggested that in the debate on 31 January. There were no complaints at that time, but general approval of the system.
The early-day motion showed that the concern arose for those over 65 and for the anomalies. That is why that issue was put to the Top Salaries Review Body. In paragraphs 6 and 9 of its report it makes clear the reasons why it believes that a change should be made in the form of the resolution. As the right hon. Member for Salford, East (Mr. Orme) said, it is a comparatively narrow point but one about which many hon. Members felt strongly. It is dealt with very well by the TSRB, and I commend the resolution to the House.
Question put and agreed to.
Resolved,
That in the opinion of this House, on the dissolution of the present or any future Parliament--
(1) A grant should be payable to any person who is a Member of this House immediately before the dissolution and at the general election consequent upon the dissolution either does not stand for election to this House or, if he does, is not elected.
(2) The amount of the grant in the case of any such person should be equal to the relevant percentage of a year's salary at the highest rate payable to Members of this House immediately before the dissolution, the relevant percentage for this purpose being that shown in the following Table in relation to--
(a) his age at the dissolution ; and
(b) the number of years for which he has served as a Member of this House before the dissolution.
Column 1037
Estimated increase in VAT payments in 1991-92 as a result of the
rise in the VAT rate to 17.5 per cent.: average by decile group of
households ranked by disposable income: £ per year.
|All United Kingdom|Of which retired:
|households:
----------------------------------------------------------------------------
Bottom |40 |32
2 |52 |42
3 |78 |69
4 |114 |123
5 |140 |142
6 |164 |143
7 |200 |195
8 |232
9 |279 |253
Top |369
Average |167 |79
Notes:
1. Based on the 1987 Family Expenditure Survey uprated to 1991.
Figures do not take account of any changes in the pattern of
household expenditure which might follow on from a change in the
VAT rate.
2. In order to provide an estimate for a reasonably large sample, the
figures for the retired households in the top three decile groups have
been combined.
Under 50 50 50 50 50 50 50 50
50 50 50 52 54 56 58 60
51 50 52 55 58 62 65 68
52 50 54 58 63 67 72 76
53 50 56 62 67 73 78 84
54 50 58 65 72 78 85 92
55 to 64 50 60 68 76 84 92 100
65 50 58 65 72 78 85 92
66 50 56 62 67 73 78 84
67 50 54 58 63 67 72 76
68 50 52 55 58 62 65 68
69 50 50 52 54 56 58 60
70 or over 50 50 50 50 50 50 50
(3) In calculating for the purposes of paragraph (2) the number of years for which a person has served as a Member of this House before the dissolution, there should be disregarded--
(a) any fraction of a year for which he has so served ; and (
(b) if a grant was payable to him under this Resolution or any of the former resettlement grant Resolutions on any previous occasion, any period of service which was taken into account or disregarded on that occasion ;
and in this paragraph the former resettlement grant Resolutions' means the second Resolution of 20th December 1971, the fourth Resolution of 4th March 1980 and the third Resolution of 19th July 1983.
Column 1038
Johnson Freight Services Ltd.
Motion made, and Question proposed, That this House do now adjourn-- [Mr. Boswell.]
9.27 pm
Mr. Peter Archer (Warley, West) : I am grateful for the opportunity to draw the attention of such an attentive House to the self-evident injustice which has happened to a company in my constituency, and we have it on the authority of Customs and Excise that it has happened to others.
Usually, when something of this kind occurs--no doubt through a mechanical and unintelligent application of the rules--it is rectified when drawn to the attention of a more senior official. If even that fails, a Minister considers the issue with the eyes of someone outside the bureaucracy. If necessary, the rule book itself is amended.
In my experience, virtually the only Government service where a manifest distortion of fairness and common sense is not rectified is in Her Majesty's Customs and Excise, which exercises its breathtakingly draconian powers as though it had never heard the word "accountable". I must say at once that I am not making a judgment about every official in the service. Some officials in Customs and Excise are manifestly fair and reasonable, but if one meets an official who is not, the officials will never admit that a fellow official may have been wrong. They even treat their Ministers, if I may say so, as word processors for those who wrote the departmental letters. I do not pretend that on this occasion anyone was crushed, just that people were treated with gross unfairness and insensitivity.
Let me recount the facts so that the House may judge for itself. Johnson Freight Services Ltd. is a company of freight agents in my constituency. In April 1987, it acted as freight forwarders for a cargo of fabrics consigned by a company in Germany to a company in London known as Fashion First Ltd. In order that the goods could be cleared by customs, Johnson Freight Services paid the value added tax of £3,167.19. Before the goods were delivered, it transpired that Fashion First could not pay for them and shortly afterwards it went into liquidation. In order to avoid having to carry the goods back to Germany, the German company sold the goods to a company in Leicester--J and S Garments Ltd.
Column 1039
In the normal course of events, when goods are imported VAT is paid on their value when they are purchased by the importer, who then marks them up and sells them at a profit. VAT is then paid on the retail value and the importer deducts as input the sum that was paid when they were imported. If J and S Garments had been the importer, it would have reimbursed Johnson Freight Services for the VAT paid on importation and it would have deducted that sum as inputs from the VAT which it paid on the sale. So Customs and Excise would have received from Johnson's the VAT due on the import price and would subsequently receive from J and S Garments the VAT due on the retail mark-up. J and S Garments would have paid the precise amount of VAT due and Johnson's would have received the money which it had advanced. That is exactly how the VAT system was always intended to work.All that was required was that Customs and Excise should have agreed to treat J and S Garments as the importer instead of Fashion First, but that was too simple for the bureaucratic mind. No, it said that J and S Garments was not the importer ; the goods had already been imported when it received them. In effect, Customs and Excise was saying that if J and S Garments reimbursed Johnson's it would not allow that company to deduct the sum as input from the money that it sent to Customs and Excise. So Customs and Excise has twice received the money and Johnson's is out of pocket for that amount. Customs and Excise is untroubled by that and, in short, its attitude to Johnson's is "Hard luck, mate. We have your money and we are keeping it." The first argument of customs was that if agents pay money on behalf of importers it is a matter for Customs and Excise and the importers. That would be an understandable argument if the money had not been paid twice. If there is to be a loss, it should not fall on Customs and Excise--I accept that. The other parties should be left to sort out between themselves who is to bear the loss. However, in this case, there has been no loss--Customs and Excise has received its money. There has been a loss only because Customs and Excise received the money twice and it wants to keep both sums.
Customs and Excise then said that the money would have been returnable if, instead of the goods being sold to J and S Garments, they had been re- exported. They could have been returned to Germany and, presumably, sent back to this country as a fresh importation. Johnson's might then have reclaimed the money, but someone would have had to pay the freight charges both ways.
You and I, Mr. Deputy Speaker, are perhaps simple about these matters, but would we not have thought it more sensible to sell the goods in this country rather than re-exporting them? In any event, even if Johnson's had known about that provision and re-exported the goods, it would not have availed the company because it would apply only if the transaction took place after 31 June 1988. Do not ask me why. Even if the provision had been introduced in 1988, there could have been no conceivable objection to a retrospective provision if it recognised rather than took away someone's right.
Finally, when the only alternative would have been to change the mind of Customs and Excise, which clearly it was not possible to contemplate, Customs and Excise said that Fashion First Ltd.--the original importer-- might reclaim the money which it had never layed out. As that potential liability existed, Customs and Excise could not
Column 1040
repay it to anyone else. Johnson's solved that problem by procuring a letter from Fashion First, undertaking that it would not ask for the money. It was all to no avail--Customs and Excise was, and remains, immovable.It might be said that Customs and Excise was bound by the regulations. Perhaps beneath that bureaucratic jargon there beats something approximating to human hearts, but however unhappy Customs and Excise was at being unable to help, it was ruled by the statute. Alas, that is not the explanation. Customs and Excise has the power to make extra-statutory concessions where fairness requires them. Indeed, the possibility of reclaiming VAT paid on importations after June 1988, if the goods were re- exported, is itself an
extra-statutory concession. But Customs and Excise is not prepared to change the wording of its own extra-statutory concessions. It says, "What we have written, we have written."
The problem may be that such a situation has never arisen before, so there has been no time properly to consider it--except since 1987. But that was not the case. On 5 September 1988, a surveyor in customs at Dover wrote to Johnson :
"Cases identical to this one where goods have been rejected by the importer and re-sold to another trader have been submitted to Headquarters in the past but no amendments have been allowed". That, it seems, concludes the argument. The Court of Appeal and even the other place in its judicial capacity may reconsider their former decisions, but not headquarters. We wither and perish, but naught changeth headquarters--it has spoken. The Minister will forgive me for saying that, when I wrote to her, she simply repeated the language of the oracle.
Some hon. Members may wonder why this case has taken so long to reach the stage of an Adjournment debate. Johnson's has been trying since 1987 to get someone in Customs and Excise to listen. It wrote to Customs and Excise at Dover on 11 January 1988 enclosing all the required documents. On 27 January, Customs and Excise replied, "Your request is refused". The reasons given were, first, that the entry could not be changed to show a new importer after the goods had been cleared by customs--I follow the logic but not the common sense--and, secondly, that the original importer still retains the right to reclaim the VAT.
After some oral consultations, Johnson's wrote again, saying that the matters were dealt with in the original documents. A letter came back asking Johnson's to resubmit the original documents, together with the letter of refusal from Customs and Excise. I can only assume that Customs and Excise failed to keep copies. Johnson's did that and then received the letter, dated 5 September 1988, to which I referred. It pointed out that, if the agency pays the VAT on behalf of the importer, that is a matter to be resolved between them. It said that headquarters had rejected similar applications in the past. I have already dealt with those two arguments.
Johnson's then tried writing to headquarters--why should the company not go to the authority that had been cited against it? Headquarters answered that the original importer had the right to reclaim the money. So Johnson's obtained from Fashion First the letter renouncing its claim to the money. The reply was that no new information had been provided which altered the decision.
Johnson's then approached me and I wrote to the Minister, who replied that the claim did not meet the
Column 1041
current criteria, as though Customs and Excise did not have the power to change the current criteria. I knew that, and I am asking that the current criteria should be amended if they give rise to such manifest injustice. I have been given no reason why that cannot be done. This is the kind of crass, uncomprehending bureaucracy that gives, crass uncomprehending bureaucracy a bad name.I hope that it is still not too late for the Minister to stand back and consider what she is being asked to endorse. If such an incident can occur in respect of a modest sum, and the Department and the Minister cannot see what is unfair about it, perhaps it is time to circumscribe the powers of Customs and Excise before it does something much worse.
9.40 pm
The Minister of State, Treasury (Mrs. Gillian Shephard) : I congratulate the right hon. and learned Member for Warley, West (Mr. Archer) on the lucid and eloquent way in which he presented the Adjournment debate. I am grateful for the opportunity to explain the Government's position on this matter, despite the fact that I am not only a word processor, but an oracle.
The right hon. and learned Gentleman has set out the chronological facts of this case, on those there is no dispute. As he said, in April 1987, Johnson Freight Services acted as forwarding agents for a consignment of fabric from Germany being imported by Fashion First Ltd. Johnson's completed the customs entry documents in the name of Fashion First Ltd. and paid to customs £3,167 VAT on its principal's behalf. It is common commercial practice for importers to appoint agents to deal with customs formalities and pay import charges in that way. In this case, however, the importer refused the goods and is believed to have gone into liquidation. The goods were not re-exported because the German suppliers resold the goods to another United Kingdom trader, J and S Garments Ltd.
As the right hon. and learned Gentleman said, Johnson's applied to customs first to change the importer's name on the import documentation, but that was refused because such changes cannot be made after goods have been cleared by customs and released. The reason for that is to avoid, as far as possible, the obvious possibilities that there might be for fraud.
Johnson's subsequently applied to customs for reimbursement of the money which the company had paid on behalf of the original importer, but which it had apparently been unable to obtain from that importer. Customs refused that application, too, because the law did not provide for such repayment. The law is clear and tightly drawn, and only the importer can reclaim VAT as input tax. It is the legal responsibility of customs to collect all charges due--duty and import VAT--on importation. That is achieved by means of an import entry submitted to customs at the time of importation declaring details of the goods being imported.
It is the importer's responsibility to have his goods entered to customs and pay any VAT or other import charges due. Only the importer can reclaim the VAT as input tax, subject to the normal VAT laws. The law on that is tightly drawn to ensure that two or more different
Column 1042
entities should not be able to deduct, as input tax, VAT on the same transaction. I know that the right hon. and learned Gentleman will understand that.For most importations, import agents or freight forwarders are used. They will submit an entry for goods at the place of importation on behalf of the importer, but importers can submit an entry and pay the VAT if they wish. If an agent or freight forwarder takes it on himself to pay the VAT due on behalf of the importer, that is a commercial arrangement between him and his principal--the importer. Customs regard the payment as having been made by the importer, and have made that clear in its publication, "Notice 702 : VAT--imports and warehoused goods".
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