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Mr. Stuart Randall (Kingston upon Hull, West): The Financial Secretary's explanation of the new clause was clear and I thank him for that. His argument, however, hinged on the Inland Revenue's investigation of the matter and on the fact that it was unable to guarantee that Ministers' cars could be regarded as pool cars because of incidental use--personal use--as opposed to official use. I would be grateful if the Financial Secretary would clarify that just a little and tell us what evidence before the Inland Revenue showed that perhaps it was difficult to regard those cars as something other than pool cars.
I have been abroad and seen Ministers travelling around the world. It is good that spouses should attend engagements with Ministers. That is important, not only because it enables Ministers who look after policy abroad to be with their spouses as often as possible, but because their spouses can perform a useful function for this country, so I welcome that provision. However, I should like to add to the comments of my hon. Friend the Member for North Warwickshire (Mr. O'Brien), the Front-Bench spokesman, on the part of the new clause that refers to
It would not be unreasonable to limit that provision to spouses. I should be grateful if the Financial Secretary would comment on that.
The definitional part of the new clause refers entirely to motor cars. Now that the European Union is becoming more and more integrated, why does the definition not include general aviation? It is no more expensive and it would be consistent with the current arrangements on the use of general aviation that all Members of Parliament have with the Fees Office: they may do so, provided that it is not more expensive than normal air travel.
Mr. Jack:
I am disappointed that the Opposition have taken the line that they have. They have explained their reasons and have suggested that there is a hidden agenda. The hon. Member for North Warwickshire (Mr. O'Brien) said clearly that we should be transparent in all this, but, as my hon. Friend the Member for Stockton, South (Mr. Devlin) said, there was a nudging-in of matters connected with a sleaze element. That is far from what the
The party of the hon. Member for Gordon (Mr. Bruce) was among others in probing that matter. The provision had not been reviewed for about 17 years, so, rightly, the Revenue thought it timely to reconsider it. It came to the view that, of the three-part test that defined the cars that Ministers, office holders and others use as pool cars, the test that dealt with so-called merely incidental travel--home-to-work travel--was unsustainable. We failed therefore on that test and, after careful analysis, the Revenue deemed that a liability of tax could arise for users of a pool car.
On the point raised by the hon. Member for Kingston upon Hull, West (Mr. Randall), when the law was originally passed, it was felt that, for example, the act of working on papers in the car was sufficient to make it merely incidental. A further re-examination of the law by the Revenue's legal advisers--particularly bearing in mind the legislation on benefits in kind and the tightening of the law--ultimately made the Revenue say to Ministers, "Look. You have got to do something about this to put beyond doubt the tax treatment of the provision of these cars."
No one has seriously challenged the provision of the cars. That is open and above board. Ministers of the day, officeholders and the Speaker have access to those vehicles because it makes good common sense for that to be so. The problem is that that common-sense procedure falls foul of a ruling by the Revenue.
The hon. Member for North Warwickshire asked whether we could postpone the measure. We have considered the matter for some time and examined whether there are other ways of dealing with it, which picks up on his point about the way in which someone in the private sector might be dealt with. The problem is that, in relation to such cases in the private sector, one of two things could happen.
An individual benefiting in this way from a benefit in kind might make a deal with his company to pay the tax if it provides the benefit or, as is more often the case, the company may gross up the salary, effectively paying the tax for the individual. That facility does not afford itself to officeholders of the day. That is the reason why we seek to make clear, and put beyond peradventure, the tax treatment of the use of pool car arrangements.
Some questions have been asked on the wider issues of the provision of accommodation, travel and spouses. We have been challenged on whether the new clause is drawn too broadly in relation to those subjects. Before we have
use of an official car or have our air fare or accommodation paid, there are gates through which we must pass--the proprietorial grounds. Those are laid down in "Questions of Procedures for Ministers". If any Minister of the day has any doubt about those, his private office will be quick to remind him or her of the correct procedures. There is no question, therefore, but that we must pass through stringent tests before we use such cars. That is the point.
A Minister whose spouse has died might require the assistance of, for example, another member of the family in undertaking his or her official duties. That is why the new clause is cast fairly widely. Before we benefit from the new clause, we must pass stringent tests. The new clause in no way, shape or form would confer on Ministers any particular additional benefit other than was outlined by Parliament in 1976. All we seek to do is to put beyond doubt the tax treatment.
In answer to the question of the hon. Member for Gordon, we are not trying to be treated differently. In 1976, Parliament took the view that pool cars should be made available to Ministers. For the reasons that I have given, we wish to sustain the availability of the cars, but put beyond doubt the tax treatment.
Mr. Mike O'Brien:
How does the hon. Gentleman deal with the fact that my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) said at that time that his objective was to put a Minister on all fours with a director or a high-paid employee?
Mr. Jack:
Exactly as I have described. If a director or high-paid employee receives the benefit in kind paid for by his employer, there are two courses of action. One is that his tax would be paid for him by virtue of his salary being grossed up. That facility is not available to office holders. That is why the tax treatment makes certain that, for the duration of the holding of the office, an individual is not liable for a substantial amount of tax.
I assure the House that the Inland Revenue has made it very clear that it would have no option but to levy tax charges in the forthcoming tax year if new legislation were not introduced. I am sorry that the official Opposition feel that they must vote against the new clause, which confers no extra benefit at all on Ministers. We look forward to hearing how they will deal with the issue in future. As usual, they have no alternative proposal. All one can say is that we are protecting all officeholders, including their leader, from what could be a very substantial tax bill.
Question put, That the clause be read a Second time:--
"any member of his family".
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