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5.58 pm
Mr. Michael Jack (Fylde): My eye is taken by the terms of the motion. The first point on which I seek clarification was raised by my hon. Friend the Member for Mid-Worcestershire (Mr. Luff)--the provision having retrospective effect. That also worries me. Retrospection in any tax measure is something of which Treasury Ministers always fight shy. I am intrigued to know why the law must go back to what it would have been had it been correct in September 1994. I should be grateful if the Minister could spell out more clearly than the notes on clauses what the measure means for companies. I am unclear as to the financial impact of retrospective VAT legislation on those enterprises.
What I am clear about is constituency cases where VAT problems of immense complexity drag on for some time, where it is sometimes difficult or, indeed, costly to
unravel the consequences of what to the citizen is retrospective activity. However, here we are talking more seriously about a change in the law.
How was it that that particular error in transcribing a cross-reference from the Value Added Tax Act 1983 came to occur? Some people may think that the motion is part of a wider exercise by officials, admittedly and understandably, combing VAT legislation to close loopholes and protect the Government from perceived revenue loss. However, is the motion being proposed for other reasons? Hon. Members should be told why the error--which has lain dormant since 1983--has suddenly been resurrected, just as the century ends. How did that occur?
The motion, intriguingly, deals with "preparations". I am not sure which definition of preparation is being used in the motion. I appreciate that VAT legislation has long ensured that the manufacture of foods--the bringing together and further processing of certain ingredients, adding value--such as biscuits and sweets has always attracted VAT. I should also tell my hon. Friend the Member for Lichfield (Mr. Fabricant) that those foods are for human consumption. Nevertheless, I do not fully understand how the word "preparations" is being used in the motion. Does it entail the bringing together of raw ingredients without further processing, or bringing together some of the ingredients that would be affected by the proposal after they have been further manufactured, cooked or processed in some other way?
Sir Teddy Taylor:
Will the Minister answer one brief question? Is there any way at all that the Government could mark on the Order Paper matters about which the House has no power to do anything? Perhaps I should first declare an interest: I have a dog of my own, called Corrie. When I get back from the House, he likes me to take him for a walk. Sometimes, however, I am detained in the Chamber, not because hon. Members talk too much, but because we spend our time talking about things about which we can do nothing.
I know that you will be well aware, Mr. Deputy Speaker--because of the great interest that you take in public affairs--that the House has recently spent hours and hours debating matters that we can do nothing about. We have had a great deal of discussion, for example, about genetically modified foods, about which people get very excited and agitated. However, because of European law, we can do absolutely nothing about GM food. We also had a long debate--for a whole day--on the age of homosexual consent, although Parliament could do nothing at all about it.
Mr. Deputy Speaker:
Order. The hon. Gentleman is a very experienced hon. Member. One example by reference perhaps; but he must not go on, ad infinitum, on matters that are nothing to do with motion 7.
Sir Teddy Taylor:
I am sorry, Mr. Deputy Speaker; but it is everything to do with the motion. I simply want
We may all think that retrospective taxation is ridiculous, and agree that the Government should withdraw a motion that would unfairly apply taxation--and carry the can for it. However, my understanding of the situation--you may not think that this is relevant, Mr. Deputy Speaker, but it is--is that, even if all 635 hon. Members said, "Let's agree that we will not backdate tax on dog food", and voted accordingly, it would have no impact at all. The Government would have to levy the tax, simply because of the sixth directive.
I know that you, Mr. Deputy Speaker, and other people do not like me talking about these things, but it is time that Parliament woke up to the fact that we spend hours and hours talking about things about which we can do absolutely nothing. I simply wish that Parliament would wake up to the fact that a democracy is dying every single day, and that--on this issue, as on so many others--we are wasting our time talking about something about which we can do nothing.
Will the Minister say if, by any remote chance, I am right about that point? If, by any remote chance, I am talking a load of rubbish, as the Deputy Speaker seems to think, will the Minister say--
Mr. Deputy Speaker:
Order. The hon. Gentleman has made a disgraceful suggestion. I am here merely to try to keep the House in order, and believe that the hon. Gentleman was straying into generalities too far beyond the scope of motion 7. I hope that he will consider very carefully what he said.
Sir Teddy Taylor:
I am sorry--it is simply something that I feel very strongly about.
Mr. Leigh:
The Minister, in an intervention on my hon. Friend the Member for Lichfield (Mr. Fabricant)--she obviously thought that it was a devastating intervention--asked whether he was aware that the motion applied to pet food. What she did not confirm was that the motion applies only to pet food. The Minister should realise that our suspicions and concerns have been fuelled by that intervention--although I think that the argument could be resolved very easily.
The motion's implications for the Revenue are enormous: the political and revenue implications of launching any attack on the principle of zero-rating food are staggeringly important. I should really like the Minister, on behalf of the Government, to commit herself to the principle that we are not starting to renege on the
pledge, which was given in the general election by her and the Government, that we shall not move away from zero-rating on food.
Mr. Swayne:
Does my hon. Friend agree that the Order Paper does not mention pet food at all, but talks about "meat, yeast, or egg"? As a consequence of the measure, and to avoid the taxation increase, we may well have to eat unleavened bread.
Mr. Leigh:
I am not sure about the need for unleavened bread. However, I am sure that, so far, we have not received a commitment from the Minister.
My hon. Friend the Member for New Forest, West (Mr. Swayne) was right to say that Back Benchers can go only by what they are told in the explanatory notes--which should be helpful. The notes that we have been given today are not at all helpful--except, as my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) has made clear, in fuelling our suspicions. If we were supposed to be reassured that the motion would apply only to pet foods, why does paragraph 2 of the explanatory notes state--as my hon. Friend the Member for Mid-Worcestershire said--that the measure will apply "principally" to pet food? Why do the notes not say that it will apply only to pet food? The House deserves a reassurance on that matter.
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