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Sir Teddy Taylor (Rochford and Southend, East): Can my right hon. Friend think of any possible reason why the Government should not publish the reports of the code of conduct committee, given that the latest one, published in May, contains a series of additional measures? Is not it an insult to democracy and to all that we are meant to stand for that the Government are agreeing to measures on so-called tax loopholes without the House of Commons or the people being told? Will he invite the Government to publish the most recent report, which I happen to have in my hand because I got it by devious means?
Mr. Heathcoat-Amory: I entirely agree. The House deserves to know what tax measures are being discussed
elsewhere, as it practically came into existence to take the means of taxation away from the Crown or the Executive and put it in the hands of those who are answerable to the electorate. My hon. Friend is seeking to assert an ancient right.
The Government have made much of their commitment to openness and "Your Right to Know". I think that they even plan to introduce a Bill to allow the people to know what is being done in their name. It would be a good start if the Government could tell us what tax measures are under review.
The parliamentary answer to which I referred made it clear that the measures that it lists are drawn only from the group's initial list. As my hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor) said, there are other lists. I believe that some energetic web surfer discovered a list of more than 200 European--not all British--tax measures that are under review by the secret committee chaired by the Paymaster General. Will the Financial Secretary publish a comprehensive list of the British measures?
Will the Financial Secretary confirm that the restrictions in the new clause, which would cut back the scope of the allowances as agreed last year, were introduced in response to fears about the EU committee, so that bringing our measures into line with the requirements of European competition law really means bringing them into line with the requirements of that committee? Why else have the restrictions been introduced? The allowances were announced last year to a great fanfare and passed by the House.
The allowances are being restricted in areas in which the situation in Northern Ireland has got worse, such as haulage. The Government's tax measures on road fuel have made the haulage industry uncompetitive, and the problem is especially acute in Northern Ireland, which has a land border with another member state, so the industry can easily be undermined by lorries using cheaper fuel from the Republic. We know that a great deal of fuel smuggling goes on there; the Government will not even give us an estimate of how much, but we know that the problem is serious and worsening.
The same applies to agriculture and fisheries. Northern Ireland faces the same problems as the rest of the United Kingdom, so the case for restricting allowances there has not been made. We strongly suspect that the restrictions are designed to bring us more in line with the requirements of the EU tax committee.
I have another question for the Minister. The terms of the new clause indicate that the capital allowances for agriculture are to be restricted in a way that is devolved to the Department of Agriculture for Northern Ireland. That is somewhat remarkable, as it means that the power, not only to authorise specific items of expenditure on agriculture, but to specify persons, is to be at the discretion of that department. Officials in that department will be able to decide that one person gets the capital allowance, but that another person does not. That is a remarkable provision for the House to approve: instead of setting out tax liabilities in rules and regulations, we are now devolving that power to the say-so of officials at the Department of Agriculture for Northern Ireland. Perhaps the Minister can tell us why the rules cannot appear on the face of the new clause.
My real point is that we are beginning to see the results of the Government's weakness in respect of European Union tax harmonisation. In 1997, they agreed to a code and they said that they would abide by it. Now, although the Government proudly announced certain tax measures last year and now want to introduce them, those measures are under review by that tax committee. In effect, the judgment of the House on matters of taxation has become subservient to a European Union committee over which we have no control. Those are the facts and we require an explanation.
Mr. Edward Davey (Kingston and Surbiton):
I apologise for not having been in the Chamber for the first minute of the Minister's speech introducing the new clause.
I agree with some of the points made by the right hon. Member for Wells (Mr. Heathcoat-Amory), especially those relating to the secrecy surrounding the group that meets in Europe, because I believe that all the committees that meet in Europe should be far more open than they have been. It is possible that, when the right hon. Gentleman was a Treasury Minister and attended meetings of ECOFIN in Brussels, he pushed for greater openness about the proceedings of that committee, but I doubt that he did so. If I am wrong, I should be more than happy to take an intervention from him. The Conservative Government did not have a good record on pushing for greater openness in Europe, and I hope that the current Government will do a better job in that respect.
I disagree when the right hon. Gentleman questions the purpose of the tax committee, because there is a need to examine how state aid is allocated and whether specific forms of state aid meet the requirements of competition law. Competition law is a bulwark of the single market. It is astonishing that, in the Chamber and in Committee, the right hon. Gentleman has argued continuously against bodies such as the tax committee, given that he is--I assume--in favour of the single market. It is astonishing for the Conservatives to be in favour of free trade and of the single market, but against those mechanisms of the European Union that are designed to make the single market work more effectively, including by abolishing state aid. The Conservatives are supposed to oppose most forms of state aid, so it is astonishing that the right hon. Gentleman does not support the EU in trying to get rid of state aid which has, historically, been used by other EU member states in ways that are to the detriment of British jobs and industry. I should have thought that the ideological position adopted by the Conservatives would lead them to be in favour of the sort of approach embodied in that European committee.
Can the Government think of no other way--for example, through capital allowances or direct grants--to support the road haulage industry in Northern Ireland as it attempts to tackle the problems that are specific to it, rather than generally affecting the mainland road haulage industry? Does the subsection to which the right hon. Member for Wells referred, which would give the Department of Agriculture for Northern Ireland powers to make specific grants, offer a means of enabling the Government and civil servants to provide help to the Northern Ireland road haulage industry? Obviously, it would be limited to that section of the industry that is related to agricultural transportation, but it might offer a means of helping at least one part of the industry.
I accept that rules for the application of tax law should appear in legislation, rather than administrative laxity or freedoms allowing civil servants in departments to hand out allowances for specific expenditures. That is notthe best way to proceed. However, in the present circumstances of the Northern Ireland road haulage industry encountering great difficulties, that power--if it can be used in the way I suggest and remain in accordance with competition law--might offer Ministers a means of helping that industry, for example, by helping it to convert to fuel-efficient lorries.
I hope that the Minister will answer my points when she winds up the debate. She should not listen to the protestations of the right hon. Member for Wells in respect of the wider issues.
Mr. Geraint Davies (Croydon, Central):
At this historic time, as we look toward a peace settlement in Northern Ireland, I am sure that the whole House would welcome any extension of preferential treatment in terms of capital allowances that focused on small and medium-sized enterprises in Northern Ireland. The new clause strikes a balance between acting in accordance with competition law and doing too much and risking accusations of providing state aid that distorts competition. The result is that we can promote industrial prosperity in Northern Ireland while abiding by competition law.
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