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9 pm
Mr. Peter Luff (Mid-Worcestershire): I shall not detain the House for long. The new clause leaves rather a nasty taste in the mouth when one considers all the other new clauses that we are debating this evening which are designed to increase the tax take, and often to take more tax from very vulnerable members of our society. Here we have a group of Members of Parliament, who could hardly be described as vulnerable, seeking to obtain new tax advantages for themselves at the taxpayers' expense.
There is a strong sentiment in many parts of the House that the original resolution was a mistake, and that tax advantages should have been retained entirely to European institutions. That pass has been sold and the privilege has now been extended to other, national Parliaments. I am sceptical about whether people will find sufficient reason to justify the additional trips to national Parliaments. There would be a rough justice in maintaining the present tax concessions rather than handing money back to MPs for these freebies.
I note that the resolution to which the new clause refers enables MPs to be paid twice the corresponding civil service class A standard subsistence rate. The perk seems to be very generous as it is, and it would be perfectly reasonable to tax this extension of it. I do not accept the logic of the Paymaster General's opening remarks.
Mr. Fabricant:
The Paymaster General opened the debate by saying that this is a small but necessary amendment, but I am not sure that it is necessary. At the moment, the provisions apply to Brussels, Luxembourg and Strasbourg, and only £44,500 out of a total budget of £250,000 has been spent, so clearly there is not much of a demand for the provision.
I said earlier that I wondered where all the Labour Members were. I notice that there are now two Labour Back Benchers present. I suggested that while we were debating the taxpayers' money, most of them were in the fleshpots of London. What bothers me is that after the new clause has been passed, they will be visiting the fleshpots of Berlin or the beaches just east of Athens, which will now fall under the aegis of the measure.
As my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) said, the economy is contracting and the weakest in society are suffering. It is typical of this Government that the pigs are being lead to the trough at such a time.
Mr. Andrew Love (Edmonton):
Does the hon. Gentleman accept that when the original motion came before the House and was fully discussed, only two or three members of the Opposition opposed it in the debate and, more importantly, voted against it when we went into the Lobbies?
Mr. Fabricant:
The point is how many Labour Members voted against that motion. Two wrongs do not make a right. If only £44,500 out of a budget of £250,000 has been used, the provision is under-utilised. I put it to the House that these trips are yet more jollies, which seem to have been promoted since the Government came to power.
Mr. St. Aubyn:
Will the Paymaster General tell us how much of the budget will be spent under the new provision? What will she do if too many of her colleagues demonstrate a propensity to indulge in this new form of subsidised travel so that the fund is exhausted before the end of the year?
Dawn Primarolo:
Opposition Members need to keep this measure in proportion. As my hon. Friend the Member for Edmonton (Mr. Love) said, when the original motion was discussed the official Opposition did not oppose it. The normal procedure is to make such trips tax-exempt.
The hon. Member for West Dorset (Mr. Letwin), who spoke from the Front Bench, asked why we need a specific tax exemption at all. Several provisions in the Income and Corporation Taxes Act 1988 deal specifically with Members of Parliament; they reflect the nature of Members' duties. In most cases, deductions for any payment to meet the cost of Members' visits to European countries would be available under the ordinary schedule E rules, but it would sometimes be difficult to determine whether a visit would meet the qualifying conditions. Section 202 of the ICTA avoids that uncertainty by taking payments to Members of Parliament who have been authorised under the terms of the House scheme out of the scope of any tax charge.
As hon. Gentlemen will know, Members of Parliament will have to apply in advance and give the reasons for and purpose of their visit, and whom they will be meeting, before the travel is agreed by the House. The Fees Office will require information on the visit's purpose, location, duration and the persons or organisations to be met to be sure that the visit is within the resolution of the House.
Mr. Fabricant:
I take the hon. Lady's point that Members will have to give an official reason, but what is to stop someone visiting an institution for three days and then spending a further week on the trip at their own expense having had the travel paid for them by the House of Commons--or should I say the taxpayer?
Dawn Primarolo:
The rules of the House are laid down and Members are required to comply with them. As the hon. Gentleman well knows--I do not know whether
The hon. Member for West Dorset asked whether legislation was needed to extend the Westminster tax scheme to the devolved Assemblies; the answer is yes. Without the amendment, the Westminster tax rules would not automatically apply to the devolved Assemblies, as should happen.
Mr. Letwin:
The question I asked was whether if, for example, the Scottish Parliament did not agree an amendment or pass a resolution that would require Members of that Parliament to make the same declaration in advance, would they nevertheless be tax exempt?
Dawn Primarolo:
My understanding is that the rules of the House on the terms under which Members of Parliament can travel, as provided under the resolution of the House, are clear, and that those rules extend, therefore, to Members of the Welsh Assembly and the Scottish Parliament.
The hon. Member for Mid-Worcestershire (Mr. Luff) felt that the proposal was yet another perk for Members of Parliament. As I said at the beginning of my remarks, it is important to keep this matter in perspective. In most circumstances, Members are treated for tax in the same way as employees generally. We are dealing with specific provisions to deal with one or two minor areas where the position of Members of Parliament does not fit easily into the general tax framework.
No more money is being made available. The budget of £250,000 for Members' visits to European institutions remains unchanged. The amendments simply bring the resolution of the House into the tax legislation--as was the practice of the previous Government. It is an entirely reasonable thing to do. I commend the new clause to the House.
Question put and agreed to.
Clause read a Second time, and added to the Bill.
Brought up, and read the First time.
Dawn Primarolo:
I beg to move, That the clause be read a Second time.
As hon. Members will know, until last week, passengers on ferries, hovercraft and aircraft travelling within the European Union were able to buy duty-free goods, either on board or at duty-free shops at ports and airports. Within the EU, duty free came to an end on 30 June. All merchandise sold for take away must now be sold duty and tax paid. The new clause makes the necessary changes to the Customs and Excise Management Act 1979, bringing the Act's provisions into line with a decision taken unanimously, in 1991, by the previous Government and all other member states.
Several statutory instruments preceded the new clause to give effect in UK legislation to the abolition of duty free. From 1 July, goods sold to the travelling public for them to take away at the end of journeys within the EU are subject to VAT at the rate applicable in the member state of departure. Excise goods, such as tobacco and alcohol products, are chargeable with duty at the rate of the member state of departure or of the country of destination--depending on where they are sold.
The vast majority of journeys within the EU can benefit from the simplified procedures introduced by the Government, and from the concessions that we managed to extract from the Commission. In the few areas where the simplified arrangements cannot operate, discussions have been held with service providers to ensure the smooth introduction of the successor regime.
'.--(1) For subsection (4) of section 1 of the Customs and Excise Management Act 1979 (goods for sale on board ships or aircraft to be treated as stores) there shall be substituted the following subsections--
"(4) Goods for use in a ship or aircraft as merchandise for sale to persons carried in the ship or aircraft shall be treated for the purposes of the customs and excise Acts as stores if, and only if--
(a) the goods are to be sold by retail either--
(i) in the course of a relevant journey, or
(ii) for consumption on board;
and
(b) the goods are not treated as exported by virtue of regulations under section 12 of the Customs and Excise Duties (General Reliefs) Act 1979 (goods for use in naval ships or establishments).
(4A) For the purposes of subsection (4) above a relevant journey is any journey beginning in the United Kingdom and having an immediate destination outside the member States.
(4B) In relation to goods treated as stores by virtue of subsection (4) above, any reference in the customs and excise Acts to the consumption of stores shall be construed as referring to the sale of the goods as mentioned in paragraph (a) of that subsection."
(2) This section shall be deemed to have come into force on 1st July 1999 but shall not have effect in relation to any shipment of goods before that date.'.--[Dawn Primarolo.]
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