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Mr. Letwin: I shall not long detain the Committee. I am sure that hon. Members are grateful for that.

The hon. Member for Kingston and Surbiton (Mr. Davey) made clear in his speech much that is important about the wrongness of the process in which the Government are engaged.

My right hon. Friend the Member for Charnwood (Mr. Dorrell), the former Financial Secretary No. 1, made a powerful case about the effect of the measure on the location of headquarters. My right hon. Friend the Member for Fylde (Mr. Jack), the former Financial Secretary No. 2--I do not suggest by that any order of priority, other than of speaking--made it clear that we needed an analysis of the economic impact of the measure. My hon. Friend the Member for Grantham and Stamford (Mr. Davies) made it abundantly plain that we are dealing with an abuse of process, an abuse of Parliament and an abuse of substance.

In the Paymaster General's response to the debate, she made three arguments. Her first was that, although the text of the consultation document, which she proceeded to misquote, made no mention whatever of the proposal

3 May 2000 : Column 256

that is hereby being enacted, and hence in no way was there any consultation on that proposal, it was nevertheless--I think I quote almost exactly--quite obvious to anyone engaged in the process that this would be, or might be, the measure that was forthcoming. If she thinks that it is quite obvious, it is odd that the CBI thought that it was unexpected, that the Institute of Directors thought that it was unheralded, that the Chartered Institute of Taxation thought that it was a surprise and that most of British industry is hopping up and down because it claims that it was never told about it. If it was obvious enough for the Paymaster General, she might have let some others into the secret. It would have been helpful.

Secondly, the Paymaster General told the Committee that the yield would be minute, not enormous, and she told us that on the basis of Inland Revenue calculations. She did not see fit to give way to allow me to ask the question which I invite her to answer now. Was it pointed out to the Inland Revenue and to her economic adviser in a meeting with accountants when the issue was raised that the base year upon which the calculation was made was exceptional? She did not answer then and she does not answer now. The fact is that the calculations that she suggested are not substantiated, are probably inaccurate and are not reflected in the views of any of those who have commented on this, whether the CBI, the IOD, the major firms or the various firms of accountants. Not in one of those sources do we find a similarity of view about the amounts to be raised. It would be interesting to know whether the hon. Lady is willing to stake her continued career on the effect of the measure next year, or, if it is to be delayed by nine months, a year later.

Thirdly, the Paymaster General claimed that the measure had been welcomed or heralded by a large number of people in various articles. It would be interesting to know whether it is generally the Treasury's practice to ignore the advice, after a proposal is put forward, of the big six accountancy firms, the CBI, the Chartered Institute of Taxation and the IOD, in favour of three or four academic articles, one of which was undoubtedly submitted for publication before the Budget and hence--although apparently it was quite obvious--before the writer had the slightest idea what the proposal in question would be.

But all those things, as my right hon. and hon. Friends have pointed out, pale into utter insignificance when compared with what the Paymaster General did not say. In the whole of her speech, she never once mentioned whether the measure would substantially deter important companies from locating their headquarters in the UK, and, if so, whether that would have a huge and sustained knock-on effect on our economy.

I can only conclude either that the Paymaster General does not care what happens to the UK economy, which is unlikely, or that she--this must be the more likely case--knows that there is a real problem here, but does not want to admit it or consult on it because she knows that it would entail admitting that the Government have, in this case, as Governments do because they are composed of human beings and we are all fallible, we as much as they--[Interruption.] My hon. Friends may disagree, but I admit on behalf of the Conservative party that we are human. So, too, are the Government. Unfortunately, Ministers and officials, in this case probably an economic adviser and a few Ministers, over against the Inland Revenue, have made a tremendous and signal error.

3 May 2000 : Column 257

The easy way to deal with those errors is to withdraw the proposal by letting the clause fall and to return later with one of the options described in a perfectly reputable Inland Revenue consultation document, and discussed the length and breadth of British industry--either the mixer companies or the onshore pooling. We could all then rest easy that the Government will not go down in history as having destroyed a large chunk of our economy. As things stand, that is exactly what is likely to happen and it will be a disgrace if the Government do not withdraw the clause.

Question put, That the clause stand part of the Bill:--

The Committee divided: Ayes 254, Noes 123.

Division No. 178
[10.29 pm


Adams, Mrs Irene (Paisley N)
Ainger, Nick
Ainsworth, Robert (Cov'try NE)
Alexander, Douglas
Armstrong, Rt Hon Ms Hilary
Atherton, Ms Candy
Austin, John
Banks, Tony
Barnes, Harry
Bayley, Hugh
Beard, Nigel
Benn, Hilary (Leeds C)
Bennett, Andrew F
Benton, Joe
Bermingham, Gerald
Berry, Roger
Best, Harold
Blackman, Liz
Blears, Ms Hazel
Boateng, Rt Hon Paul
Borrow, David
Bradley, Keith (Withington)
Bradshaw, Ben
Brinton, Mrs Helen
Brown, Rt Hon Gordon
(Dunfermline E)
Brown, Rt Hon Nick (Newcastle E)
Brown, Russell (Dumfries)
Browne, Desmond
Butler, Mrs Christine
Byers, Rt Hon Stephen
Campbell, Mrs Anne (C'bridge)
Campbell-Savours, Dale
Cann, Jamie
Caplin, Ivor
Caton, Martin
Cawsey, Ian
Chaytor, David
Clapham, Michael
Clark, Rt Hon Dr David (S Shields)
Clark, Dr Lynda
(Edinburgh Pentlands)
Clarke, Charles (Norwich S)
Clarke, Eric (Midlothian)
Clarke, Rt Hon Tom (Coatbridge)
Clarke, Tony (Northampton S)
Clwyd, Ann
Coaker, Vernon
Colman, Tony
Connarty, Michael
Cooper, Yvette
Corbett, Robin
Corbyn, Jeremy
Corston, Jean
Cox, Tom
Cranston, Ross
Crausby, David
Cryer, Mrs Ann (Keighley)
Cryer, John (Hornchurch)
Cummings, John
Cunningham, Rt Hon Dr Jack
Dalyell, Tam
Darling, Rt Hon Alistair
Davey, Valerie (Bristol W)
Davidson, Ian
Davies, Rt Hon Denzil (Llanelli)
Dawson, Hilton
Dean, Mrs Janet
Denham, John
Donohoe, Brian H
Doran, Frank
Dowd, Jim
Drew, David
Eagle, Maria (L'pool Garston)
Edwards, Huw
Ellman, Mrs Louise
Ennis, Jeff
Field, Rt Hon Frank
Fisher, Mark
Flint, Caroline
Flynn, Paul
Foster, Rt Hon Derek
Foster, Michael Jabez (Hastings)
Foulkes, George
Fyfe, Maria
Gardiner, Barry
George, Bruce (Walsall S)
Gerrard, Neil
Gibson, Dr Ian
Godman, Dr Norman A
Godsiff, Roger
Goggins, Paul
Gordon, Mrs Eileen
Griffiths, Nigel (Edinburgh S)
Grocott, Bruce
Grogan, John
Hain, Peter
Hall, Mike (Weaver Vale)
Hanson, David
Harman, Rt Hon Ms Harriet
Heal, Mrs Sylvia
Healey, John
Henderson, Ivan (Harwich)
Hepburn, Stephen
Hill, Keith
Hinchliffe, David
Hodge, Ms Margaret
Hoey, Kate
Hood, Jimmy
Hoon, Rt Hon Geoffrey
Hope, Phil
Howells, Dr Kim
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hurst, Alan
Hutton, John
Iddon, Dr Brian
Jackson, Ms Glenda (Hampstead)
Johnson, Alan (Hull W & Hessle)
Johnson, Miss Melanie
(Welwyn Hatfield)
Jones, Rt Hon Barry (Alyn)
Jones, Helen (Warrington N)
Jones, Ms Jenny
(Wolverh'ton SW)
Jones, Dr Lynne (Selly Oak)
Jones, Martyn (Clwyd S)
Jowell, Rt Hon Ms Tessa
Keen, Alan (Feltham & Heston)
Khabra, Piara S
Kilfoyle, Peter
Ladyman, Dr Stephen
Lawrence, Mrs Jackie
Lepper, David
Levitt, Tom
Liddell, Rt Hon Mrs Helen
Linton, Martin
Lloyd, Tony (Manchester C)
Llwyd, Elfyn
Love, Andrew
McAvoy, Thomas
McDonagh, Siobhain
Macdonald, Calum
McDonnell, John
McFall, John
McGuire, Mrs Anne
McIsaac, Shona
McKenna, Mrs Rosemary
Mackinlay, Andrew
McNamara, Kevin
MacShane, Denis
Mactaggart, Fiona
McWilliam, John
Mahon, Mrs Alice
Marsden, Paul (Shrewsbury)
Marshall, Jim (Leicester S)
Marshall-Andrews, Robert
Meacher, Rt Hon Michael
Michael, Rt Hon Alun
Milburn, Rt Hon Alan
Miller, Andrew
Moffatt, Laura
Moonie, Dr Lewis
Moran, Ms Margaret
Morgan, Ms Julie (Cardiff N)
Morley, Elliot
Morris, Rt Hon Ms Estelle
(B'ham Yardley)
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Naysmith, Dr Doug
Norris, Dan
O'Brien, Bill (Normanton)
O'Hara, Eddie
Olner, Bill
O'Neill, Martin
Organ, Mrs Diana
Osborne, Ms Sandra
Palmer, Dr Nick
Pearson, Ian
Perham, Ms Linda
Pickthall, Colin
Pike, Peter L
Plaskitt, James
Pollard, Kerry
Pond, Chris
Pound, Stephen
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Prescott, Rt Hon John
Primarolo, Dawn
Prosser, Gwyn
Purchase, Ken
Quin, Rt Hon Ms Joyce
Radice, Rt Hon Giles
Rammell, Bill
Rapson, Syd
Raynsford, Nick
Reed, Andrew (Loughborough)
Reid, Rt Hon Dr John (Hamilton N)
Roche, Mrs Barbara
Rooker, Rt Hon Jeff
Ross, Ernie (Dundee W)
Rowlands, Ted
Roy, Frank
Ruane, Chris
Ruddock, Joan
Ryan, Ms Joan
Sarwar, Mohammad
Sawford, Phil
Sedgemore, Brian
Sheerman, Barry
Simpson, Alan (Nottingham S)
Skinner, Dennis
Smith, Rt Hon Andrew (Oxford E)
Smith, Miss Geraldine
(Morecambe & Lunesdale)
Smith, Jacqui (Redditch)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent)
Snape, Peter
Soley, Clive
Spellar, John
Squire, Ms Rachel
Steinberg, Gerry
Stevenson, George
Stewart, David (Inverness E)
Stewart, Ian (Eccles)
Stoate, Dr Howard
Strang, Rt Hon Dr Gavin
Stuart, Ms Gisela
Taylor, Rt Hon Mrs Ann
Taylor, David (NW Leics)
Temple-Morris, Peter
Thomas, Gareth (Clwyd W)
Thomas, Simon (Ceredigion)
Timms, Stephen
Tipping, Paddy
Todd, Mark
Touhig, Don
Trickett, Jon
Turner, Dennis (Wolverh'ton SE)
Turner, Dr Desmond (Kemptown)
Turner, Dr George (NW Norfolk)
Twigg, Derek (Halton)
Tynan, Bill
Vis, Dr Rudi
Ward, Ms Claire
Welsh, Andrew
Wicks, Malcolm
Wigley, Rt Hon Dafydd
Williams, Rt Hon Alan
(Swansea W)
Williams, Mrs Betty (Conwy)
Wilson, Brian
Winnick, David
Wood, Mike
Worthington, Tony
Wray, James
Wright, Dr Tony (Cannock)

Tellers for the Ayes:

Mr. David Clelland and
Mr. Graham Allen.


Amess, David
Arbuthnot, Rt Hon James
Atkinson, Peter (Hexham)
Ballard, Jackie
Beith, Rt Hon A J
Bercow, John
Blunt, Crispin
Boswell, Tim
Brady, Graham
Brand, Dr Peter
Brazier, Julian
Brooke, Rt Hon Peter
Browning, Mrs Angela
Bruce, Ian (S Dorset)
Bruce, Malcolm (Gordon)
Burstow, Paul
Butterfill, John
Campbell, Rt Hon Menzies
(NE Fife)
Cash, William
Chapman, Sir Sydney
(Chipping Barnet)
Clappison, James
Collins, Tim
Cormack, Sir Patrick
Cran, James
Curry, Rt Hon David
Davey, Edward (Kingston)
Davies, Quentin (Grantham)
Davis, Rt Hon David (Haltemprice)
Dorrell, Rt Hon Stephen
Duncan Smith, Iain
Emery, Rt Hon Sir Peter
Faber, David
Fabricant, Michael
Flight, Howard
Forth, Rt Hon Eric
Fowler, Rt Hon Sir Norman
Fox, Dr Liam
Gale, Roger
Garnier, Edward
Gibb, Nick
Gill, Christopher
Gray, James
Green, Damian
Greenway, John
Grieve, Dominic
Hamilton, Rt Hon Sir Archie
Hammond, Philip
Harvey, Nick
Hawkins, Nick
Heald, Oliver
Heath, David (Somerton & Frome)
Heathcoat-Amory, Rt Hon David
Hogg, Rt Hon Douglas
Horam, John
Howard, Rt Hon Michael
Howarth, Gerald (Aldershot)
Jack, Rt Hon Michael
Jackson, Robert (Wantage)
Jenkin, Bernard
Key, Robert
King, Rt Hon Tom (Bridgwater)
Kirkbride, Miss Julie
Kirkwood, Archy
Lansley, Andrew
Leigh, Edward
Letwin, Oliver
Lewis, Dr Julian (New Forest E)
Livsey, Richard
Lloyd, Rt Hon Sir Peter (Fareham)
Loughton, Tim
Lyell, Rt Hon Sir Nicholas
McIntosh, Miss Anne
MacKay, Rt Hon Andrew
Maclean, Rt Hon David
Maclennan, Rt Hon Robert
Madel, Sir David
Malins, Humfrey
Maples, John
Maude, Rt Hon Francis
Mawhinney, Rt Hon Sir Brian
May, Mrs Theresa
Moss, Malcolm
Nicholls, Patrick
Norman, Archie
Ottaway, Richard
Page, Richard
Paice, James
Paterson, Owen
Pickles, Eric
Portillo, Rt Hon Michael
Robathan, Andrew
Robertson, Laurence
Rowe, Andrew (Faversham)
Russell, Bob (Colchester)
St Aubyn, Nick
Shephard, Rt Hon Mrs Gillian
Simpson, Keith (Mid-Norfolk)
Smith, Sir Robert (W Ab'd'ns)
Spicer, Sir Michael
Stanley, Rt Hon Sir John
Steen, Anthony
Swayne, Desmond
Syms, Robert
Tapsell, Sir Peter
Taylor, Ian (Esher & Walton)
Taylor, John M (Solihull)
Taylor, Matthew (Truro)
Taylor, Sir Teddy
Tredinnick, David
Trend, Michael
Tyler, Paul
Tyrie, Andrew
Waterson, Nigel
Webb, Steve
Whitney, Sir Raymond
Whittingdale, John
Widdecombe, Rt Hon Miss Ann
Willetts, David
Wilshire, David
Winterton, Mrs Ann (Congleton)
Winterton, Nicholas (Macclesfield)
Yeo, Tim
Young, Rt Hon Sir George

Tellers for the Noes:

Mrs. Eleanor Laing and
Mr. Peter Luff.

Question accordingly agreed to.

3 May 2000 : Column 259

Clause 102 ordered to stand part of the Bill.

3 May 2000 : Column 260

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