Standing Committee F
Thursday 2 March 2000
[Sir David Madel in the Chair]
Contributions in respect of benefits in kind: Great Britain
Amendment moved [this day]: No. 335, in page 60, line 30, leave out from `beginning' to `and' in line 31 and add `on 6th April of the year after the date of commencement of this Act, or, if the Act comes into force on various dates, the earliest of these dates,'.—[Mr. Pickles.]
The Chairman: I remind the Committee that with this we are taking the following amendments:
No. 336, page 60, line 34, leave out from `made' to end of line 36.
No. 342, in clause 59, page 63, line 35, leave out from `beginning' to `and' in line 36 and insert `on 6th April of the year after the date of commencement of this Act, or, if the Act comes into force on various dates, the earliest of these dates,'.
No. 343, in page 63, line 39, leave out from `made' to end of line 41.
Mr. Eric Pickles (Brentwood and Ongar): I was winding up.
The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): I am still amazed about that wallet.
Mr. Pickles: The hon. Member for Wallasey (Angela Eagle) mentions my wallet which is reasonably bulky but, as she can see, contains nothing.
Mr. Laurence Robertson (Tewkesbury): It may contain food vouchers.
Mr. Pickles: As my hon. Friend said, it might contain food vouchers, which I would use to buy fruit.
I was about to give the Under-Secretary time to reply this morning as I thought that we were going on until half-past 11. I remind Committee members that we were discussing when the provision comes into force. As I said, we fight a civil war on such matters to ensure that Bills do not introduce arbitrary taxation before they are enacted. I was hurt by the suggestion that Conservative Members are cavaliers, as I have always regarded myself as being on Cromwell's side. I have no doubt on what side I would have fought to get rid of those tyrants, the Stuarts.
Why is the provision being implemented before the Bill is enacted? Matters are not usually handled like that.
The Minister of State, Department of Social Security (Mr. Jeff Rooker): This morning, the hon. Member for Brentwood and Ongar (Mr. Pickles), referred to social security matters. However, in some respects, that is not an accurate description. For example, in speaking to the clauses, I am representing my right hon. Friend the Chancellor.
National insurance contributions are the exclusive concern of the Inland Revenue and are no longer a matter for the Department of Social Security. The Parliament Act 1911 prevents such matters being included in Finance Bills and we are not in the business of suggesting that it be amended. Therefore, there is a vehicle for implementing the Bill, which is essential to prevent a separate Bill from being introduced. However, the hon. Gentleman raised a perfectly legitimate point, as Royal Assent will be given to the Bill after 6 April, the date on which the provisions are intended to take effect.
This morning, I mentioned a document in an information pack sent to all employers. About 1.25 million such packs have been produced and the document clearly states that the national insurance provision is subject to the passage of the Bill, giving employers the chance to make preparations.
The crunch, however, comes in a related matter. The last Budget made provision for a series of changes to the national insurance system and we have produced a draft publication on that. The first returns are not required to be sent to the Revenue until July 2001. The provisions do not come into force until early April 2001 and there is full financial year to go before we reach that date. The deadline for submitting P11D is much earlier than that for the self assessment to which I referred this morning.
Business itself want us to align national insurance and tax as far as possible. We do not believe that the provision will cause problems for employers. I do not regard Bill's legislative proposals as being retrospective. Anyone who promotes retrospective proposals must be careful about what they are doing, and be sure of why they are doing it. Retrospectivity basically means announcing a change to what went on prior to any announcement ever having been made. These legislative proposals are not retrospective. They were announced last year. The Bill is now in its Committee stage and will become effective within the year. The necessary forms will not have to be completed until the end of the next financial year. Delaying for a further year would make a complete mess of other national insurance changes. Many of the details will be in regulations and must be operative from the beginning of the tax year; that cannot happen half way through. Consultation has taken place.
Mr. Pickles: I accept much of what the right hon. Gentleman says and understand the general effect. I am more concerned about the procedural and constitutional effect. With the Budget, there is a process of moving a series of resolutions to bring provisions into effect before the Finance Bill goes through the House. Is the right hon. Gentleman saying that that mechanism cannot be used for these items? If he is, will he explain why?
Mr. Rooker: That is a good question. It is not possible to use that mechanism, and I am unable to explain the reason. It has something to do with the Provisional Collection of Taxes Act 1968, under which the Chancellor of the Exchequer, when making announcements on the Budget, can bring in tax changes that day, usually at 6 pm. The authority for that comes from the 1968 Act. However, the Ways and Means Resolutions, all 40 or 50 of which are quite specific, are carried at the end of the Budget debate. I have served on only two Finance Bill Committees, and I cannot remember the technicalities. After the first, there was a bit of a gap before I was allowed to be a member of the second. I led for the Opposition on the latter, so I was back in favour. Also, Finance Bills usually are not given Royal Assent until the summer, by which time we are a quarter of the way through the financial year anyway, and if there are changes in say, personal allowances, over and above those already in place, they go back to the beginning of the financial year. No one ever complains about that. The nature of the beast that is the Finance Bill is such that, by and large, their lordships do not amend it. But the Provisional Collection of Taxes Act—the instrument that can give the Chancellor the power to bring in measures immediately, if he chooses to do so—does not cover national insurance contributions. That is one of the difficulties. These clauses are, in a way, in the Bill for reasons of parliamentary and legislative convenience. Treasury Ministers do not have another Bill around, and the clauses cannot go into the Finance Bill.
Mr. Pickles: The right hon. Gentleman is being honest and I am grateful for that. But we do not understand why this cannot be done by Ways and Means Resolutions, and we should like to know the reason. Perhaps the right hon. Gentleman will undertake to have someone write to us so that it is on the record.
Mr. Rooker: I am more than happy to do that. As a parliamentarian, I am uncomfortable about it. The Treasury knows that it has only one Bill each year, the Finance Bill, in which to deal with finance. On account of the changes that have been made whereby national insurance goes to the Treasury and into the Inland Revenue, different rules apply. The rules of procedure and Standing Orders are different, as are the rules for the Second Reading of a Finance Bill. The 10 o'clock rule does not apply. No changes are made in the House of Lords. The Treasury now has responsibility for these measures and changes for which there would not usually be a vehicle may be required from time to time. So in that respect there has to be a more satisfactory arrangement. I am happy to write to the hon. Gentleman and to other members of the Committee explaining why there is a difficulty and, I hope, what we will do in the future. There may not be a social security Bill every year, even if such changes are required. There must be a normal vehicle for these changes and if it is not a Finance Bill there must be another procedure that does not short-cut other scrutiny procedures.
Mr. Pickles: The right hon. Gentleman has been more than reasonable. We were considering dividing the Committee on the amendment because the matter is so important, but the Minister disarmed us. We ask that he is kind enough to impress on the parliamentary draftsmen that a proposal should be drafted as quickly as is reasonably possible because we want to be clear about it before Report.
Mr. Rooker: Yes, it will be produced before Report.
Mr. Pickles: On that basis, and on the clear evidence that the right hon. Gentleman is a member of the Cromwell appreciation society, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 57, as amended, ordered to stand part of the Bill.
Clause 58 ordered to stand part of the Bill.
Contributions in respect of benefits in kind: Northern Ireland
Amendments made: No. 318, in page 62, line 3, after `(2)' insert
`Subject to section 10ZA below,'.
No. 319, in page 62, line 48, at beginning insert
`any enactment contained in the Income Tax Acts'.—[Mr. Rooker.]
Clause 59, as amended, ordered to stand part of the Bill.
Clause 60 ordered to stand part of the Bill.
Clauses 63 to 64 ordered to stand part of the Bill.
Angela Eagle: I beg to move amendment No. 366, in page 97, line 10, column 3, at end insert—
`In section 17(1), the word ``and'' after paragraph (b).'
The Chairman: With this we may take Government amendments Nos. 367 and 368 to 370.