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Mr. Hogg: Is not the problem the fact that, if the House entrusts to a Committee the ability to change procedures and thereby to impose obligations on the citizen, we shall entrust to a Committee a role that should be reserved for the whole House? The House should set obligations and impose penalties.
Mr. Jack: My right hon. and learned Friend would be entirely correct if that were what the exercise was about, but it was not. The exercise was simply and straightforwardly intended to rewrite the existing law in plain and understandable English so far as is possible, given the technicalities of the tax code. We are considering the mechanism by which the House and the other place will be invited to review the fruits of that exercise.
Mr. Hogg: I understand what my right hon. Friend says. I am happy to agree with him, provided that the process does not go beyond that which he outlines. That is why I did not intervene in the Minister's speech. However, my right hon. Friend said that another exercise should exist in parallel. I understood him to say that that exercise would address the merits of any tax requirement with which the citizen had to comply.
Mr. Jack: As a member of the Committee that had the opportunity to listen to some of the remarks made by those who have been closely associated with the exercise, I can see that there are evolving ideas and concepts, which, if they were able to find their place in legislation, would go beyond the exercise of rewriting the tax code in plain English, but would further improve it. However, that is not what the House is invited to approve. I am merely saying to the Paymaster General that I hope that the present Administration will not lose sight of the fact that good ideas that have come out of the exercise are within the scope and purpose of existing tax legislation.
Indeed, ideas have come, for example, from the Institute of Chartered Accountants in England and Wales, which would like to go further in developing an exercise to simplify our tax code. The House is invited to approve a mechanism to make certain that the work of draftsmen and officials has been true to tax law.
Mr. Edward Davey: May I help the right hon. Gentleman and the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg)? If I understand the right hon. Gentleman correctly, he would like to extend the tax law rewrite project to other areas in order to develop some of the ideas. He is not suggesting that the procedure to which the House is asked to assent is the one that will be used to develop those ideas. Perhaps he would like to describe the procedure that he envisages for such development.
Mr. Jack: I entirely agree with the hon. Gentleman's intervention. If we have a chance to debate another Finance Bill before the election, the Paymaster General
might embrace the idea of developing some of the sensible ideas on, for example, the way in which pay-as-you-earn legislation operates--sensible, improving measures that do not fundamentally alter the PAYE legislation but make its operation even more effective than the one that will result in due course from the rewrite exercise.I do not want to detain the House unnecessarily, but it would be wrong if hon. Members did not put on record their appreciation of the efforts of my right hon. Friend Earl Howe for chairing the Committee and making progress on the exercise with incredible dedication and enthusiasm.
In response to a point raised by my hon. Friend the Member for Spelthorne (Mr. Wilshire), I reiterate that the exercise that we are asked to approve does not change in any way the present tax code. It merely invites the expertise of both Houses to approve that the new plain English law enacts the existing law in every respect, but in a more understandable linguistic form.
11.2 pm
Dawn Primarolo: I pay tribute to the right hon. Member for Fylde (Mr. Jack), who I know has been a keen enthusiast for the tax law rewrite project, both as a Minister in the previous Administration and as a member of the Steering Committee, on which he worked hard. I certainly underline strongly our appreciation of the dedicated work of all those involved with the tax law rewrite, particularly Lord Howe of Aberavon, who has a passion for driving through the legislation.
It is important for hon. Members to remember--I did not think that I would need to remind them given that the act was one of the last of the previous Government--that the project was required to look at rewriting the code, without alteration, so that it was more user-friendly, had a more logical structure, used shorter sentences, was more consistent in the use of definitions, used modern language, clearly signposted related provisions and grouped together similar laws. The project was told that there should be no change in the underlying tax system, although some minor, obvious changes could be made to tidy up legislation. They will be flagged up in the procedure, so that everybody is aware of where they are.
Full consultation with interested parties throughout the life of the project will continue, and a new streamlined parliamentary procedure for enactment of the rewrite Bills will be produced. That was provided for in Standing Order No. 60 and included provision for the Joint Committee, for the involvement of the other place, and for the structure that is similar to that of a Select Committee with all the powers that that entails. The provision recognises that the majority of the Committee's members will be from the House of Commons and that it will be chaired by a Member of this House. That will ensure that the clear interest that this House has in such matters is preserved.
Mr. Hogg: I am not against the proposals that the Paymaster General is outlining, but I want to be clear about one point. It appears to be common ground that the Committee will not be able to alter the substance of underlying tax law. Who will have the overarching role
of supervising the work of the Committee, so that we can be sure that the underlying tax law is not changed by the decisions taken by the Committee?
Dawn Primarolo: I will check that point, but my understanding is that the person appointed to chair the Committee will have the lead responsibility on how the Committee manages its business. It is important that parliamentary draftsmen and Ministers ensure that information is available to members of the Committee, so that they can satisfy themselves of the position. It is not an adversarial Committee structure. It seeks to use the expertise of both Houses, without duplication of procedure, to undertake what seemed to be the simple proposition of rewriting the tax code into--dare I say it--a more user-friendly form. The Committee will report to the House and the House will finally have to decide whether it agrees to a Bill. A double lock is in place.
I have covered the points about Members of the other House that were raised by the hon. Member for Spelthorne (Mr. Wilshire). If he examines what the Conservative party did when they were in government, he will see that there is a common thread. The procedure to be established is similar to that for consolidation Bills, and it was recommended by the Select Committee on Procedure in 1997.
The right hon. Member for Fylde and the hon. Member for Kingston and Surbiton (Mr. Davey) referred to simplification. That issue is outside the tax law rewrite requirements, but, in principle, I am sympathetic to their point. I have served on the Finance Bill Committee both in opposition and in government, and I am well aware of the arguments of professional tax bodies, such as the Institute of Chartered Accountants and the Chartered Institute of Taxation. Last month, this issue was the theme of the Hardman memorial lecture that was given by Lord Howe. It is important to acknowledge that pressure from tax professionals was the stimulus for the review in 1995 that led to the establishment of the tax law rewrite project.
However, the issue gives rise to difficult questions and there is no consensus on how tax simplification should be carried out or on what should be simplified. The rewrite project does not just simplify the tax code; it makes it much clearer and easier to understand.
The Government have taken steps on tax simplification. We included such measures in the Finance Act 2000, and the drafting of new elements of tax legislation and the phraseology that is used follow the example of the tax law rewrite. However, Members will know that such simplification is not always possible, particularly when such measures have to be cross-referenced with parts of the tax code that have existed for a long time.
Mr. Jack: Will the hon. Lady consider calling a half-day meeting, between now and the election, of all the interested parties, some of whom she has mentioned, at least to discuss with the Treasury and the Inland Revenue what is meant by tax simplification? They could then perhaps define the scope and scale of such an exercise.
Dawn Primarolo: I have already had such discussions with those organisations. The right hon. Gentleman will know from his experience as Financial Secretary that when a Minister seeks to defend revenue that does not arrive in the Treasury as planned by tax law because of
highly complex tax planning measures, responding to those complex proposals requires a complex solution. One of the big issues for us is anti-avoidance legislation, which all Governments have increasingly used.I hope, Mr. Deputy Speaker, that you will allow me to make a brief point that is slightly wide of the debate. The Government undertook consultation on a general anti-avoidance regulation. We offered the profession alternatives: a general regulation or the continuation of specifically targeted anti-avoidance measures. We went further and consulted on two solutions to a specific problem; one of those solutions was targeted and the other was a general regulation. The profession decided that it wanted to stick with the specific legislation. That has clear implications for the complexity of the tax code and the operation of the system.
Those issues go beyond the tax law rewrite but they are pertinent to the wider debate on the tax code. I am sure that the House will continue to debate those matters, not only in proceedings on finance Bills but in general finance debates. I say to the right hon. Gentleman that I am aware of those issues and I pay particular attention to them. However, as he will know, it is not always as simple to introduce a measure as it is to agree to it.
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