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6.31 pm

Mr. John Redwood (Wokingham): I have declared my interests in the Register of Members' Interests, but I guess that that is not strictly relevant as we are assured that the intention of the proposal is not to change or affect the law.

There have been some diversions of opinion on the Opposition Benches, and I should like to pull those strands together. We are basically agreed. My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) thinks that the proposal could pose a substantial threat, but I hope that he will reflect on the matter a little. I believe that the Paymaster General is being honest when she says that the intention is not to change the law, that such changes would normally be made through a Finance Bill, and that the Government are trying to simplify the way in which the law is phrased without making serious tax changes. Although my right hon. Friend is understandably suspicious, because sometimes Governments do things about which they have not told us, he may be a little too worried. I suspect that the Minister is trying to keep the law as it is.

To reassure my right hon. Friend, I agree with my hon. Friends the Members for Buckingham (Mr. Bercow) and for Bury St. Edmunds (Mr. Ruffley) that, with a different

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Minister, the matter could be more serious. Inadvertently, I fear, even with this Paymaster General, we might find that we got into difficulty with the procedure, as my right hon. Friend so sensibly set out. There are many concerns and all sorts of worries.

Mr. Bercow: I hope that, despite his characteristic generosity of spirit, my right hon. Friend is not suggesting that the Paymaster General is safe and unthreatening.

Mr. Redwood: I was saying that, on this issue, I believe that the Paymaster General is speaking honestly and honourably, as a Member of this House should strive to do, but that we have on occasions felt rather misled by the Government. I do not think that the Minister has any intention to mislead us. The Government have been trying to come up with a system that might meet the cross-party spirit. We want to simplify our tax laws, but if the Government wanted to change tax rates, introduce more stealth taxes or do all the other things that the Paymaster General's boss, the Chancellor of the Exchequer, is so good at doing and has done on so many occasions, we would still want proper, robust debate and different procedure.

My main concern relates to the phrase in the motion

about which my right hon. Friend the Member for Bromley and Chislehurst is also concerned. Our tax laws are so wide-ranging, complicated and difficult to understand that the task before the Committee is herculean. The Minister must concede that substantial change in the way in which tax law is written will be required if the Committee is to fulfil its rather grand remit and not to disappoint or simply make matters complex in a way different from the complicated and Byzantine legislation that we inherit.

Dawn Primarolo: Just to clarify matters for the right hon. Gentleman, the Joint Committee will be checking that the tax law rewrite committee, which has already done all the work on simplification of the Capital Allowances Bill, has not changed the underlying policy of the law--in line with his comments and those of the right hon. Member for Bromley and Chislehurst (Mr. Forth).

Mr. Redwood: I quite agree; that is the point that I am trying to make. The task is difficult because the law is so complicated. I am sure that the Minister does not intend that the law will be changed as a result of the process, but the experts undertaking the rewrite and the Joint Committee, which is the eyes and ears of this House and the other place, may well find that almost impossible. Achieving the objective of simplification will require so many changes that it will be very difficult to ensure that the law is not changed.

My worry is about inadvertent change. Because we have extremely complicated legislation--Ministers will always say that that is for good reasons, but I am not sure that I am entirely persuaded of that--the job of determining it often falls to tax accountants, lawyers, experts and specialists. Very often, important issues are resolved not in the House of Commons but in courts of law. We know that lawyers, paid very large fees for their expertise, intelligence and high training in such fields, are very good on behalf of their clients at highlighting any slight shift in the weight of words, in punctuation or in the way in which a sentence appears in the overall text.

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It would be possible for the Joint Committee to nod through a Bill that had been drafted with the best of motives. The word of the law would then be slightly different--presumably, that is the whole point of the simplification exercise. The Government could be embarrassed by the courts construing a law revised under the procedure in a way that had not been expected. Far be it from me to want to protect the Government from embarrassment, but I want certainty and clarity in tax matters. Inadvertently, the House, the Joint Committee and the proposed procedure would have failed because a change in the law would have occurred.

Such inadvertent change would be even worse: as there had been no debate about changing the law, as is normal, and Ministers had not intended to change the incidence of tax, people would be without warning. They might not notice that anything important had changed; they might have said to themselves that they need not read the new version of the law because it implements exactly the same policy as the Budget or Finance Act they had previously studied. However, because the words had changed, there had been a court case and lawyers and a judge had construed the law differently, such people might suddenly discover an unexpected tax liability.

Mr. Jack: In preparing his remarks for the debate, my right hon. Friend will no doubt have looked at the Capital Allowances Bill, which the Committee is to consider, and come to his own conclusions. Will he give me an illustration of the concern that he thinks might cause difficulty for the Committee, as he has described?

Mr. Redwood: The point of my argument is no, I could not do so because we are talking about very complicated and detailed issues for which one needs to be a tax lawyer or specialist concentrating on such matters on behalf of one's client. Those who are paid big sums of money will of course look very carefully at a Bill such as the Capital Allowances Bill for evidence of any change. I am sure that my right hon. Friend is right that those drafting the Bill will have tried to avoid that, but he surely at least concedes the theoretical possibility that one day a change of words--he will agree that the words must be changed in order to simplify--could trigger such a court case, much expense and even a change in interpretation.

Mr. Burnett: Perhaps the right hon. Gentleman had in mind clause 153(1), concerning whether a ship is a qualifying ship or not. It is not if it is used "for sport or recreation". Perhaps a ship could be used partly for one and partly for the other. Might not that be the sort of discussion in the Joint Committee or the House?

Mr. Redwood: The hon. Gentleman makes a powerful point on which I had not alighted. The example he gives could be only one of many cases in which the form of words is changed from the underlying legislation to the new and allegedly more simple legislation. Wherever a change occurs, lawyers and accountants will pore over it, and although I happily accept that, in 99 per cent. of such cases, they will conclude--reluctantly--that, because the underlying intention is clear, they cannot bring a case or advise their client to pay good fees for bringing the change before the courts, there might be cases into which clever lawyers and accountants will probe and delve. We know that at times the courts construe tax legislation in a

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way that was not envisaged by the Ministers who originally introduced the legislation, with the result that, because not everything has been thought through in advance, the Government has to return to the House to tie up loose ends or amend the law yet again--

Madam Deputy Speaker: Order. Will the right hon. Gentleman confine his remarks to whether or not the Joint Committee should be established?

Mr. Redwood: I shall indeed, Madam Deputy Speaker. You are quite right.

I pass on to paragraph (2) of the motion, which states that


That reinforces my argument. In the motion, we see clearly envisaged a difficult task for the Committee. It will have to look at a complicated rewrite of the law and ask itself two crucial questions: is it more simple than it was before and, at the same time, is it exactly the same as it was before? My argument is that it will be difficult to meet both requirements. Paragraph (2) reveals that the Government accept, rightly, that the exercise will be difficult, long-winded and probably expensive.

When the Paymaster General rises to allay some of the fears expressed by my right hon. and hon. Friends and me, I hope that she will explain how long she thinks the process will take in relation to a Bill such as the one that we are shortly to discuss, and how much money might be spent on

It strikes me that that could be a fairly large budget item, because the Paymaster General must have in mind expenditure on extremely expensive tax lawyers and tax accountants. If, like my right hon. Friend the Member for Bromley and Chislehurst, we want to make sure that no slips occur, the Committee and the Government will need to employ lawyers and accountants who are every bit as sharp and as good as those who will be examining the issues from the other side.

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