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Mr. Deputy Speaker: Order. Second Reading was moved formally.

Mr. Forth: What?

The Paymaster General (Dawn Primarolo): Further to the point of order raised by the hon. Member for Croydon, South (Mr. Ottaway), Mr. Deputy Speaker. The Division was called and I went into the Lobby. In the confusion, I was not here when the debate began, so the Government Whip moved Second Reading formally. I would be happy to speak now--or I could allow the hon. Member for Croydon, South to speak now and I could speak during the debate. Unfortunately, what happened was caused by the incompetence with which the Opposition called the Division.

Mr. Deputy Speaker: Order. In the confused circumstances that have arisen, the Bill has been moved formally and the hon. Member for Croydon, South (Mr. Ottaway) has begun his speech. It might make for better order if he were allowed to continue and the Minister's speech were to follow his.

Dawn Primarolo: Further to that point of order, Mr. Deputy Speaker. May I help the House? As I understand it, the hon. Gentleman offered to resume his seat and allow me to speak at this stage. I think that, if it would be in order, it would help the House to proceed through the debate--but I need to be guided by you.

Mr. Deputy Speaker: If there is general agreement in the House to that somewhat unusual procedure--I understand that there is--I shall call the Minister. It is to be hoped that the House will give its consent to the hon. Member for Croydon, South when he attempts to address it a second time.

8.31 pm

The Paymaster General (Dawn Primarolo): Thank you, Mr. Deputy Speaker. I also thank the hon. Member for Croydon, South (Mr. Ottaway) for being in the Chamber, rather than in the Division Lobby, at the appropriate time.

I am pleased to be opening, in a somewhat unconventional way, the Second Reading debate on the Bill, which rewrites our current legislation on capital allowances. This is the first Bill to be produced by the Inland Revenue tax law rewrite project--a long-term undertaking to modernise our direct tax legislation and make it clearer and easier to use.

As this is such a significant milestone in the work of the project, perhaps I may be permitted to say a few introductory words about it, before dealing with the Bill itself.

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The tax law rewrite project was set up in 1996 to rewrite all, or most, of the UK direct tax code--more than 6,000 pages of legislation, enacted over the past 200 years. That is no small task. Following extensive consultation by the Inland Revenue, the right hon. and learned Member for Rushcliffe (Mr. Clarke), in what proved to be his final Budget statement, announced that the project would proceed. Commending the undertaking to the House, he said:

I give all due credit to the right hon. and learned Gentleman for the vision and foresight that he showed in authorising the project--no doubt the right hon. Member for Fylde (Mr. Jack) also played his part in the Treasury ministerial team of the day. The project commanded our full support at the time, and now that we are responsible for its continuing progress, I am happy to confirm that we remain as fully committed to its success as they were.

The right hon. and learned Member for Rushcliffe showed rather less foresight in his prediction that the first rewrite Bill would be ready to enact in the 1997-98 Session. The task has proved even more difficult and complex than was predicted when it began. It is sufficient testimony to the importance that people everywhere attach to the project that, although its progress has been slower than was hoped, there is still widespread support for it, both in Parliament and throughout the UK tax community. This is because everyone recognises that it is vital that the work is done properly rather than quickly. Much has changed in the past four years, but the support for the tax law rewrite is a constant.

The main feature of the project can be summarised as follows: its aim is to restructure the existing legislation into a more logical order for its present purpose. It is not simply, as has sometimes been claimed, a plain English makeover. The restructuring is probably the main benefit of the rewrite process, and it is the main reason why the work is taking so long. However, the results of this painstaking process are enormously appreciated by tax professionals. As one leading figure in the tax world has commented:

That is no mean praise.

Other features of the rewrite process include shorter sentences, modern language, clearer signposts related to provision, more constant definitions, greater use of reader aids and helpful methods of showing the statements that are made in the Bill.

I have said this before, but I think that it is important to emphasise again that the remit of the project precludes any changes in the main tax policies. That issue has engaged the House's attention in the debates on the two preceding motions today. All members of the Joint Committee will surely be there to ensure that the rewrite does exactly that, and does not change main tax policies or question policy.

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There is general agreement among those who have been involved in the extensive consultation on this work that some minor changes in detail might be proposed where those will further improve the legislation. Examples of such changes are new provisions to fill in the gaps in the existing legislation, abolition of obsolete material, correction of minor anomalies and, as I mentioned in the previous debates, the inclusion of extra statutory concessions into the legislation.

Major changes to the body of our tax law will always be matters for the Finance Bill. However, there is a general consensus that such minor housekeeping matters as I have described can be proposed for these Bills, always provided that they are flagged up clearly in the consultation process so that people can consider them properly.

Mr. Peter Lilley (Hitchin and Harpenden): Could the Paymaster General define a little more clearly what constitutes a minor change in her view? Is it a change that affects only a few people or one that affects people only up to a certain quantum in their potential tax liability? Can she quantify how many people or what quantum of tax change might constitute "minor"?

Dawn Primarolo: This question came up in a previous debate this afternoon when the right hon. Gentleman was unable to be present. Ultimately, it is for the House to decide, in tidying up the legislation, whether an issue is minor. As has been pointed out by right hon. and hon. Members in the previous debates, what is considered minor by one person may not be considered so by another. However, the tax law rewrite project was asked to concentrate only on issues to remove legislation that was obsolete, to tidy up legislation where the use of slightly different language did not change the meaning but made it more accessible in terms of understanding and to deal with the extra statutory concessions that I have just mentioned.

Regardless of whether members of the Committee are Treasury Ministers, such as myself, or Back-Bench Members, they will need to ensure that the tax law rewrite simplifies the structure without removing or changing the underlying policy of the tax unless the House is satisfied, by a vote, when the report comes back from the Committee, that the changes are minor and assist the flow and understanding of the legislation but make no huge difference.

As a Minister, I take the view that it is for Finance Bills and Treasury Ministers to consider the underlying changes in policy and for debates to be held in the House; it is not for tax law rewrite committees to do that. Today's debates have shown clearly that every Member of the House also understands that point. Although the right hon. Member for Hitchin and Harpenden (Mr. Lilley) is not one of the House of Commons members of the Joint Committee, I am sure that, when the Bill comes back, he will cast his experienced and beady eye over the detail of those matters in which he considers there is some vulnerability so as to ensure that the House discusses them properly.

Mr. David Ruffley (Bury St. Edmunds): When the Joint Committee decides that a change is minor, will the hon. Lady tell the House by what means and in what

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manner the House will be able to scrutinise such a recommendation? Will it be debated on the Floor or elsewhere?

Dawn Primarolo: May I direct the hon. Gentleman to the explanatory notes that accompany the Bill? Annex 1 of the second volume lists the 66 changes that are considered minor; they either remove anomalies or tidy up the measure. The clause, line and, I think, the page numbers are given, so any Member--whether or not a member of the Committee--can address those issues. Certainly, when the Committee reports back, hon. Members will be able to make points on those changes.

It is most unusual for there to be two volumes of explanatory notes. They give an excellent history of capital allowances, and explain their purpose and structure, who benefits from them and their current intent. There is also a clause-by-clause explanation. The document identifies the 66 incidents of change, followed by a number of further helpful notes and explanations. It gives a thorough and clear explanation of the Bill that will go to the Joint Committee and then return to this place for consideration by hon. Members.

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