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Mr. Flight: Would the Minister agree that the market would assume that a company that did not avail itself of the special NIC option was pretty pessimistic about its future? However, might not there be some good practical reasons, which were not negative with regard to a company's prospects, to explain why a company had not availed itself of the option? The most obvious would be that a company wanted to make a substantial change among its executives, with the result that many options would lapse. Cash flow may also be relevant, so it is possible that a misleading signal could be given to the markets. The hon. Member for Workington (Mr. Campbell-Savours) is right to say that the information will appear in the accounts, but the news is likely to be in the markets beforehand.
Mr. Timms: The hon. Gentleman argues against his own point, as he said earlier that many interpretations could be placed on a company's decision not to avail itself of the opportunity provided by the Bill. For example, it might consider--reasonably enough--that many of the options would never be exercised, but that would not have anything to do with the company's future prospects. Because there could be so many reasons for a company not availing itself of the option, we need not fear that the market would interpret the decision in any particular way.
Mr. Campbell-Savours: Little things often go wrong. Has my hon. Friend the Minister consulted widely on the impact of possible events that have not been considered in the House today? Is he satisfied that he has considered all the relevant issues in detail, and that there is therefore no need to worry?
Mr. Timms: I have discussed the matters widely with many companies. I was accused a few minutes ago of taking too much notice of what people had said on the matter. I cannot give the House a categorical assurance that I have thought through every conceivable element of the Bill, and I am sure that there will be some fruitful discussions in Committee. However, I can assure my
hon. Friend that we have consulted widely, and talked to people specialising in the accounting treatment of the provisions of the Bill. I am reasonably satisfied that we will not run into unforeseen difficulties such as my hon. Friend quite rightly described.The hon. Member for Torridge and West Devon (Mr. Burnett) asked about would happen when a company chose to "indemnify"--as he put it--the payments made to an employee. Any payment from an employer to an employee is subject to tax and national insurance. The tax relief that will be offered is only the relief that I described--that is, for the amount of secondary national insurance contributions that the employee bears. However, if the employer takes back some of the liability--if he, for example, cancels some of it out--the employee will not pay further tax and national insurance on that. In other words, I consider that in the situation that the hon. Gentleman has described, there would not be what one would regard as an indemnity; rather, the employer would take back some of the liability, and if that happened the question of tax and national insurance would not arise.
We anticipate that as many as two thirds of eligible companies will choose to take advantage of the measure; we have already had expressions of interest from more than 50. The ability to settle the liability based on current values and remove future growth from the charge to national insurance will help many companies. I believe that it will be widely welcomed and I commend it to the House.
Question put, That the amendment be made--
The Committee divided: Ayes 117, Noes 280.
AYES
Amess, David
Arbuthnot, Rt Hon James
Atkinson, Peter (Hexham)
Baldry, Tony
Bercow, John
Beresford, Sir Paul
Blunt, Crispin
Boswell, Tim
Bottomley, Peter (Worthing W)
Brazier, Julian
Browning, Mrs Angela
Burns, Simon
Butterfill, John
Chope, Christopher
Clappison, James
Clark, Dr Michael (Rayleigh)
Clarke, Rt Hon Kenneth
(Rushcliffe)
Clifton-Brown, Geoffrey
Collins, Tim
Cormack, Sir Patrick
Cran, James
Davies, Quentin (Grantham)
Davis, Rt Hon David (Haltemprice)
Donaldson, Jeffrey
Duncan, Alan
Duncan Smith, Iain
Emery, Rt Hon Sir Peter
Evans, Nigel
Fabricant, Michael
Fallon, Michael
Flight, Howard
Forth, Rt Hon Eric
Fowler, Rt Hon Sir Norman
Fox, Dr Liam
Fraser, Christopher
Gale, Roger
Garnier, Edward
Gibb, Nick
Gill, Christopher
Green, Damian
Greenway, John
Grieve, Dominic
Gummer, Rt Hon John
Hague, Rt Hon William
Hamilton, Rt Hon Sir Archie
Hammond, Philip
Hawkins, Nick
Heald, Oliver
Heathcoat-Amory, Rt Hon David
Hogg, Rt Hon Douglas
Horam, John
Howard, Rt Hon Michael
Jack, Rt Hon Michael
Jenkin, Bernard
Key, Robert
Laing, Mrs Eleanor
Lait, Mrs Jacqui
Lansley, Andrew
Leigh, Edward
Lewis, Dr Julian (New Forest E)
Lidington, David
Lilley, Rt Hon Peter
Lloyd, Rt Hon Sir Peter (Fareham)
Loughton, Tim
Luff, Peter
Lyell, Rt Hon Sir Nicholas
MacGregor, Rt Hon John
McIntosh, Miss Anne
MacKay, Rt Hon Andrew
Maclean, Rt Hon David
McLoughlin, Patrick
Madel, Sir David
Malins, Humfrey
Maples, John
Mates, Michael
Maude, Rt Hon Francis
May, Mrs Theresa
Norman, Archie
O'Brien, Stephen (Eddisbury)
Ottaway, Richard
Page, Richard
Paice, James
Randall, John
Redwood, Rt Hon John
Robathan, Andrew
Robertson, Laurence (Tewk'b'ry)
Roe, Mrs Marion (Broxbourne)
Ross, William (E Lond'y)
Rowe, Andrew (Faversham)
Ruffley, David
St Aubyn, Nick
Sayeed, Jonathan
Shepherd, Richard
Simpson, Keith (Mid-Norfolk)
Smyth, Rev Martin (Belfast S)
Soames, Nicholas
Spelman, Mrs Caroline
Spicer, Sir Michael
Spring, Richard
Stanley, Rt Hon Sir John
Steen, Anthony
Swayne, Desmond
Syms, Robert
Tapsell, Sir Peter
Tredinnick, David
Trend, Michael
Tyrie, Andrew
Viggers, Peter
Walter, Robert
Waterson, Nigel
Wells, Bowen
Whitney, Sir Raymond
Whittingdale, John
Winterton, Mrs Ann (Congleton)
Winterton, Nicholas (Macclesfield)
Yeo, Tim
Young, Rt Hon Sir George
Tellers for the Ayes:
Mr. Stephen Day and
Mr. James Gray.
NOES
Abbott, Ms Diane
Ainger, Nick
Ainsworth, Robert (Cov'try NE)
Allan, Richard
Allen, Graham
Anderson, Rt Hon Donald
(Swansea E)
Anderson, Janet (Rossendale)
Armstrong, Rt Hon Ms Hilary
Ashdown, Rt Hon Paddy
Atherton, Ms Candy
Atkins, Charlotte
Bailey, Adrian
Bayley, Hugh
Beckett, Rt Hon Mrs Margaret
Beith, Rt Hon A J
Bell, Martin (Tatton)
Benn, Hilary (Leeds C)
Benn, Rt Hon Tony (Chesterfield)
Bennett, Andrew F
Benton, Joe
Berry, Roger
Best, Harold
Betts, Clive
Blackman, Liz
Boateng, Rt Hon Paul
Bradley, Keith (Withington)
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Brand, Dr Peter
Breed, Colin
Brinton, Mrs Helen
Brown, Russell (Dumfries)
Buck, Ms Karen
Burden, Richard
Burnett, John
Butler, Mrs Christine
Byers, Rt Hon Stephen
Cable, Dr Vincent
Campbell, Mrs Anne (C'bridge)
Campbell, Rt Hon Menzies
(NE Fife)
Campbell-Savours, Dale
Cann, Jamie
Caplin, Ivor
Casale, Roger
Caton, Martin
Cawsey, Ian
Chaytor, David
Chidgey, David
Clapham, Michael
Clark, Paul (Gillingham)
Clarke, Charles (Norwich S)
Clelland, David
Clwyd, Ann
Coaker, Vernon
Coffey, Ms Ann
Cohen, Harry
Colman, Tony
Connarty, Michael
Cooper, Yvette
Corbyn, Jeremy
Corston, Jean
Cotter, Brian
Cousins, Jim
Cranston, Ross
Crausby, David
Cummings, John
Cunningham, Jim (Cov'try S)
Dalyell, Tam
Darvill, Keith
Davey, Edward (Kingston)
Davey, Valerie (Bristol W)
Davidson, Ian
Davies, Rt Hon Denzil (Llanelli)
Dawson, Hilton
Denham, John
Dismore, Andrew
Dobbin, Jim
Dobson, Rt Hon Frank
Donohoe, Brian H
Doran, Frank
Dowd, Jim
Drew, David
Drown, Ms Julia
Dunwoody, Mrs Gwyneth
Eagle, Maria (L'pool Garston)
Edwards, Huw
Efford, Clive
Ellman, Mrs Louise
Ennis, Jeff
Fearn, Ronnie
Fitzpatrick, Jim
Fitzsimons, Mrs Lorna
Flint, Caroline
Foster, Rt Hon Derek
Foster, Don (Bath)
Foster, Michael Jabez (Hastings)
Foster, Michael J (Worcester)
Gapes, Mike
George, Andrew (St Ives)
George, Rt Hon Bruce (Walsall S)
Gerrard, Neil
Gibson, Dr Ian
Gilroy, Mrs Linda
Goggins, Paul
Griffiths, Win (Bridgend)
Grogan, John
Hain, Peter
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hamilton, Fabian (Leeds NE)
Hanson, David
Harvey, Nick
Healey, John
Heath, David (Somerton & Frome)
Henderson, Doug (Newcastle N)
Henderson, Ivan (Harwich)
Hendrick, Mark
Hepburn, Stephen
Heppell, John
Hewitt, Ms Patricia
Hill, Keith
Howells, Dr Kim
Hoyle, Lindsay
Hurst, Alan
Hutton, John
Iddon, Dr Brian
Illsley, Eric
Jackson, Ms Glenda (Hampstead)
Jackson, Helen (Hillsborough)
Jamieson, David
Jenkins, Brian
Johnson, Alan (Hull W & Hessle)
Jones, Rt Hon Barry (Alyn)
Jones, Mrs Fiona (Newark)
Jones, Helen (Warrington N)
Jones, Jon Owen (Cardiff C)
Jones, Dr Lynne (Selly Oak)
Jones, Nigel (Cheltenham)
Joyce, Eric
Keetch, Paul
Kelly, Ms Ruth
Kemp, Fraser
Kennedy, Jane (Wavertree)
Khabra, Piara S
Kidney, David
Kilfoyle, Peter
Kirkwood, Archy
Kumar, Dr Ashok
Ladyman, Dr Stephen
Lammy, David
Lawrence, Mrs Jackie
Laxton, Bob
Lepper, David
Leslie, Christopher
Levitt, Tom
Lewis, Ivan (Bury S)
Lewis, Terry (Worsley)
Linton, Martin
Livsey, Richard
Llwyd, Elfyn
Love, Andrew
McAvoy, Thomas
McCafferty, Ms Chris
McDonnell, John
McFall, John
McIsaac, Shona
Mackinlay, Andrew
McNulty, Tony
MacShane, Denis
McWalter, Tony
McWilliam, John
Mahon, Mrs Alice
Mallaber, Judy
Martlew, Eric
Maxton, John
Michie, Bill (Shef'ld Heeley)
Michie, Mrs Ray (Argyll & Bute)
Milburn, Rt Hon Alan
Miller, Andrew
Mitchell, Austin
Moffatt, Laura
Moore, Michael
Moran, Ms Margaret
Morgan, Alasdair (Galloway)
Morgan, Ms Julie (Cardiff N)
Mountford, Kali
Mudie, George
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Murphy, Rt Hon Paul (Torfaen)
Naysmith, Dr Doug
Oaten, Mark
O'Brien, Bill (Normanton)
Olner, Bill
O'Neill, Martin
Öpik, Lembit
Pearson, Ian
Perham, Ms Linda
Pickthall, Colin
Pike, Peter L
Plaskitt, James
Pond, Chris
Pope, Greg
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Primarolo, Dawn
Purchase, Ken
Raynsford, Nick
Rendel, David
Robertson, John
(Glasgow Anniesland)
Roche, Mrs Barbara
Rooker, Rt Hon Jeff
Rooney, Terry
Ross, Ernie (Dundee W)
Rowlands, Ted
Ruane, Chris
Ruddock, Joan
Russell, Bob (Colchester)
Russell, Ms Christine (Chester)
Sanders, Adrian
Sarwar, Mohammad
Savidge, Malcolm
Sedgemore, Brian
Shaw, Jonathan
Sheerman, Barry
Sheldon, Rt Hon Robert
Shipley, Ms Debra
Simpson, Alan (Nottingham S)
Singh, Marsha
Skinner, Dennis
Smith, Angela (Basildon)
Smith, Rt Hon Chris (Islington S)
Smith, Jacqui (Redditch)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent)
Smith, Sir Robert (W Ab'd'ns)
Snape, Peter
Soley, Clive
Southworth, Ms Helen
Spellar, John
Squire, Ms Rachel
Starkey, Dr Phyllis
Steinberg, Gerry
Stewart, David (Inverness E)
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stringer, Graham
Stuart, Ms Gisela
Stunell, Andrew
Taylor, Rt Hon Mrs Ann
(Dewsbury)
Taylor, David (NW Leics)
Taylor, Matthew (Truro)
Temple-Morris, Peter
Thomas, Gareth (Clwyd W)
Thomas, Gareth R (Harrow W)
Thomas, Simon (Ceredigion)
Timms, Stephen
Todd, Mark
Touhig, Don
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Dr George (NW Norfolk)
Turner, Neil (Wigan)
Tyler, Paul
Vaz, Keith
Wareing, Robert N
Watts, David
Webb, Steve
White, Brian
Whitehead, Dr Alan
Wicks, Malcolm
Williams, Rt Hon Alan
(Swansea W)
Williams, Alan W (E Carmarthen)
Williams, Mrs Betty (Conwy)
Wills, Michael
Winnick, David
Wood, Mike
Woolas, Phil
Worthington, Tony
Wright, Tony (Cannock)
Tellers for the Noes:
Mr. Kevin Hughes and
Mr. Gerry Sutcliffe.
Question accordingly negatived.
Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading):--
The House divided: Ayes 302, Noes 3.
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