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10.14 pm
Mr. Kenneth Clarke: I have just cast my vote in protest against the Government's insistence that the Bill be debated at this late hour. I regret that the House's family-friendly policies do not extend to those of us who are interested in the rewrite of tax law.
I was about to answer an intervention made by my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg), who asked whether we had addressed the changes. I shall return to the matter a little later in my speech, but I want to make it clear that, although the Joint Committee scrutinised the Bill as a whole--that was our task--we concentrated on two particular issues. The first was whether the drafting was an improvement on the drafting of the existing law--whether it clarified the meaning of the law to an intelligent user of the measure. Secondly, we addressed ourselves to the changes to tax law that were, on the
instructions of the House, intended to be only minor and necessary for the clarification of that law. As the report of the Joint Committee makes clear, we were indeed so satisfied--
Mr. Clarke: Before my hon. Friend starts to press me on the details--he probably wants to make an urgent point on dredging allowances in his own contribution--I should like to make a little progress. Before we deal with the details and with the comments on procedure made by my hon. Friend the Member for Croydon, South, I want to explain the purpose of the legislation and the task that the House asked the Joint Committee to undertake when it embarked on that entirely novel procedure.
The purpose of the legislation was to make tax law in this country more user-friendly. I shall not dwell on the origins of the process, but they go back to 1995--a time when Finance Bills were getting longer and longer, and complaints from Members of the House about the incomprehensibility of the legislation were getting louder and louder--
Mr. Bercow: On a point of order, Mr. Speaker. My right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) is delivering an intriguing message, which is, or should be, of interest to all right hon. and hon. Members, but there is such a hubbub that I fear many of them are missing it. Will you rule?
Mr. Speaker: I can hear the right hon. and learned Gentleman. As long as the Speaker can hear, that is fine.
Mr. Clarke: Thank you, Mr. Speaker. Hon. Members at the Bar are making the quietest hubbub that I have heard for a long time. No doubt their attention will be drawn when my hon. Friend the Member for Buckingham speaks--[Hon. Members: "We cannot wait."]
Like my right hon. Friend the Member for North-West Hampshire (Sir G. Young), the then Financial Secretary, and junior Treasury Ministers, I was particularly impressed by the fact that complaints about the length and incomprehensibility of Finance Bills were received not only from Members of the House but from accountants, tax lawyers and users of the legislation. They, too, said that they did not understand its drafting.
There is a fond belief that lawyers and accountants welcome complications in the law because that makes for litigation and disputes and thus a higher income for members of their professions. However, that is not my experience of the best practitioners. Hon. Members will find that the best practitioners in accountancy, at the tax Bar and generally among tax lawyers, welcome the chance to be able to advise their clients clearly about the effects of changes in tax law and about the intentions of Parliament.
By the mid-1990s, we had reached the stage of being in danger of expressing ourselves in a way that was quite incomprehensible and that caused considerable confusion for users of the legislation. When we set up the tax law rewrite project, with the aim of making the law clearer and easier to use for those who needed to do so, it received a general welcome. I shall not repeat the tributes that were made, although I am grateful to those who took up the cudgels.
It was easy to set the process in motion, but I pay a special tribute to my noble Friend Lord Howe of Aberavon, who became an enthusiast for the project, based largely on his experience as a former Chancellor of the Exchequer. He took on the chairmanship of the steering committee and helped to devise the procedure that the House now follows to enable the simplification to be delivered by means of a reasonable process. The procedure is based on a precedent established for a 1952 Customs and Excise measure, but we found that it had been adequately refined. I also pay tribute to the director of the project team, Mr. Neil Munro, and to his team, who put years of effort into the production of the project.
When we started the tax law rewrite project, we underestimated how long it would take. I fear that I am on record somewhere as stating that the entire Inland Revenue law would be rewritten in five years so that we could start to deal with a comprehensive body of law. More than five years later, all we have is the Capital Allowances Bill. There is far more to come; capital allowances represent the first discrete block of provisions on which the tax law project team has worked.
That leads me to deal with the process in a way that answers the understandable concerns of my hon. Friend the Member for Croydon, South, who served on the Committee. He is a Treasury Front-Bench spokesman, and I pay tribute to him for the diligence with which he persisted in scrutinising the Bill. As he says, he was sometimes in a minority of one, but I hope that he accepts that he was treated with considerable courtesy and respect when he suggested how we should handle such matters.
My hon. Friend was in a minority of one, which shows that he was unable to persuade me that we needed to take expert evidence; nor was he able to persuade any Member of either House from any party that we needed to do so. However, that is not to say that he did not maintain a very stout argument to that effect and occupied a considerable time during our first sitting's informal and unreported proceedings--[Hon. Members: "Oh."] I, too, was concerned about the fact that the proceedings were unreported. We had a discussion about that and we were enjoined to follow Select Committee procedures.
I have never been a member of a Select Committee, although I have often been a witness before one. I am told that Select Committees frequently debate matters in private, without the presence of Hansard, and throw their proceedings open to the public when witnesses appear. The Committee persuaded me that we should follow that procedure. I can say only that, in private, my hon. Friend the Member for Croydon, South did indeed argue at some length about whether we should have an independent outside witness, but for several reasons, he was unable to persuade any of us that that was necessary.
In my opinion, the main reason was the very nature of the process that had been used for the previous five years. We often talk about the desirability of consulting on proposed legislation. I do not think that any measure before the House has been consulted on as copiously as the Bill. For five years, the steering committee and the consultative committee have conducted a long process of consulting every interested body in the country.
All the professional bodies, any practitioner who wanted to make representations and any interested business man were given the opportunity to respond to suggestions on how the law might be simplified. Indeed,
several draft Bills were given wider exposure and issued for consultation. They were commented on and the comments were responded to by the project team. The process was meant to be consensual and bipartisan, so the project team embarked on no serious controversy if any outside body was prepared to start to get into a ditch to resist any proposal.
Mr. Hogg: My right hon. and learned Friend is being very generous with his time in giving way again. He has told the House that the Committee pursued practices adopted by Select Committees. He will know that Select Committees usually--perhaps always--receive advice from their advisers. In this case, why was it not thought appropriate for the Committee to have advisers to give an independent view?
Mr. Clarke: I am aware that that is the usual practice, but I do not think that there is any requirement to have an independent adviser. When I was a Minister, I was known to complain that I faced Select Committees that appeared to allow their entire reports to be written by their supposedly independent advisers. I am sure that the Minister does not agree with that at all. That practice was not always wholly desirable, but we considered it because my hon. Friend the Member for Croydon, South pressed us to do so.
The problem is that it would have been extremely difficult to find an outside practitioner who had not participated in the consultation process or had not had the opportunity to do so. The list of the bodies that were consulted and the committees formed by the Law Society and chartered accountancy bodies was so copious that almost every interested practitioner had plenty of time to participate. We would have had to comb the country to find someone who had not had a hand in the process.
Our only option would have been to find someone who had no interest in the subject, but who was welcome to receive the substantial fees that would, no doubt, have been required to enable a new lawyer or accountant to get up to speed on five years of work and every feature of the capital allowances tax law so that he was in a position to give us advice. My hon. Friend the Member for Croydon, South will recall that it was argued that any decent practitioner--if we could find one who was new to the process--would require months to get up to speed with the process that had ground everything exceedingly small for the previous five years, although I would not have begrudged that person those substantial fees.
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