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Mr. Edward Davey: I shall be brief. As the hon. Member for Croydon, South (Mr. Ottaway) said, the administration of the register could give rise to costs as it is set up and rolled out. I understand that a compliance cost assessment has been made. What are the costs estimated to be? Although there is a great deal of detail about who is to registered, how they will be registered and how the commissioners should keep such information, the commissioners are not obliged to minimise the compliance costs on the industry and are given a fairly free hand in going about the registration process. How do the Minister and his Department intend to keep the administration costs that will be imposed on business to the minimum necessary to collect the levy?
Clause 18 is relevant in determining whether someone should be registered under clause 24(2)(a). Let us take the example of a sole trader who is principally engaged in an exempt process, such as rock cutting, to produce what is described in clause 18(2)(a) as "dimension stone". If I have correctly understood the enormously intricate articulation of clauses 17 and 18, that is not, according to clause 18(2), a taxable activity. A person engaged in that activity would not be caught by clause 24(2)(a) and thus would not have to register. However, if the exempt process produces what is described in clause 18(1)(a) as
My second concern relates to value added tax legislation. Much of what we are about to consider in laborious detail is a set of standard clauses derived from such legislation. No doubt the Government will recognise that. Alas, the clauses are nastier forms of the standard, which in itself is nasty. Both governing parties must take joint responsibility, over the past half century, for that. VAT legislation is an abomination to mankind. I take no pride in being a member of a party that played its role in that. However, this Government have done nothing to remedy the problem; instead, they have made it worse.
Clause 24(6) proposes something that is worse than most other measures in similar legislation. No doubt if the Minister reflects on it, he will agree that it is intolerable. I have just exposed the genuine doubt of Mr. Jones who does not know whether he is conducting a taxable activity. However, we learn in subsection (6) that
Mr. Jones has not even got to the stage of setting up his business; much less has he produced the dust that may or may not be weighable--the Minister was unable to tell us--as a spoil, waste, off-cut or other by-product captured by clause 18(1)(a). There is no dust or stone on the premises; there is only Mr. Jones on the premises. However, he made the mistake of trying to raise money for his business by issuing a prospectus to various of his friends suggesting that they join him in his venture. For all I know, and for all the Minister knows, it may appear to the commissioners that Mr. Jones intends to operate the premises for the purpose of producing a taxable substance, but that is not the purpose at all. The purpose is to produce, by an exempt process, an item that is not taxable--but the by-product is taxable because the Minister's drafting seems to make it so. I do not know whether or not it is taxable because I cannot really understand the Bill, and I do not suppose that the Minister can either. In any case, it may be that the Bill makes the dust taxable--hence it presumably appears to the commissioners to constitute Mr. Jones's intention to operate or use premises for winning aggregate.
We have reached the limits. I understand that Customs and Excise is, thank God, run by British civil servants, who are, on the whole, reasonable people. On the whole, therefore, they will probably administer this appalling, tyrannical legislation in a rather less than appalling and
I do not suppose that politicians in the Treasury today have any more intention of producing such legislation than they ever did, but someone has come up with this wonderful drafting. No doubt it was drawn from some obscure part of the arcana imperii of VAT legislation or, for all I know, the legislation on the landfill tax. The Minister thinks that he can taunt me about that tax, but I intend to disillusion him on that point. I was not in Parliament to vote for the landfill tax and I would not have voted for it if I had been. The landfill tax stands as a token of only one thing--the Minister's mythology when he says that these measures are fiscally neutral. He is the representative of a Government who raised the landfill tax without raising national insurance contributions. Whatever the origins of this provision, Conservative or Labour, and whether it is intended for long-term or short-term misuse, I care not--it is wrong and indefensible and it ought not to be in the Bill.
I do not see how subsection (6) combines with subsection (8) to produce anything other than the most unholy and arbitrary mess. I may be wrong about that. There may be a long tradition of such statutory construction in other Finance Acts. The Financial Secretary may be able to explain to us how a definitive boundary, established on the basis of an intention as it appears to the commissioners, but which is not yet represented by an actuality of production, can nevertheless be treated by the courts as a reasonable proposition. My mind boggles at that, but it may be the case, and I look forward to hearing from the Financial Secretary how subsection (8) will interact with subsection (6).
Mr. Timms: The clause sets out the requirement to register for the aggregates levy. It brings into effect schedule 4, which in turn gives further detail on the required procedures and conditions. A business has to register if it is responsible for the "commercial
Some businesses are not necessarily concerned with extracting and supplying aggregates to the construction industry, but supply other industries such as glass making or metallurgy. The Bill will assist those businesses where possible by exempting them from registration and minimising the administrative burden. The hon. Member for Kingston and Surbiton (Mr. Davey) asked whether that would be the case, and I can certainly give him that assurance. Those companies will need to demonstrate that they do not supply or otherwise exploit any aggregate for a purpose that is neither exempted nor relieved.
Customs and Excise is given powers to decide the boundaries of any premises for registration purposes to safeguard against avoidance of the levy by businesses that might otherwise locate taxable activity outside previously agreed boundaries. The hon. Member for Croydon, South (Mr. Ottaway) asked several questions about how that will work. What is being described is very much the core, day-to-day activity of Customs; it is the sort of activity in which it excels. I agree with the hon. Member for West Dorset (Mr. Letwin) about the quality of civil servants in the UK. There is nothing qualitatively new about what is required of Customs in the Bill. It is merely the circumstances that are different.
The obligation is on the taxpayer to register. There is not a de minimis level, but certain activities are exempt. If there were a de minimis level, the environmental cost of extraction would not be addressed equally by all businesses and the levy could be considered unfair, as I pointed out earlier. Everything set out in the clause is workable and straightforward. It presents no novel or insuperable difficulties for Customs and Excise.