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8.15 pm

How does Customs and Excise operate in relation to people who are part of the possibly taxable community? It presumes that those who are on its registers and who enter into its data should be taxed. If they turn out not to be paying tax, it will send out into the highways and byways experienced, powerful-minded individuals who will come to find out why they are not doing so. That is what is worrying me, as I expect the Financial Secretary knows.

Mr. Timms: Can the hon. Gentleman give any examples of taxes for which there is no register of taxpayers?

Mr. Letwin: As a matter of fact, I do not know whether there is a register of income tax payers. If the Financial Secretary's implication is correct, however, he is rather arguing my way. If the point of registers is to tax people, and if registers are generally attached to taxes, his accusation that I was making an elision in supposing that inclusion on the register related to paying tax is false. If he is correct that taxes are generally accompanied by registers, I am right to suggest that inclusion on a register is generally accompanied by taxation. That is the point of being on a register. The point about a person being expected to be taxed is that Customs and Excise will presume that that person should be paying tax. If a person should be paying tax, Customs and Excise will come down like a ton of bricks if he or she is not doing so.

I shall return to Mr. Jones, who is doing his stone cutting and appears to the commissioners to be somebody who intends to do something that might be taxable, poor man, but then turns out not to produce any product that he recognises to be an aggregate. He is not doing anything that he recognises as commercially exploiting a material, but he will be visited by Customs and Excise, which will ask why no tax is being paid. Instead of cutting stone, Mr. Jones will be involved in weeks or months of intensive negotiation with various levels of Customs and Excise. Not least, he will perhaps eventually be involved with the commissioners, who do not even have to respond to him. If they do not do so, they are taken to have judged against him--a point to which we shall return later. The process will be a huge intrusion.

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If none of that is true, and the Government do not intend to create circumstances in which there is a presumption of guilt--an assumption that people should be taxable once they are on the register--I do not see the need for the register. The Financial Secretary has not explained that need, unless the register is an attempt to create a presumption that somebody who is included on it should be paying the tax, so that the bureaucracy can visit, inspect and pursue. Of course, that is fine with regard to people who are genuinely liable for tax because they are carrying out the activities in question. However, introducing arrangements for somebody who merely appears to the commissioners to intend to carry out such activities seems part of a slippery slope towards an unintended tyranny.

Mr. Timms: I must respond to the hon. Gentleman's remarks, even though they were expressed in a somewhat amusing tone.

Of course, somebody who is included on the register can be issued with an assessment for tax, if that person is making taxable supplies. That is the purpose of the register. If the individual does not need to be registered, he can inform us of that fact. If Customs and Excise is satisfied that he is not commercially exploiting aggregates and does not intend to do so, he will be deregistered. That is extremely straightforward and conventional, and I think that the hon. Gentleman's concerns about slippery slopes to tyranny can be set to one side.

Question put and agreed to.

Clause 24 ordered to stand part of the Bill.

Schedule 4

Aggregates levy: registration

Question proposed, That this schedule be the Fourth schedule to the Bill.

Mr. Ottaway: I shall make only a couple of points about the schedule. My hon. Friend the Member for West Dorset (Mr. Letwin) brilliantly exposed the flaws and weaknesses in the introduction of the register. The first few lines of the schedule, which are at the heart of the matter, state:

"An unregistered person who . . . has formed the intention of carrying out the taxable activities . . . shall notify the Commissioners of that fact."

My hon. Friend ruthlessly exposed the flaws in the use of the word "intention". Whose intention is required? The schedule refers to an "unregistered person", but who decides what the intention is? The Financial Secretary rightly looks puzzled, as this is a serious question. However, as any lawyer in his first year of law will know, the question concerns the difference between mens rea and actus reus--the difference between "Does he have the intent?" and "Is he deemed to have had the intent?" The Minister laughs, but I shall provide an analogy from criminal law. If a man sets out to kill someone, that is classed as mens rea, and he is charged with murder. However, if a man drives a car dangerously and accidentally kills someone, that is manslaughter, and is classed as actus reus. That is a fundamental principle of law.

Let us relate that to the aggregates levy. The question of intention is fundamental because the schedule provides for substantial fines. Someone can be fined up to 5 per

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cent. of the relevant levy. However, let us consider the other end of the spectrum. The Financial Secretary said that there was no de minimis provision--no minimum tonnage to qualify for the levy. Yet there is a minimum fine of £250. If aggregates are £12.50 a tonne, that fine applies to anyone who produces 20 tonnes of aggregates, which would probably be approximately the size of the Table before us. That is not much; as a by-product, it is insignificant.

Someone who produces something that is not taxable, but has a by-product, may have no intention of evading the aggregates levy. There may be a little mound of some substance around the place that makes him liable for a fine. I assume that that attracts a criminal record. The amount is not great, and the Financial Secretary is right to smile. However, there is an important point about intention; its determination is important.

My hon. Friends may wish to raise other points, but I want to discuss only one further matter, which relates to the Data Protection Act 1998. The schedule gives commissioners the power to publish specific information from the register. The interaction with the Data Protection Act is serious and could involve criminal activity. The commissioners could be guilty of that unless their actions complied with the Act. It would therefore be helpful if the Financial Secretary could give some idea of the way in which the information will be published, and deal with the serious points about criminality and intention.

Mr. Tyrie: I want to concentrate on paragraph 7, which is entitled "Publication of information on the register". Following the comments of my hon. Friend the Member for Croydon, South (Mr. Ottaway), it is interesting that sub-paragraph (3) states:

"Information may be published in accordance with this paragraph notwithstanding any obligation not to disclose the information that would otherwise apply."

I presume that that is a waiver of the Data Protection Act 1998. If not, I should like to know what it means.

I shall comment on some of the points that my hon. Friend the Member for West Dorset (Mr. Letwin) made about the reason for the register. I agree that perhaps the tax deserves a register, but I am not convinced that it needs to be published. I should be grateful if the Financial Secretary explained the reason for its publication. I understand the reason for a register of companies, and why the public should be able to consult it. I notice that the Financial Secretary feels the need for some advice, and I look forward to hearing it; I shall keep going for long enough for him to receive it. Is the VAT register publicly available as a consultable document? I do not know the answer. Clearly, there should be a VAT register, but is it publicly consultable? Does Customs and Excise have the discretionary power to publish information on it? Do clause 24 and schedule 4 thus follow precedent?

What information should be published? Paragraph 7 states that the commissioners

"may publish . . . any information which--


(a) is derived from the register; and


(b) falls within any of the descriptions set out below."

In other words, the commissioners may publish only information that falls into both categories. Is that interpretation correct, or may they publish any information derived from the register, with (b) as an additional clarification? What is the limiting factor on the amount of information that may be published?

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Why is the power to publish discretionary? The wording makes it clear that that is the case. Paragraph 7 states:

"The Commissioners may publish, by such means as they think fit, any information",

and so on. If some information is to be in the public domain, would not it be sensible to establish what information is to be placed there, provide a list and state that that will be done at a given time--perhaps once a year, or more frequently on the internet?

I do not follow the logic of the provision. As in so many measures introduced by the Government--and, occasionally, by previous Conservative Governments--the provision is unnecessarily wide. It grants a huge amount of power to the commissioners. I should be grateful if the Financial Secretary answered my points. Why do the commissioners need to publish? Why not list the information that is to be published? Why not remove the discretion from the commissioners? Does the provision follow a precedent set by the VAT register and others?

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