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Mr. Timms: I do not understand the difficulty with paragraph 1, which is clear. If the individual does not intend to sell the aggregate, he is not required to register. If he intends to sell, he should register. That seems straightforward to me. I do not share the difficulty that the hon. Member for Croydon, South (Mr. Ottaway) has with that.
Now let me deal with some of the other points. The names and business addresses of people who exploit aggregates commercially are already in the public domain. I refer to the statutory declaration that is already required. Customs and Excise will produce a consolidated list of those people whose details are already available, which should not give rise to any alarm.
8.30 pm
Mr. Letwin: Perhaps what the Financial Secretary has just said shows that I have entirely failed to understand the articulation of clause 19. Certainly either I have done so, or he has. Clause 19(1)(a) seems to make it clear to the ordinary reader that a quantity of aggregate is subjected to exploitation if
- "it is removed from a site falling within subsection (2)".
- "the originating site of the aggregate".
Mr. Timms: The position is as set out in clause 19. Normally, commercial exploitation will involve selling. There might be occasions on which that is not the case, but normally it will be.
Mr. Letwin: That really will not do. This is not some sort of general discussion about how to run a kindergarten. This is the law of the land, and if the Bill becomes law, it will say that a quantity of aggregate that is removed from a site is, ipso facto, commercially exploited. If it is thereby commercially exploited, it is prima facie the case
that if someone intends to cut rock to make dimension stone, with a by-product that he never expected but which, nevertheless, exists under the definition of aggregate, and he removes it from the site simply to rid himself of the stuff, he is commercially exploiting it. That is not what the Financial Secretary said, and I do not think that it is what he intends to achieve. The problem of intention here is the mismatch between the Financial Secretary's intention and the words of the Bill.
Mr. Timms: The circumstances that the hon. Gentleman is seeking to construct, in which some unfairness would be perpetrated as a result of the measure, do not exist. Clause 19 sets out what constitutes commercial exploitation, and that is the way in which Customs and Excise will apply the requirements.
The reason why a register is needed is that customers of those in the aggregate industry have a right to know whether the person supplying aggregate to them--and possibly increasing the price accordingly--is registered for the purposes of the levy. Even without that provision, they would be able to ask Customs and Excise whether a particular person was registered, and Customs and Excise would tell them. That is the position that currently applies with the landfill tax, which, even if it was not supported by the shadow Chief Secretary, was introduced by the previous Government.
The time and manner of notification, and the information contained in it, will be prescribed in the regulations and will also be set out in a public notice prior to the commencement date. I say to the hon. Member for Chichester (Mr. Tyrie) that that is an entirely conventional procedure, exactly following those relating to the landfill tax. Indeed, a large part of the wording in the schedule and in the other technical parts of the measure is taken word for word from the measures that deal with the landfill tax.
Mr. Tyrie: Perhaps some mistakes were made in the drafting of the landfill tax legislation--who knows? I do not know, because I was not around. Before the Minister finishes, will he answer the questions that I asked? Why has a discretionary power been given, rather than an order to publish the lists, if the reason given is that customers need to consult the lists to ensure that they are dealing with bona fide suppliers? Are there Data Protection Act implications, and does paragraph 3 act as a waiver to that Act? Why are we not setting out in the Bill what information is to be provided, rather than allowing the commissioners to make up their own minds what information to put into the public domain?
Mr. Timms: As I said earlier, much of the wording in the schedule was taken from the legislation dealing with the landfill tax. I imagine that similar circumstances will almost certainly apply in this instance, although I will check that and drop the hon. Gentleman a line addressing that point and the others that he has raised.
Let me say a little more about commercial exploitation, because some misunderstanding may be creeping in here. As the hon. Member for West Dorset (Mr. Letwin) said, clause 19(1) says that aggregate is subjected to exploitation if it is removed from a site. However, aggregate is commercially exploited only if the conditions in clause 19(3), too, are met. In all those circumstances a
person might be registrable, but if it is clear that no tax will be due, despite all that, Customs and Excise will not need to include the individual on the register.
Mr. Letwin: I am afraid that that does not answer the question either. The Financial Secretary should look at clause 19(3). Incidentally, it is not clear whether paragraphs (a), (b), (c), (d) and (e) are, as it were, exclusive, but I assume that there is, in conceptual terms, an "or" after each paragraph. There is neither an "and" nor an "or" in my text.
Mr. Timms: In fact, there is an "and" at the end of paragraph (d).
Mr. Letwin: Indeed there is. Perhaps this is helpful. Is the Financial Secretary telling us that commercial exploitation of something that is exploited under clause 19(1) occurs only if all the conditions in paragraphs (a), (b), (c), (d) and (e) of subsection (3) apply simultaneously?
Mr. Letwin: That is genuinely helpful.
Clause 25 ordered to stand part of the Bill.
Clause 26
Question proposed, That the clause stand part of the Bill.
Mr. Letwin: I am sorry that we must return to some of the debate we have just had, but I am glad that we are doing so in that, following the Financial Secretary's helpful clarification, it is clear to me--after another look at clause 19(3)--that my point has not been answered.
Clause 26 reveals the next feature of the scene. Subsection (1) tells us that a person who is registered may be required by the commissioners to give security. It is not just that my poor Mr. Jones has to appear on the register. It is not just that--as was pointed out by my hon. Friend the Member for Croydon, South (Mr. Ottaway)--if he does not make the right noises, attract the attention of Customs and Excise and find himself on the register, he may pay a fine that may be 5 per cent. of what would have been his levy, or £250 if that is the lesser sum. It is not just that Customs and Excise can visit him, inspect him and presume him to be guilty--to be someone who should be paying tax, but is not. He can be required to give security: to lend Customs and Excise money, so to speak. That is the next purpose of his being on the register.
We discover from line 14, the second line of clause 26(1), that a person does not need to be on the register to be required to give security; he can simply be "required to be registered". Whoever drafted the clause had very much in mind precisely the case of my Mr. Jones. We are talking about someone who, it appeared to the commissioners, had the intention--who had not thought himself that he had the intention, and had not asked to be on the register, but has been required to be registered and must now give security.
We return to the question of what intention this person must appear to the commissioners to have had in order to find himself in the invidious position of being presumed guilty, inspected, fined if he does not go on to the register and, under clause 26, required to give security. The answer is that he must have had the intention of exploiting commercially. The Financial Secretary thought that he had found a way out of that by explaining--very helpfully--that, under clause 19(3), to be commercially exploiting, someone who is exploiting under clause 19(1), whose definitions of exploitation include simply removing aggregate from a site, must simultaneously fulfil the conditions of paragraphs (a), (b), (c), (d) and (e) of subsection (3).
Let us have a look at those paragraphs. Is any of them, in layman's terms, a normal measure of exploitation--or, to put it another way, selling? That is the word that the Financial Secretary used--incautiously, because it betrayed his real intention, which, unlike the clause, was perfectly rational. The answer is no.
Let us look at subsection (3)(a). It is commercial exploitation if, as part of the phenomenon, the thing in question
- "is subjected to exploitation in the course or furtherance of a business".
- "the exploitation to which"
- "is subjected does not consist in its removal from one registered site to another".
- "does not consist in or require its removal to a registered site".
- "consist in or require its removal to any premises for the purpose of having china clay or ball clay extracted"--
- "as a result and without its being subjected to any process involving its being mixed with any other substance or material (apart from water), it again becomes part of the land".
Therefore, Mr. Jones can, I fear, be judged by the commissioners in their wisdom to be intending to be commercially exploiting some dust. I speculate; I do not know. The Minister does not know. He cannot tell me whether dust is included, but I think that it might be--some dust that comes about when Mr. Jones is engaged in the admittedly exempt process of cutting some stone to produce some rock to produce some dimension stone. He is not selling the stuff. He is not intending to sell the stuff. The Bill does not ask him to prove that he is selling the stuff, or otherwise. It makes no reference to selling. It must be the case that he fits within subsections (1) and (3) of clause 19, taking 19(3) to mean 19(3)(a) to (e) simultaneously applied.
My Mr. Jones could well fit in exactly that category. What does he have to do? He has to put down security under clause 26. He has to pay a fine if he does not register.
He has to permit the Inland Revenue, presumably, to inspect his premises as someone who is registered. When it does, it will undoubtedly ask why on earth he is not paying the tax.This is a poor situation. Again, I am more than happy to acknowledge my error if I have made one, but, as far as I could make out, the Financial Secretary genuinely thought, as a normal and intelligent person might have, that clause 19, with the various other clauses that we are discussing, including clause 26, would have the commonsensical effect of clobbering all those people in all those ways only if they were intending to sell something. However, that is not what the Bill does. It is very surprising that the Financial Secretary should come here and talk about selling when that is not what the Bill does, unless I have missed something else.
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