House of Commons portcullis
House of Commons
Session 2000-01
Publications on the internet
Standing Committee Debates
Finance Bill

Finance Bill

Standing Committee A

Thursday 3 May 2001


[Dr. Michael Clark in the Chair]

Finance Bill

(Except clauses 1 to 3 and 16 to 53 and

schedules 4 to 11)

9.30 am

The Chairman: Before we commence our proceedings, I wish to make two announcements. First, I promised the right hon. Member for Fylde (Mr. Jack) confirmation of the ruling that I made a week ago regarding laptop computers and other such devices in Committee. I have checked with the Chairman of Ways and Means and the ruling that I made is correct. There has been no change to that ruling since last year. Laptop computers are not allowed in Committee.

Secondly, for the benefit of the Government Whip, I should say that the chuckwagon will be here at about 11 o'clock. I am sure that I do not have to remind him that it is necessary to remain quorate if members of the Committee wish to respond to the refreshments that will be provided outside the Room.

Vice-Chamberlain of Her Majesty's Household (Mr. Graham Allen): On a point of order, Dr. Clark. I have been in intensive negotiations this morning with those in the Refreshment Department and understand that it will be convenient for them if the chuckwagon arrives between 10.30 and 10.45 am. The Department is short staffed, but because of our cross-party representations, it has agreed to provide refreshments at that time.

The Chairman: Thank you. The quorum situation has not changed—unless the hon. Gentleman has renegotiated that, too, which I very much doubt. There still needs to be 10 members of the Committee present in the Room. The quorum is 11, and that includes me.

Mr. Andrew F. Bennett (Denton and Reddish): On a point of order, Dr. Clark. Will you express to the Chairmen's Panel hon. Members' considerable concern about the arcane ruling on laptop computers? I accept that any equipment in the Room should not interfere with the proceedings of the Committee, but it is a mystery why we cannot have such devices, given that they would make us more efficient in Committee.

The Chairman: A ruling was made a year ago in response to a point of order raised in last year's Finance Bill Committee by the right hon. Member for Fylde. The subject was discussed extensively with the Chairmen's Panel and the Chairman of Ways and Means and it was felt strongly by the Chairmen that the devices should be allowed in Committee, provided that they were used to help hon. Members understand the proceedings of the Committee better, not for letter writing and constituency work. Unfortunately, despite that strong recommendation, it seems that the ruling has not been changed. I shall therefore, on behalf of members of the Committee, ask the Chairman of Ways and Means once again to pursue the matter, so that we may come to a more acceptable ruling.

Mr. Michael Jack (Fylde): Further to that point of order, Dr. Clark. I raised the original point of order because last year's ruling was that no electronic devices should be brought into Committee. It so happens that, of all the electronic devices that may be within the curtilage of Committee Room 10, laptop computers were singled out as the electronic device that could not be used. In response to my letter, the previous Speaker very kindly said in a postscript that the matter should be looked at. I am most grateful to you, Dr. Clark, for again seeking a review of the matter by the Chairmen's Panel and others, perhaps with a view to a ruling for the next Parliament.

The Chairman: The right hon. Gentleman will realise that my previous ruling was against him—I am not using that word offensively. I was obliged to make it to conform with the rules of the House. I made representations on his behalf for the ruling to be changed.

Mr. David Taylor (North-West Leicestershire): Further to that point of order, Dr. Clark. The Select Committee on the Modernisation of the House of Commons, of which I am a member, has discussed the matter in detail, and continues to do so. It hopes, in the next Parliament, to offer recommendations to the House in relation to the use of laptops and other electronic devices. Many members of the Select Committee consider such reform to be overdue.

The Chairman: I thank the hon. Gentleman for that explanation.

Clause 70 ordered to stand part of the Bill.

Schedules 22 and 23 agreed to.

Clause 71 ordered to stand part of the Bill.

Schedule 24

Creative artists: relief for fluctuating profits

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

Mr. Oliver Letwin (West Dorset): I welcome schedule 24 as it offers the clearest possible exposition of averaging. It is a great improvement on the previous incomprehensible palimpsest, and I congratulate the people who drafted it.

I wish to raise three brief points with the Paymaster General. The first of them is a minor point. Paragraph 6(3) retains the taper for variations in annual profits of between 70 and 75 per cent. In the context of what is now a rational exposition of averaging, why is it necessary to distinguish that particular case? I have no preference between the two cut off levels: either 70 per cent. or 75 per cent. would satisfy me, if simple averaging were applied. The Chartered Institute of Taxation has made a similar point, and I can see no abiding reason for that sole remaining complexity. I do not intend to go to the stake about the matter, but I hope that the Paymaster General will consider dispensing with paragraph 6(3).

I hope that my second point is in order, Dr. Clark. Although the schedule is admirable, it relates exclusively to artists. Some of my constituents are artists but, as the Paymaster General will be aware, many more of them are farmers, who are also subject to averaging. That is a good thing—and, this year, averaging is, of course, especially important to them. However, averaging is not applied to their income in a way that an ordinary human being can understand, as their affairs are still mired in the old text. I do not claim that, if the new text were to apply to them, all my farmers would immediately sit down and read schedule 24, but at least their accountants would understand what was going on, which would be a major advance. It would be nice to have an assurance that in due course, they will be included.

Prospective averaging applies to the professions covered by the provision. I draw the Paymaster General's attention to paragraph 4(3), in lines 1 and 2 of page 213, which contains a provision for averaging years 1 and 2, and years 2 and 3. With a simple arithmetic example, I can determine that it is perfectly drafted, as it achieves exactly the right effect. However, some people—in this case, artists working on a commission that they know will be complete not next year but the year after, or farmers who know that there is nothing that they can sell in the coming year—have reason to know that their profits will be much affected in a coming year. Such people could fairly easily establish that with the Inland Revenue, and subsequent averaging would catch up with the fact in any event. In such circumstances, it would make sense to provide for prospective averaging.

I have previously asked the Paymaster General whether, specifically in relation to farmers, the Inland Revenue will now take a relaxed and generous attitude to provisional, or prospective, averaging. No provision is made for that. Have inspectors been given by the policy divisions of the Inland Revenue any guidance that would lead them to be generous in allowing provisional averaging? I cannot envisage how, in the case of artists, to which the schedule specifically relates, someone could go to the stake on the issue, but for farmers, as the Paymaster General knows, it is a live issue; indeed, for some of them it is, economically, a matter of life or death.

I hope that the Paymaster General will reassure us on the questions of the application of the much clearer format to farming in due course and of provisional and prospective claims for averaging. Having said that, if all our tax legislation were as beautifully clear as the schedule, we would be in a much better position.

Mr. John Burnett (Torridge and West Devon): Averaging for farmers has a long and, as I am sure Labour Members will agree, distinguished origin. It was introduced by the 1978 Labour Government, at the behest of Lord Jim Callaghan. I hope, therefore, that my words will find sympathy with Labour Members, as I believe that they will Conservative Members and my own hon. Friends.

I join the hon. Member for— [Interruption.]

Mr. Letwin: West Dorset.

Mr. Burnett: I join the hon. Member for West Dorset (Mr. Letwin) in a plea for simplicity—

Mr. Letwin: I apologise for being slow to respond. I was merely amused by the hon. Gentleman's reference to his hon. Friends, as the Liberal Democrat Benches are currently empty. Does he agree that averaging is an interesting case of a good measure that received cross-party support when it was proposed?

Mr. Burnett: Absolutely. I believe that the proposal had support from the then Liberal party as well as from the Conservative and Labour parties. Unfortunately, it had been complicated—not, I suspect, at the behest of this House, although it obviously got through.

My plea is for simplicity. Inland Revenue press release BM 12 refers to matching this relief to that for farmers, so it is not entirely irrelevant to consider what has happened to farming over the years. Let us have a simpler system.

I would like to drop a hint to Treasury Ministers. Not many farmers have made a profit over the past five years, so the relief for them is not exactly substantial, especially in the light of that collapse of farm incomes and profit. I hope that Treasury Ministers will consider a one-off right to average over the past six years for agriculture in its present parlous condition, given the huge burdens being suffered.


House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 3 May 2001