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12 Feb 2003 : Column 952—continued

Mr. O'Brien: My hon. Friend and constituency neighbour raises an important point, which the Paymaster General and I discussed in the Second Reading Committee, and I shall refer to it a little later in my remarks. If my hon. Friend will be patient until I reach that point, I shall perhaps be able to deal with it in the round and he will get a more contextual answer. We have to bear in mind where the offset of the costs may arise, as well as the actual numbers. However, given the assurances in the regulatory impact assessment, it would be fair to say that, overall, they are relatively de minimis.

I add our genuine thanks to the many members of the accountancy and legal professions and taxpayer representatives who have taken part in the consultative committee that has reviewed this work, as well as to all those who have participated in the consultation, among whom are those listed on pages 3 and 4 of the explanatory notes, which the Paymaster General so helpfully read out during her opening remarks in response to an intervention made by my right hon. Friend the Member for East Yorkshire (Mr. Knight).

I make no apology for taking time to pay tributes because the House would be unable to undertake such work without the support and expertise of so many people dedicating considerable time and effort. Our gratitude rightly extends, equally, to the Inland Revenue staff who have been involved and, not least, to the team of parliamentary draftsmen, to whom my right hon. Friend the Member for East Yorkshire referred, who have grappled with this complex and continuing project.

It is important to note that the Bill, as with all rewrite Bills, is not intended to change the effect of current legislation in any significant way. That point was made

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by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth). However, each rewrite will include a number of minor changes to the law—for example, to legislate for extra-statutory concessions—and this one is no exception.

As I said earlier, 183 changes are listed in the second volume of the Bill. I ask the Paymaster General to highlight a number of those changes, including additional examples of where this project has afforded the opportunity to discard obsolete provisions, during our proceedings this afternoon—it is rapidly becoming this evening—to underwrite the crucial element of trust that has to inform our proceedings.

In the Second Reading Committee, I raised that issue with the Paymaster General and asked her to flag up those changes well in advance so that, in addition to the process being transparent, it continues to carry with it the crucial trust and integrity by which it has been characterised to date. That should provide some of the assurances to which my right hon. and hon. Friends alluded in earlier interventions.

Although it was estimated that the rewrite project would involve 6,000 pages of legislation and initially take about five years, it has long since been recognised that the original programme would not be attainable. I agree with the Paymaster General that it is more important for work to be done properly, rather than quickly, as she said in a written answer on 31 January 2002.

Since its inception, this project has rightly attracted interest and support across the political spectrum, as well as in the business and financial services community. We have to recognise that the whole tax law rewrite project is a continuing one and that it will improve the democratic settlement between taxpaying citizens and the state in terms of transparency, communication and clarity, as is our obligation, only if it maintains its momentum and the Government remain wholeheartedly committed to it.

I have no doubt, frankly, that that is the Paymaster General's intent, but I ask her to confirm to the House that, as a minimum, the same resources—not least the availability of appropriately skilled and experienced parliamentary draftsmen—are maintained and supported in moving on to the next stage in rewriting the PAYE regulations, which, as she rightly said, are out to consultation.

In answer to an intervention made by the hon. Member for Torridge and West Devon (Mr. Burnett), it is important to recognise that the Paymaster General would help the House enormously if she were to tell us the programme for the next stage of the project. Although the rewrite of PAYE regulations was not within the original remit of the rewrite team, it has rightly been included in response to representations. Will the Paymaster General confirm that resources will continue to be made available for a timetable within the overall tax rewrite project? Will she push the project forward?

Will the right hon. Lady tell us what resources will be made available for the third Bill of the rewrite project—covering trading, property, investment, miscellaneous, and exempt income—in 2004–05? The boundary

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between the Bill that we are discussing today and the third income tax Bill has, understandably, been fluid. However, it was said that the boundary definition would be finalised during 2002–03. Will she give us that boundary definition?

In the Second Reading Committee, there was confusion in one quarter, but it is important to acknowledge that this Bill, and the whole rewrite project, is not aimed at the simplification of tax policy. The Paymaster General rightly said that we must distinguish between clarification of tax, in the rewrite project, and simplification of tax, which is a separate project. The rewrite project concentrates on codifying English tax law. However, there is an important qualification. Were my right hon. Friend the Member for Bromley and Chislehurst still here, he would be able to hear the assurance that I promised. I will tell him that tomorrow's Hansard will make riveting reading. The qualification is that, under Standing Orders Nos. 60 and 152C, it is for the House, in scrutinising the Joint Committee's work, to determine tax law. The Committee's judgment on any changes made by the Bill will have to be scrutinised by the House in order to determine whether the changes are minor or not. That goes to the heart of the point that my hon. Friend the Member for Witney (Mr. Cameron) made a few minutes ago. That point underscores the point that I made earlier about trust. The powers of the House must not be prejudiced. On the issue of trust, I ask the Paymaster General to take a few examples from note 183 in the annexe to volume 2 to show that they are indeed minor.

This Bill is before the House as a result of considerable work and time devoted by many experts and professionals, who have had to consider a number of what are called exposure drafts. There has been concern—and even complaints—about a new syndrome, which has become known as exposure draft fatigue, or EDF. The 2002–03 tax rewrite annual plan says:

My noble Friend Lord Howe of Aberavon has taken that point on board and the process has become more streamlined. It is, I would say, the better for it. There is now a considerable amount of material on this project, which the Inland Revenue has helpfully published on its internet site:

Accompanying the Bill is a regulatory impact assessment, and some points have already been made about it. It is an important and useful document that was signed by the Paymaster General and discussed in Committee. While recognising that it is difficult to quantify the costs to taxpayers, it is important to recognise that there will be some costs involved in retraining tax practitioners so that they become familiar with the new structure. However, the regulatory impact assessment is fair in regarding the costs likely to be offset or, taken as a whole, to be relatively de minimis.

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Will the Paymaster General confirm the Inland Revenue's view contained in the regulatory impact assessment? It said that although

Mr. George Osborne: Unfortunately, I have not read the Hansard report of the Committee discussion on this point, but was there any discussion of the costs to the Inland Revenue of the project? What are the direct costs to government from all the work that has been done on the rewrite, the use of the parliamentary draftsmen and so on?

Mr. O'Brien: I am grateful to my hon. Friend, not least for his rapier-like persistence that we should at all times discharge our duties to look out for the waste of taxpayers' money. He will see in paragraph 28 of the regulatory impact assessment that the cost to the Inland Revenue of producing the Bill has been estimated at about £7.6 million spread over a period of six years that started in 1997 and goes through to the current financial year. As the assessment says:

the Income and Corporation Taxes Act 1988—

Paragraph 29 adds:

There is, therefore, a cost, but it has to be considered in the round. As my hon. Friend heard earlier, we have to consider whether making income tax law—particularly as it relates to earnings and pensions and income from social security—easier to understand represents value for money in terms of the significant cost that is incurred. I believe that it does.

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