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12 Feb 2003 : Column 962—continued
Mr. Deputy Speaker: Order. I am sorry, but the hon. Member for Eddisbury (Mr. O'Brien) is again being tempted into byways that are not really to do with the Third Reading of the Bill.
Mr. O'Brien: I will certainly take your strictures to heart, Mr. Deputy Speaker, and leave on the record what my hon. Friend the Member for Buckingham has said. I hope that the Government will take serious note of his contribution in that intervention.
I was seeking to highlight, by way of example, why there is real concern about the consistency of the Government's action in relation to the tax law rewrite
project, a crucial element of which is the Bill before us tonight, and to mention the assurances that we wish to see under the PAYE regulations.
Dawn Primarolo: The hon. Gentleman was complaining about the Finance Act 2002, in which the Government took out all the provisions on loan relations— which were a complete mess—and rewrote them, which equates to less pages of legislation.
Dawn Primarolo: I thank the hon. Gentleman for the grammatical correction—fewer pages. The hon. Member for Eddisbury cannot seriously suggest that the Finance Act 2002 entirely comprised new legislation, because a huge chunk of it rewrote legislation that his Government had messed up.
Mr. O'Brien: Hon. Members on either side of the House will have different interpretations, but the recollection of my right hon. and hon. Friends is that the Financial Times was justified in calling that Finance Bill a doorstop, regardless of whether some clauses were taken out.
Given the consensual nature of the tax law rewrite project, the work of the Joint Committee and my support for what the Paymaster General has done, I hope that she realises that I do not intend to be unfair or difficult. However, there is a question in my mind about the consistency of devoting so much time and so many people to the valuable work on the tax law rewrite project, which is demonstrated by the Bill, and the inevitability of having such large Finance Bills. We do not know what will be in the forthcoming Finance Bill, and the Paymaster General will not disclose any of the contents of the Chancellor's Budget, whenever it takes place—I hope that we will soon be told the date. It will help the future work of the tax law rewrite project if the standards applied to that project are used in the drafting of Finance Bills. I believe that the Paymaster General indicated that that was the case in her opening remarks.
Dawn Primarolo: It is the case that when legislation is rewritten and put into Finance Bills, it is rewritten in the tax law rewrite style. When, for a Finance Bill of a few years ago, we completely rewrote some VAT legislation using the tax law rewrite style, Opposition Members thought that it was a completely new piece of legislation and opposed it on that basis.
Mr. O'Brien: The Paymaster General has the advantage of me, in that I was not party to that. Different interpretations can always be made, but the point is that every year we dedicate ourselves with a great deal of effort to the most important Bill that goes through Parliament, namely, the Finance Bill. I am simply asking the Paymaster General to recognise that it is important to take a consistent approach to the tax law rewrite project and to the framing of Finance Bills.
The Chancellor's Budgets of 1998 and 2000 were two of the biggest Finance Bills. As regards the 2002 Finance Bill, nine pages set out changes to rates of duty for small brewers, six pages dealt with new tax arrangements for community and amateur sports clubs, 14 pages set out new tax arrangements for vaccines research and five
pages were given to revisions to the aggregates levy. Specialists are alarmed by the size of legislation. John Whiting of PricewaterhouseCoopers has said:
- "The only thing that keeps it bearable is the fact that we have seen a lot of it before. But for that, we'd be utterly floored."
- "The whole of the personal tax area is ripe for simplification."
On the same subject, Frank Haskew, an executive at the Institute of Chartered Accountants, commented:
- "This is out of all proportion to anything we have ever seen before. The volume of tax law has doubled since the 1980s. I do not know how ordinary people have a hope of understanding their tax affairs. Even accountants are struggling."
As we rapidly reach the conclusion of my remarks on the subject, it is important to comment on the increasing complexity of the tax system in relation to the Capital Allowances Act 2001, which was the first measure in the tax law rewrite era.
Mr. John Taylor (Solihull): I had not intended to intervene, although I am an expert on income tax because I have paid it for approximately 40 years. However, my hon. Friend said that even accountants were struggling. In my experience, accountants do extraordinarily well out of such monsters as the Bill.
Mr. O'Brien: My hon. Friend makes an interesting and important point. I do not want to decry accountants, because so many experts on whom hon. Members have relied to reach our current position of considering a tax law rewrite Bill are accountants. It is not right to condemn those who are properly and professionally able to make a sensible and sometimes rewarding living out of being experts. Perhaps simplifying the law will make it more challenging for them to earn a crust. That relates to the impact assessments that some of my hon. Friends wanted clarified earlier. I try to emulate my hon. Friend the Member for Solihull (Mr. Taylor) in many respects, but I dread the day when I shall have paid income tax for 40 years.
I am deeply conscious of your earlier guidance, Mr. Deputy Speaker, about not being tempted to stray too far down alleys, byways and cul-de-sacs by my hon. Friends, who are perhaps struggling to come to grips with the vast array of documentation.
The Capital Allowances Act 2001 was the first element of the tax law rewrite project. My noble and learned Friend Lord Howe of Aberavon said:
- "The Finance Act 2000 . . . is almost twice as long as our only rewrite product so far—after about four years' work—the Capital Allowances Bill. As I said last summer, 'It is like trying to repaint Brighton Pier at a time when its owners are trying to extend it to the French coast.'"
We are also considering burgeoning costs to the taxpayer.
Mr. Bercow: Will my hon. Friend give way?
Mr. O'Brien: I am in danger of never reaching the last paragraph of my speech, but I shall give way.
Mr. Bercow: I know that my hon. Friend wants to be reminded of the integral relationship between the complexity of tax law and its implications for the introduction of each Finance Bill. Does he agree that it is therefore right to record what Lord Howe of Aberavon is too modest to note? His first Finance Bill, in 1979, in marked contrast to a measure of 488 pages that the current Chancellor introduced, was merely 28 pages long.
Mr. O'Brien: I of course defer to the remarkable body of factual knowledge, both useful and completely useless, that my hon. Friend is so often able to deploy for our elucidation. The example he gives is, I think, an example for all time, and it would be most helpful if Chancellors—especially this Chancellor—heeded it. Under Parkinson's law, 22 pages are likely to receive better scrutiny.
David Taylor: Will the hon. Gentleman give way?
Mr. O'Brien: I am happy to give way to the hon. Gentleman, who so far has spoken only from a sedentary position.
David Taylor: Does the hon. Gentleman agree that while there is sometimes a positive correlation between the size of Members—such as the hon. Member for Buckingham (Mr. Bercow)—and their quality, the correlation between the length of Acts and their quality can be inverse?
Mr. O'Brien: I hesitate to stray too far in the direction of the analogy about size and other matters. It is important to recognise that the contributions of members of all parties here are always to be respected, because they are all honourable Members.
This has been a helpful and, indeed, somewhat surprising debate. Like the Paymaster General, I dare say, I had not expected so much interest to be displayed. I am glad that I put in all those hours of work before a debate on what is, after all, quite a dry and technical subject. Thank goodness I did not decide to go and do something else, instead of doing at least some of the homework that was necessary for me to understand the vast array of documentation with which the Joint Committee has so ably presented us.
As I was saying, all this comes at a cost—a burgeoning cost to the taxpayer. If we have any duty at all, it is to consider taxpayers' interests at all times. Despite computerisation and the increased use of companies in the administration of the tax and benefits system, it costs about £6 billion a year to run the Inland Revenue and the Benefits Agency. In 1950–51 it cost less than £1 billion, in 2001 prices, to run the Revenue and the equivalent of the Benefits Agency. We should look for any available way of making legislation relating to the Revenue simpler.
I hope that part of the benefit of the tax rewrite will be the elimination of waste in connection with the running costs of a Department. I also hope that, as soon as possible, the Paymaster General will deliver a positive assessment. I should like to think that, as a result of the clarification and ease of use that will result from the rewrite project, some of the administration costs in the Inland Revenue will be reduced. As the Paymaster General is the Minister responsible for such matters, it is incumbent on me to address these remarks to her. We must always be on the lookout for opportunities to minimise waste of the public money that has been so hard earned by the taxpayer.
Given all that I have said, and bearing in mind the warning that I gave in the latter part of my speech—and provided that the Paymaster General and the Chancellor are prepared to heed that warning—my colleagues and I, as Her Majesty's loyal and official Opposition, will be more than happy to support the Bill. We congratulate all who were involved in its presentation in its current form.
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