| Previous Section | Index | Home Page |
Mr. John Taylor: Will my hon. Friend reassure his colleagues that he will resist with all his force anyone who has the impertinence to tell him not to do his job properly in scrutinising this legislation with the care that he has been showing? In light of the fairly recent House of Lords case of Pepper v. Hart, which permitted their lordships, on a disputed point about the interpretation of a statute, to call for the Hansard to enable them to see what Members have said in the Chamber and in Committee, is there not an analogy by which we should press for a change in the convention and have access to the legal advice to the Government?
Mr. O'Brien: I would not want to stray into the highways and byways of Pepper v. Hart, as it may come to a request for the Hansard of the Fourth Standing Committee on Delegated Legislation on 7 May to understand what was placed on the record about the extraordinary arrangements that led to the acquisition of the Labour party's new headquarters in Old Queen street. We should move on before we stray down byways on which I would properly expect to be called to order.
What we were concentrating on is that I have asked for the counsel's opinion that is underpinning the Government's whole approach. I have understood from a clear letter that that will not be forthcoming, and although the Economic Secretary's reaction that he would look into the matter seriously and check the vires was proper, and he was clear about that in Committee, he has refused to provide that counsel's opinion. The real problem is that we have now had the result of the Seeling case, and he has given me no countervailing opinion as to why this issue is distinguishable from the remedy—and the mischief that he is trying to remedy—in the clause, and why Seeling came out in favour of my arguments rather than in support of his.
Furthermore, the Economic Secretary was quick to suggest, in his defence of what I believe is an ill-considered and ill-thought-out proposal in clause 22—which has a strange alliance with the arrangements that the Labour party employed for its headquarters—that there were not that many advisers. Perhaps I was making them up. However, since the discussion on 7 May, I dare say that he has also had the opportunity—certainly his advisers will have done—to check out the websites. I have been contacted by a number of people who have said that they are glad that the arguments have been raised, because they reflect their concerns. The Institute of Chartered Accountants, the Chartered Institute of Taxation and the Law Society's tax committee have all given a great deal of thought to the issue, and they are very concerned.
I do not believe that we have taken a shotgun approach, which is what was expected after the Budget and what the Minister tried to suggest. This is thought-through professional advice, and the grapeshot is turning into rifle and rapid fire.
7 pm
Mr. Djanogly: I have also received a copy of the letter, and I thank the Minister for that. I do not have it in front of me, but I seem to recall that the reason why counsel's opinion was not provided had to do with the fact that it discussed tax avoidance schemes. Presumably, those who wish to use them should not see the advice. However, surely the whole purpose of this provision is to review the anti-avoidance scheme. To that extent, in the spirit of co-operation and with the aim of doing what the clause is intended to, we should see that advice.
Mr. O'Brien: I am grateful to my hon. Friend. He served on that Committee and made a valuable contribution. He has clearly been persuaded by the arguments.
It is important to recognise that the Institute of Chartered Accountants has said:
- "In accordance with the rules laid down in article 17 of the sixth directive, the court further stated that"—
- "a rule or administrative practice imposing a general restriction on the right of deductions in cases where there is limited but none the less genuine business use constitutes a derogation from article 17 of the directive and is valid only if the requirements of article 27(1) or article 27(5) of the directive are met. This clause"—
- "therefore appears contrary to EC law. In our view, the intention of this provision, namely the denial of initial input tax recovery can only be achieved if derogation under article 27(1) is sought and granted. Until such time, this clause may result"—
- "in further litigation, creating uncertainty and costs for both taxpayers and customs, with the end result likely to be that this clause is held to be illegal. Surely we should not be party to such an attempt by the Government. They have not yet put up a sufficient case or defence for it. Unless and until a derogation has been obtained, the clause should be removed from the Finance Bill."
In conclusion—I know that this will be a relief to some—this is an important issue that should be placed on the record. I repeat that we are not anti-avoidance, but anti-uncertainty. We have moved from the serious issue of trying to analyse the mischief and the remedy that the Government proposed to finding that they seem not to want to provide us with the basis upon which they have introduced these provisions. However, we have countervailing legal precedent.
We are compelled to vote against clause stand part, because it is a matter of authority, proportionality and the absence of the advice to enable proper scrutiny of an argument that has been fully made. We have a duty to prevent uncertainty and to stop legislation appearing in
a Finance Bill, of all Bills, that could make it void on the ground of illegality. That is the last thing that we should allow. It is our first duty to prevent it.
Mr. Michael Howard (Folkestone and Hythe): On a point of order, Sir Michael. My point of order relates to the timetabling of the Bill. My hon. Friend the Member for Arundel and South Downs (Mr. Flight) set out earlier today why we need proper scrutiny and debate in the Committee considering this Bill. It is now abundantly clear from our proceedings that such scrutiny cannot occur in the time allowed.
The Order Paper lists 10 clauses and three schedules due for debate today. The Committee has not had an opportunity to debate all those measures, and that state of affairs was caused by the Government's decision to limit debate on one of the longest-ever Finance Bill's to just seven days in Committee and then to guillotine that debate.
Among the vital issues that we will not have time to scrutinise are many of the details of the new tax on leases, in particular how it is to be implemented. That issue is of huge concern to business, not least because for some small firms it could lead to a 10-fold increase in their tax bill. The manner in which the tax is being introduced, with details still unclear and a consultation process that was curtailed, has been described by the Law Society as "astonishing". It wanted the measure to be deferred to 2004. That is what our amendment would do, but it will not be discussed in Committee.
Yesterday, the right hon. Member for Birmingham, Ladywood (Clare Short) warned of
- "increasingly poor policy initiatives being rammed through Parliament".—[Official Report, 12 May 2003; Vol. 405, c. 38.]
Mr. Kenneth Clarke (Rushcliffe): Further to that point of order, Sir Michael. May I urge you to consider whether the Procedure Committee should become involved? Perhaps you could advise the Speaker on that. The issues raised go beyond the important events of today and yesterday, and I fully support what my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) said.
I am a member of the Joint Committee that is considering the future of the House of Lords. One of the very few matters on which that Committee remains unanimous is that this House should retain sole charge of issues of taxation and finance. Finance Bills have only recently been guillotined or timetabled. There is no tradition of that or of filibustering them. They have usually been handled by agreement. However, it seems that large sections of the Bill will not be debated on the Floor of the House. The Committee is timetabled, so they will almost certainly not be debated Upstairs. So whole sections of the Bill will be passed without a word of debate or scrutiny. People will draw comparisons between what we do in this House and the scrutiny that the House of Lords gives to Bills on non-finance matters. It is time that we reconsidered our procedures and re-established some of the old conventions, which used to give this House some authority in such matters.
Mr. Jack : Further to that point of order, Sir Michael. May I ask whether you have seen any examples in the
debate so far of Members who have spoken out of order or of unnecessary time wasting on which the Chair has had to comment?
Mr. Eric Forth (Bromley and Chislehurst): Further to that point of order, Sir Michael, and in particular the point of order raised by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). You will be only too aware, Sir Michael, as I am sure the House is, that even in normal circumstances when the Government arbitrarily restrict the debate on other Bills in this House, voters and the public at large can expect at the very least that the other place might step in and use its latitude to provide proper scrutiny when we have been unable to do so thanks to the Government's actions. However, we cannot rely on that for this Bill.
Surely it is doubly incumbent on the House, yourself, Sir Michael, and the House authorities to ensure that we discharge our responsibility in giving this Finance Bill—indeed, all Finance Bills—the most thorough scrutiny. We are being denied that opportunity, as today has proved beyond all doubt. What can be done to protect us, the House and, indeed, the taxpayer from this Government tyranny?
| Next Section
| Index | Home Page |