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9.10 pm
Mr. Boateng: I beg to move, That the Bill be now read the Third time.
The Finance Bill has now benefited from scrutiny in Committee and on Report, and I should like to pay tribute to the work of all Members on both sides of the House who have contributed to what has been a thorough and good-humoured study of the Bill and its provisions. We have made considerable headway. A number of amendments were tabled that we felt able to accept, and they have undoubtedly played some part in improving the Bill during its passage.
The Chairman of our Committee, the hon. Member for Macclesfield (Sir Nicholas Winterton), described our consideration of this Bill as an example of Parliament working at its best, and I am bound to say that I thoroughly concur with him in that assessment. I want to thank those Front Benchers who spoke for the Opposition, and I should also mention those Back Benchers who are new to Finance Bill proceedings. One thinks in particular of the hon. Member for Tatton (Mr. Osborne), who made some extremely amusing and entertaining contributions to our deliberations. We will all remember his tour of the Vale of Tatton, which was one of the highlights. It has whetted many of our appetites for visiting his constituency.
On a serious note, I want to thank my right hon. Friend the Paymaster General, who was ably accompanied by my hon. Friend the Economic Secretary, for her leadership on the Bill. I should also mention my hon. Friend the Member for Bradford, South (Mr. Sutcliffe), who is happily no longer with us, having joined the Government in another capacity.
It is right that the Finance Bill should receive careful attention and consideration from Members. It continues our commitment to enterprise and fairness, building a Britain of economic strength and social justice. The context for the Bill has been a continued challenging and uncertain period for the world economy. In recent years, we have witnessed not only a persistent global cyclical downturn but the first world slow-down for 30 years to affect every continent. Many leading countries have experienced recession during the past two years. Now, this Finance Bill positions the
United Kingdom and our businesses to take advantage of the potential for renewed growth that exists in this country.
Mr. Redwood : Will the right hon. Gentleman give way?
Mr. Boateng: In a moment. The Bill builds on our achievements in creating a strong macro-economic framework, to create a more dynamic, flexible and productive economy. We have reformed the tax system to create an environment friendly to enterprise, promoting investment, innovation and skills. The Bill marks the next stage of reform, and I shall come to its detail in moment, after giving way to the right hon. Member for Wokingham (Mr. Redwood).
Mr. Redwood: I am grateful to the Chief Secretary for giving way. Given the current rate of rise in house prices, does he think that the Government should now apply the regulator that they are thinking of applying—higher stamp duty and capital gains tax on principal residences—this side of the election, or does he see that that might be politically disadvantageous to them?
Mr. Boateng: I fear that the right hon. Gentleman is returning to his obsessions on the basis of a hypothesis that I simply do not recognise.
The Finance Bill marks the next stage of reform. Clauses 158 to 161 contain a package of measures to simplify the capital gains tax system. Clause 164 extends for a further year, to March 2004, the 100 per cent. first year allowance available to small businesses for spending on information and communications technology. Clauses 138 to 140 simplify and modernise employee share schemes, making them easier to administer and giving employees more flexibility. Following feedback from business, the Bill improves the way in which research and development tax credit works, allowing more businesses—particularly small and medium-sized enterprises, and more types of expenditure—to qualify. Clauses 132 to 134 freeze corporation taxes at 30 per cent. The main rate is lower than in any other major industrialised country.
The Bill builds on our policies for enterprise and innovation, but not at the price of fairness. Rather, it underwrites that fairness. To reduce the cost to business of locating and investing in disadvantaged areas and to support the regeneration of brownfield sites, clause 57 removes stamp duty from all non-residential property transactions in the 2,000 enterprise areas. On public services, last year's spending review set out our plans for an extra £61 billion of investment by 2005–06, with three quarters of the additional spending to go on health, education, transport, housing and the fight against crime.
We are implementing a programme of unprecedented investment linked to reform and modernisation, and this year we have introduced increases in national insurance contributions to fund improvements in the national health service. It is therefore right that the Government ensure that we have a tax system under which everyone pays their fair share. That is why this Finance Bill includes a wider package of measures to ensure a level playing field for taxpayers who fulfil their obligations.
The Bill introduces measures to tackle VAT fraud and avoidance—in particular missing trader fraud, which costs us billions of pounds and makes billions of pounds of profit for organised crime. It also takes action to prevent tax avoidance through manipulating share schemes, and provides further support for companies that want to operate schemes fairly. Action has also been taken to counter capital gains tax avoidance through offshore trusts and second-hand life insurance policies, and we have acted too to close a loophole in the controlled foreign company rules that allow some companies to escape UK tax on profits from extended warranties and credit protection insurance.
One of the most important aspects of this year's Bill is one to which we have given some attention in the course of our deliberations. Certainly, the hon. Member for Hertford and Stortford (Mr. Prisk) has spent a lot of time on it, as have I.
Mr. Prisk : I got no straight answers.
Mr. Boateng: The hon. Gentleman complains from a sedentary position that he got no straight answers, but I do not really think that is fair. It is a surprisingly ungracious remark from an hon. Gentleman whom we have rather indulged, at every stage of our deliberations. The hon. Gentleman made some good contributions, although he adopts what I can only describe as the Edgar Lustgarten approach to the promulgation of amendments.
Mr. Prisk: Is it not true that the claims for the Bill are fiction?
Mr. Boateng: I hear what the hon. Gentleman says. I do not want to go down that road, although I am glad that he knows about Edgar Lustgarten. I am surprised, though, as he is on the cusp of ignorance about someone who is known to everyone over 40.
Mr. Boateng: The hon. Gentleman is nowhere near 40, so I will explain. Edgar Lustgarten was a barrister. In the 1950s and 1960s, as a second string to his bow, he found work providing voiceovers for B-rated movies and television programmes in which there was always a catalogue of heinous offences and wrongdoing. Those responsible were always confounded by the timely and precipitate intervention of the forces of law and order. I fear that the hon. Member for Hertford and Stortford rather cast himself in that role, and I now begin to draw my remarks to the detail of the Bill.
Mr. Deputy Speaker (Sir Alan Haselhurst): I am extremely relieved that the Chief Secretary is doing that, as I would not want to think that he was filibustering his own Bill.
Mr. Boateng: I have a rather good example of the approach of the hon. Member for Hertford and Stortford. We spent some time on the issue of subsales in the course of our deliberations. The hon. Member for
Hertford and Stortford gave it the Edgar Lustgarten treatment in this sense; there was a question, an answer and then a pause. Then, there was an exclamation and the suggestion somehow that—in responding to representations asking us to make provisions in relation to subsales and to recognise that off-plan sales were important—we had somehow done something wrong or were trying to cover something up, and that he, with determination and zeal, had discovered what that was. Nothing could be further from the truth.The consultation process on the Bill has been second to none. We have listened, taken on board the points that have been made and amended the Bill accordingly. Rather than Edgar Lustgarten-like carping, there should be a warm welcome from the hon. Member for Hertford and Stortford.
Mr. Boateng: I hope that the hon. Gentleman will now rectify his error.
Mr. Prisk: I will not tempt you, Mr Deputy Speaker, down any other literary avenues that the Chief Secretary wishes to pursue. Perhaps I could simply bring him back to the subject before us. On Report, he failed to answer a critical question. Having told us that this was a fine, good and solid Bill, why did he write to the shadow Chancellor to say that the Bill was so poor that it would take a couple of years to amend it?
Mr. Boateng: That was a typical Lustgarten technique. There is no evidence upon which the hon. Gentleman bases his assertion. No such words were used in the letter; instead, there was an affirmation of our commitment to ongoing consultation and to improving the legislation. The hon. Gentleman ought to welcome that, and not cast aspersions.
One of the most important aspects of the Bill has been the comprehensive modernisation of stamp duty, which we have brought into the 21st century. Over the next few months, we will continue to consult interested parties to ensure a smooth implementation of stamp duty land tax on 1 December. That will be backed up by a comprehensive education programme for solicitors, licensed conveyancers and other interested professionals. I have promised the hon. Member for Yeovil (Mr. Laws) an early opportunity to experience the benefits of the particular electronic tool that is being presented to assist accountants, as he expressed an interest in it.
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