Finance Bill

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Mr. Boateng: I do not intend to give the hon. Gentleman another example, particularly in the light of what he has just said. I do intend to work through the example given in the explanatory notes so that he fully understands it. If he then has a problem with that, we can return to it on Report rather then deal with it now. That is probably the best way of making progress.

The Chairman: Order. I am sure that the Chief Secretary will accept that any such letter that goes to the hon. Member for Billericay should go to the Chairman and every member of the Committee. I understand the Chief Secretary's position.

Mr. Boateng: I shall certainly ensure that every Committee member, including the hon. Gentleman and you, Sir Nicholas, receives a copy of the letter, which will make things abundantly clear to all who have been following the exchange closely.

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Mr. Baron: If I may test your patience, Sir Nicholas, I would like to ask that that letter be produced in time for our discussions on Report, so that the Committee can examine the issues again.

4.45 pm

Mr. Boateng: Whenever, in the course of our deliberations, I promise to enter into a correspondence—I hope that it will not be often—you can be sure, Sir Nicholas, that it will be completed before our discussions on Report. I know that you would not have it any other way.

Mr. John Burnett (Torridge and West Devon): May I welcome you, Sir Nicholas, to the Chair?

I am heartened by what I have heard from the Chief Secretary, and some credit must go to the revenue law committee of the Law Society, which drew my attention and that of other Committee members to the confusion and lack of precision in the example given in the explanatory notes to clause 45. I have taken comfort from what the Chief Secretary has said, because from what I can gather the Government will table clauses on Report that will preserve subsale relief in certain instances. What comes out of the Government new clauses will obviously require considerable scrutiny. I hope that outside professional bodies and individuals will be consulted on the new clauses as swiftly as possible. This is an important matter and we have had an important debate. The fact that the Government have said that they are prepared to reconsider the matter and are not wedded to abolishing subsale relief is welcome.

Mr. Prisk: I also welcome your chairmanship, Sir Nicholas, which I know will be firm but fair.

At the beginning of this debate, I said that those on the Conservative Benches were deeply concerned about the way in which the abolition of subsale relief was proposed in the clause. Many of those reservations remain, although I agree with the hon. Member for Torridge and West Devon that we have seen, if not a rapid change in the Chief Secretary's position, certainly welcome commitments to bring forward significant changes to the nature and application of the clause. We still have a fundamental reservation, however, about why it was right last year to reinstate the relief and right this year to abolish it.

My hon. Friend the Member for Billericay highlighted a concern of many outside professionals and he is to be commended for his persistence in drawing out that information—that is why we are here. I do not want this to become too much of a back-slapping session, but I also commend the Chief Secretary for his willingness to respond to the matter in writing. I suspect that I am not the only one struggling with B, A and C and the figures of £90,000, £10,000 and £100,000, so we would all welcome having that explained in writing. Information in writing will be of particular use to those outside for whom this could be of concern.

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Mr. Burnett: Will the hon. Gentleman, like me, be interested if the letter contains elaborate examples of part performance? It is important for the general public and professional advisers to know exactly what the Revenue means by part performance. Does it mean only payment of rent or receipt of profits, or will the Revenue consider other matters to be part performance, such as taking possession?

Mr. Prisk: I am not sure that I would necessarily use the word ''elaborate'', but I hope that the letter will provide a full range of options. Although my request was not responded to on three occasions, I hope that we will finally receive an answer about the housebuilder, the first-time buyer and the parcels of land. Does the Minister want to respond to my question? He does not. What a shame. I hope that he will do so in his letter. Such matters are of crucial importance to first-time buyers, if they are to face a second charge—a stealth tax—under the provision. I began the debate by saying that we want to hear what the Chief Secretary has to say about the matter and that we have reservations about the way in which the clause will operate.

Mr. Michael Jack (Fylde): Does my hon. Friend, like me, believe that the whole episode is an interesting reflection on the quality and output of the 280 hours of consultation that prefaced our discussions?

Mr. Prisk: As always, I am grateful to my right hon. Friend who is prescient, if notthing else. [Interruption.] Of course, he is many other things. He has much more experience that I do in such matters and understands the issue. My right hon. Friend will appreciate the fact that many organisations, including the Chartered Institute of Taxation, have said that the measures and the absence of subsale relief are unsatisfactory and require a major rethink. My right hon. Friend is right. The compensation process has been inadequate. It has failed to provide the information that the Government could have provided to make the Bill full, clear and open for all to see. That is not the case now.

Mr. George Osborne (Tatton): Does my hon. Friend agree that one of the problems is that we are still being asked to pass a clause that abolishes the relief? Although the Government say that there will be many exceptions and that they will come forward with them, the Committee does not have a clear idea about what the exceptions will be, their extent or the proportion of transactions that they will cover. That is an extremely unsatisfactory position.

Mr. Prisk: As my hon. Friend knows, I made a heartfelt plea to the Chief Secretary about the matter. We are in a bizarre situation, and I know that you, Sir Nicholas, will be concerned about it. The Chief Secretary referred to a consultation process that is taking place as we debate the matter. It may change the nature of the clause, yet we cannot scrutinise it. The right hon. Gentleman said consultation was a good thing. Of course, it is. However, for it to run in parallel when we, as parliamentarians, are scrutinising the Bill, not knowing what the consultation process will

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deliver, is wholly unsatisfactory. My hon. Friend the Member for Tatton (Mr. Osborne) has made a pertinent point.

In the spirit of good will, I am tempted not to vote against the clause, but only on one proviso, which is that the Chief Secretary will tell the Committee that he will listen to all propositions put forward by outside bodies and that substantial changes will be made to the clause. If he cannot do so, Conservative Members will still feel the need to vote against the clause. Will he advise us of his intentions?

Mr. Boateng: I do not know whether I can make myself more clear than I have already. It has been interesting to watch the exchange between the hon. Member for Tatton and the hon. Member for Hertford and Storford, who leads for the official Opposition in Committee. I sense that one hon. Gentleman was egging on the other, as I sense that the still, small voice of reason was at work in the mind of the hon. Member for Hertford and Stortford, but was overcome by the hon. Member for Tatton. That is sad, and if it is to be the hallmark for the future, we shall spend considerable time until the guillotine falls debating such provisions.

Let me give an assurance that I hope will satisfy all Opposition Members. We will move clauses on Report to make it clear that relief will be available in wider circumstances than would otherwise be the case under the clause as it is drafted. I hope that that important point is clear and understood and that it provides a reason for not dividing the Committee at this stage.

As I have said, it is not the intention to charge a contract that is not substantially performed. In the example in paragraph 9 in the explanatory note, which we have discussed in some detail, there would be no charge on B. I hope that that sets at rest the mind of the hon. Member for Billericay. That aside, the effect of the clause is to charge contracts that are substantially performed, which may excite the hon. Member for Tatton, who seems hell bent on stirring it in the Committee. That is the whole point; that is why we are gathered here.

Mr. Jack: On a point of order, Sir Nicholas, I would be grateful for your guidance. I recall that in the past when members on the Government Benches in the Committee considering the Finance Bill had doubts about a clause, that clause could, if they so wished, not be moved while awaiting further work to be done on it. Does that facility still accord itself to the Chief Secretary today, if he so wished?

The Chairman: This clause has been moved from the Chair. Therefore, as with all clauses on stand part, it must be disposed of. I seek only to give guidance to the Committee; the Committee will do what it wishes. The Chief Secretary appears to have given certain assurances to the Opposition. If that is not good enough, so be it; members can continue to pursue the point. Nevertheless, the clause must be disposed of.

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Mr. Boateng: I am grateful, Sir Nicholas. Opposition Members will have heard your wise words.

Mr. Baron: Will the Chief Secretary give way?

Mr. Boateng: Or not, as the case may be.

Mr. Baron: The Chief Secretary made the point—the first time I have heard him make it—that there will be no charge on B. Can I be clear that the sentence on which I have been dwelling, about paying

    ''stamp duty land tax under clause 44 on the chargeable consideration payable under the first contract, £100,000''

does not stand and that it will be taken out of the equation?

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