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The Paymaster General (Dawn Primarolo): I thank all Members who have spoken. It has been a good debate. At the beginning, Opposition Members asserted that this was a dull Finance Bill, but during the afternoon and evening they got quite worked up. I agree with the hon. Member for Hertford and Stortford (Mr. Prisk) that the debate was wide-ranging.

My hon. Friends the Members for Newcastle upon Tyne, North (Mr. Henderson) and for Bexleyheath and Crayford (Mr. Beard) rightly pointed out that sustained growth has been combined with low inflation, low interest rates and the lowest levels of unemployment for a generation. New employment figures show that, since 1997, more than 1.8 million jobs have been created and that, every working day, 600 businesses start up. Instead of the record under the previous Government, when we were first in and last out in downturns in the economy, it is right to conclude, as my right hon. Friend the Chancellor did in his Budget statement, that the UK has weathered the global downturn and will continue to grow in 2004.

Our economic stability, matched by sustained growth and a sound and fair tax system, allows us to commit more investment not less to public services and to choose long-term investment, which matters most to the people of this country. As the hon. Member for Yeovil (Mr. Laws) rightly said, economic stability provides a secure background against which we can consider in greater depth public services, unlike in the 1980s, under the previous Government, which were dominated by bankruptcy, unemployment, house repossession, Government debt and disaster for millions of families. The Finance Bill will build on those economic strengths for the future and prepare the UK for the challenges of the future.

I want to deal with pension simplification and the points made by the hon. Members for Arundel and South Downs (Mr. Flight) and for East Carmarthen and
20 Apr 2004 : Column 261
Dinefwr (Adam Price). Basically, the hon. Member for Arundel and South Downs misunderstood completely the pension simplification arrangements. He said that we are replacing eight pensions with six. Clearly, he is confused about the fact that there will be only one regime for taxation, which replaces the existing eight. It is only right that there should be a variety of schemes to meet the range of needs. He went on to say—I do not know whether he was suggesting that we should have different valuation factors—that the single valuation factor was somehow unfair. I know that he must appreciate, as he is knowledgeable on these subjects, that a single valuation factor ensures that administration of the schemes is kept simple. Surely he does not propose that we make it more complex.

Both the hon. Gentleman and the hon. Member for Hertford and Stortford (Mr. Prisk), in winding up this debate, complained about the length of the Finance Bill. As they well know, the pension simplification alone replaces approximately 350 pages of existing legislation, along with thousands of pages of guidance and has been widely welcomed, particularly as it puts back the implementation date to 2006. The point made about women on maternity leave or in career breaks is absolutely wrong. What we have is simplification. The rule that was referred to is no longer needed, as women are not restricted and can contribute more before and after their career breaks, providing much more flexibility and the ability to save more.

On the point made by the hon. Member for East Carmarthen and Dinefwr about second homes and the housing market—clearly, we will debate the issue in more depth in Committee—it is simply not true that our proposals will encourage speculative investment. There was much misunderstanding in the early stages and I know that he has quoted in good faith the points that others are making. Now that the proposals are clear to them, I think that he will find that his concerns are misplaced. I look forward to that debate.

I congratulate the right hon. Member for Fylde (Mr. Jack) on running in the London marathon and I am sorry that I was not there to cheer him on his way past the Treasury. I want to touch on his points with regard to avoidance and whether Parliament has got it wrong. That is a crucial debate, on which the hon. Member for Hertford and Stortford touched in his closing remarks. In 1997, Lord Nolan described avoidance as

Of course, we would expect all individuals and companies to want to make the most efficient use of the tax system and its reliefs, but we have seen systematic, abusive schemes that give relief for economic activity that was never undertaken or multiple reliefs for the same action that was never intended. The right hon. Gentleman talks about losses or capital allowances and how they are being used now. He cannot seriously be
20 Apr 2004 : Column 262
suggesting that we take out of our tax system all the capital allowances or lease proposals that so help business to deal with the point.

Mr. Jack: My purpose in illustrating my concern about clause 290 was not in any way to challenge the efficacy of capital allowances, but merely to probe how clause 290 would operate in the example that I gave.

Dawn Primarolo: The debate in Committee—on which I hope the right hon. Gentleman will serve—will enable all hon. Members to draw a clear distinction between legitimate tax planning, avoidance and evasion and allow us to discuss how we should respond to these challenges in fairness, treating all taxpayers on an equal basis.

Both the right hon. Member for Fylde and the hon. Member for Arundel and South Downs asked about legal privilege and whether it was our intention to override it—it is not—and about the regulations that will provide for the disclosure. The regulations will be made available before we get to that part of the Standing Committee. There will be consultation on them, because it is our intention to try to make sure that this works, for exactly the reasons that everybody in this House would expect.

On transfer pricing, I understand the CBI's concern, but we have consulted it and have made changes to the transfer pricing rules, which was a sensible response.

Many hon. Members referred to strip stamps. The simple point is that, after nearly three years of discussion and consultation with the industry, given the increased fraud and the illicit market in this area, no alternative solution could be found. We can debate that on the Floor of the House in detail next week, but hon. Members need to apply themselves to this fact: why should honest taxpayers see a loss in revenue because of illegal activity? If that is wrong, how do we deal with it? I must say that the industry has not come forward with any alternative proposals.

Mr. Alan Reid: The Government's own regulatory impact assessment estimates that the industry's proposals would save £70 million a year.

Dawn Primarolo: That is less than half the tax yield. We have to address that matter in this House. The hon. Gentleman cannot have it both ways and he needs to face the challenge square on.

A modern and fair tax system that encourages work, keeps pace with developments in business practice and in the global economy and raises sufficient revenues to fund the Government's objective of building world-class public services is what this Finance Bill provides for. As my hon. Friend the Member for Wallasey (Angela Eagle) said, a strong economy is a platform for a fair and secure society for all, with jobs and investment in public services, innovation and science. The Bill is both responsive to and realistic about the challenges that this country faces in competing in the world economy.

Let us compare that with the policies of the Conservative party. The expenditure cuts, undermining vital public services, proposed by the shadow Chief
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Secretary would bring a return to the underinvestment, insecurity and disaster of his party's economic policy in the 1980s and early 1990s.

Our vision is for a Britain that supports fairness, security and opportunity for all. The Finance Bill builds on a platform of economic stability and I commend it to the House.

Question put, That the amendment be made:—

The House divided: Ayes 190, Noes 301.

Division No. 133
[7:45 pm


Amess, David
Ancram, rh Michael
Atkinson, David (Bour'mth E)
Atkinson, Peter (Hexham)
Bacon, Richard
Barker, Gregory
Baron, John (Billericay)
Barrett, John
Beggs, Roy (E Antrim)
Bellingham, Henry
Beresford, Sir Paul
Blunt, Crispin
Boswell, Tim
Bottomley, Peter (Worthing W)
Bottomley, rh Virginia (SW Surrey)
Brady, Graham
Brazier, Julian
Brooke, Mrs Annette L.
Browning, Mrs Angela
Burns, Simon
Burnside, David
Burstow, Paul
Burt, Alistair
Cable, Dr. Vincent
Cameron, David
Campbell, Gregory (E Lond'y)
Campbell, rh Sir Menzies (NE Fife)
Carmichael, Alistair
Cash, William
Chapman, Sir Sydney (Chipping Barnet)
Chope, Christopher
Clappison, James
Clarke, rh Kenneth (Rushcliffe)
Collins, Tim
Conway, Derek
Cormack, Sir Patrick
Cotter, Brian
Cran, James (Beverley)
Curry, rh David
Davey, Edward (Kingston)
Davies, Quentin (Grantham & Stamford)
Davis, rh David (Haltemprice & Howden)
Djanogly, Jonathan
Dodds, Nigel
Donaldson, Jeffrey M.
Dorrell, rh Stephen
Doughty, Sue
Duncan, Alan (Rutland)
Duncan, Peter (Galloway)
Duncan Smith, rh Iain
Evans, Nigel
Fabricant, Michael
Fallon, Michael
Field, Mark (Cities of London & Westminster)
Flight, Howard
Flook, Adrian
Forth, rh Eric
Foster, Don (Bath)
Fox, Dr. Liam
Francois, Mark
Garnier, Edward
George, Andrew (St. Ives)
Gibb, Nick (Bognor Regis)
Gidley, Sandra
Grayling, Chris
Green, Damian (Ashford)
Green, Matthew (Ludlow)
Grieve, Dominic
Hague, rh William
Hammond, Philip
Harvey, Nick
Hawkins, Nick
Heald, Oliver
Heath, David
Heathcoat-Amory, rh David
Hendry, Charles
Hermon, Lady
Hoban, Mark (Fareham)
Hogg, rh Douglas
Holmes, Paul
Horam, John (Orpington)
Howarth, Gerald (Aldershot)
Hunter, Andrew
Jack, rh Michael
Jackson, Robert (Wantage)
Jones, Nigel (Cheltenham)
Keetch, Paul
Key, Robert (Salisbury)
Kirkbride, Miss Julie
Kirkwood, Sir Archy
Knight, rh Greg (E Yorkshire)
Laing, Mrs Eleanor
Lait, Mrs Jacqui
Lamb, Norman
Lansley, Andrew
Laws, David (Yeovil)
Leigh, Edward
Lewis, Dr. Julian (New Forest E)
Lidington, David
Lilley, rh Peter
Llwyd, Elfyn
Loughton, Tim
Luff, Peter (M-Worcs)
McIntosh, Miss Anne
Mackay, rh Andrew
Maclean, rh David
McLoughlin, Patrick
Maples, John
Marsden, Paul (Shrewsbury & Atcham)
Mates, Michael
Maude, rh Francis
Mawhinney, rh Sir Brian
May, Mrs Theresa
Mercer, Patrick
Mitchell, Andrew (Sutton Coldfield)
Moore, Michael
Moss, Malcolm
Murrison, Dr. Andrew
Norman, Archie
Oaten, Mark (Winchester)
O'Brien, Stephen (Eddisbury)
Öpik, Lembit
Osborne, George (Tatton)
Ottaway, Richard
Page, Richard
Paice, James
Paisley, Rev. Ian
Paterson, Owen
Portillo, rh Michael
Price, Adam (E Carmarthen & Dinefwr)
Prisk, Mark (Hertford)
Pugh, Dr. John
Randall, John
Redwood, rh John
Reid, Alan (Argyll & Bute)
Rendel, David
Robathan, Andrew
Robertson, Angus (Moray)
Robertson, Hugh (Faversham & M-Kent)
Robertson, Laurence (Tewk'b'ry)
Robinson, Peter (Belfast E)
Rosindell, Andrew
Russell, Bob (Colchester)
Sanders, Adrian
Sayeed, Jonathan
Selous, Andrew
Shephard, rh Mrs Gillian
Shepherd, Richard
Simmonds, Mark
Simpson, Keith (M-Norfolk)
Smith, Sir Robert (W Ab'd'ns & Kincardine)
Smyth, Rev. Martin (Belfast S)
Spelman, Mrs Caroline
Spicer, Sir Michael
Spink, Bob (Castle Point)
Spring, Richard
Stanley, rh Sir John
Steen, Anthony
Streeter, Gary
Stunell, Andrew
Swayne, Desmond
Swire, Hugo (E Devon)
Syms, Robert
Tapsell, Sir Peter
Taylor, Ian (Esher)
Taylor, John (Solihull)
Taylor, Matthew (Truro)
Taylor, Dr. Richard (Wyre F)
Teather, Sarah
Thomas, Simon (Ceredigion)
Turner, Andrew (Isle of Wight)
Tyler, Paul (N Cornwall)
Tyrie, Andrew
Waterson, Nigel
Watkinson, Angela
Webb, Steve (Northavon)
Weir, Michael
Whittingdale, John
Widdecombe, rh Miss Ann
Wiggin, Bill
Willetts, David
Williams, Hywel (Caernarfon)
Williams, Roger (Brecon)
Willis, Phil
Wilshire, David
Winterton, Ann (Congleton)
Winterton, Sir Nicholas (Macclesfield)
Wishart, Pete
Young, rh Sir George
Younger-Ross, Richard

Tellers for the Ayes:

Mr. Geoffrey Clifton-Brown and
Mr. David Ruffley


Abbott, Ms Diane
Ainger, Nick
Ainsworth, Bob (Cov'try NE)
Allen, Graham
Anderson, rh Donald (Swansea E)
Anderson, Janet (Rossendale & Darwen)
Atherton, Ms Candy
Atkins, Charlotte
Bailey, Adrian
Baird, Vera
Battle, John
Beard, Nigel
Begg, Miss Anne
Bennett, Andrew
Berry, Roger
Best, Harold
Betts, Clive
Blackman, Liz
Blears, Ms Hazel
Boateng, rh Paul
Borrow, David
Bradley, rh Keith (Withington)
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Browne, Desmond
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, Andy
Byers, rh Stephen
Caborn, rh Richard
Cairns, David
Campbell, Alan (Tynemouth)
Campbell, Ronnie (Blyth V)
Caplin, Ivor
Casale, Roger
Caton, Martin
Cawsey, Ian (Brigg)
Challen, Colin
Chapman, Ben (Wirral S)
Clapham, Michael
Clark, Mrs Helen (Peterborough)
Clark, Dr. Lynda (Edinburgh Pentlands)
Clarke, rh Tom (Coatbridge & Chryston)
Clarke, Tony (Northampton S)
Clelland, David
Coffey, Ms Ann
Cohen, Harry
Coleman, Iain
Cook, Frank (Stockton N)
Cook, rh Robin (Livingston)
Cooper, Yvette
Corston, Jean
Cousins, Jim
Cranston, Ross
Crausby, David
Cruddas, Jon
Cryer, Ann (Keighley)
Cummings, John
Cunningham, Jim (Coventry S)
Cunningham, Tony (Workington)
Curtis-Thomas, Mrs Claire
Dalyell, Tam
Davey, Valerie (Bristol W)
David, Wayne
Davidson, Ian
Davies, rh Denzil (Llanelli)
Davis, rh Terry (B'ham Hodge H)
Dawson, Hilton
Dean, Mrs Janet
Denham, rh John
Dhanda, Parmjit
Dismore, Andrew
Dobbin, Jim (Heywood)
Dobson, rh Frank
Donohoe, Brian H.
Doran, Frank
Dowd, Jim (Lewisham W)
Drew, David (Stroud)
Dunwoody, Mrs Gwyneth
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Edwards, Huw
Efford, Clive
Ellman, Mrs Louise
Etherington, Bill
Farrelly, Paul
Field, rh Frank (Birkenhead)
Fisher, Mark
Fitzpatrick, Jim
Fitzsimons, Mrs Lorna
Flint, Caroline
Flynn, Paul (Newport W)
Follett, Barbara
Foster, rh Derek
Foster, Michael (Worcester)
Foster, Michael Jabez (Hastings & Rye)
Foulkes, rh George
Francis, Dr. Hywel
Gapes, Mike (Ilford S)
George, rh Bruce (Walsall S)
Gerrard, Neil
Gibson, Dr. Ian
Goggins, Paul
Griffiths, Win (Bridgend)
Grogan, John
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hamilton, David (Midlothian)
Hanson, David
Harman, rh Ms Harriet
Havard, Dai (Merthyr Tydfil & Rhymney)
Healey, John
Henderson, Doug (Newcastle N)
Henderson, Ivan (Harwich)
Hendrick, Mark
Hepburn, Stephen
Hesford, Stephen
Hewitt, rh Ms Patricia
Hill, Keith (Streatham)
Hinchliffe, David
Hoey, Kate (Vauxhall)
Hood, Jimmy (Clydesdale)
Hope, Phil (Corby)
Howarth, George (Knowsley N & Sefton E)
Hoyle, Lindsay
Hughes, Beverley (Stretford & Urmston)
Humble, Mrs Joan
Hutton, rh John
Iddon, Dr. Brian
Illsley, Eric
Ingram, rh Adam
Irranca-Davies, Huw
Jackson, Glenda (Hampstead & Highgate)
Jackson, Helen (Hillsborough)
Jamieson, David
Jenkins, Brian
Johnson, Alan (Hull W)
Jones, Helen (Warrington N)
Jones, Jon Owen (Cardiff C)
Jones, Martyn (Clwyd S)
Joyce, Eric (Falkirk W)
Kaufman, rh Gerald
Keeble, Ms Sally
Keen, Alan (Feltham)
Kelly, Ruth (Bolton W)
Kemp, Fraser
Kennedy, Jane (Wavertree)
Khabra, Piara S.
Kidney, David
Kilfoyle, Peter
King, Ms Oona (Bethnal Green & Bow)
Knight, Jim (S Dorset)
Kumar, Dr. Ashok
Lammy, David
Lawrence, Mrs Jackie
Laxton, Bob (Derby N)
Lazarowicz, Mark
Lepper, David
Leslie, Christopher
Levitt, Tom (High Peak)
Linton, Martin
Lloyd, Tony (Manchester C)
Love, Andrew
Lucas, Ian (Wrexham)
Luke, Iain (Dundee E)
Lyons, John (Strathkelvin)
McAvoy, Thomas
McCafferty, Chris
McCartney, rh Ian
McDonagh, Siobhain
MacDonald, Calum
McDonnell, John
MacDougall, John
McFall, John
McGuire, Mrs Anne
McIsaac, Shona
McKechin, Ann
Mactaggart, Fiona
McWalter, Tony
McWilliam, John
Mahmood, Khalid
Mahon, Mrs Alice
Mallaber, Judy
Mann, John (Bassetlaw)
Marris, Rob (Wolverh'ton SW)
Marsden, Gordon (Blackpool S)
Marshall, Jim (Leicester S)
Marshall-Andrews, Robert
Martlew, Eric
Meacher, rh Michael
Meale, Alan (Mansfield)
Merron, Gillian
Michael, rh Alun
Miliband, David
Miller, Andrew
Mitchell, Austin (Gt Grimsby)
Moffatt, Laura
Mole, Chris
Moonie, Dr. Lewis
Moran, Margaret
Morgan, Julie
Morris, rh Estelle
Mountford, Kali
Mudie, George
Munn, Ms Meg
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Naysmith, Dr. Doug
O'Hara, Edward
Olner, Bill
Organ, Diana
Osborne, Sandra (Ayr)
Owen, Albert
Palmer, Dr. Nick
Pearson, Ian
Perham, Linda
Picking, Anne
Pickthall, Colin
Pike, Peter (Burnley)
Plaskitt, James
Pollard, Kerry
Pond, Chris (Gravesham)
Pope, Greg (Hyndburn)
Pound, Stephen
Prentice, Ms Bridget (Lewisham E)
Prescott, rh John
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Ken
Purnell, James
Quinn, Lawrie
Rammell, Bill
Rapson, Syd (Portsmouth N)
Raynsford, rh Nick
Reed, Andy (Loughborough)
Robertson, John (Glasgow Anniesland)
Robinson, Geoffrey (Coventry NW)
Roche, Mrs Barbara
Rooney, Terry
Ross, Ernie (Dundee W)
Roy, Frank (Motherwell)
Ruane, Chris
Ruddock, Joan
Russell, Ms Christine (City of Chester)
Ryan, Joan (Enfield N)
Salter, Martin
Sarwar, Mohammad
Savidge, Malcolm
Sedgemore, Brian
Shaw, Jonathan
Sheridan, Jim
Simpson, Alan (Nottingham S)
Singh, Marsha
Skinner, Dennis
Smith, Angela (Basildon)
Smith, rh Chris (Islington S & Finsbury)
Smith, Geraldine (Morecambe & Lunesdale)
Smith, Llew (Blaenau Gwent)
Soley, Clive
Southworth, Helen
Spellar, rh John
Starkey, Dr. Phyllis
Steinberg, Gerry
Stewart, David (Inverness E & Lochaber)
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Gerry
Taylor, Dari (Stockton S)
Taylor, David (NW Leics)
Timms, Stephen
Tipping, Paddy
Todd, Mark (S Derbyshire)
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Dr. Desmond (Brighton Kemptown)
Turner, Neil (Wigan)
Twigg, Derek (Halton)
Twigg, Stephen (Enfield)
Tynan, Bill (Hamilton S)
Vaz, Keith (Leicester E)
Vis, Dr. Rudi
Walley, Ms Joan
Ward, Claire
Wareing, Robert N.
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, rh Alan (Swansea W)
Williams, Betty (Conwy)
Wills, Michael
Winnick, David
Wood, Mike (Batley)
Woodward, Shaun
Woolas, Phil
Worthington, Tony
Wright, Anthony D. (Gt Yarmouth)
Wright, David (Telford)

Tellers for the Noes:

Vernon Coaker and
Mr. John Heppell

Question accordingly negatived.

20 Apr 2004 : Column 266

Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on second or third reading), and agreed to.

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