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Mr. Forth: I am sure that we will want to explore retrospectivity in some detail and at some length. It always merits that treatment.
 
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I am grateful to my hon. Friend for citing a simple example, because I was just about able to follow it, but has he considered what would happen in a complicated case involving the transfer of land with considerable variations in value among a large number of partners?

Mr. Prisk: I am grateful to my right hon. Friend. I tried to interest the Committee in a simple example, but he is right that matters may be more complex. Particularly in larger partnerships of 500 or 600 members, there is a danger that a very complicated series of transactions might be taking place before 20 October, on 20 October, in the period after 20 October or after Royal Assent. As it is necessary to deal with a series of periods, retrospectivity is the crucial issue. Some people suspect that the date was selected because it is the publication date of the original draft legislation. However, these provisions did not form part of that original draft, certainly not during the consultation process. Many experts in the field believe that a better reference date would have been the publication date of the Finance Bill.

The amendment would remove the element of retrospectivity. I do not claim that the date that it specifies is ideal—it is primarily a probing amendment—but it would be useful for us to hear the Financial Secretary's views on the matter.

Mr. Forth: I am left wondering whether my hon. Friend has gone remotely far enough. If I followed his argument, as I hope that I did, his amendment leaves an element of retrospectivity that I would have hoped to challenge. As it stands, the Bill is clearly retrospective in that the relevant date is 20 October 2003, but am I not right in supposing that if my hon. Friend's amendment were accepted and we ended up with the date of 8 April 2004, that would still be retrospective by the time the Bill received Royal Assent? We must always strike a balance between preventing individuals from being tempted to pre-empt the provisions of such a Bill by conducting certain transactions as it goes through Parliament and introducing an element of retrospection.

In the 21 years since I came to this place, Sir Alan—of course, I am a mere newcomer compared with yourself—I have always been led to believe that retrospection in legislation is to be avoided. That is the political milk of my elders and betters on which I was raised. Here we have a double example of that, because not only is there retrospection in the original draft of the Bill, but blow me down if there is not retrospection in my hon. Friend's amendment. I am therefore trying to probe my hon. Friend—and, by implication, the Minister—in trying to establish whether, by seeking to introduce this element into the Bill or to reinforce it or alter it, we would be materially better off using my hon. Friend's date of 8 April 2004 than we would be if we used 20 October 2003.

I am grateful to my hon. Friend for pointing out that he speculates that the original date was in the provisions because that was when the Bill first saw the light of day. I hope that that is a reasonable interpretation of what he said. He went on to suggest that a better reference point would be the publication date of the Bill. That leaves me mystified, because I am not sure that I can see a material or helpful distinction between what he described as the date of the "original draft legislation"—I altered that
 
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slightly when I described it as the Bill's first seeing the light of day, because that is a more comfortable phrase for me—and the date in his amendment.

The reason that I make this distinction is that, if we are concerning ourselves with people who might wish to pre-empt the legislation, either of those dates is invalid. If I became aware of the Bill on the date of the original draft's publication, that would be one thing, but I would also become aware of it on its publication date. In either case, by the time that we reached Royal Assent, I would have been able to avoid its provisions. I do not see how the amendment materially alters the retrospective element in the Bill, with which I thought we were taking issue. All that I am saying is that I need my hon. Friend to help me by explaining why the amendment makes a material difference.

In case the Minister thinks that my hon. Friend is bearing the brunt of my critical remarks, I am not leaving her out of this. I hope that she, too, will seek to justify to the Committee why the date on the Bill was chosen. What was the justification for that date among all other dates? Is it tied to anything in particular? Has it been conjured out of thin air with no apparent rationale, as are so many dates that appear before us? I would have thought that most unlikely, but it is incumbent on the Minister to share with the Committee the provenance of her preferred date of 20 October 2003. Similarly, I remain unconvinced of the validity of the date suggested in my hon. Friend's amendment.

I am left in a cloud of uncertainty and I am sure that the massed ranks of the Committee will want to be reassured that the rationale behind the dates before us is beyond doubt, so that those who are to suffer the penalties or advantages of the provision will be able to do so with certainty and confidence. That is all I ask and it is not an unreasonable request. I hope that the Minister, and perhaps my hon. Friend, will be able to set my mind at rest.

Ruth Kelly: The amendments change the dates in paragraphs 18 and 19 of schedule 39. Those dates determine when ad valorem stamp duty or stamp duty land tax, rather than just the £5 fixed stamp duty, has to have been paid to benefit from a reduced charge on a transfer of land from a partnership to a partner or former partner. The amendments seek to move the date from 20 October 2003 to 8 April 2004. I do not accept that the use of 20 October 2003 introduces an element of retrospectivity, as the right hon. Member for Bromley and Chislehurst (Mr. Forth) suggested. It will not affect any partnership transactions undertaken before the Bill receives Royal Assent. What it may affect is the stamp duty land tax paid when land is transferred from a partnership to a partner after Royal Assent. The date of 20 October 2003 is well chosen as the date when the public consultation on application of stamp duty land tax to partnerships was announced.

At that time, the Inland Revenue published draft legislation for consultation, and clauses similar in nature to clauses 18 and 19 were included in that draft legislation. That was considered expedient to forestall the £5 fixed stamp duty being used to frank land transactions in partnerships after the draft legislation
 
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was announced, thereby reducing any stamp duty land tax on an eventual transfer of that land out of the partnership to a partner.

I would consider changing the date now to 8 April 2004, or indeed any other date, a retrograde step. It would be seen as penalising those taxpayers who, having a choice as to how to structure a transaction, chose to structure it in such a way that they paid ad valorem stamp duty in the expectation that they would then benefit from the reduced charge when that land was transferred out of the partnership. Retrospectively to give the same benefit to those partners who chose to pay £5 fixed duty on or after 20 October 2003 would be seen as grossly unfair.

As this date has been in the public domain since 20 October, I see no valid reason for changing it and therefore recommend that the hon. Member for Hertford and Stortford (Mr. Prisk) withdraw his amendment.

Mr. Prisk: We have had another surprisingly eventful and positive debate. One of our concerns in tabling probing amendments of this character is teasing out the answer to questions such as why the Government chose a particular date. Fortunately, we have had that answer in the debate, yet it was not clarified before.

I am extremely grateful to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), who has added to the debate in many respects. Although I appreciate that his mind was not at rest at the beginning of these deliberations, the cloud may have lifted an inch or two, but no more—I am but a modest man, so I would not hope to achieve more than that—in clarifying the Government's thinking in terms of the date chosen.

Our amendments are by no means perfect; I wish that they were, Sir Alan, as how easy things would be then. I hope that we have been able to establish exactly the thinking behind the Government's principles. Our purpose in choosing the date that we did relates to the final publication of the Bill, the essence of which is before us. We felt, rightly I think, that the draft Bill was indeed merely a draft. However, I am encouraged in many ways by what the Minister has said. On that modest basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Prisk: I beg to move amendment No. 32, in page 554, leave out from beginning of line 31 to end of line 44.

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