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Mr. Flight: The exemption to the gifts with reservations rules to which amendments Nos. 1 and 4 relate was introduced by the Labour Government in 1999 and specifically applies to gifts of farm land, where the donor continues to enjoy the land as a partner under the terms of a partnership that had been in place for at least seven years prior to the gift. That is the simple reason for the reference to seven years, and the amendment is designed to continue an exemption that the Government introduced.

On the bigger issue, amendment No. 11 is not perfectly worded, but the Paymaster General knows that the Government have refused to address the
 
7 Jul 2004 : Column 901
 
problem with their unscrambling formula. If one unscrambles, one does not end up in the same position as if one had never made the arrangements in the first place, because the property in question ends up with a base cost for capital gains tax, which goes forward to the next generation and is almost certainly hugely below what it would be if one had never made the arrangements in the first place. The unscrambling arrangements are an extremely damaging form of transitional arrangement.

Without rehearsing all the arguments, my hon. Friends and I remain of the view that the legislation is retrospective. It applies substantial taxation to transactions entered into as far back as 18 years ago, when they were perfectly legal and, indeed, when the Inland Revenue said that they were perfectly legal. If that is not retrospective, I do not know what is.

We do not wish to put amendment No. 1 to the vote, because the issue is very clear, so long as the Government understand what it is. However, we wish to press to a vote amendment No. 2, which relates to the fundamental issue of retrospection.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 2, in page 356, line 26, leave out "17th March 1986" and insert "19th June 2003".—[Mr. Flight.]

Question put, That the amendment be made:—

The House divided: Ayes 153, Noes 265.

Division No. 219 [4:20 pm


AYES

Ainsworth, Peter (E Surrey)
Allan, Richard
Amess, David
Ancram, rh Michael
Arbuthnot, rh James
Atkinson, David (Bour'mth E)
Bacon, Richard
Baldry, Tony
Barker, Gregory
Baron, John (Billericay)
Beggs, Roy (E Antrim)
Beresford, Sir Paul
Bottomley, Peter (Worthing W)
Brady, Graham
Brazier, Julian
Brooke, Mrs Annette L.
Burnett, John
Burns, Simon
Burt, Alistair
Cable, Dr. Vincent
Cameron, David
Campbell, rh Sir Menzies (NE Fife)
Cash, William
Chapman, Sir Sydney (Chipping Barnet)
Chidgey, David
Chope, Christopher
Clappison, James
Conway, Derek
Cormack, Sir Patrick
Cotter, Brian
Cran, James (Beverley)
Curry, rh David
Davies, Quentin (Grantham & Stamford)
Davis, rh David (Haltemprice & Howden)
Doughty, Sue
Duncan, Peter (Galloway)
Evans, Nigel
Ewing, Annabelle
Fallon, Michael
Field, Mark (Cities of London & Westminster)
Flight, Howard
Flook, Adrian
Forth, rh Eric
Foster, Don (Bath)
Francois, Mark
George, Andrew (St. Ives)
Gibb, Nick (Bognor Regis)
Gillan, Mrs Cheryl
Goodman, Paul
Grayling, Chris
Green, Damian (Ashford)
Greenway, John
Grieve, Dominic
Gummer, rh John
Hague, rh William
Hammond, Philip
Hancock, Mike
Harris, Dr. Evan (Oxford W & Abingdon)
Harvey, Nick
Hawkins, Nick
Heald, Oliver
Heathcoat-Amory, rh David
Hendry, Charles
Hermon, Lady
Holmes, Paul
Horam, John (Orpington)
Howarth, Gerald (Aldershot)
Jackson, Robert (Wantage)
Jenkin, Bernard
Johnson, Boris (Henley)
Key, Robert (Salisbury)
Kirkbride, Miss Julie
Kirkwood, Sir Archy
Knight, rh Greg (E Yorkshire)
Laing, Mrs Eleanor
Lait, Mrs Jacqui
Laws, David (Yeovil)
Leigh, Edward
Letwin, rh Oliver
Liddell-Grainger, Ian
Lidington, David
Lilley, rh Peter
Llwyd, Elfyn
Loughton, Tim
McIntosh, Miss Anne
Mackay, rh Andrew
McLoughlin, Patrick
Malins, Humfrey
Mates, Michael
Mawhinney, rh Sir Brian
May, Mrs Theresa
Mercer, Patrick
Mitchell, Andrew (Sutton Coldfield)
Moore, Michael
Moss, Malcolm
Murrison, Dr. Andrew
Osborne, George (Tatton)
Ottaway, Richard
Page, Richard
Paice, James
Paterson, Owen
Price, Adam (E Carmarthen & Dinefwr)
Prisk, Mark (Hertford)
Pugh, Dr. John
Randall, John
Redwood, rh John
Robathan, Andrew
Robertson, Angus (Moray)
Robertson, Laurence (Tewk'b'ry)
Russell, Bob (Colchester)
Salmond, Alex
Sanders, Adrian
Sayeed, Jonathan
Selous, Andrew
Shephard, rh Mrs Gillian
Shepherd, Richard
Simpson, Keith (M-Norfolk)
Smith, Sir Robert (W Ab'd'ns & Kincardine)
Smyth, Rev. Martin (Belfast S)
Soames, Nicholas
Spelman, Mrs Caroline
Spicer, Sir Michael
Spink, Bob (Castle Point)
Spring, Richard
Stanley, rh Sir John
Steen, Anthony
Stunell, Andrew
Swire, Hugo (E Devon)
Tapsell, Sir Peter
Taylor, Ian (Esher)
Taylor, Matthew (Truro)
Taylor, Dr. Richard (Wyre F)
Taylor, Sir Teddy
Teather, Sarah
Thomas, Simon (Ceredigion)
Thurso, John
Tonge, Dr. Jenny
Trimble, rh David
Tyler, Paul (N Cornwall)
Tyrie, Andrew
Walter, Robert
Waterson, Nigel
Webb, Steve (Northavon)
Weir, Michael
Widdecombe, rh Miss Ann
Wiggin, Bill
Wilkinson, John
Williams, Hywel (Caernarfon)
Willis, Phil
Wilshire, David
Winterton, Sir Nicholas (Macclesfield)
Wishart, Pete
Young, rh Sir George

Tellers for the Ayes:

Mr. David Ruffley and
Mr. Peter Atkinson


NOES

Abbott, Ms Diane
Ainger, Nick
Ainsworth, Bob (Cov'try NE)
Alexander, Douglas
Allen, Graham
Anderson, rh Donald (Swansea E)
Anderson, Janet (Rossendale & Darwen)
Armstrong, rh Ms Hilary
Atkins, Charlotte
Austin, John
Baird, Vera
Banks, Tony
Barnes, Harry
Barron, rh Kevin
Battle, John
Beard, Nigel
Begg, Miss Anne
Bennett, Andrew
Benton, Joe (Bootle)
Berry, Roger
Best, Harold
Blackman, Liz
Blears, Ms Hazel
Blizzard, Bob
Borrow, David
Bradley, rh Keith (Withington)
Bradley, Peter (The Wrekin)
Brennan, Kevin
Brown, rh Nicholas (Newcastle E Wallsend)
Browne, Desmond
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, Andy
Byers, rh Stephen
Caborn, rh Richard
Cairns, David
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Caplin, Ivor
Casale, Roger
Chapman, Ben (Wirral S)
Chaytor, David
Clapham, Michael
Clark, Mrs Helen (Peterborough)
Clark, Dr. Lynda (Edinburgh Pentlands)
Clark, Paul (Gillingham)
Clarke, rh Tom (Coatbridge & Chryston)
Clelland, David
Clwyd, Ann (Cynon V)
Coffey, Ms Ann
Cohen, Harry
Colman, Tony
Connarty, Michael
Corbyn, Jeremy
Corston, Jean
Cousins, Jim
Cranston, Ross
Crausby, David
Cryer, Ann (Keighley)
Cryer, John (Hornchurch)
Cummings, John
Cunningham, Jim (Coventry S)
Cunningham, Tony (Workington)
Curtis-Thomas, Mrs Claire
Dalyell, Tam
Darling, rh Alistair
Davey, Valerie (Bristol W)
Davies, rh Denzil (Llanelli)
Davies, Geraint (Croydon C)
Dawson, Hilton
Dean, Mrs Janet
Denham, rh John
Dhanda, Parmjit
Dismore, Andrew
Dobbin, Jim (Heywood)
Dobson, rh Frank
Doran, Frank
Dowd, Jim (Lewisham W)
Drown, Ms Julia
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Edwards, Huw
Efford, Clive
Ellman, Mrs Louise
Ennis, Jeff (Barnsley E)
Etherington, Bill
Farrelly, Paul
Field, rh Frank (Birkenhead)
Fisher, Mark
Fitzpatrick, Jim
Fitzsimons, Mrs Lorna
Flynn, Paul (Newport W)
Follett, Barbara
Foster, rh Derek
Foster, Michael Jabez (Hastings & Rye)
Foulkes, rh George
Gapes, Mike (Ilford S)
Gerrard, Neil
Gibson, Dr. Ian
Godsiff, Roger
Goggins, Paul
Griffiths, Jane (Reading E)
Grogan, John
Hain, rh Peter
Hall, Mike (Weaver Vale)
Hamilton, David (Midlothian)
Hanson, David
Harman, rh Ms Harriet
Havard, Dai (Merthyr Tydfil & Rhymney)
Henderson, Doug (Newcastle N)
Hendrick, Mark
Hesford, Stephen
Heyes, David
Hill, Keith (Streatham)
Hinchliffe, David
Hood, Jimmy (Clydesdale)
Hoon, rh Geoffrey
Hope, Phil (Corby)
Hopkins, Kelvin
Howarth, rh Alan (Newport E)
Howarth, George (Knowsley N & Sefton E)
Hughes, Beverley (Stretford & Urmston)
Hughes, Kevin (Doncaster N)
Hurst, Alan (Braintree)
Iddon, Dr. Brian
Illsley, Eric
Jackson, Glenda (Hampstead & Highgate)
Johnson, Alan (Hull W)
Johnson, Miss Melanie (Welwyn Hatfield)
Jones, Jon Owen (Cardiff C)
Jones, Kevan (N Durham)
Jones, Lynne (Selly Oak)
Jowell, rh Tessa
Kaufman, rh Sir Gerald
Keeble, Ms Sally
Keen, Alan (Feltham)
Keen, Ann (Brentford)
Kelly, Ruth (Bolton W)
Khabra, Piara S.
Kidney, David
Kilfoyle, Peter
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, David
Lawrence, Mrs Jackie
Lepper, David
Leslie, Christopher
Levitt, Tom (High Peak)
Lewis, Terry (Worsley)
Liddell, rh Mrs Helen
Linton, Martin
Lloyd, Tony (Manchester C)
Love, Andrew
Lucas, Ian (Wrexham)
Luke, Iain (Dundee E)
Lyons, John (Strathkelvin)
McCabe, Stephen
McCafferty, Chris
McDonnell, John
MacDougall, John
McFall, rh John
McGuire, Mrs Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
McNamara, Kevin
Mactaggart, Fiona
McWalter, Tony
Mahon, Mrs Alice
Mandelson, rh Peter
Marris, Rob (Wolverh'ton SW)
Marsden, Gordon (Blackpool S)
Marshall-Andrews, Robert
Martlew, Eric
Meacher, rh Michael
Meale, Alan (Mansfield)
Merron, Gillian
Michael, rh Alun
Milburn, rh Alan
Miliband, David
Moffatt, Laura
Mole, Chris
Moran, Margaret
Morgan, Julie
Morley, Elliot
Mountford, Kali
Mudie, George
O'Brien, Bill (Normanton)
O'Hara, Edward
Olner, Bill
Osborne, Sandra (Ayr)
Owen, Albert
Perham, Linda
Picking, Anne
Pickthall, Colin
Pike, Peter (Burnley)
Pollard, Kerry
Pond, Chris (Gravesham)
Pope, Greg (Hyndburn)
Pound, Stephen
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Primarolo, rh Dawn
Purchase, Ken
Purnell, James
Quinn, Lawrie
Rammell, Bill
Robertson, John (Glasgow Anniesland)
Ruane, Chris
Ruddock, Joan
Russell, Ms Christine (City of Chester)
Ryan, Joan (Enfield N)
Salter, Martin
Sarwar, Mohammad
Savidge, Malcolm
Sawford, Phil
Sedgemore, Brian
Sheerman, Barry
Sheridan, Jim
Shipley, Ms Debra
Short, rh Clare
Skinner, Dennis
Smith, rh Andrew (Oxford E)
Smith, rh Chris (Islington S & Finsbury)
Smith, Geraldine (Morecambe & Lunesdale)
Smith, Jacqui (Redditch)
Smith, Llew (Blaenau Gwent)
Soley, Clive
Southworth, Helen
Starkey, Dr. Phyllis
Stevenson, George
Stewart, David (Inverness E & Lochaber)
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Stringer, Graham
Stuart, Ms Gisela
Taylor, rh Ann (Dewsbury)
Taylor, Dari (Stockton S)
Thomas, Gareth (Clwyd W)
Touhig, Don (Islwyn)
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)
Walley, Ms Joan
Ward, Claire
Wareing, Robert N.
White, Brian
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, rh Alan (Swansea W)
Williams, Betty (Conwy)
Wills, Michael
Winnick, David
Wood, Mike (Batley)
Woodward, Shaun
Worthington, Tony
Wright, Anthony D. (Gt Yarmouth)

Tellers for the Noes:

Mr. Jim Murphy and
Vernon Coaker


Question accordingly negatived.

 
7 Jul 2004 : Column 904
 

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