Finance Bill

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Mr. Tyrie: Will any of that money be used to provide information to the customers of NSI about euro changeover? If so, will the Electoral Commission be consulted?

10.15 am

Ruth Kelly: The money is for the very small, targeted expenditure that is needed to reduce the risk of any future changeover. The Departments have to decide how best to allocate that money and present a case for it. If the hon. Gentleman has the idea that vast sums of Government money would be used by the DMO and National Savings and Investments to carry out a full-scale nationwide information campaign, that is just not the object of the exercise.

National Savings has already presented a euro changeover plan and it is possible that it could achieve the timetable already set out in the national changeover plan, but we have concluded that the risks to it in trying to meet the changeover are unacceptably high. A little bit of targeted money now will reduce that risk substantially. It makes economic sense, leaves our options open and reduces the risks in a sensible manner, and I commend the clause to the Committee.

Mr. Flight: My understanding is that the banking industry has refused to spend any more money on such preparations on the grounds of probability. Clearly, it has a certain interpretation of the Government's stance. In practical terms, whatever happens will be bound by whatever the banking system does, so there is not much sense in the Government spending money if the banking system is not spending money.

I hope that these enabling clauses will be interpreted with the appropriate caution and restraint. There really is no point in spending that money; it is not a prudent investment and it will need to be spent as and when the banking system moves forward.

Mr. Tyrie: The Financial Secretary helpfully said that the sum would be much less than the £30 million-odd being spent primarily by three Departments, but we have not been told how much other Departments have spent. We have still not been supplied with the information that we asked of the Government. I should be grateful if she could provide a little more detail about how much she thinks will be spent—even

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if she cannot do it now—or at least say that she will come back to us if spending goes beyond a certain threshold.

Is spending £5 million or £10 million? It is highly speculative expenditure of public money. As my hon. Friend the Member for Arundel and South Downs pointed out, based on the noises made by the Government most of the private sector has formed its own perfectly reasonable views and is not wasting money. The Government, however, are going ahead and spending, or at least planning to spend, the money. The public should know how much will be spent and, in more specific terms than we have been given, how.

I am often struck by how much more detail and transparency a budget prepared for a spending Department requires and how much scrutiny it can come under as a consequence of the work of the Comptroller and Auditor General, compared with how easily and with how little scrutiny the Treasury, often through tax relief and measures such as these proposals, can find ways of spending money. That is exactly what is happening now. There used to be many complaints about the Bank of England doing the same, although Ed Balls was excellent at working up transparency proposals from the Bank of England.

Now we have the same problem with these proposals, which I largely supported. In this clause, we have the problem in a microcosm. Can we please have the minimum level of detail expected for the vast majority of public spending in this country? How much will be spent? What is the cap? Will the Government come back to us if spending goes beyond the cap and, broadly, how much will be spent within that limit and how?

Ruth Kelly: I have already told the Committee that it is quite difficult to predict how much will be spent, although we expect the amount to be fairly small in relation to other Departments. I talked about £8 million by the Department for Work and Pensions, which has a much bigger task to make the benefits system compatible with payments in euros. It has a much bigger task than the DMO and National Savings and Investments, but it is up to the Department to present a business case, think through what possible risks there are with a changeover and analyse where small, targeted amounts could be spent now. Currently, it has no flexibility whatever to do that because it is not authorised by Parliament. It is merely asking for a little bit of extra flexibility. Of course, as this progresses, if it is able to give detailed estimates I will try my best to answer the hon. Gentleman's question in more detail in writing.

Mr. Tyrie: If the Minister will agree now to publish the business case, we can move on to the next clause.

Ruth Kelly: We do not generally publish the business case, partly because National Savings and Investments operates in a commercial environment. It would not be right to share detailed information. This might form part of a wider business case. It may be possible to provide estimates of how much has been spent. I am

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not sure about that. I will need to ask the individual Departments whether it is possible to isolate some of the costs. No doubt we will have this debate in future.

On the point that the hon. Gentleman and the hon. Member for Arundel and South Downs made about the banking sector, we are closely engaged with the sector in the working groups and in the preparation of the national changeover plans. We have regular meetings with representatives from banking, insurance, the wholesale and financial markets, retail and small businesses, utilities, accountancy firms and so forth about how to prepare for the introduction of the euro. Many private sector organisations have already made small, targeted investments. In some sense many of them are well prepared. It is only sensible that the Government should match that. I appeal to the hon. Gentleman's common sense and that of my hon. Friends to approve this sensible clause.

Question put and agreed to.

Clause 307 ordered to stand part of the Bill.

New Clause 2

Shares in employee-controlled companies and unconnected companies

    '(1) Each of the provisions of Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (c.1) (employment income: securities) specified in subsection (2) (exception from charges for certain company shares) is amended in accordance with subsections (3) to (5).

    (2) The provisions are—

    (a) section 429 (restricted securities),

    (b) section 443 (convertible securities),

    (c) section 446R (securities acquired for less than market value), and

    (d) section 449 (post-acquisition benefits from securities).

    (3) In subsection (1) of each of those sections, after paragraph (b) (but before the word ''and'' where that word features at the end) insert—

    ''(ba) subsection (1A) is satisfied,''.

    (4) After subsection (1) of each of those sections insert—

    ''(1A) This subsection is satisfied if the avoidance of tax or national insurance contributions was not the main purpose, or one of the main purposes, of the arrangements under which the right or opportunity to acquire the employment-related securities was made available.''

    (5) In subsection (4) of sections 429, 443 and 446R, and in subsection (3) of section 449, for the words after ''are not'' substitute ''employment-related securities.''; and accordingly omit section 429(5), 443(5), 446R(5) and 449(4).

    (6) In Chapter 3A of that Part of that Act (securities with artificially depressed market value), after section 446I insert—

    ''446IA Disapplication of exceptions from charges

    (1) Section 429 (exception from charge under section 426 for certain company shares) does not prevent section 426 (restricted securities: chargeable events) applying in relation to an event if section 446E or 446I(1)(a) would have effect in relation to the event.

    (2) Section 443 (exception from charge under section 438 for certain company shares) does not prevent section 438 (convertible securities: chargeable events) applying in relation to an event if section 446G, 446H or 446I(1)(b) would have effect in relation to the event.

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    (3) Section 446R (exception from charge under Chapter 3C for certain company shares) does not prevent that Chapter (securities acquired for less than market value) applying in relation to employment-related securities if section 446B would have effect in relation to them.

    (4) Section 449 (exception from charge under Chapter 4 for certain company shares) does not prevent that Chapter (benefits from securities) applying in relation to a benefit if section 446I(1)(e) would have effect in relation to the benefit.''

    (7) In Chapter 3B of that Part of that Act (securities with artificially enhanced market value), after section 446N insert—

    ''446NA Disapplication of exceptions from charges

    (1) None of the provisions specified in subsection (2) (exceptions from charges for certain company shares) apply in relation to employment-related securities if the market value of the employment-related securities at the time of the acquisition has been increased by at least 10% by non-commercial increases within the period of 7 years ending with the acquisition.

    (2) The provisions are—

    (a) section 429 (restricted securities),

    (b) section 443 (convertible securities),

    (c) section 446R (securities acquired for less than market value), and

    (d) section 449 (post-acquisition benefits from securities).

    (3) If section 446L (market value on valuation date increased by more than 10% by non-commercial increases during relevant period) applies in relation to employment-related securities, section 429 does not subsequently apply in relation to the employment-related securities.''

    (8) This section applies on and after 7th May 2004.'.

    —[Ruth Kelly.]

    Brought up, and read the First time.

    Motion made and Question proposed, That the clause be now read a Second time.

 
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