| Previous Section | Index | Home Page |
Mr. Heald: Will the right hon. Gentleman give way?
Mr. Hain: I am sorry, but I will not give way.
I am sorry to disagree on that point with the hon. Member for Buckingham (Mr. Bercow) because he is an effective parliamentarian in every other respect. I admire him greatly, but I do not want to diminish the prospects for his future career by adding to that in any way.
WAYS AND MEANS
Bill ordered to be brought in upon the said resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Secretary Prescott, Mr. Secretary Darling, Mr. Secretary Reid, Ms Secretary Hewitt, Mr. Secretary Johnson, Secretary Ruth Kelly, Mr. Paul Boateng, Dawn Primarolo, Mr. Stephen Timms and John Healey do prepare and bring it in.
Mr. Stephen Timms accordingly presented a Bill to grant certain duties, to alter other duties and to amend the law relating to the national debt and the public revenue and to make further provision in connection with finance: And the same was read the First time and ordered to be read a Second time and to be printed [Bill 104].
6 Apr 2005 : Column 1432
Finance (No. 2) Bill
[Relevant documents: oral and written evidence taken by the Treasury Committee on 21 and 22 March, HC 482-i and -ii, on the 2005 Budget.]
Order for Second Reading read.
1.7 pm
The Chief Secretary to the Treasury (Mr. Paul Boateng): I beg to move, That the Bill be now read a Second time.
This is a somewhat shortened version of the Finance Bill. Owing to the Dissolution of Parliament, it now contains some 106 clauses, compared with the original 172 presented to the House. However, my right hon. Friend the Chancellor outlined in the Budget statement what we will be doing to maintain British stability and growth in the face of a future of intense global competition and the Bill continues to reflect our determination to meet those challenges and to maintain stability, promote fairness and maximise the opportunities for our nation both now and in the future.
For a tax system to be effective, everyone must pay their fair share of taxes and receive the credits that they are entitled to and that is why the Government have already published proposals to prevent the avoidance of tax on capital gains by people using options to sell or buy assets at uncommercial prices and to close a loophole in the controlled foreign company—or CFC—rules that are designed to prevent UK multinationals from diverting profits to low-tax regimes.
We have set out legislation to close arrangements that seek to avoid or reduce income tax and national insurance contributions on remuneration by using employment-related securities. As outlined in the pre-Budget report, we have published proposals to remove annuities and other annual payments from the types of payment treated as charges on income.
The Government are also committed to closing a number of marketed avoidance schemes that involve financial products that have been disclosed under the rules introduced in the Finance Act 2004, and as announced in the Budget, to legislating to counter the exploitation by companies of differences within and between tax codes to get a UK tax advantage.
The Government believe that these measures and others that were included in the original Finance Bill presented to the House are essential for an effective, principled, targeted and fair tax system. It is therefore our full intention to introduce a second Finance Bill after the election—should it be the wish of the British people—in which the measures not included in this revised version will be brought back. We will, of course, aim to ensure that the statutory dates for these measures will continue to apply, as announced in the Budget.
Mr. Michael Jack (Fylde) (Con):
The Chief Secretary has just referred to people receiving the tax credits to which they are entitled. What assurances can he give that every effort will be made to resolving the mounting tide of problems faced by people with payable tax credits and overpayments, particularly during the course of the election campaign when Members of Parliament will clearly not be in the position that they
6 Apr 2005 : Column 1433
were to argue the case for their constituents? In my case, it is a rising tide of human misery that does not appear to be being solved.
Mr. Boateng: The right hon. Gentleman is, uncharacteristically, indulging in pre-election hyperbole and has gone over the top. He knows that my right hon. Friend the Paymaster General takes any concerns about the tax credit system and its efficient working very seriously. I assure him that the measures are in place that will continue to ensure that the Inland Revenue and those responsible for this issue respond efficiently and effectively in the way that they normally do.
Mr. John Bercow (Buckingham) (Con): Will the Chief Secretary give way?
Mr. Boateng: I am fond of the hon. Gentleman, but I want to make some headway. I will then, of course, give way. I am sure that he has something interesting to say.
In the meantime, the Bill introduces anti-avoidance measures in clauses 85 and 87 to 91 that seek to prevent avoidance when there are contrived claims of artificially high double tax relief—claims that are made against United Kingdom profits in order to minimise tax liability in the UK.
Alongside that, clauses 59 to 79 will introduce anti-avoidance legislation for film relief. The targeted aim of these measures is to remove opportunities for abusing film tax reliefs and to put matters beyond doubt for the industry in future. That should be seen against the important role that Britain's creative industries now play, comprising 8 per cent. of our national income. To reflect that, clause 58 will temporarily extend existing relief for limited budget films. It provides for the existing relief to continue to apply for films on which principal photography commences before 1 April 2006, so long as they are completed on or before 31 December 2006.
Mr. Mark Prisk (Hertford and Stortford) (Con): Will the Chief Secretary give way?
Mr. Boateng: I must first give way to the hon. Member for Aylesbury.
Mr. Bercow: Or even for Buckingham.
Given the importance of clause 21(8) on research institution spin-out companies, can the right hon. Gentleman explain why that very important provision is not subject to the affirmative procedure of the House?
Mr. Boateng: I am glad that the hon. Member for Buckingham (Mr. Bercow) raises that point. If he restrains his characteristic exuberance, he will hear me come to that provision in the fullness of time.
Mr. Boateng:
If I can make a little headway, I will of course give to the hon. Gentleman. I am sure that he also has interesting points to make.
6 Apr 2005 : Column 1434
These measures reflect the Government's ongoing determination to ensure that our tax system is fair and competitive. Just last September, the World Bank ranked the UK first in Europe and seventh of the top 20 countries to conduct business in. In January 2004, the Organisation for Economic Co-operation and Development ranked our economic and administrative regulations as being among the lowest in the OECD. I therefore hope that Members on both sides of this House will surely recognise the need to introduce measures now that enable Britain to maintain that position within the global economy.
Faced with an accelerating pace of technological change and a rapid expansion of global competition, our economic future should not be founded upon low-skill, low-tech enterprise. It depends, instead, on establishing British leadership in skills, science and the knowledge economy, as the hon. Member for Buckingham recognises. After all, developing countries are on course to produce half the world's manufacturing exports and we need to ensure that ours is an added-value economy.
Britain now has one of the most open competition policies in the world and we are the most effective and active advocate of free trade. Today, the enterprise challenge is to enhance the flexibility needed for a successful economy and tackle the regulatory concerns that all industrial economies face while securing the standards required in a successful society.
| Next Section | Index | Home Page |