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I have been approached by a charity in my constituency of Ilford, North, which has brought to my attention problems surrounding old manuscripts and books. Would it be possible to clarify in the wind-up debate whether new subsection (5G) in clause 11 on gift aid would apply?
My second point concerns VAT on charities. I understand the difficulties, but I was saddened by the VAT provisions and wonder whether it would be possible to abolish them for charities where it could be proved that their programmes were based only in the UK and were oriented towards social, educational or welfare purposes. That would help many charities and would mean a saving of millions of pounds for them.
As a previous director of a charityI declare an interest, as someone who is still involved in charitiesI fully understand the problems that charities face. Programmes such as distance learning projects, which link schools across the world, create a better
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understanding not only of religious but of other means of charitable provision, and they certainly benefit the schools involved. A finite amount of money is available from philanthropy and any movement to provide further help would be welcome. As I have already said, I am fully aware of the financial difficulties that might be caused by my suggestion.
Until recently, I was a cabinet member for the community in the London borough of Redbridge, so I know that large sums of money are given to charities through the voluntary sector grants programme. The suggestion that I have made would mean that some of those grants would no longer be needed, so they could be given to other groups in the voluntary sector. That would provide a better use of the taxes raised both locally and nationally.
As I said at the start, I am fully aware of the potential problems, but, like myself, the Economic Secretary has also been involved in charities for many years and understands what they have to grapple with when they face VAT costs. I would really like the matter to be looked into further, notwithstanding the difficulties.
Mr. Richard Spring (West Suffolk) (Con): We have had an excellent debate and heard some very good speeches, and I particularly welcome the maiden speeches from both sides of the House. We started off with a speech from the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), who referred to the taxation of pensions in clauses 7 to 10.
We then heard from the hon. Member for Eastleigh (Chris Huhne), who brings considerable experience from his time as an MEP to this place, so we welcome his contributions. He spoke about growth rates in the EU, about the impact of house prices and house liabilities. He also referredit is an important issue, if slightly outside the confines of the Billto self-invested personal pensions and the whole "home to let" relationship. It is a matter of controversy and will undoubtedly be debated in the public domain.
I would argue, however, that it has become such an important issue because of the severe pressure on individuals to restore decent pensions for themselves. That has become a huge difficulty now in this country and I hope that the hon. Member for Eastleigh would concede that, if we go back eight years, the issue was not in the public domain or shared among the people of this country. Their anxieties were much less then, which says much about the collapse of savings, the attack by the current Chancellor on the pensions industry and, in a sense, the perfectly legitimate desire of people to put money into property in order to secure a decent income for their old age. The hon. Gentleman is absolutely right that we must look carefully into the problem in order to prevent any abuses, but we also need to understand how it has all happeneda development that none of us can welcome.
The hon. Member for Newport, East (Jessica Morden)unfortunately, she is no longer in her placemade her maiden speech and spoke warmly about Alan Howarth, the previous Member, who is now, I understand, in the House of Lords. Indeed, he is well known as a personable individual, well liked on both sides of the House. I understand that he is the second of
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her predecessors who has entered the other place. She spoke about the history of Newport, the Chartist movement and the importance of local industry, and she used the term "economic renaissance" to characterise the new businesses entering her constituency that have brought employment growth. In my view, the hon. Lady delivered a confident and well presented speech. When she enters the Chamber, I will have the opportunity of wishing her well in her parliamentary career. I am sure that she will make a valuable contribution to our debates.
It is always a great pleasure to hear from my hon. Friend the Member for Grantham and Stamford (Mr. Davies)an outstanding and original thinker, who always presents telling arguments. He spoke about the abstruse nature of the Red Book, which has developed over the last few years, and he is entirely right about that. It is increasingly difficult to get to the essentials of what the Red Book is about. He also talked about worrying aspects of economic policy and argued, as widely asserted by many independent commentators, that the Chancellor appears to be losing the control over public expenditure that he has spoken about so often.
My hon. Friend is absolutely right to talk about the rising tax burden in this country5 per cent. of GDP over the last five years, which is an enormous increase by any historic standards. The current budget deficit is now substantial and the Chancellor's capacity to miss the forecasts does not bode well for the future. My hon. Friend is also absolutely right to say that rules must be effective and he ably challenged the Chancellor's interpretation of the so-called golden rule.
The hon. Member for North Ayrshire and Arran (Ms Clark) also made her maiden speech, in which she spoke passionately of her constituency. She was extremely articulate and talked about Keir Hardie being part of the history of her constituency. I sometimes wonder what Keir Hardie would make of current Labour politicians, who seem to spend their summers not helping trade unionists and others, but staying in princely Italian palazzos. That is certainly a very long way from Keir Hardie.
There seems to have been some genetic programming, which was apparent when the hon. Lady talked about her great-great grandfather being a pacifist and socialist. Once again, I wonder what her great-great grandfather would think of the current reign of the Prime Minister, soon coming to an end, in that context[Interruption.] I see that the hon. Lady is now in her place, so I can tell her that I have been praising her for her confident and competent speech, including her comments about Keir Hardie and her great-great grandfather, which we all enjoyed hearing.
The hon. Lady also spoke about our presidency of the G8, about world poverty and, indeed, about the importance of the UK taking a lead in that matter. That view is shared on both sides of the House. Now that she is here, I would like to applaud her further and wish her well in her time in the House. I know that she will make some excellent contributions to our debates.
It is always a great parliamentary treat to hear from the hon. Member for North Antrim (Rev. Ian Paisley), who is a great parliamentary institution in himself. He talked about links to Scotland and about the need to strike a balance between desirable outcomes in the very
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complicated Bill before us. He said that he supported anti-avoidance measures, but also raised the valid point that he did not want to see any innocent person suffering by being brought into anti-avoidance measures because they were not properly defined. As a doughty defender of Northern Ireland, the hon. Gentleman went on to say that water and sewerage services there require urgent upgrading. That is long overdue, and I hope that the Government will say what progress is being made.
The hon. Member for Bristol, East (Ms McCarthy) also made her maiden speech this afternoon. She spoke about her predecessor, Jean Corston, a valued Member of this House who concentrated on human rights and who was a distinguished chair of the parliamentary Labour party. The hon. Lady talked about some of the individuals who were part of her constituency's history. They included Ernie Bevin, who started his career there and who is universally acclaimed as an outstanding Foreign Secretary in his day. She also mentioned Tony Benn and Sir Stafford Cripps. The latter was known for his frugality, and I wonder what he would have made of the lifestyles enjoyed by some Members of the Government Front Bench today. That would be an interesting revelation. However, the hon. Lady will clearly be a passionate defender and promoter of the city of Bristol and its rich history. I certainly wish her well in her time in the House.
It was a great pleasure to hear the maiden speech by my hon. Friend the Member for Braintree (Mr. Newmark). He refused to take no for an answer at the election before last, and came back to win his seat just over a month ago. That shows great strength of character, and his wealth of successful business experience will be greatly valued. It shone through very clearly in his speech this afternoon. He was rightly generous to his predecessor, Alan Hurst, and to my noble Friend Lord Newton, who will be remembered by many hon. Members with great affection as a dedicated Front Bencher, active both in the Cabinet and in the House. He really was greatly liked.
My hon. Friend spoke of the beautiful corner of England that he represents and he set out some of its history. He also mentioned the Anglo-American link that he embodies. Many of the original settlers in what became the United States came from the area covered by his constituency and mine. Many great parliamentarians, such as Churchill and Macmillan, shared his link with America, so we have high hopes and expectations for my hon. Friend. He talked too about the centralisation of public servicesand I agree with him about thatand about the attack on our rural support structures. I am his near neighbour in parliamentary constituency terms, and I completely understand what he meant. He mentioned as well the terrible impact on pensioners and people on fixed incomes of the swingeing increases in council tax that have been especially devastating in constituencies such as ours. Quite rightly, he talked about the need to constrain the power of Government so that we can retain our competitiveness. After a maiden speech of that quality, we can expect many more excellent contributions from my hon. Friend in the years to come.
The hon. Member for Wirral, West (Stephen Hesford) made some rather uncharacteristically churlish comments about my hon. Friend's contribution. I think that the hon. Gentleman's opponent in the recent general election was Esther McVeigh, and his remarks call to mind a
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conversation between Winston Churchill and Nancy Astorin this case, I think that the substance of that conversation applies in the reverse. The hon. Gentleman spoke about the Bill's complexity. He said that we would have to explore the anti-avoidance proposals in detail, and he was right to ask specifically about the amount of revenue that they would raise. I hope that the Financial Secretary will give the House some clarification when he winds up the debate.
It is always a great pleasure to listen to my right hon. Friend the Member for Charnwood (Mr. Dorrell). He is a very experienced politician, having held many distinguished offices in a previous Cabinet, and he brings to the House an understanding forged in a successful business career. That combination is all too rare. My right hon. Friend said that all hon. Members support well thought out anti-avoidance measures, and that that was linked to the Revenue having more discretion. As a quid pro quo, however, he said that we needed to look carefully at getting the balance right in respect of pre-decision tax clearance. He is absolutely right: the Revenue authorities must be more available to help businesses deal with matters such as tax arbitrage rules, for example. In that way, greater clarity can be brought to the planning process. I hope that my right hon. Friend will continue to contribute to debates such as this.
My hon. Friend the Member for Shipley (Philip Davies) recently became a father, and I congratulate him on that, although I am not sure exactly when that happened. He spoke of his constituents' common sense and described himself as a straight-talking Yorkshireman. He spoke affectionately of Sir Marcus Fox, another great parliamentary character, and also paid generous tribute to his predecessor, Christopher Leslie. He was a fine Minister and, like my hon. Friend, I hope that he finds his way back to the House of Commonsbut, also like my hon. Friend, not as the MP for Shipley. My hon. Friend said that he wanted to remain on the Back Benches. We shall see about that. He spoke of his business experience at Asda and about working for his mother. However, despite his modesty, it is clear from his excellent speech that he may be tested in an entirely different direction.
My hon. Friend the Member for Wellingborough (Mr. Bone) talked about how far he had travelled to reach the House of Commons. He described fighting Neil Kinnock in the Pudsey constituency, and spoke warmly about his predecessor, Paul Stinchcombe, who had sponsored Alexine's law. He spoke about his constituency and the problems encountered in his local hospital. He set out the pressures suffered by the road system in his area and he spoke about his constituents' fear of crimea considerable problem all over the country.
My hon. Friend also spoke about visiting Cranwell and about the importance of putting our country first. He was right to do so, as he was to talk about the danger of elites becoming disconnected from their electorates. The events of the past few days entirely vindicate that observation. He said that the European elite was obviously out of touch and that that was underlined by the results of the recent referendums in Europe. The House will be aware that the British Government have chickened out of holding a referendum in this country
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for fear of being given a lesson about elitism. However, I hope that a referendum will be held in this country one day. My hon. Friend displayed a true and good Tory instinct when he said that we must put our country first, and I applaud him for that.
My hon. Friend the Member for Beverley and Holderness (Mr. Stuart), in another excellent maiden speech, talked about the problem of dignity and means-testing. I do not seek to make a party political point, but it is true that many people, especially the elderly, find the bureaucracy in the process of claiming their legitimate benefits very difficult. The huge growth of means-testing in our country has also played an adverse part in the decline of savings. My hon. Friend spoke about his predecessor, James Cran, who was a kind and funny person whom I knew well. He was very popular here. My hon. Friend also described the undoubted beauties of his constituency, including the famous Beverley minster, and how he hoped the Prime Minister would take up the invitation to visit. Well, my hon. Friend can try to invite the Prime Minister, but I expect that he has other geographic issues on his mind at present. My hon. Friend also mentioned the lifeboats and the Royal National Lifeboat Institution, a group of unsung heroes. He also talked about coastal erosion and the need to simplify the labyrinthine systems and overreaching bureaucracy that are part and parcel of our benefit system. I am truly delighted that he is now a parliamentary colleague and I know that he will make an excellent contribution to our debates.
I was very pleased to hear the speech by my hon. Friend the Member for Surrey Heath (Michael Gove). For some time, he has surveyed the activities of this House as a journalist, casting an eagle eye on our debates and issues of policy. He did so with great perspicacity for many years. I am delighted that he is no longer an observer of our activities but part of them and I know that he will contribute richly to our proceedings. He talked about his constituency and the vibrant multinational companies located there, as well as the small companies. My hon. Friend talked movingly about his own family experience and the implications for it of a destructive bureaucracy. That has obviously provoked much thought on his part, and I entirely share his conclusions. He was very generous in talking of his predecessor, Nick Hawkins, whom he praised as a hard-working constituency MP with a sharp legal mind.
My hon. Friend talked about the beauty and charms of his constituency and he also mentioned, with reference to Camberley, the importance of the military in our national life, a comment that will have struck a chord with many hon. Members. At a time when many of our national institutions are under something of a cloud our armed forces are probably held in greater esteem than any other institution, and they deserve our support. My hon. Friend also talked about the pressures of overbuilding in the constituency, of the terrible centralisation of decision making on such matters and the inability of local people to have any real influence on what happens in their environment in planning matters. He warned of arbitrariness and retrospective application in clause 39, and he was right to talk about the need for low taxes, a simplified taxation system, light and flexible regulation and for this nation to be outward looking. I am delighted that he is now a parliamentary colleague and I know that he will be a great contributor to our debates.
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The hon. Member for Richmond Park (Susan Kramer) warned of pension mis-selling and property linkage. The FSA is there to deal with that and I hope that the interests of investors will be protected with a lighter touch than has been the case. One has to ask why people are driven to such behaviour, and it is because of the decline in pensions as a factor in income, especially as people get older. It is to the eternal shame of this Government that what they inheritedprobably the most generous, effective and well-funded pension system anywhere in Europehas come to the present state. The hon. Lady also talked about money for infrastructure projects and she made an interesting suggestion, although I am not sure that it is Liberal Democrat policy, that windfall taxes should be levied on gains arising from property that rises in value as a result of infrastructure projects. That will be an interesting subject for discussion as the Liberal Democrats sort out their tax policy.
My hon. Friend the Member for Chipping Barnet (Mrs. Villiers) brings to the House her tremendous experience as a Member of the European Parliament. She was considered an outstanding MEP on Treasury matters. In the European Parliament she made a huge contribution and we got a flavour of her quality when she spoke todayshe has already made her maiden speech. She talked about the European company statutes, clauses 51 to 65, to set up pan-European companies, and she warned that, although that will be voluntary, it will be very bureaucratic. As she said, after 30 years, most businesses favour national corporate registration as opposed to EU registration. She talked about the EU's encroachment on tax affairs, and she was absolutely right to talk about the role of the European Court of Justice in pushing forward tax harmonisation and to ask how its power could be curbed. She referred to the Marks and Spencer case, which will be an interesting one to follow.
Clause 37 refers to schedule 6 and the implementation of international accounting standards and I am pleased that the Government listened and have already amended the original Finance Act 2005. My hon. Friend talked about the need for transatlantic standards in accounting practices, and in respect of clauses 16 to 23, on the taxation of investment funds, she referred, as have others, to her concerns about the delegation to secondary legislation and the importance of proper scrutiny of all the proposals. She rightly emphasised, as I have sought to do in the last few minutes, the crisis in savings and pensions, which is in part due to the scourge of bureaucratic means-testing that has been so counter-productive in that regard.
It was excellent to hear from my hon. Friend the Member for Windsor (Adam Afriyie), who talked about the importance of examining the Bill's impact on businesses. He was right to say that our private sector is the engine of our economy; for charities, it is the golden goose and we should consider the weight of regulation. He referred to the charitable giving and gift aid provisions in clause 11 and their impact on the hospices in his constituency and, indeed, on Windsor castle. He wanted some clarification and we shall certainly be considering the implications of those proposals in Committee.
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My hon. Friend the Member for Wimbledon (Stephen Hammond) spoke about the complexity of the tax system. Of course, that is desirable for anti-avoidance but we must look carefully at the implications for international competitiveness. He talked about the small charities and museums in his constituency and raised an important point about what the definition of the viewing of artefacts is and whether that needs examination. Indeed it does and we shall consider it in Committee.
My hon. Friend the Member for Ilford, North (Mr. Scott) is an ex-director of a charity and he talked about old manuscripts and books. He asked whether clause 9 would apply and I hope that the Financial Secretary will refer to that when he winds up the debate.
As we consider the British economy, we can see that we have certainly come a long way from post-neoclassical endogenous growth theory. I looked up "endogenous" in the dictionary; it said "growing or originating from within". As we can see once again in the Finance Bill, what has certainly grown from within is the sheer, appalling complexity of our tax systema culture in which announcements are made that leave everybody from ordinary citizens to business people in the dark, with professionals such as accountants and actuaries struggling to get to grips with what is happening. Whatever else the Chancellor's legacy may be, it will be the micro-management of the economy on a scale unprecedented in our history.
In Committee, we shall of course want clarity about retrospective or retroactive proposals. Naturally, illegitimate tax avoidance is something that nobody could support but we shall want to examine the entrails carefully.
In conclusion, of course anti-avoidance is at the heart of the Bill, but we shall want to examine it in detail in Committee and achieve a balance to ensure that anti-avoidance is clear and workable in practice. Undermining the attractions of the UK as a place to do business simply cannot be countenanced. We want to minimise arbitrary and unnecessary intrusiveness and to maximise the availability of pre-clearance to the taxpayer. We want to consider enhanced powers and the discretion of the Revenue, as in clauses 24 and 26 on tax arbitrage. We want a fair quid pro quo for the investor and for the business community.
Deregulation has been alluded to; for example, e-conveyancing, which is covered in the Bill, was mentioned. However, I say to the Paymaster General: there is no point in the Chancellor announcing, as he has done, that he is reducing the number of quangos and civil servants. There can never simply be effective deregulation without changing the very remit of the regulatory authorities, such as the Financial Services Authority, separating them more from Treasury influence and enforcing the principle rather than detailed prescription.
To talk the talk of deregulation, pile on yet more and more red tape and not change the underlying remit of the statutory authorities that are involved in regulation is, of course, to mislead the public about the true intentions of this control-freak Government on so many levels. The sheer cost of dealing with our rules and regulations and our tax system is now a huge burden on our businesses, our national life and our public services.
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We cannot deal with all that in the Billit is narrowly basedbut we accept it in principle and will not seek to divide the House tonight.
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