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I do not accept the hon. Gentleman's point. My argument is about the importance of prioritising the resources we have to help the poorest
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pensioners. I do not believe the prescription of the Conservative party, of simply increasing the basic state pension by the rate of earnings, is the answer. With over a fifth of pensioners retiring now on more than £400 a week, I do not believe that that would be a justifiable use of the inevitably restricted resources that any Government have at their disposal.
The House will welcome the fact that the wife of the hon. Member for Shipley (Philip Davies) happily gave birth the other day and I am glad that he was able to deliver his maiden speech, even if it was slightly after the due date. He paid a generous and humorous tribute to Chris Leslie, a local Shipley lad, like the hon. Gentleman, who brought great abilities to this House. Like Opposition Members, I am confident that Chris will be back in this House, whether for Shipley or for somewhere else. However, the current hon. Member for Shipley's speech indicated that he might have some of the same qualities as Chris, and I wish him well.
The hon. Member for Wellingborough (Mr. Bone) has worked hard to gain his place in this House and he paid generous tribute to his predecessors and to his constituency, and I pay tribute to his very good maiden speech.
The hon. Member for Beverley and Holderness is not in his place, regrettably, but he spoke with equal passion about his constituency and about Europe. I will alert my right hon. Friend the Prime Minister to the invitation to Beverley minster, although I say to the hon. Gentleman, "Don't hold your breath."
The hon. Member for Surrey Heath (Michael Gove) gave a classic maiden speech, although it may have been a touch too bipartisan for his long-term good within the Conservative party. He displayed the historical and literary breadth and background that we know he brings to this House, with references ranging from John Gay to John Betjeman to Country Life.
On the contributions by old hands, my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) argued in favour of clauses 7 to 10, which rightly bring more flexibility to the provision of pensions. That will increasingly be needed and he is right that the Bill supports the move in that general direction. He also argued that clauses 13 to 15, on scientific research organisations, are important because they will help to support more investment in that part of the British economy. He spoke with knowledge and long experience, both in the House and in his previous role as a trade union official.
The hon. Member for Grantham and Stamford (Mr. Davies) was just warming up when he abruptly sat down. We are pleased to see him back in his seat and hope that his temporary ill health was, indeed, only temporary. He was concerned in particular about the macro-economic position and treated us to his analysis of the fiscal rules. He argued that they are right in principle and right conceptually, but was pessimistic about the Government meeting the golden rule. One or two other hon. Members suggested the same thing.
This year's Budget shows that all tax and spending commitments that we set out are fully funded and that there is a margin of £6 billion against the golden rule in the current cycle. The Budget shows that the golden rule will be met whether the cycle ended last year or ends this
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year or next year. The forecasts are based on cautious assumptions that are independently audited by the National Audit Office. They also build in a safety margin against unexpected events. Alongside Canada, the UK is now the only G7 country with net debt below 40 per cent. of GDP. Public finances in Britain are sound. There is no threat to the sustainability of the UK public finances in the long term.
The hon. Member for North Antrim (Rev. Ian Paisley) was worried about clause 67. The Bill does no more than deal with the tax consequences of the proposed reorganisation of water services in Northern Ireland. The Water Service is due to be transferred to a new company in 2006. That company will remain within the ownership of the Department for Regional Development. The reorganisation is not due to take place until early in 2006, following the extensive consultation that he wants.
John Healey: The hon. Gentleman will have to raise that in the consultation process. The Bill, and my responsibility in relation to clause 67, deals narrowly with the tax consequences of the proposed reorganisation.
My hon. Friend the Member for Wirral, West (Stephen Hesford) paid tribute to the wide set of policies that are the responsibility of the Chancellor. He described the Treasury as no longer being the dead hand of the Government. It put me in mind of the quote by Harold Wilson, when in contrast he said that the Treasury is full of very clever chaps who are expert at saying no. My hon. Friend was right to say that the principle of fairness underpins the Bill. It does so because we are dealing with those who evade tax and, by doing so, we help to ensure that they do not steal an advantage over their competitors and impose additional tax burdens on those who pay the tax that is due.
Corporate anti-avoidance measures in the Bill are targeted against avoidance. This means that they should have no impact on genuine commercial activity that does not have a UK tax advantage motive. I stress that concern because the hon. Member for Runnymede and Weybridge raised it. The Government are committed to maintaining a modern and competitive tax system, but for that to be effective, everyone must pay a fair share of taxes and the taxes that are legally due.
My hon. Friend the Member for Wirral, West asked who the beneficiaries of e-conveyancing will be. First, the taxpayer will be a beneficiary, because the process is simplified immeasurably. The solicitor carrying out the e-conveyancing will be aware of all the requirements and will discover automatically whether there are any errors, so the second beneficiary will be Her Majesty's Revenue and Customs, because of the efficiency savings resulting from that type of electronic communication and dealing.
The right hon. Member for Charnwood (Mr. Dorrell) is a former Financial Secretary to the Treasury. I accept that his interest, like mine, is to ensure well-targeted
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action to counter avoidance, although I am less sure about the group therapy that he seemed to propose for current and ex-Treasury Ministers. He raised important principled concerns about the introduction of what he described as additional discretion for the tax authorities, especially in relation to the arbitrage clauses, 24 to 31. He also described the need for binding tax clearances for the taxpayer.
It might assist the more detailed scrutiny in Committee if I say that the anti-avoidance provisions relating to arbitrage apply only when all the conditions set out in the legislation are met and when HMRC issues a notice. That does not introduce discretion: the conditions of the legislation have to be met and the notice procedure ensures that the legislation is targeted. HMRC has issued guidance and examples of how the legislation will apply in practice. If companies are still unclear about how the provisions apply, they may approach HMRC for clearance, and if clearance is given, HMRC will be bound by it.
Mr. Hoyle: Of course tackling tax avoidance is important, but one of the benefits of having local tax offices is local knowledge. Given the good job that they do and the benefits that the community gets from having an accessible local office, will my hon. Friend ensure that the number of local tax offices is not reduced and, in particular, that the office in Chorley will remain open?
John Healey: My hon. Friend makes a powerful case for HMRC's local activities. He might have missed the finer points of this afternoon's debate, so let me point out that we are dealing with tax avoidance by multinational companies. I am sure that he is not proposing that we locate HMRC local offices in all the places where such information and advice might need to be provided.
The Financial Secretary has offered an important undertaking to the House. If a taxpayer asks, in advance of making arrangements, whether the Revenue would issue a certificate under clauses 24 and 26, the Revenue will give a straight answer to the question and that answer will be binding on the Revenue in the event that the taxpayer goes ahead with the proposed reorganisation.
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