Previous SectionIndexHome Page

Mark Tami (Alyn and Deeside) (Lab): It passes the simplicity test.

Mr. Field: Yes, the title passes the simplicity and certainty test. Of that there can be no doubt.

The working party's report would be germane to the report mentioned in the new clause. Also, the Chartered Institute of Taxation has proposed the idea of a tax practice committee, which would, in concept, have three main functions: first, the oversight of the consultative process for new tax laws to ensure that new laws are properly consulted on, subject to anti-avoidance constraints; secondly, the proposing of sections of existing tax law in need of review; and thirdly, oversight of the tax law rewrite project.

The tax practice committee is envisaged as being a group that is drawn from all those involved with the taxation process—the professions, business, tax authorities and, hopefully, academia. As part of the review, commentators have called for the House of Lords to be given a greater role in the scrutiny of Finance Bills. I appreciate that that is a controversial idea—it was last tried 95 years ago—but it is an interesting proposal. For historical reasons, the House of Commons has had sole charge of money Bills since the Budget of 1909–10, but a second revising Chamber would have a part to play in improving the way in which tax law is maintained. We hope that that change could take place during the course of this Parliament.

It would be wrong to ignore the role that the other place could play. It has plenty of expertise, which would be useful in the consideration of tax changes, as one or two Ministers have realised in previous debates. The Lords cannot currently alter a money Bill and I am not seeking to go down that path. It was intriguing, however, to see the establishment last year of a Sub-Committee to look at administrative aspects of the Finance Bill. Its remit may be narrow, but we may wish to build on that. I accept the sovereignty of the Commons in matters of taxation. [Interruption.] I do not have much choice, I am afraid. It is time, however, to look again at the way in which tax law is put together and how we operate under the paramount rule of the Commons in this area.

Ed Balls : I am trying to understand the nature of the hon. Gentleman's proposal. In the case of the Bank of England, we decided that independence was the right thing. In the end, with the support of Opposition
6 Jul 2005 : Column 331
Members—it took a little time—we decided that it was right to hand over the power to take month-by-month interest rate decisions to a group of independent experts. There is a material difference, however, between making monetary policy decisions with a single instrument and a single target and tax policy decisions. The hon. Gentleman is proposing to move tax policy decision making away from the House of Commons and elected Members of Parliament and instead asking independent experts to make policy decisions about tax. Is he proposing that Parliament should give up power in that way, not merely to unelected Members of the other place but to entirely unelected individuals?

Mr. Field: The hon. Gentleman has misunderstood what we are trying to achieve. We think that establishing such a commission is a sensible way forward, given the sheer amount of taxation legislation and the fact that little of it is regularly reviewed. That does not mean that policy matters would be in the hands of that body. Its remit would be determined once it has been set up. No one would suggest that law policy should be made by the Law Commission. It makes recommendations about changes in the law and assists the Commons and another place to initiate debates. The Law Commission influences the agenda on an independent basis, and I envisage a tax law commission operating in the same way. However, there is a great distance between that proposition and the proposition that policy decisions should be made by such a commission.

I understand the concerns that have been set out, but I hope that the broad proposals that I have tried to set out will lead to a debate on the matter. Whatever route is eventually taken, the new clause aims to highlight the need for a mechanism for a proper review of our tax law.

Chris Huhne (Eastleigh) (LD): I support the proposal for a tax law commission. If we had some weighing scales and put the current tax statutes on them we would find that there has been an increase of almost 50 per cent. since the influence of the hon. Member for Normanton (Ed Balls) began to be felt in the Treasury in 1997. I cannot believe that he thinks that the increase has had the desired effect. I accept that there is a tax law rewrite project, which has the desirable goal of helping to simplify matters, but the Liberal Democrats do not want policy to be determined by anyone other than elected Members of the House of Commons. However, the great ship of tax statute has become so barnacled that a short spell in dry dock with a good amount of scrubbing and cleaning is thoroughly desirable. The attempt to simplify, modernise, review and improve tax statute is an experiment that is worth trying. The Liberal Democrats therefore support the proposal. I hope that Government Members who are aware of the extent of tax statutes will do the same.

2.15 pm

Ed Balls: I noted the hon. Gentleman's seeming agreement about the commission with the members of the Opposition party—

Mr. Richard Spring (West Suffolk) (Con): The Conservative party.
6 Jul 2005 : Column 332

Ed Balls: I was trying to work out whether I could say that or not—the learning experience is hard. Does the hon. Gentleman also agree with the Conservative proposals on expanding the role of the House of Lords to scrutinise and interfere with tax policy?

Chris Huhne: The hon. Gentleman will know that our proposals for changing the role of the House of Lords go rather further, and start with a directly elected Chamber. I hope that he will have the opportunity to support them at some point. However, in a second-best world, the proposal to establish a tax law commission is a useful attempt to deal with the simplification of tax statutes. The Liberal Democrats usually sign up to campaigns such as Quash a Quango, so the hon. Gentleman might find it ironic that we are recommending the establishment of a quasi-autonomous non-governmental organisation.

Helen Goodman (Bishop Auckland) (Lab): Has any consideration been given to the appointments system for the future tax law commission?

Chris Huhne: The hon. Lady will see that the new clause would give the Treasury the opportunity to present details of the way in which the commission would work. I can see that the Paymaster General is warming to that excellent idea.

The hon. Member for Cities of London and Westminster (Mr. Field) was clearly attempting to spin things out to allow time for the hon. Member for Runnymede and Weybridge (Mr. Hammond) to return from lunch and introduce the next item on the agenda, but it is not necessarily right for me to participate in that game. We have dealt with the main objections to the new clause and the Liberal Democrats will support it.

Mrs. Theresa Villiers (Chipping Barnet) (Con): I appeal to the House to support new clause 4 for common-sense reasons. We have an excellent Law Commission, but there is no rational explanation for having a commission that examines all laws except tax law. Why is tax law so different that the Law Commission's excellent record should not be applied to it? Can the Government explain what is so distinctive about tax as to justify that gap, when the rest of the law is covered by the process of review, rationalisation and simplification undertaken extremely well by the Law Commission?

As we have heard, one of the main advantages of setting up a tax law commission is that it could assist in the simplification of our tax law. The increasing complexity of tax is one of the major weaknesses in the Government's economic policy. I admit that it is not an issue that people are talking about on Barnet high street, but the complexity of our tax system is now doing significant damage to our economy.

The Chancellor has tended to use the tax system far too much for micro-management, to try to pick winners in terms of economic growth, and for social engineering. This has increased the complexity of the system exponentially since his stewardship of the economy began in 1997. That complexity has been compounded by the need to correct previous legislation, and by the Chancellor's attempts to hide the number of tax increases that he has chosen to inflict on the British public.
6 Jul 2005 : Column 333

Stephen Hesford : I am following closely what the hon. Lady is saying, but as the hon. Member for Cities of London and Westminster (Mr. Field) said, the tax law commission, if it came into existence, would not deal with policy. Does she agree that it therefore would not deal with her suggestions about social engineering and the like, even if the House accepted that as a proposition, because that is policy, not tidying up.

Next Section IndexHome Page