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Mr. Newmark: Will the Paymaster General give way?

Dawn Primarolo: I want to make some progress.

As the hon. Member for Christchurch implied, this is not about making people pay more national insurance. It is about ensuring that they pay the national insurance that the House, over decades, has decided that everyone should pay. It is a question of fairness. Unfortunately, however, all Governments faced the same problem. Governments would see a contrived avoidance scheme and close it down; the avoiders would then move to another highly sophisticated scheme, which would have to be targeted.

The current Government took a number of steps. I announced the first in a statement on 2 December 2004, making it clear not just that the Government would close the loopholes that they had identified so far, but that any future attempt not to pay the right amount of national insurance or tax would be prevented. The hon. Member for Fareham (Mr. Hoban), whom I welcome to his first debate as a member of the shadow Treasury team, said that that statement was unclear. Let me read a sentence from it, because I am not sure how people can claim to be confused by it or not to understand it.

That seems perfectly clear to me.

The statement announced the closing of existing loopholes, which was dealt with by Finance Bill tax measures and is dealt with by measures in this Bill. It also introduced a strong deterrent. It said "Just don't do it, because however you do it, we will close down the scheme." The amendments would remove, or weaken, that deterrent. They effectively say to those in the tax avoidance industry "Let us continue to play this game of cat and mouse. You carry on finding ways not to pay tax, and we will close the schemes down after the Treasury has lost the revenue." That is not acceptable to any fair-minded or, dare I say, reasonable person.

The hon. Gentleman also brought up the question of consultation, and the roles of the commissioners and the Treasury. It was a good debating point, but was based on a fundamental misunderstanding of the workings of Her Majesty's Revenue and Customs. As the Bill only completed its passage through both Houses earlier this year, I find that a bit strange.

Her Majesty's Revenue and Customs is a statutory body, and Treasury Ministers represent it in Parliament. It is therefore appropriate for the Treasury to introduce the legislation. Both here and in the other place, there were debates on exactly what was meant by the term "Treasury" in legislation. It means the Treasury as a Department, meaning the Treasury and HMRC.

On the specific amendments, I have to ask why the Treasury and HMRC would not be working together on the regulations. Of course they would, so amendments
15 Dec 2005 : Column 1500
Nos. 1, 4, 7, 10 and 11 are wholly unnecessary. Whenever Treasury regulations are to be made to supplement primary tax and national insurance contributions, officials from both the Treasury and HMRC always discuss and consult each other on the wording. It is simply unnecessary to enshrine such a normal practice, which has been accepted as straightforward administrative practice for an extremely long time, in the Bill. Doing so would be a waste of parliamentary and drafting time.

Conservative Members then went on to stress the need for consultation, but they know perfectly well that the regulations are subject to consultation and affirmative procedure. Anyone who wants to express their views on regulations can do so. The notion of consultation, as it appears in the amendments, is simply preposterous.

What of amendments Nos. 14, 15 and 17? I do not believe that the right hon. Member for Bromley and Chislehurst intends to destroy the Bill, but if he does, he should have said so when he moved his amendments, rather than dress up his aims in linguistic niceties about the meaning of "reasonableness" and "expedient". The amendments strike at the heart of the caveat of a deterrent. If the statement of 2 December 2004 holds in its deterrent effect, no legislation will be necessary because people will not try, through remuneration—this applies only to employment remuneration—to avoid paying their proper taxes or insurance.

The idea that in those three amendments—Nos. 14, 15 and 17—all that the right hon. Gentleman is doing is a bit of linguistic tidying-up is simply not the case. If he wants to know the use of "expedient", he needs to see it in the wider context. He knows full well that it is not about looking into whatever dictionary one cares to take off the shelf because the context of the word is important as well. In the particular case of proposed new section 4C, the expediency applies to certain specified purposes, which is quite right. If he wants precedent for using the word "expedient" rather than "reasonableness", he need look no further than to his own Government in 1992, although I can understand why he now wants to distance himself from decisions that he was happy to vote for at the time.

This has been an interesting debate, but it would have been better if the right hon. Member for Bromley and Chislehurst had been more straightforward with the House about what he was attempting to do—to remove the strong and important deterrent effect of the regulations. If the right hon. Gentleman still wants to put his amendments to the vote, I ask my hon. Friends to oppose them.

Mr. Forth: It certainly has been a revealing debate and the Paymaster General's petulance gives the lie to some interesting aspects of the Government's attitude—not least the fact that she has reduced the commissioners to a mere cipher of the Treasury. I do not know what the commissioners think about that or whether the Government would want to view their role in those terms. We now have it on the record that the Paymaster General is asking why we should bother consulting the commissioners because they are one and the same with the Treasury and there would be no point in doing so. We can leave that matter hanging for future study and
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reference, but it has been a remarkable revelation from a senior Minister about the diminished role of those commissioners.

3.15 pm

The Paymaster General's defence of the word "expedient" and her rejection of our attempt to introduce the word "reasonable" were equally revealing. She seems to be saying that any measures designed to counter tax avoidance must be expedient, or they would not work, and that any suggestion of reasonableness is unacceptable. Well, that is very revealing of the Government's attitude both generally and specifically. So from that point of view, this debate, through the vehicle of the amendments, has shone a searchlight not just on the Bill's wording but on the attitude of Ministers and Departments—in this case, the Treasury.

Having listened carefully to the debate and to the—

Mr. Newmark: Is not the Paymaster General's earlier answer to my right hon. Friend a case in point? It may well have been an expedient response to his amendment, but it certainly was not a reasonable one. Perhaps we should look at this discussion in that context.

Mr. Forth: I am grateful to my hon. Friend, who has elegantly summed up the tone of this debate and illustrated the attitude of the Paymaster General and the Treasury.

Mr. Chope: I know that my right hon. Friend is normally suspicious of consensus, but has he noted the support among Liberal Democrats for my amendment No. 14?

Mr. Forth: Yes, and I thought that it was very significant.

Having listened to what my hon. Friend the Member for Christchurch (Mr. Chope) said about my amendment—I indicated at the outset that I had a realistic view of what I was trying to achieve—I beg to ask leave to withdraw the amendment. I understand, however, that my hon. Friend may wish to press his amendment No. 14 to a Division.

Amendment, by leave, withdrawn.

Amendment proposed: No. 14, in page 1, line 17, leave out
'appears to the Treasury to be expedient'

and insert 'is reasonable'.—[Mr. Chope.]

Question put, That the amendment be made:—

The House divided: Ayes 44, Noes 237.

Division No. 118
[3.17 pm


Alexander, Danny
Bone, Mr. Peter
Bottomley, Peter
Brake, Tom
Brooke, Annette
Cable, Dr. Vincent
Clegg, Mr. Nick
Davey, Mr. Edward
Davies, Philip
Dodds, Mr. Nigel
Donaldson, Mr. Jeffrey M.
Dunne, Mr. Philip
Field, Mr. Mark
George, Andrew
Goldsworthy, Julia
Gray, Mr. James
Harris, Dr. Evan
Hemming, John
Hollobone, Mr. Philip
Holmes, Paul
Howarth, David
Jackson, Mr. Stewart
Keetch, Mr. Paul
Knight, rh Mr. Greg
Kramer, Susan
Lamb, Norman
Laws, Mr. David
Moore, Mr. Michael
Öpik, Lembit
Robertson, Angus
Robinson, Mr. Peter
Rowen, Paul
Russell, Bob
Smith, Sir Robert
Spink, Bob
Stunell, Andrew
Swinson, Jo
Tyrie, Mr. Andrew
Vaizey, Mr. Edward
Wallace, Mr. Ben
Williams, Mr. Roger
Williams, Stephen
Willis, Mr. Phil
Wilson, Sammy

Tellers for the Ayes:

Mr. Eric Forth and
Mr. Christopher Chope


Abbott, Ms Diane
Ainger, Nick
Ainsworth, rh Mr. Bob
Anderson, Mr. David
Anderson, Janet
Atkins, Charlotte
Austin, Mr. Ian
Austin, John
Bailey, Mr. Adrian
Baird, Vera
Balls, Ed
Banks, Gordon
Barron, rh Mr. Kevin
Battle, rh John
Bayley, Hugh
Benn, rh Hilary
Benton, Mr. Joe
Blackman, Liz
Blears, rh Hazel
Bradshaw, Mr. Ben
Brennan, Kevin
Brown, Lyn
Brown, Mr. Russell
Browne, rh Mr. Des
Buck, Ms Karen
Burden, Richard
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, Mr. Liam
Cairns, David
Campbell, Mr. Ronnie
Caton, Mr. Martin
Cawsey, Mr. Ian
Challen, Colin
Chapman, Ben
Clapham, Mr. Michael
Clark, Ms Katy
Clarke, rh Mr. Tom
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cooper, Rosie
Cooper, Yvette
Corbyn, Jeremy
Crausby, Mr. David
Cruddas, Jon
Cryer, Mrs. Ann
Cunningham, Mr. Jim
Cunningham, Tony
David, Mr. Wayne
Dean, Mrs. Janet
Denham, rh Mr. John
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dobbin, Jim
Dobson, rh Frank
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Durkan, Mark
Eagle, Angela
Eagle, Maria
Ellman, Mrs. Louise
Ennis, Jeff
Farrelly, Paul
Fisher, Mark
Flello, Mr. Robert
Flint, Caroline
Foster, Mr. Michael (Worcester)
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
Goggins, Paul
Goodman, Helen
Griffith, Nia
Grogan, Mr. John
Gwynne, Andrew
Hain, rh Mr. Peter
Hanson, Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Havard, Mr. Dai
Healey, John
Hendrick, Mr. Mark
Hepburn, Mr. Stephen
Hesford, Stephen
Hewitt, rh Ms Patricia
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodgson, Mrs. Sharon
Hoey, Kate
Hoon, rh Mr. Geoffrey
Hope, Phil
Hopkins, Kelvin
Howarth, rh Mr. George
Hughes, rh Beverley
Humble, Mrs. Joan
Hutton, rh Mr. John
Iddon, Dr. Brian
Irranca-Davies, Huw
Jackson, Glenda
James, Mrs. Siân C.
Jenkins, Mr. Brian
Jones, Helen
Jones, Mr. Kevan
Jones, Lynne
Jones, Mr. Martyn
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kennedy, rh Jane
Khabra, Mr. Piara S.
Kilfoyle, Mr. Peter
Knight, Jim
Lammy, Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Linton, Martin
Lloyd, Tony
Love, Mr. Andrew
Lucas, Ian
MacDougall, Mr. John
Mackinlay, Andrew
Mactaggart, Fiona
Mahmood, Mr. Khalid
Malik, Mr. Shahid
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Marshall, Mr. David
McAvoy, rh Mr. Thomas
McCabe, Steve
McCarthy, Kerry
McCarthy-Fry, Sarah
McDonagh, Siobhain
McDonnell, Dr. Alasdair
McDonnell, John
McFadden, Mr. Pat
McGuire, Mrs. Anne
McIsaac, Shona
McKenna, Rosemary
McNulty, Mr. Tony
Merron, Gillian
Michael, rh Alun
Miliband, rh Mr. David
Miliband, Edward
Miller, Andrew
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Morden, Jessica
Morgan, Julie
Mudie, Mr. George
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Denis
Murphy, Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
O'Brien, Mr. Mike
O'Hara, Mr. Edward
Olner, Mr. Bill
Osborne, Sandra
Palmer, Dr. Nick
Plaskitt, Mr. James
Prentice, Bridget
Prentice, Mr. Gordon
Primarolo, rh Dawn
Prosser, Gwyn
Purnell, James
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reed, Mr. Jamie
Riordan, Mrs. Linda
Robertson, John
Rooney, Mr. Terry
Ruane, Chris
Ruddock, Joan
Russell, Christine
Ryan, Joan
Salter, Martin
Shaw, Jonathan
Sheerman, Mr. Barry
Sheridan, Jim
Simon, Mr. Siôn
Skinner, Mr. Dennis
Slaughter, Mr. Andrew
Smith, rh Mr. Andrew
Smith, Angela E. (Basildon)
Smith, Geraldine
Smith, rh Jacqui
Snelgrove, Anne
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Strang, rh Dr. Gavin
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, Ms Dari
Taylor, David
Thomas, Mr. Gareth
Thornberry, Emily
Timms, Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Trickett, Jon
Turner, Dr. Desmond
Ussher, Kitty
Wallace, Mr. Ben
Waltho, Lynda
Ward, Claire
Wareing, Mr. Robert N.
Watts, Mr. Dave
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, rh Mr. Alan
Williams, Mrs. Betty
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Wyatt, Derek

Tellers for the Noes:

Mr. Alan Campbell and
Mr. Frank Roy

Question accordingly negatived.

15 Dec 2005 : Column 1503
3.30 pm

Mr. Forth: I beg to move amendment No. 5, in page 2, leave out lines 10 to 12.

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