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Mr. Kevan Jones: Does my hon. Friend agree with the Low Pay Commission, which has pointed out that many part-time women workers would not benefit under the scheme?

Rob Marris: I did not know that, although it does not surprise me. Although the HCI had some success, times change and we must move on.

It is unfortunate that the HCI appears to have been axed overnight rather than its withdrawal being phased over a year. It is entirely proper for the Treasury to examine whether a tax measure produces a certain effect and whether that effect could be produced through the better use of taxpayers' money. The Opposition would rightly berate any Government who introduced a measure to help with skills and who did not change it for years and years rather than keeping it under review to
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see whether it worked, whether behaviour changed as a consequence of it and whether they should put taxpayers' money into something else.

Peter Luff: I am grateful to the hon. Gentleman, who is a colleague on the Trade and Industry Committee. On the abolition of the scheme, I would not be so angry if a year's notice had been given on the intention to ban the scheme, which would have been the right way to proceed. The Paymaster General must address why the change is so sudden, because the matter could have been handled much more elegantly and effectively and with less serious consequences for the employees who risk losing their jobs.

Rob Marris: I am sure that the Paymaster General will address that issue later, if she catches your eye, Mrs. Heal. I believe that the hon. Gentleman has a constituency interest in the matter, for which he is rightly fighting. In terms of the economy as a whole, however, we must consider whether, for example, fewer computers will be purchased because of the abolition of the initiative. I do not know the answer to that, but I suspect that many fewer computers will be bought. While, sadly, there may be the P45s to which the hon. Gentleman referred in his constituency, in terms of the economy as a whole more people may be employed in outlets such as Dixon's, which is going to call itself Curry's, or wherever, selling computers to people direct instead of their being refracted through their employers. I do not know the research on that, and I do not know whether the Treasury does.

The hon. Member for Rayleigh mentioned what was said in The Times, and probably in other newspapers, about the idea, which I am sure that the Government do not have, of taxing personal e-mails. I would draw an analogy with company cars. I am sure that the House has spent a lot of time over the years discussing the taxation of company cars. The matter has come to rest in the past few years because, as a House and as a society, we have reached a modus vivendi and a balance as to how much company cars should be taxed. In most cases, company cars are used for business purposes as well as domestically. A car is an expensive piece of kit. Why have a car that one uses at work, and that one then has to park at work, or, if one can prove that there is no secure parking at work, drive home and leave there? When one then went to the supermarket, one had to go in a different car that one had bought oneself. We all recognised that that was a bit silly.

The taxation of part of the value of company cars is done on a fairly rough and ready basis. People do not go round saying, "How many miles have you driven?" There used to be banding. I think that there still is—I do not have a company car any more—but they are pretty broad bands. One does not have to clock every mile as regards whether it is business and personal. There is a contradistinction between the cost of enforcing something and simply getting in some tax while not spending too much on enforcement.

Perhaps we can have a similarly rough and ready approach to computers provided by employers for business use at people's homes by assuming that, say, 75 per cent. is business use as against 25 per cent. that is
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personal use. Otherwise, we could go on and on, ad infinitum, with the taxpayer subsidising computers at home for people's private use, which was a measure to kick-start IT literacy and competency in 1999. That may be the route that Sweden is taking, and good luck to it if it does.

The Government are absolutely right to set the Bill in the context of the mosaic of upskilling measures for our economy, and absolutely right to review it, but I wish that they had given it a little more time instead of doing it overnight.

Julia Goldsworthy: I welcome the announcement of a dedicated digital inclusion team and hope that it will really tackle exclusion issues. Will the entirety of the £370 million in savings that the abolition of the scheme will generate be transferred into that, or will some go into the Treasury pot?

If the clause remains in the Bill, it will signal the end of a very successful scheme that has helped 500,000 people, more than 75 per cent. of whom were in the lower-income tax brackets. Those people gained access to computers at home, not only for them but for their families. Siemens told us that its participation rate is more than 35 per cent.

Can the Paymaster General tell us more about how the decision to end the scheme was made? I understand that it was made a matter of hours before the Budget with very little consultation with the Department of Trade and Industry. The explanatory notes give this reason for the decision:

Will the Paymaster General not only write to the hon. Member for Mid-Worcestershire (Peter Luff) with that evidence but place it in the Library so that all Members can have access to it?

The Government claim that there are fundamental problems in two key areas, yet neither need be terminal for the scheme. All that is needed is clearer definition of the existing regulation. The Government would be more believable if, when they gave their reasons, they accompanied them with the hard evidence which, as yet, we have not seen.

The first problem is that of the definition of a computer, which in the original regulation is defined as "computer and peripheral equipment". There is a precedent in terms of how that has been resolved in other countries. Sweden tightened up its definitions of "eligible equipment" and "ineligible equipment", and made it clear that only one computer per household would be eligible. It might be worth paying attention to another Scandinavian precedent—that of Denmark, which cancelled the scheme but brought it back a year later. The Government might be forced to eat their words in future. There are ways of coming up with a series of workable definitions that continue to bring benefits to employees and their families. It should not merely be a case of robbing Peter to pay Paul in order to improve inclusion in other deprived groups.

On the wider issue of salary sacrifice, I understand from the HCI Alliance that the Office of Fair Trading has to approve every single hire agreement that goes
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through the scheme, so that if a claim fell outside the terms of the scheme, it would not qualify for the exemption. If the Government were able to provide evidence of such abuse, that would help clarify the situation. Certainly, the HCI Alliance has no evidence that it was being abused in that way or beyond the definitions of the regulation.

Withdrawal of the scheme will create a massive compliance problem for employees and employers. The regulatory impact assessment is very helpful. It explains that if the exemption is removed, all employees are technically required to log the time that they spend at home on their work computer using it for leisure purposes, such as checking e-mails or playing computer games, because it will be taxable. The removal of the scheme will create further confusion, not remove it.

Paragraph 18 of the RIA states:

The RIA goes on to say in paragraph 22:

I will be grateful if the Paymaster General can explain what "significant" means and how employers are planning to fill out their tax returns.

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