Mr.
Browne: I am going to be as gracious as I ever can be and
say that I found the Minister’s response rather persuasive on
many points, and I am happy to acknowledge that. The only point about
which I continue to have a reservation, although I very much understand
the case that the Minister makes, is the specific issue of the taxpayer
having to anticipate which documents HMRC considers are likely to be
required at some point in the future. I appreciate that, if that caveat
is not allowed, there is the opportunity for people to pile loads of
documentation through the shredder, knowing perfectly well that it is
likely to be useful, but they will be able to put their hand up at a
later date and say, totally innocently, “Sorry, I did not
realise that I was doing that”.
Of course,
the danger of trying to prevent that activity in the way that the
Minister is attempting to prevent it through this legislation is that
other people who are not acting with malign intentions may feel that
they are somewhat caught out too. That situation is what I was trying
to safeguard against, but I appreciate that, in trying to safeguard
against it, we would potentially open up a big avenue of abuse, which
the Minister is concerned about. As I say, although my concerns on
behalf of the innocent taxpayer who is seeking to be compliant remain,
because of the Minister’s perfectly legitimate concerns I do not
anticipate that the Committee is likely to approve amendment No. 178.
It is not my place to do anything on amendment No. 264, because I am
not the author of that amendment, so I will sit down and allow the hon.
Member for South-West Hertfordshire to complete the
formalities.
The
Chairman: We are grateful to the hon.
Gentleman.
Mr.
Gauke: The hon. Member for Taunton says that I will
complete the formalities. How does he know that he is not going to get
some inspiring oratory? [Laughter.] Alright, I
will complete the formalities.
I am
grateful to the Minister for her comments. I am grateful that she paid
due regard to the Low Incomes Tax Reform Group, which does a lot of
very good work. However, her arguments on amendments Nos. 293 and 307
are persuasive. Although there are circumstances in which recognition
of a lack of access to professional advice should be taken into
account, I can see the difficulties of having a one-size-fits-all
definition of “reasonable excuse” for these purposes and
a degree of flexibility is helpful.
I also note
the Minister’s comments with regard to amendment No. 265; she
made comparable comments earlier, and I will accept her comments. I am
not necessarily entirely convinced on amendment No. 266, but I
certainly will not press for a Division on that.
On amendment
No. 265, the Minister said that the current system seems to be working
well. I would be grateful if she could keep that under review, and I am
sure that she will, so that if there are problems with notices of
appeal that can be looked at again. On
amendment No. 264, I can see the administrative difficulties that may be
created and the potential delays. It is always a question of getting
that balance right and it is not necessarily an easy judgment to make.
Having made those comments, however, and having probed the Government
on these issues, I beg to ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn.
Mr.
Browne: I beg to move amendment No. 182, in
schedule 36, page 369, line 33, leave
out from ‘Schedule’ to end of line 34 and
insert ‘may not be made unless a draft of the
regulations has been laid before, and approved by a resolution of, the
House of
Commons.’. I
felt that we had not spent nearly long enough on schedule 36 and that
another amendment would keep us going until perhaps a Division in the
Chamber.
I will be
brief. There is a slightly ritualistic quality to the amendment because
it is the type of amendment that is tabled by Opposition parties as a
matter of routine. I sound rather world weary for someone who has only
been in Parliament for three years. I have observed the tabling of such
amendments many times and the Government in my experience resist them.
I anticipate that they will do the same again. There is no harm,
however, in tabling such an amendment even if one anticipates that one
will be unsuccessful.
The
amendment seeks to require an affirmative resolution when changes are
made. Paragraph 55(2) states that all statutory instruments provided
for under the schedule will be subject to negative resolution.
Amendment No. 182 changes that to an affirmative resolution. The basis
for that is that we continue to have serious concerns with regard not
just to this schedule and legislation but to other Government
legislation generally about the lack of safeguards afforded to the
taxpayer and the Government being empowered to make changes without
going through the degree of parliamentary scrutiny which we would wish
to see. Amendment No. 182, therefore, seeks to ensure that Parliament
is able to debate further regulations and scrutinise HMRC’s
practices more thoroughly than would otherwise be the
case.
Mr.
Gauke: As the hon. Gentleman said, there is a certain
ritualistic nature to the amendment. None the less, I think it is
valuable because Government should always have to justify the use of
the negative resolution as opposed to the affirmative procedure. When I
have debated the matter with the Financial Secretary in the past, she
has tended to make the point that it is the sort of thing that
Oppositions call for and Governments reject.
Schedule 36
is an important schedule. It contains an important number of
provisions. The detail on the safeguards by no means matches the detail
on the powers and deterrents; the whole process is about powers,
deterrents and safeguards, a point that I made last week. From what we
have heard, most of the safeguards will be in the form of guidance
rather than in the regulations. There are regulations, but if we were
to look at where the real issue is, it is probably more within the
guidance. That is partly why we have taken some time over schedule 36.
We wanted to get the Minister to consider those particular
points.
Given that,
and notwithstanding the characterisation which tends to be the case in
these matters, we are perhaps not as strongly moved by the argument for
the affirmative resolution to apply in these particular circumstances.
I do not know whether that indicates wider expectations. I would be
grateful, however, to hear the Government’s explanation of why
the particular procedures are in place, as opposed to something that
gives Parliament greater scrutiny, given that this is an important
schedule with important
powers.
Jane
Kennedy: I do not intend to rehearse the usual arguments.
Although the Opposition parties’ complaints are habitual, they
are none the less heartfelt. In particular, there is good reason to
explain why there are three regulation-making powers in schedule 36.
The first, in paragraph 21 allows commissioners to make regulations
about the procedures for the first-tier tribunal to resolve disputes
over whether information or a document is privileged. The regulations
represent an additional safeguard for taxpayers and provide a clear
framework to resolve such disputes, which does not currently exist for
taxation. The regulations will simply relate to procedural
matters.
Paragraph 58
contains another regulation-making power that will allow commissioners
to make regulations to specify particular activities as a
“business”. Primary legislation already sets out some
activities to be considered businesses, and the consequences in
relation to inspection powers. The regulation-making power will enable
more detail to be provided—as I indicated when we discussed
these matters in greater detail earlier—particularly for new or
unusual activities. The negative resolution procedure is appropriate
for each of those regulation-making powers because of their narrow
scope and because they will provide greater clarity and safeguards for
taxpayers. The
third regulation-making power, in paragraph 39, allows the Treasury to
revalorise the level of penalties for failing to comply with an
information notice in line with the value of money. That is standard
wording for revalorisation provisions, which are customarily dealt with
through the negative resolution procedure. I do not believe that there
is any good reason to act differently in this case. Using the
affirmative resolution procedure for any of those provisions would run
contrary to the normal practice for tax matters. I have not been
persuaded by the hon. Member for Taunton, and I hope that he will
withdraw his
amendment.
Mr.
Browne: As the hon. Member for South-West Hertfordshire
said, we are trying to strike a balance between, on the one hand, an
HMRC empowered to do its job on behalf of taxpayers in order to
maximise the revenue accruing to the Government through entirely
legitimate and legal procedures, and on the other safeguarding the
rights of the individual. The lengthy and detailed scrutiny of this
part of the Bill has been extremely useful, precisely because it is so
important to strike the right balance. I am keen to see
Parliament’s powers extended, so that it can continue to
scrutinise in great detail any future changes. However, I accept that I
am unlikely to persuade the Government of the merits of that case. On
that basis, I beg to ask leave to withdraw the
amendment. Amendment,
by leave, withdrawn.
Amendment
made: No. 225, in schedule 36, page 370, line 3, at end
insert— ‘“premises”
includes— (c) any
building or structure, (d) any
land, and (e) any means of
transport,’.—[Jane
Kennedy.] Amendment
proposed: No. 270, in schedule 36, page 371, line 45,
leave out ‘present and future liability’ and
insert ‘or present
liability or any future liability to the extent that it depends in
whole or in part to any past or present
transactions’.—[Mr.
Gauke.] Question
put, That the amendment be
made:— The
Committee divided: Ayes 7, Noes
16.
Division
No.
12] Blackman-Woods,
Dr.
Roberta Question
accordingly negatived.
5.45
pm Amendments
made: No. 226, in schedule 36, page 373, line 12, at end
insert— ‘68A In
section 29(6)(c) (assessment where loss of tax discovered), omit
“, whether in pursuance of a notice under section 19A of this
Act or
otherwise”.’. No.
227, in
schedule 36, page 373, line 20, at
end insert— ‘71A (1) Section
107A (relevant trustees) is amended as
follows. (2) In subsection
(2)(a), for “, 95 or 97AA” substitute ‘or
95’. (3) In subsection
(3)(a), omit “or
97AA(1)(b)”.’. No.
228, in
schedule 36, page 376, line 8, leave
out ‘118’ and insert ‘115’.—[Jane
Kennedy.] Schedule
36, as amended, agreed
to.
Clause
109Computer
records
etc Amendment
proposed: No. 229, in clause 109, page 68, line 25, at
end insert ‘, or (d) makes any
other provision in connection with a requirement mentioned in paragraph
(a) or (b).’.—[Jane
Kennedy.]
The
Chairman: With this it will be convenient to discuss
Government amendments Nos. 230 to
234. This
is not the place for a stand part debate, but, as I have indicated, if
in discussing any of the Government amendments it is convenient to make
reference to matters
that might delay us in a protracted stand part debate, my hearing will
perhaps catch up after the reference has been made, as long as it is
not too
long. Mr.
Gauke: I hope to catch your eye during the stand part
debate, Sir Nicholas. I appreciate why the Financial Secretary moved
the amendment formally. She says that the amendments are of a technical
nature, but I thought that it would be helpful if she could briefly
describe the significance of changing the references to
“provision” to “enactment”, just so that
the Committee is fully aware of the reason behind the amendments. I
have no further comments at this
time. Stewart
Hosie (Dundee, East) (SNP): I heard what you said at the
beginning, Sir Nicholas. I hope that you will not chide me, as I want
to speak directly to amendment No. 229, but it is difficult to do that
without discussing the context of clause 109 generally. I shall keep
this as brief as I can and associate it with the amendment, when I
can.
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