Mr. Browne: I am going to be as gracious as I ever can be and say that I found the Ministers 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 Ministers 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.
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 Ministers 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, 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 HMRCs 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 Governments 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 providedas I indicated when we discussed these matters in greater detail earlierparticularly 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 Parliaments 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
(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]
Question accordingly negatived.
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.
Computer 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.]
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
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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