Lorely
Burt: After listening to the argument made by the hon.
Member for Hertford and Stortford, it seems entirely appropriate that
the laying of the report before Parliament should be timebound. I will
be pleased to support the measure, and perhaps the Minister could see
his way to incorporating it within the
Bill.
Mr.
McFadden: The amendments are, quite fairly, concerned with
ensuring that there is no undue delay in laying the accounts before
Parliament. As the hon. Member for Hertford and Stortford noted, the
relevant section of the schedule says:
“The
Secretary of State must lay before Parliament a copy of each certified
statement and report
received”. The
amendments add a time limit on the Minister’s duty to lay a copy
of the LBRO accounts before Parliament and the Welsh Assembly. In
principle, we recognise the importance of timing in the interests of
proper public accountability. The hon. Gentleman said that scrutiny was
improved with speed—perhaps that was not quite the word, but
certainly without undue delay—and our intention is for copies to
be placed in the House as soon as the accounts have been signed off by
the auditor. However, in practice, such time limits laid down in
statute are uncommon. Although the hon. Gentleman is right to say that
there should be no undue delay, it is accuracy that is ultimately
important. The Government hope that the hon. Gentleman will not press
the amendment, as a statutory deadline might work against the
overriding objective of accuracy.
The wording
of the amendment might unintentionally create inflexibility. The
requirement to air the accounts in this way might mean that they could
only be made available on dates when the House is sitting. That might
make a 30-day deadline difficult to meet, for example, if accounts were
presented early in the recess. We could even inadvertently cause a
delay as we may need to refuse them in order not to fall foul of the
statutory requirement. I am sure that that is not the hon.
Gentleman’s intention, but the way that it might fall could
inadvertently slow the process down.
In previous
debates I referred to a couple of precedents, and I hope that the
Committee will bear with me if I do so again. For example, the Natural
Environment and Rural Communities Act 2006, which set up Natural
England, does not set time limits for the agency’s accounts to
be laid before Parliament. The Education (Schools) Act 1992, which set
up Ofsted, also specified no time period for laying the chief
inspector’s report before Parliament. I sympathise with the
intent behind the amendment. The hon. Member for Hertford and Stortford
is absolutely right: there should not be undue delay in these matters
and the Government do want to see accounts dealt with
promptly. Mr.
Prisk: The Minister says that he accepts the principle
behind the amendment. If the Government are willing to bring forward a
different time period, or an adjustment in the words, I would be happy
to withdraw the amendment. It may be that actually, the Minister does
not want any time limit at
all.
Mr.
McFadden: I cannot promise the hon. Gentleman that I will
bring forward a different time limit. While he is right to stress that
the accounts should be laid before Parliament as soon as possible, the
overriding objective must be accuracy and I would resist putting a
number of days in the Bill. I hope that he will not press the
amendment. If he does, I would ask my colleagues to resist him for that
reason. However, I understand exactly his point about the desirability
of avoiding undue delay. That is certainly the Government’s
objective, but we also have the overriding objective of making sure
that the accounts are
right. Mr.
David Kidney (Stafford) (Lab): My hon. Friend will be
asking us to vote no to a time limit. He has given a list of other Acts
of Parliament that have a similar requirement with no time limit. Has a
rule, a convention, a practice or a rule of thumb been developed under
which there is a time that Departments aim for when they submit such
documents to
Parliament?
Mr.
McFadden: My hon. Friend asks whether there is an informal
rule outside 30 days. We certainly try to deal with matters each year
before we go into recess. We do not do so by a number of days, but we
try to avoid undue delay. The precedents that I quoted in respect of
Ofsted and Natural England do not have such time limits. I completely
agree with the sentiment of avoiding undue delay, but to put a number
of days in the Bill might lead us, for the reasons that I have
explained, to unintended consequences. I hope that accuracy would be
accepted as the main objective, and if the accounts are accurate there
should certainly be no undue delay in tabling
them. Judy
Mallaber (Amber Valley) (Lab): In the event that the
reports or accounts were published at the start of the summer recess.
and thus would not be before Parliament for a period, would they still
be published in some form so that people could see them or would that
have to wait until Parliament sits
again?
Mr.
McFadden: My fear is that the effect of the amendment
would be that if the accounts were coming to us shortly before the
summer recess, we might say that we do not have the 30 days and that it
would be better to receive them after the summer recess. That would
cause an inadvertent and unintentional delay. I absolutely respect and
agree that there should not be undue delay, but I am not quite sure
that setting down a time limit of 30 days is the correct way to ensure
that.
Mr.
Prisk: I am grateful to the Minister and hon. Members for
the debate because it is important that we can ensure that our scrutiny
is effective. The presentation
of documents to this place must therefore be timely. To say that
something is uncommon is one of the weakest arguments that I have come
across. It is uncommon, dare I say it, for England to win the World
cup, but that does not necessarily mean that it is a bad
thing— [Interruption.] I shall leave that to
the Scots to debate among themselves. I have veered into dangerous
territory. The fact that something is uncommon does not mean that it is
bad. That was a fascinating but rather irrelevant
argument. The
Minister said that he recognised the merit of the fact that we need to
have documentation in a timely way. I do not buy the argument that
somehow inaccuracy will result. We are discussing the annual report
that the LBRO is required to present to the Secretary of State. We are
not talking about a time limit for the LBRO to get its accounts right,
but the time from when the Secretary of State receives the documents
and when he or she decides to place them in the Library of the House of
Commons. The accuracy argument does not work. It might work if it was
about 30 days for the preparation of the accounts. That is a perfectly
legitimate argument, but it does not work in the context under
discussion. I
recognise fully that 30 days is not a perfect answer, but I accept that
quite understandably Ministers wish to have no trammels on their
ability to act. However, we should not simply accept that. The hon.
Gentleman is an honourable man. I am sure that it would be his wish and
intention to present the documents in time, but we might not
necessarily be dealing with him. We need to think of future Ministers
and other circumstances, and need to ensure that the House can pursue
its scrutiny effectively. Unless he can offer me something that would
show recognition with a time limit perhaps on Report, it is not my
intention to withdraw the
amendments. 11.15
am
Mr.
Kidney: The debate has raised an interesting point, and I
am as surprised as the hon. Gentleman that major bodies, such as Ofsted
and Natural England, send reports to the Secretary of State, who then
apparently has no time limit at all in which to lay them before
Parliament. That is a serious omission in Parliament’s
administration. If we think of something such as a Select Committee
report, Ministers are required by convention, rather than a rule, to
reply within two months. That would perhaps get us over the
Minister’s main objection about recesses. Does the hon.
Gentleman think that if he presses the amendment to a vote in the
Committee, whatever the result, maybe the Procedure Committee ought to
be looking more generally at all such reports and a time scale for
laying them before
Parliament?
Mr.
Prisk: The hon. Gentleman is absolutely right to say that
the House, beyond this Committee—I will not stray too far
away—needs to think about how we can tighten up the procedures
so that there is a process. I cannot believe that Whitehall is opposed
to a process, although I can understand the wish to reserve a certain
flexibility, but the hon. Gentleman is absolutely right, and that is
why I wish not to withdraw the amendment, but to press it to a Division
to proceed with the
matter. Question
put, That the amendment be made:—
The
Committee divided: Ayes 6, Noes
8.
Division
No.
1] Question
accordingly
negatived. Schedule
1 agreed
to. Clause
2 ordered to stand part of the
Bill.
Schedule
2Replacement
of the LBRO company by
LBRO
Mr.
Prisk: I beg to move amendment No. 46, in
schedule 2, page 43, line 30, leave
out paragraph
3. This
is purely a probing amendment, so we seek not to delete, but to
clarify. Paragraph 3 relates to matters of tax, including stamp duty
land tax. Can the Minister tell us whether the effect of the paragraph
is intended to be
retrospective?
Mr.
McFadden: As the hon. Member for Hertford and Stortford
says, the provision is about the tax treatment of the LBRO as it
becomes a statutory body. We are keen to make the transfer from the
operation as a private company to a statutory body as smooth as
possible. The creation of LBRO as a company last year has enabled a lot
of good preparatory work to be done to make it ready for that
transition. However, the Bill needs to provide for transfers to the
statutory corporation when it comes into existence, and that involves
the transfer of property, which would have tax consequences, whether
through income or corporation tax, or stamp duty.
The transfer
of assets and liabilities from the LBRO company to the LBRO could
result in inappropriate tax consequences for the transferor or
transferee, which would arise solely because of the transfer. For
example, property transferred for no consideration could be treated as
transferred at market value for capital gains purposes. Paragraph 3
addresses those consequences by providing tax neutrality. It ensures
that a transfer will not give rise to a tax change or confer a tax
advantage on either the transferor or the transferee. This is about
ensuring that the transition between the private company and a
statutory body can operate without unintended tax consequences. In
terms of retrospection, I am not clear what the hon. Gentleman is
driving at, given that we are talking about a transfer that is to take
place if the Bill is approved by Parliament. The schedule deals with
the tax implications of the transfer at the point that it takes
place.
Mr.
Prisk: My concern is that the LBRO company will engage in
a series of activities, assets and so on, possibly including real
estate, which would, on transfer
to the new body, create a potential tax liability—stamp duty land
tax being the obvious example. Many of those taxes relate to the change
in value from the original purchase. Does the measure address the
liability at the point of transfer solely, or is it concerned with the
tax matters since the incorporation of the LBRO company, and thus
retrospective?
Mr.
McFadden: My understanding is that there should not be an
issue with the change in value of assets that the hon. Gentleman
describes. I am happy to give him further detail about that, but the
schedule deals with assets at the point of transfer. That is the key
point. The schedule seeks to avoid unintentional or unwelcome tax
consequences that could arise as the result of a move from a private
company to a statutory
body.
Mr.
Prisk: It is a hideously complex prospect, but one that it
is important to clarify. I am grateful to the Minister for offering to
write to me and, I presume, the Committee members, to clarify the
matter. I appreciate that it may be something that is beyond his
immediate knowledge. On that basis, I beg to ask leave to withdraw the
amendment. Amendment,
by leave, withdrawn.
Schedule 2
agreed
to. Clauses
3 and 4 ordered to stand part of the Bill.
Schedule 3
agreed
to.
Clause
5Objective
relating to general
functions
Mr.
Prisk: I beg to move amendment No. 1, in
clause 5, page 3, line 37, at
end insert— ‘(d) in
accordance with any Code issued from time to time under Section 22 of
the Legislative and Regulatory Reform Act 2006 (c.
51).’. Amendment
No. 1 would insert a new paragraph (d) to clause 5. Its purpose is
expressly to include Hampton principles in the LBRO’s
objectives. The reason goes back to the origins of the Bill, namely,
the Hampton review of regulatory enforcement. The principles include
co-ordination, consistency of regulatory enforcement, a risk-based
approach—targeting the rogues and not the individual who has
made the odd error—and, most important, securing compliance with
rules rather than just chasing prosecution. Those principles are
supported by Opposition Members and by many businesses. Indeed, the
amendment has the support of a number of businesses and their
representatives, including the British Retail Consortium. Although I
appreciate that subsection (2) lists some of those principles, it is
neither explicit nor complete. The amendment would strengthen the
clause, and I look forward to hearing the Minister’s reply as to
why he thinks the reverse, or whether in fact he is only too delighted
to accept the amendment.
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