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The shadow Chief Secretary to the Treasury, the hon. Member for Runnymede and Weybridge (Mr. Hammond), made a number of interesting points, and I want to deal with some of them in the time that I have. He asked a question about the tax rate on trusts. Rates were aligned in 2004 to prevent avoidance of the higher rate by routeing income through a trust. The trust rate will be increased in line with the higher rate, so we are not opening up opportunity for trusts to be used for avoidance. Those for whom the lower rate is appropriate can reclaim tax; many do so already. In the case of self-assessment, that will happen automatically. If, as was suggested, the trust is for a vulnerable beneficiary or a
bereaved child, for example, an election can be made under the vulnerable beneficiary legislation, which has a special tax regime.
On bingo, which came up in the debate, we have increased the rate of bingo duty, but withdrawn VAT on participation fees. The overall consequence of that is to reduce the rate of tax on bingo from 24 or 25 per cent. to 22 per cent. I am sure that the change will assist those in the bingo industry.
The shadow Chief Secretary welcomed the announcement in the Budget and in the Bill on foreign profits taxation, and I am grateful to him for that. He made the point that there had been a good consultation exercise, and I thank him for that as well. I hope he will have a word with the hon. Member for Fareham (Mr. Hoban), who took a slightly different position in his winding-up speech. I agree that we have made an important announcement that will increase and improve the competitiveness of the UK.
Mr. Philip Hammond: I am happy to acknowledge the proper consultation that went on in relation to the foreign profits taxation, but can the Financial Secretary tell us why there was no consultation at all on clause 92?
Mr. Timms: The hon. Gentleman may be referring to the requirement on accounting officers to confirm that their businesses have appropriate systems in place for assessment of tax. No doubt we will have some debate on that in Committee. The great majority of people will think that it is appropriate that companies give that assurance as a measure to help address the problems of avoidance, which were mentioned in the debate and which have been of concern elsewhere. It is an appropriate measure to ensure that companies are paying the tax that is due.
On the pension changes that were discussed in the debate, we will consult on the detail of how those will work. I can confirm that civil servants on sufficiently high salaries will be affected by those changes. We were asked in the debate whether we would acknowledge the position of those who make regular but less frequent pension contributions—less frequently than quarterly. I refer Members to my statement to the House on Budget day, in which I confirmed that we would examine that issue.
The shadow Chief Secretary asked whether we would use plea bargaining with tax avoiders. The Bill sets out the criteria for exemption from HMRC publishing people’s names in the event that they deliberately evade taxes, which is a full disclosure, either unprompted or prompted, within a time frame specified by HMRC.
The hon. Gentleman was right—just last week we secured state aid approval for the venture capital trust scheme, but I caution him about looking at the prospect for relaxing some of the restrictions put in place in 2007. We will need to ensure that we continue to comply with state aid rules.
Many businesses, especially in London, will have been extremely concerned about the hon. Gentleman’s refusal to commit his party to support for the Crossrail scheme. There is very strong support among businesses and, I thought, across the House for the Crossrail project. His unwillingness to commit to that will have caused widespread concern.
I wish to comment on some of the other contributions in the debate. The hon. Member for Taunton (Mr. Browne) made some observations about the Government’s approach. He made some enjoyable observations about the Conservative party. I particularly enjoyed the bit where the hon. Member for Beverley and Holderness (Mr. Stuart) felt that he had to leap to his feet to defend his party leader from the criticisms that the hon. Gentleman was delivering. The hon. Member for Taunton did not have a great deal to say about the Bill, but I am sure he will do so in the debates next week and upstairs in Committee.
My hon. Friend the Member for Wolverhampton, South-West (Rob Marris) made a characteristically thoughtful speech and I, for one, would welcome his presence on a seventh Finance Bill Committee. He is absolutely right to underline the need to plan for efficiency savings. We have announced that we will introduce £5 billion of efficiency savings from next year, and they will be very carefully planned, as opposed to the slash-and-burn approach that we have seen from the Opposition. It is absurd for the Conservatives to demand £5 billion in spending cuts this year without any attempt at all to identify where those savings would fall or what their effects would be.
My hon. Friend was right to highlight the scale of the increase in borrowing in the next few years, and that those increases will be matched throughout the world in comparable countries. In fact, they will be matched not only in developed countries but in developing countries. He was right also to welcome the first-year allowances, which businesses have widely welcomed.
The hon. Member for Dundee, East (Stewart Hosie) commented on the rise in unemployment, and I agree about the concern at the rise. That is why I am sure that he will welcome the job guarantee for young people, which was announced in the Budget. Indeed, perhaps he will agree with this recent comment:
“Previous recessions have left tens of thousands unemployed for years, even decades, and stuck on dependency culture without the skills that they need to get a job. The devastating impact...is still being felt in many parts of the UK today. It is encouraging that action is being taken”—
“to target this”.
That was Margaret Eaton, the Conservative chair of the Local Government Association, welcoming that measure in the Budget.
My hon. Friend the Member for Edmonton (Mr. Love) also made an excellent speech, rightly drawing attention, through his visit with others to the Debt Management Office this morning, to the realities of the current market for Government debt.
David Taylor: Was the Financial Secretary as disappointed as I was by the serried ranks of Conservative MPs who, in their contributions, hyperventilated to the extent of needing defibrillators at one proposed change to national insurance for those who earn £20,000 or more? They failed to point out that a person on an average income of £25,000 will pay 0.5 per cent. on the £5,000 over £20,000, equalling £25 a year. Instead, they suggested that it was some sort of awful impost.
Mr. Timms: Of course, those increases are more than offset by the increases in personal allowances which we introduced last year and in the Bill this year.
The Bill presents effective tax measures to support businesses and households through these tough economic times, and it also looks ahead. It lays foundations for a strong recovery to make the most of new opportunities when the upturn comes, and for fair fiscal consolidation to keep the public finances on a sustainable path. I commend this Bill to the House.
Question put, That the Bill be now read a Second time.
The House divided: Ayes 285, Noes 209.
AYES
Abbott, Ms Diane
Ainger, Nick
Alexander, rh Mr. Douglas
Allen, Mr. Graham
Anderson, Mr. David
Atkins, Charlotte
Austin, Mr. Ian
Bailey, Mr. Adrian
Balls, rh Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Beckett, rh Margaret
Benn, rh Hilary
Benton, Mr. Joe
Berry, Roger
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blizzard, Mr. Bob
Blunkett, rh Mr. David
Borrow, Mr. David S.
Bradshaw, Mr. Ben
Brennan, Kevin
Brown, Lyn
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Bryant, Chris
Burden, Richard
Burnham, rh Andy
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, rh Mr. Liam
Caborn, rh Mr. Richard
Campbell, Mr. Ronnie
Caton, Mr. Martin
Cawsey, Mr. Ian
Challen, Colin
Chapman, Ben
Chaytor, Mr. David
Clapham, Mr. Michael
Clark, Paul
Clarke, rh Mr. Charles
Clelland, Mr. David
Clwyd, rh Ann
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cook, Frank
Cooper, Rosie
Cooper, rh Yvette
Corbyn, Jeremy
Cousins, Jim
Crausby, Mr. David
Creagh, Mary
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
David, Mr. Wayne
Davidson, Mr. Ian
Davies, Mr. Dai
Davies, Mr. Quentin
Dean, Mrs. Janet
Denham, rh Mr. John
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dismore, Mr. Andrew
Dobbin, Jim
Dobson, rh Frank
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Drew, Mr. David
Eagle, Angela
Eagle, Maria
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Farrelly, Paul
Fisher, Mark
Fitzpatrick, Jim
Flello, Mr. Robert
Flint, rh Caroline
Flynn, Paul
Follett, Barbara
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
Godsiff, Mr. Roger
Goggins, Paul
Griffith, Nia
Griffiths, Nigel
Gwynne, Andrew
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. David
Hamilton, Mr. Fabian
Hanson, rh Mr. David
Harris, Mr. Tom
Havard, Mr. Dai
Healey, rh John
Hepburn, Mr. Stephen
Heppell, Mr. John
Hesford, Stephen
Hewitt, rh Ms Patricia
Heyes, David
Hill, rh Keith
Hodgson, Mrs. Sharon
Hoey, Kate
Hopkins, Kelvin
Howarth, rh Mr. George
Howells, rh Dr. Kim
Hoyle, Mr. Lindsay
Hughes, rh Beverley
Humble, Mrs. Joan
Hutton, rh Mr. John
Iddon, Dr. Brian
Illsley, Mr. Eric
Irranca-Davies, Huw
Jackson, Glenda
Jenkins, Mr. Brian
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jones, Mr. Martyn
Jowell, rh Tessa
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Kennedy, rh Jane
Khan, Mr. Sadiq
Kidney, Mr. David
Kilfoyle, Mr. Peter
Knight, rh Jim
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, rh Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Lewis, Mr. Ivan
Linton, Martin
Lloyd, Tony
Love, Mr. Andrew
Mackinlay, Andrew
Mactaggart, Fiona
Mallaber, Judy
Marris, Rob
Marsden, Mr. Gordon
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCabe, Steve
McCafferty, Chris
McCarthy, Kerry
McCarthy-Fry, Sarah
McCartney, rh Mr. Ian
McDonnell, John
McFadden, rh Mr. Pat
McFall, rh John
McGovern, Mr. Jim
McGuire, rh Mrs. Anne
McKenna, Rosemary
McNulty, rh Mr. Tony
Meacher, rh Mr. Michael
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Miliband, rh David
Miller, Andrew
Mitchell, Mr. Austin
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Moran, Margaret
Morden, Jessica
Morgan, Julie
Mudie, Mr. George
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Denis
Murphy, rh Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
O'Brien, Mr. Mike
O'Hara, Mr. Edward
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pearson, Ian
Plaskitt, Mr. James
Pope, Mr. Greg
Pound, Stephen
Prentice, Bridget
Prentice, Mr. Gordon
Prescott, rh Mr. John
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, rh James
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reed, Mr. Jamie
Reid, rh John
Riordan, Mrs. Linda
Robertson, John
Robinson, Mr. Geoffrey
Roy, Mr. Frank
Roy, Lindsay
Ruane, Chris
Ruddock, Joan
Russell, Christine
Salter, Martin
Seabeck, Alison
Sharma, Mr. Virendra
Shaw, Jonathan
Sheridan, Jim
Simon, Mr. Siôn
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andy
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
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, Ms Dari
Taylor, David
Thomas, Mr. Gareth
Thornberry, Emily
Timms, rh Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Ussher, Kitty
Vaz, rh Keith
Vis, Dr. Rudi
Walley, Joan
Waltho, Lynda
Ward, Claire
Watson, Mr. Tom
Watts, Mr. Dave
Whitehead, Dr. Alan
Wicks, rh Malcolm
Williams, rh Mr. Alan
Williams, Mrs. Betty
Wills, rh Mr. Michael
Wilson, Phil
Winnick, Mr. David
Winterton, rh Ms Rosie
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Tellers for the Ayes:
Helen Goodman and
Ian Lucas
NOES
Afriyie, Adam
Ainsworth, Mr. Peter
Alexander, Danny
Amess, Mr. David
Ancram, rh Mr. Michael
Arbuthnot, rh Mr. James
Bacon, Mr. Richard
Baldry, Tony
Barker, Gregory
Baron, Mr. John
Barrett, John
Bellingham, Mr. Henry
Benyon, Mr. Richard
Binley, Mr. Brian
Bone, Mr. Peter
Boswell, Mr. Tim
Brady, Mr. Graham
Brazier, Mr. Julian
Breed, Mr. Colin
Brokenshire, James
Brooke, Annette
Browne, Mr. Jeremy
Browning, Angela
Burrowes, Mr. David
Burt, Alistair
Burt, Lorely
Cable, Dr. Vincent
Campbell, rh Sir Menzies
Carmichael, Mr. Alistair
Cash, Mr. William
Chope, Mr. Christopher
Clappison, Mr. James
Clegg, rh Mr. Nick
Clifton-Brown, Mr. Geoffrey
Cox, Mr. Geoffrey
Curry, rh Mr. David
Davey, Mr. Edward
Davies, David T.C. (Monmouth)
Davies, Philip
Dorrell, rh Mr. Stephen
Dorries, Nadine
Duddridge, James
Duncan, Alan
Duncan Smith, rh Mr. Iain
Dunne, Mr. Philip
Ellwood, Mr. Tobias
Evans, Mr. Nigel
Evennett, Mr. David
Fabricant, Michael
Fallon, Mr. Michael
Farron, Tim
Field, Mr. Mark
Foster, Mr. Don
Fox, Dr. Liam
Francois, Mr. Mark
Fraser, Christopher
Gale, Mr. Roger
Garnier, Mr. Edward
Gauke, Mr. David
George, Andrew
Gibb, Mr. Nick
Gidley, Sandra
Gillan, Mrs. Cheryl
Goldsworthy, Julia
Goodman, Mr. Paul
Goodwill, Mr. Robert
Gove, Michael
Gray, Mr. James
Grayling, Chris
Greening, Justine
Grieve, Mr. Dominic
Gummer, rh Mr. John
Hammond, Mr. Philip
Hammond, Stephen
Hands, Mr. Greg
Harper, Mr. Mark
Harris, Dr. Evan
Harvey, Nick
Hayes, Mr. John
Heath, Mr. David
Heathcoat-Amory, rh Mr. David
Hemming, John
Herbert, Nick
Hoban, Mr. Mark
Hogg, rh Mr. Douglas
Hollobone, Mr. Philip
Holloway, Mr. Adam
Holmes, Paul
Horam, Mr. John
Horwood, Martin
Hosie, Stewart
Howard, rh Mr. Michael
Howarth, Mr. Gerald
Hughes, Simon
Hunt, Mr. Jeremy
Hunter, Mark
Jack, rh Mr. Michael
Jackson, Mr. Stewart
Jenkin, Mr. Bernard
Jones, Mr. David
Kawczynski, Daniel
Kennedy, rh Mr. Charles
Key, Robert
Kirkbride, Miss Julie
Knight, rh Mr. Greg
Kramer, Susan
Laing, Mrs. Eleanor
Lait, Mrs. Jacqui
Lamb, Norman
Lansley, Mr. Andrew
Leech, Mr. John
Leigh, Mr. Edward
Letwin, rh Mr. Oliver
Lewis, Dr. Julian
Liddell-Grainger, Mr. Ian
Lilley, rh Mr. Peter
Llwyd, Mr. Elfyn
Luff, Peter
Mackay, rh Mr. Andrew
Maclean, rh David
MacNeil, Mr. Angus
Main, Anne
Malins, Mr. Humfrey
Maples, Mr. John
Mason, John
Mates, rh Mr. Michael
Maude, rh Mr. Francis
McIntosh, Miss Anne
McLoughlin, rh Mr. Patrick
Mercer, Patrick
Milton, Anne
Moore, Mr. Michael
Moss, Mr. Malcolm
Mulholland, Greg
Mundell, David
Murrison, Dr. Andrew
Neill, Robert
Newmark, Mr. Brooks
O'Brien, Mr. Stephen
Öpik, Lembit
Ottaway, Richard
Paice, Mr. James
Paterson, Mr. Owen
Penning, Mike
Penrose, John
Pickles, Mr. Eric
Price, Adam
Prisk, Mr. Mark
Pritchard, Mark
Randall, Mr. John
Redwood, rh Mr. John
Reid, Mr. Alan
Rennie, Willie
Rifkind, rh Sir Malcolm
Robathan, Mr. Andrew
Robertson, Mr. Laurence
Rogerson, Dan
Rowen, Paul
Russell, Bob
Sanders, Mr. Adrian
Scott, Mr. Lee
Selous, Andrew
Shepherd, Mr. Richard
Simmonds, Mark
Simpson, Mr. Keith
Smith, Sir Robert
Spicer, Sir Michael
Spink, Bob
Spring, Mr. Richard
Stanley, rh Sir John
Steen, Mr. Anthony
Streeter, Mr. Gary
Stuart, Mr. Graham
Stunell, Andrew
Swayne, Mr. Desmond
Swinson, Jo
Swire, Mr. Hugo
Syms, Mr. Robert
Tapsell, Sir Peter
Taylor, Dr. Richard
Teather, Sarah
Thurso, John
Timpson, Mr. Edward
Tredinnick, David
Turner, Mr. Andrew
Tyrie, Mr. Andrew
Vaizey, Mr. Edward
Vara, Mr. Shailesh
Viggers, Sir Peter
Villiers, Mrs. Theresa
Walker, Mr. Charles
Wallace, Mr. Ben
Waterson, Mr. Nigel
Watkinson, Angela
Weir, Mr. Mike
Whittingdale, Mr. John
Willetts, Mr. David
Williams, Hywel
Williams, Mark
Williams, Mr. Roger
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Wilson, Mr. Rob
Winterton, Sir Nicholas
Wright, Jeremy
Yeo, Mr. Tim
Young, rh Sir George
Younger-Ross, Richard
Tellers for the Noes:
Mr. Stephen Crabb and
Bill Wiggin
Question accordingly agreed to.
Mr. Douglas Hogg (Sleaford and North Hykeham) (Con): On a point of order, Mr. Deputy Speaker. You will know that in the debate that we have just concluded there were 14 Back-Bench speakers, of whom only three came from the Labour Benches. Would you confirm that the usual practice is to constitute the Committee stage of a Bill to reflect those who participated on Second Reading? If that is right, should not the Committee of Selection ensure that there is a majority of Opposition spokesmen and speakers on the Committee on the Finance Bill?
Mr. Deputy Speaker: The right hon. and learned Gentleman knows that that is not a point of order for the Chair. The Chair might have the power to do certain things and might wish to do others, but one thing that the Chair certainly does not do is tell the Committee of Selection what to do. I am sure that it will take every matter into account.
That—
(1) Clauses 7, 8, 9, 11, 14, 16, 20 and 92 be committed to a Committee of the whole House;
(2) the remainder of the Bill be committed to a Public Bill Committee; and
(3) when the provisions of the Bill considered by the Committee of the whole House and the Public Bill Committee have been reported to the House, the Bill be proceeded with as if it had been reported as a whole to the House from the Public Bill Committee.— ( Mr. Timms .)
That the Finance Bill Committee shall have leave to sit twice on the first day on which it meets .—( Mark Tami .)
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