Mr.
Hands: The Exchequer Secretary is being generous in giving
way. She surprised me when she said that £200 million
would be lost over three years. Does that sum relate only to the
company that was at the centre of the court case? I realise that she
cannot disclose the tax paid by particular companies, but it seems a
widespread practice to use landfill materials to improve or change a
site. Am I right in thinking that that practice has been going on
throughout the
country?
Sarah
McCarthy-Fry: I do not have to hand the basis on which
those figures were calculated, but I am happy look into the matter and
to pass the information to the hon. Gentleman.
A question
was asked about different dates for the introduction of rates. Certain
powers need to be brought in to enable the making of the underpinning
regulations. From the point of view of taxpayers, the changes come into
force on 1 September 2009.
I can now
tell the hon. Gentleman that the £200 million figure
relates to the whole industry, not just to one
company. I
was asked about our progress with consultation. We have received four
formal responses, and a number of representative organisations have
asked to meet HMRC and HMT. As the hon. Gentleman said, the
consultation process does not end until 24 July. To ensure that
landfill site operators understand the technical changes, we will
publish full public guidance before the changes come into effect. We
have already provided operators with a draft of the
guidance. I
am confident that in the short term the changes will ensure that
landfill tax will continue to play a central role in supporting waste
policy. I commend the clause and schedule to the Committee.
Question
put and agreed
to. Clause
118 accordingly ordered to stand part of the
Bill.
Schedule
60 agreed to.
Clause
119Requirement
to destroy replaced vehicle registration
documents Question
proposed, That the clause stand part of the
Bill.
Mr.
David Gauke (South-West Hertfordshire) (Con): It is a
pleasure to serve under your chairmanship for the last time on this
Finance Bill, Mr. Atkinson.
I have only
one question for the Minister. The clause amends the Vehicle Excise and
Registration Act 1994 to allow the Secretary of State for Transport to
make regulations compelling the registered keepers of vehicles to
destroy the vehicle registration certificate once they have received an
amended or updated version. My question for the Minister is simple: why
is that in a Finance Bill? It does not seem to be directly a taxation
matter and consequently it sits somewhat strangely in the
Bill. Mr.
Brian Jenkins (Tamworth) (Lab): I have more than one
question. I am glad that the measure is in the Bill, because at least I
have the opportunity to put a couple of points to my hon.
Friend.
I understand
why we are compelling owners of vehicles to destroy documents, but some
people in this country keep what are called historic vehicles. The
historic vehicle is itself an asset, but the documentation is also an
asset. When a vehicle is sold and ownership is transferred, it adds
value to the vehicle if it was owned by a famous individual, a member
of the Royal family or other such person. The documentation is part and
parcel of the history of the vehicle. Will my hon. Friend give me an
assurance that when a new document has been issued, the owner of the
vehicle can send the old document into the Driver and Vehicle Licensing
Agency where it can be stamped “no longer valid” and
returned to the owner, so that it can be part of the history of the
vehicle?
A second
point is that although we say that we need to compel owners to destroy
documents, people will be allowed to register documents online, which
means that there is no requirement to send the documents back to the
DVLA. What assurance can my hon. Friend give me that we will not have a
situation in which two sets of documents refer to one set of vehicle
registration details? Will not such a situation benefit those
individuals in the motor trade—they are thankfully few and far
between—who carry out the process of ringing, whereby, after a
bit of work, two cars are given the same registration number and the
same engine stamped number? We will have provided such individuals with
an extra set of documents because one set has not been destroyed.
Surely, to restrict growth in that trade, it would be far better if we
insisted that those documents be sent back to the DVLA. We could
therefore close the loop and ensure that we have not got two sets of
documents in circulation for one vehicle. I wait for clarification from
my hon. Friend on those two
points.
Sarah
McCarthy-Fry: The hon. Member for South-West Hertfordshire
asked why the measure is in the Finance Bill. The provision relates to
vehicle licences, which are taxpayer records. The change will help to
keep taxpayer records up to date. The purpose of the clause is to grant
the Secretary of State for Transport the power to make regulations
allowing keepers of vehicles to destroy an existing vehicle
registration document once they have received a new one. They are
currently legally obliged to notify and return a registration document
to the DVLA if any of the details on it change.
The
clause lays the foundation for the DVLA to begin work on a system of
electronic notification. Motorists will be able to destroy a superseded
registration document, instead of having to return it. When the
secondary legislation provided for in the clause is enacted, it will
bring into force a deregulatory measure that will remove from motorists
the burden of having to return the registration
document. The
DVLA plans to have a full round of stakeholder engagement before
regulations are amended. I am sure that the Federation of British
Historic Vehicle Clubs will be part of that stakeholder engagement and
that we will consult with it. On historic vehicles and the fact the
documentation is an asset, there is no change to the current system.
Owners of such vehicles currently have to return the document to the
DVLA to be destroyed. Under the Bill, they will simply be able to do it
themselves. Question
put and agreed
to. Clause
119 accordingly ordered to stand part of the
Bill.
Clause
120Hydrocarbon
oil duties: minor
amendments Question
proposed, That the clause stand part of the
Bill.
Mr.
Hands: I have only one question, but I am looking forward
to the Minister’s explanation of clause 120, which
amends the Hydrocarbon Oils Duties Act 1979. My question relates to
subsection (2) and the omission of the number 12. The explanatory notes
say that that is an unnecessary reference. I am intrigued about why,
after 30 years, it has been noticed to be an unnecessary reference.
Perhaps the hon. Lady could explain what it used to refer
to.
Sarah
McCarthy-Fry: I am afraid that I cannot give a detailed
explanation of why the reference is unnecessary. I am just glad that,
after 30 years, someone has spotted
it. The
second part of the clause corrects the wording of section 14D(2) of the
1979 Act so that there is a clear distinction between conduct that
attracts a civil penalty and conduct that is a criminal offence
relating to the supply of rebated biodiesel or bioblend for prohibited
use. Question
put and agreed to.
Clause
120 accordingly ordered to stand part of the
Bill.
Clause
121Inheritance
tax: agricultural property and woodlands relief for EEA
land Question
proposed, That the clause stand part of the
Bill.
Mr.
Gauke: The clause extends agricultural property relief and
woodlands relief to land held anywhere in the European economic area.
There is little in the Budget material or the explanatory notes to the
clause to explain the reason for that. The extension is welcome, and I
do not intend to divide the Committee on clause stand part, but it
would be helpful if the Minister outlined the reason for the clause. We
have been advised that it is probably the result of a formal request
from the European
Commission following the European Court’s decision in the Hein
v. Persche case, but I shall be grateful if the Minister
confirms
that. For
a few years, the European Commission has steadily pressed member states
to eliminate territorial discrimination in estate and gift tax reliefs.
Most case law has involved gifts to charities when the donor is a
taxpayer in one state and the charity is based in another. Hein
v. Persche is a similar case. Until now, whenever it has had a
success, the Commission has issued formal requests to member states,
but the UK has generally resisted them. The clause seems to mark a
shift in
attitude. Will
the Minister confirm the reason for the clause, and will he tell the
Committee whether there has been a change in attitude? In the past, did
the UK tend to resist the elimination of territorial discrimination in
estate and gift tax reliefs, whereas now the Government are taking a
different approach? Subject to information on those points, we have no
objection to the
clause.
The
Economic Secretary to the Treasury (Ian Pearson): My turn
now, Mr. Atkinson. It is a pleasure to serve under your
chairmanship this afternoon.
I am sure
that members of the Committee who own agricultural property or
woodlands in the European economic area and who might be thinking of
dying soon will be interested in the clause. It ensures that if
inheritance tax relating to a property has been paid or was due in the
past six years, relief may be available. It will provide greater
consistency of treatment for inheritance tax reliefs and bring them
more into line with relief for business
property. The
hon. Member for South-West Hertfordshire is right in saying that by
doing this, the Government will meet their obligations under EC law. He
referred to a specific court case, and my understanding is that there
was a reasoned opinion, which we considered at official level. We
believe that it is right to make the changes proposed in the clause and
to ensure that we extend inheritance tax woodlands relief to owners of
property in the EEA. I hope that that clarifies the
matter. Mr.
Peter Bone (Wellingborough) (Con): I do not think the
Minister answered my hon. Friend’s question in full. Has there
been a change of policy? It is normal to resist EU directives or
guidance in this area, so that nation states decide their own taxation
policy. We are perhaps seeing another creeping part of the European
superstate.
1.45
pm
Ian
Pearson: It is always a pleasure to hear the views of the
hon. Gentleman and confirm that the divisions in the Conservative party
over Europe are alive and kicking, despite the efforts to keep them
below the surface for many years.
Mr.
Adrian Bailey (West Bromwich, West) (Lab/Co-op): In the
context of the debate and the views expressed by the hon. Member for
Wellingborough, does my hon. Friend think that it is appropriate to
describe him as a Tory backwoodsman?
[Laughter.]
The
Chairman: Order. I would be grateful if the Minister did
not respond to that
intervention.
Ian
Pearson: The key point is that we considered the arguments
made by the European Commission in this case. We always look at such
matters on a case-by-case basis. Having carefully considered the views
of the Commission, we decided to extend the reliefs to the EEA. The
measure will be backdated six years and will go forward
prospectively.
The cost of
woodlands relief is negligible. We estimate the costs of agricultural
property relief, on a backdated basis, to be about £5 million a
year on a continuing basis. That is not a big sum of money and not many
people are affected, but we think it is the right thing to
do. Question
put and agreed
to. Clause
121 accordingly ordered to stand part of the
Bill. Clause
122 ordered to stand part of the Bill.
Schedule
61Alternative
finance investment
bonds
Ian
Pearson: I beg to move amendment 321, in
schedule 61, page 422, line 16, leave
out from ‘2003)’ to end of line 19 and insert
‘except that it does not include a
lease if the lease is for— (a) a
term of years of 21 years or less,
or (b) in Scotland, a period of
21 years or
less.’.
The
Chairman: With this it will be convenient to discuss
Government amendments 322 to
332.
Ian
Pearson: The amendments ensure that the legislation
functions as desired in the registration of the charge in all three
Land Registry jurisdictions: England and Wales, Northern Ireland, and
Scotland. The charge is an important anti-avoidance measure related to
the allowances for tax treatment of alternative finance investment
bonds, sometimes referred to as Islamic law compliant bonds, and help
to level the playing field with conventional
products. Before
turning to the details of the amendments, I will say a few words about
Government policy on Islamic finance, which relates to clause 122 and
schedule 61. The Government want everybody, irrespective of
religious or ethical beliefs, to have access to financial products. As
with other high potential growth areas in financial services, the
Government are committed to the UK becoming a global leader in Islamic
finance. We have made significant progress in recent years and the UK
is currently by far the largest western centre for Islamic finance.
More than 20 UK firms offer Islamic products and services—more
than anywhere else in the western world. The UK has five stand-alone
sharia-compliant banks and one stand-alone sharia-compliant insurance
provider. The London stock exchange is one of the premier listing
venues for sharia-compliant products globally, with 18 issuers listing
sukuk on the London stock exchange to date, raising close to
£6.5 billion. We are confident that we will strengthen and
enhance our position in the future, with benefits to all UK
taxpayers.
Let
me comment very briefly on the issue of potential sovereign sukuk. In
November 2008, the Government announced the decision not to proceed
with the issuance of sovereign sukuk at that time. The decision was
driven by a number of factors, mainly that sovereign sukuk would not
have offered value for money owing to the economic conditions in world
financial markets and our debt management policy. I emphasise that that
decision does not reflect diminished Government commitment to Islamic
finance in the UK. Our work, including the measures announced in the
Finance Bill, which I hope we will pass today, will pave the way for
the Islamic finance industry to issue corporate sukuk products as an
alternative source of funding for UK and overseas funds. The Government
will keep the situation with sovereign sukuk under review. Personally,
I would like sovereign sukuk to be issued in the
future.
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