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Businesses will only pay the sum to which I have just referred when they lose an appeal. As a result, the payment will reflect the variable costs of all adjudications. It is also intended that the motorist will be required to pay a modest fee for each appeal made, irrespective of whether that appeal succeeds. The intention is not to burden appellants unduly, but to discourage speculative appeals without foundation.

Since the payment made by losing companies will contribute to covering the costs of other cases where the vehicle immobilisation business has won the appeal, and it will be based on averaging out the costs over all appeal cases, there is an element of cross-subsidy. The Home Office believes that this is the fairest approach; the bulk of the overall cost is met by those companies that lose appeals, but a modest fee will discourage motorists from speculative appeals. In general, a Ways and Means resolution is needed if people are required to pay out money other than for a service or other benefit that they are receiving fairly directly.

The House will be aware that my right hon. Friend the Home Secretary announced on Second Reading that we would table amendments to the Bill to provide for the establishment of a victims of overseas terrorism compensation scheme. As with the legislation governing the domestic criminal injuries compensation scheme, the amendments to the Bill include provision for compensation to be repayable in circumstances specified in the scheme. The criminal injuries compensation scheme of 2008 provides for compensation to be repaid where the beneficiary subsequently receives a payment in respect of the same injury from another source-for example, following a civil claim for damages. We envisage that the overseas terrorism compensation scheme will include a similar provision. As with the domestic scheme, new clause 14 tabled to the Bill provides for any such repayments to be paid into the Consolidated Fund. Provisions in
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legislation about the use of receipts must be authorised by a Ways and Means resolution, hence the second paragraph of the motion before the House today.

We have had an extensive debate-

Mr. Bone rose-

Claire Ward: But clearly not extensive enough, and as there is still time left that the hon. Gentleman wishes to ensure is available to him, I am more than happy to give way.

Mr. Bone: I am very grateful to the Minister, who is being extremely generous in giving way. She is winning me over, I have to say. I grasped the point on the issues relating to vehicles-slowly-and I am with her on that. However, the terrorism issue is not mentioned in the motion as such. If we could have a little more explanation of that, she might win me over.

Madam Deputy Speaker: Order. I am afraid I must intervene ahead of the Minister and say that that is wide of the motion.

Claire Ward: Thank you, Madam Deputy Speaker, for your guidance. I am not sure there was much more I could have added without getting into a debate on the substantive nature of the amendments, and I am sure that Members will want to have that opportunity in Committee or when the Bill returns to this House.

This is an important motion that has been debated more than thoroughly by the House today. The right place to debate matters of detail, of course, is in the Public Bill Committee, where there will be an opportunity for its members to discuss the amendments. I hope the House will give its full support to the Ways and Means motion today, and I commend it to the House.

Question put and agreed to.

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Corporation Tax Bill

Motion made, and Question put forthwith (Standing Order No. 60(8)),

Question agreed to.

Third Reading

1.34 pm

The Financial Secretary to the Treasury (Mr. Stephen Timms): I beg to move, That the Bill be now read the Third time.

I am pleased to open this Third Reading debate on the Corporation Tax Bill, and delighted to be debating once again with the hon. Members for South-West Hertfordshire (Mr. Gauke) and for Stockport-

Dr. John Pugh (Southport) (LD): Southport.

Mr. Timms: Indeed; that is not the first time that I have made that mistake. The three of us took part in a rather different discussion yesterday.

This Bill rewrites a range of corporation tax provisions, including provisions about the computation of profits, small profits relief, losses, group relief and distributions. It also rewrites some provisions that are more specialised-for example, those related to UK real estate investment trusts and others related to avoidance.

The Bill has been produced by Her Majesty's Revenue and Customs' tax law rewrite project and continues the project's work to modernise direct tax legislation so that it is clearer and easier to use. Last year, the project completed the first part of the task of rewriting corporation tax when the Corporation Tax Act 2009 was enacted. This Bill completes that work and means that, substantially, the whole of the legislation relating to corporation tax will have been rewritten.

Let me remind the House about the work of the tax law rewrite project. It was set up in 1996 by the then Chancellor-the current shadow Business Secretary-following a defeat for the then Government in the Finance Bill Committee, of which I was a member, on an amendment moved by the then hon. Member for Beaconsfield, Tim Smith. The project has, on the whole, continued to enjoy support from across the House since its establishment. Its principal aim is that the rewritten legislation should be far more accessible to users than the source legislation, some of which is dense and difficult to follow. Its success has been widely acknowledged and confirmed by independent market research.

To date, the project has rewritten the capital allowances and income tax legislation, and completed the first part of the task of rewriting corporation tax legislation. This Bill is the sixth produced by the project. The project takes great care to ensure that the legislation's effect is essentially unchanged by rewriting, but it can make minor changes in the law where they improve the legislation-for example, to remove ambiguity, to repeal obsolete provisions or to correct minor, unintended anomalies. There are 66 such changes set out in the explanatory notes to this Bill. Major changes will always be matters for a Finance Bill. All proposed changes in
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the law are considered by both the project's committees, and no minor changes are included in the Bill without the approval of both.

The work would have been impossible without considerable input from tax specialists and others, and I express particular thanks to them and to the members of the project's consultative committee, chaired by Miss Robina Dyall, who have ensured that the consultation has been detailed and thorough. The consultative committee includes representatives of small and large businesses, accountants, lawyers and other tax specialists. The time and commitment they have all invested are greatly appreciated.

The strategy of the project is set by its steering committee, chaired by the noble Lord Newton of Braintree, which includes Members from both Houses of Parliament and members of the judiciary, of business and consumer groups and of the accountancy and legal professions. I am particularly grateful to Lord Newton, who took over from the noble Lord Howe, for his commitment and guidance, and to the members of his committee.

The Joint Committee of both Houses, of which I was a member, chaired by the hon. Member for Chichester (Mr. Tyrie), considered the Bill on 11 January and noted the extensive consultation process to which it had been exposed. It paid close attention to the reasons for rewriting recently enacted legislation, the impact of the rewrite changes proposed in the Bill, and the powers in the Bill to amend the legislation. It also considered all the amendments to the Bill. The Joint Committee concluded that the Bill is a welcome clarification of the existing law, which, as a result, will be easier to use and more accessible. The Committee was satisfied that the changes to the law were of very minor significance and it accepted the amendments, all of which were technical.

This Bill is the second of two Bills that rewrite corporation tax legislation. Some of the corporation tax rules in it originally applied to both income tax and corporation tax, but as the tax law rewrite project's previous Acts provided a separate set of provisions for income tax, the income tax provisions have been in the rewrite style, whereas the corresponding corporation tax provisions remained in the original form. The Bill finishes the process of bringing the drafting of corporation tax back into line with that for income tax where the provisions share the same source legislation.

The Bill is a worthwhile contribution to modernising direct tax legislation, making it clearer and easier to use, and it maintains the project's excellent record in improving current legislation and has been welcomed by those who use it. I am very grateful for the support that has been shown across the House throughout this exercise, and I commend the Bill to the House.

1.40 pm

Mr. David Gauke (South-West Hertfordshire) (Con): It is pleasure to speak on Third Reading. This is very nearly the end of the process-we have another Bill to discuss this afternoon-but it is a good opportunity for us to thank those who have been involved in it over the past 14 years. As the Minister said, it all began in 1996 when my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), the then Chancellor of the Exchequer, set up the tax law rewrite project. He went on to Chair the Joint Committee on Tax Law
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Rewrite Bills. Those are two of the many contributions-both past and future-that he will have made to public life.

By the time a tax Bill reaches its Third Reading, an Opposition Front Bencher has usually devoted what feels like weeks of their life to addressing the matter. The tax law rewrite project process is unusual, in that an Opposition Front Bencher's involvement tends to be on Second Reading and Third Reading. The Minister has a slightly greater role as a member of the Committee, but I am sure that he would be the first to accept that it is not quite as demanding upon his time as a Finance Bill would normally be.

None the less, for many people this has been the most enormous project, and one should pay tribute to those who have been involved in it: the independent steering committee, which is chaired by Lord Newton and, as the Minister said, was previously chaired by Lord Howe of Aberavon, who has had a long-term interest in the making of tax law; Members of both Houses who have been part of the Joint Committee; members of the judiciary, and of the legal and accounting professions; and business and consumer groups. I particularly wish to thank my hon. Friend the Member for Chichester (Mr. Tyrie) for his service as Chair of the Joint Committee. In its report, which I read through, he acknowledged that he was new to the process, but he handled the proceedings with the skill that one would expect of him.

I also wish to thank the consultative committee, which consisted of members of the main tax and business representative bodies, and the many consultees involved in the process, both in the professional organisations and businesses, and in Her Majesty's Revenue and Customs. They responded to the project by devoting a great deal of their time to it, without any compensation as such, and they played an important role in developing this law.

Of course I also wish to thank the tax law rewrite project team for all its efforts over many years in developing this legislation. The first bit of legislation was the Capital Allowances Act 2001. It was followed by three Acts relating to income tax: the Income Tax (Earnings and Pensions) Act 2003, ITEPA; the Income Tax (Trading and Other Income) Act 2005, ITTOIA; and the more simply-named Income Tax Act 2007. In this context, one should also mention the Income Tax (Pay As You Earn) Regulations 2003. The legislation on corporation tax is: the Corporation Tax Act 2009, this Bill and the Taxation (International and Other Provisions) Bill, which we will debate subsequently.

I have set out my thanks to all those involved in the process; the level of professionalism has been very high. I now wish to raise a query that the Minister will anticipate, and it is not, in any way, meant to take away from anything done by those who have been involved in the process. Does the process go far enough? It has required a great deal of expertise, it has placed great demands upon the consultees and it has cost £37 million, which is not an insignificant sum.

It is worth citing the remarks made by John Whiting, the tax policy director of the Chartered Institute of Taxation, with whom those of us who have anything to do with tax tend to be familiar. He said:

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He went on to say that

We fully endorse those remarks.

The importance of the project has not just been about the rewriting of the legislation and the provision of greater clarity in the wording-that is important; we can build upon a lot of the work that has been done, because we can use some of the structures that exist. For example, the Joint Committee involves parliamentarians making use of outside expertise to scrutinise technical legislation with perhaps more thoroughness than we normally achieve through the Finance Bill process. I have had the honour of being part of that process for the past four years, but I wonder whether, in this complicated area of tax law, a committee that can inquire more than debate and that has access to expert advice is able to provide greater scrutiny than the traditional parliamentary process.

Dr. Pugh: There is a general demand, which I think we all accept, from business to have corporation tax simplified. However, the paradox is that when one starts talking about removing a specific allowance that affects a specific business, the tune changes somewhat. Thus, it is rather difficult to conduct the process in a universally agreed way.

Mr. Gauke: The hon. Gentleman makes a perfectly good point; the losers tend to make more noise than the winners-that is inevitable. I was coming to the issue of simplification, which relates to the argument that John Whiting has been making. Two elements are worth exploring, the first of which is the possibility of a greater degree of scrutiny. The tax law rewrite project has involved scrutiny, but the project has had a very limited remit: to focus on rewriting the language. We will discuss the conclusions that have resulted from that.

The second element is the push towards simplification, and I take on board fully the remarks of the hon. Member for Southport (Dr. Pugh) about that. None the less, the view of my party is that simplification is worth pursuing. All this, whether we are discussing the clarity of language, which is what this Bill is about, or simplification, fits into the issue of the competitiveness of the tax system. I will not digress at any length into corporation tax rates, for example, but this is obviously a Bill on corporation tax and it would be remiss of me not to mention the fact that we used to have a corporation tax rate that was lower than the OECD average in 1997, whereas it is now higher. In 1997, the UK had the 11th lowest corporation tax rate in the world, and now has the 23rd lowest-

Madam Deputy Speaker (Sylvia Heal): Order. May I remind the hon. Gentleman that, as he has recognised, there are some limits to this debate? I hope that he will recognise that and confine his remarks appropriately.

Mr. Gauke: I am grateful for that guidance, Madam Deputy Speaker.

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I certainly shall not pursue the issue of corporation tax rates, but clearly the intention behind the Bill is to improve the clarity of corporation tax law. That is an important element in improving-or trying to improve-the competitiveness of the UK tax system. Our argument is that we should go further and that simplification would do much to improve our competitiveness. The process that we have seen in the tax law rewrite project is a valuable guide to how we could go further. I shall not dwell on our proposal for an office of tax simplification, which would make use, as this project has, of the expertise in the tax professions, in businesses, in HMRC and in HM Treasury to ensure that we develop our tax law in an attractive way.

It is worth stressing that we live in a very competitive world. The UK, in many respects, should be well placed to benefit from a globalised world, but it needs a competitive tax system. May I briefly highlight the fact that in 1997 the UK was fourth in the World Economic Forum's global competitiveness report's ranking for having the lowest tax burden? According to a measurement that is not exactly the same but is the closest equivalent, it is now ranked 84th for the extent and effect of taxation. That is a substantial decline, not because of the tax rewrite project but despite it, of course. None the less, we need to go much further. We believe that an office of tax simplification would be a huge step forward.

Let me raise another query with which the Minister might be familiar, as he briefly touched on it in his remarks. The argument was often made that making legislation clearer in the context of income tax was very important. Income tax is relevant to nearly all of us, whereas companies tend to be advised on corporation tax. It is an area that inevitably involves some specialist expertise. Is it quite as necessary to pursue a rewrite project in that context?

Of course, the first point to make-the Minister touched on this-is that there is an interrelationship between income tax and corporation tax, and having reformed income tax, it makes sense to follow with this corporation tax Bill. The second point is that existing practitioners are often somewhat dubious about the project, because they already know where everything is. They are familiar with the existing law and the various sections and schedules, and they know their way around. There is a complication when a new Act that changes things around is introduced. Of course, one must have a degree of intergenerational fairness to tax advisers in this area, and it might well be easier for future generations to find their way around with this new legislation.

Sometimes it is recent legislation that is being amended-again, the Minister touched on this point. In particular, he highlighted the legislation on real estate investment trusts. The regime for REITs was introduced in 2006, and it is substantially rewritten in the Bill. I was struck by the remarks of John Sellers, the head drafter of HMRC's tax law rewrite project, in Committee on 11 January. He referred to the substantial recasting of REIT legislation and went on to say:

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