Session 2010-11
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Finance (No. 2) Bill

Finance (No. 2) Bill

The Committee consisted of the following Members:

Chair: Martin Caton 

Brown, Lyn (West Ham) (Lab) 

Burt, Lorely (Solihull) (LD) 

Elphicke, Charlie (Dover) (Con) 

Evans, Chris (Islwyn) (Lab/Co-op) 

Gauke, Mr David (Exchequer Secretary to the Treasury)  

Gilmore, Sheila (Edinburgh East) (Lab) 

Goodwill, Mr Robert (Scarborough and Whitby) (Con) 

Greening, Justine (Economic Secretary to the Treasury)  

Hanson, Mr David (Delyn) (Lab) 

Harrington, Richard (Watford) (Con) 

Leslie, Chris (Nottingham East) (Lab/Co-op) 

McCarthy, Kerry (Bristol East) (Lab) 

McGovern, Alison (Wirral South) (Lab) 

Mordaunt, Penny (Portsmouth North) (Con) 

Shannon, Jim (Strangford) (DUP) 

Sharma, Alok (Reading West) (Con) 

Shelbrooke, Alec (Elmet and Rothwell) (Con) 

Williams, Stephen (Bristol West) (LD) 

Simon Patrick, Committee Clerk

† attended the Committee

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Public Bill Committee 

Thursday 28 October 2010  

[Martin Caton in the Chair] 

Finance (No. 2) Bill

Clause 27 

Penalties for failure to pay tax 

9 am 

Question proposed, That the clause stand part of the Bill. 

Mr David Hanson (Delyn) (Lab):  Good morning, Mr Caton. Whatever happens, this is our last day in Committee. We shall debate from clause 27 to clause 33, as well as the new clause tabled by my hon. Friend the Member for Nottingham East, and I hope that we shall make progress as speedily as we can. 

The Opposition have no problem with the policy objectives of clause 27, but I would like to test the Minister, because the clause gives him and the Treasury wide powers to implement provisions at a future date. Subsection (2) states 

“Schedule 11 comes into force on such day as the Treasury may by order appoint.” 

Will the Minister say which day and which time the Treasury might by order appoint for implementation of the said provision following Royal Assent? I ask that because the clause gives him a wide implementation power. 

Subsection (3) states: 

“An order under subsection (2)…(a) may commence a provision generally or only for specified purposes, and…(b) may appoint different days for different provisions or for different purposes.” 

That, too, gives the Minister a wide power to reflect on the issues and bring in, at different times, provisions relating to the specified purposes under clause 27. I would welcome an outline of his thinking on implementation of the clause. 

Subsection (4) is also a very wide provision, so the Minister needs to put on record his approach to the issues. The subsection states: 

“The Treasury may by order make any incidental, supplemental, consequential, transitional, transitory or saving provision which appears appropriate in consequence of, or otherwise in connection with, that Schedule.” 

I know that it is probably common practice to put in place such a wide power, but it is important that the Minister gives some indication of the circumstances in which he would exercise it. In the event of the clause receiving the approval of both Houses, we will be giving him great power to vary the penalties for failure to pay tax. 

Subsection (5) states: 

“An order under subsection (4) may…(a) make different provision for different purposes, and…(b) make provision amending, repealing or revoking any Act or subordinate legislation whenever passed or made (including this Act and any Act amended by it).” 

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This is a fairly strong Henry VIII power. It is incumbent on the Minister to explain the circumstances in which he would use it, in the same way as, when I was a Minister, I had to explain the circumstances in which I would use a power. I remind the hon. Gentleman of that because I served for 13 years as a Minister in the previous Government and on numerous occasions, in relation to numerous Bills that granted similar powers, Opposition Members questioned me on exactly how I would use the powers downstream. Therefore, it is only fair that I give the Minister the opportunity to reflect on these matters accordingly. 

Subsection (6) states: 

“An order under this section is to be made by statutory instrument.” 

It is important that we know whether the Minister believes that such a statutory instrument would be subject to the affirmative procedure. Alternatively, would the Opposition be required to pray against the instrument if we want to examine matters in a more detailed way? Again, we have no objection to the clause in principle, but we want clarification on certain points. 

Subsection (7) states: 

“A statutory instrument containing an order under subsection (4) which includes provision amending or repealing any provision of an Act is subject to annulment in pursuance of a resolution of the House of Commons.” 

Will the Minister give some indication of how that will work? 

I do not wish to cause the Minister too much grief on the principle of the clause. We support it, because penalties for failure to pay tax are important. Schedule 56 to the Finance Act 2009 is important; it was passed by the previous Government. Given the wide-ranging nature of the powers that we are seconding to him, however, will the Minister give some indication of how he might choose to exercise them? 

The Exchequer Secretary to the Treasury (Mr David Gauke):  It is a pleasure, Mr Caton, to serve under your chairmanship for one last time on the Bill. 

Before dealing with clause 27, I return briefly to schedule 2, which we considered earlier in our proceedings. We did not debate the schedule, and as a consequence I have failed to mention something that could be usefully put on record: the changes to venture capital schemes introduced under that schedule will made through a commencement order, and it is our intention to bring in the changes from next April. I hope that the Committee will forgive me for digressing. 

I now turn to clause 27 and the points made by the right hon. Member for Delyn. As we heard, the clause is part the ongoing review of Her Majesty’s Revenue and Customs, and it marks the completion of the third stage of penalties reform under the review. There are currently a variety of different penalties for late payments across different taxes, and some have no sanction for late payment. The changes before us add 15 further taxes and duties to the new aligned structure that was legislated for last year. As with the changes made in clause 26, these new taxes are all indirect taxes or excise duties. The new penalty structure will be more effective in influencing behaviour, as well as fairer and more proportionate. It is important that HMRC makes every effort to support taxpayers in meeting their tax obligations, but it is equally important that the consequences for failing to meet those obligations are made clear. 

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An extensive series of consultations led to the first tranche of legislation in the Finance Act 2009. Following that Act, HMRC published a draft of the current provisions on 9 December 2009 and invited comments. We listened to the many responses from key stakeholders and representative bodies and made changes as a result. For example, we refined the VAT payments on account mechanism to be as easily understood as possible. Throughout the consultation, the reforms were broadly supported by key stakeholders and representative bodies. 

The new penalty structures and safeguards will require changes to HMRC’s IT systems and business processes. It will also require substantial advance publicity to taxpayers and their advisers to ensure that people are ready for the changes. That is why the schedule is to be brought into force by Treasury order, which will allow for implementation in stages. HMRC plans to implement the changes as and when resources permit and when sensible opportunities arise. That touches on one of the questions raised by the right hon. Gentleman. 

The right hon. Gentleman also asked when the changes in clarification to the law will come into effect. For amendments that relate to last year’s enactments, which have already come into effect, HMRC intends to lay an appointed-day order before the House shortly after Royal Assent. The changes will mainly affect the operation of late payments penalties for pay-as-you-earn, which came into effect on 6 April 2010. However, as they are based on an annual appraisal of an employer’s payment obligations, penalties will not start to be issued until May 2011. 

The right hon. Gentleman also raised the question of Henry VIII clauses. He said, quite fairly, that he frequently had to defend such clauses as a Minister. In a spirit of candour, it is fair to say that I often queried them when I was an Opposition spokesman. 

The harmonisation of penalties requires the untangling of a great deal of old and complex tax legislation, and the clause is designed purely to enable HMRC to make necessary amendments, savings or repeals easily. Given the nature and scale of the changes, the broad power of amendment is needed to facilitate accurate consequential amendments or transitional provisions, as it is not possible to predict what changes to the current law will be required in the future. An identical approach was taken under the Finance Act 2009 in respect of measures that introduced the basic structure for the alignment of penalties, and I hope that the right hon. Gentleman will appreciate that the powers relate clearly to that specific area and not more broadly. 

The right hon. Gentleman asked whether the orders will be subject to the affirmative procedure. They will be made under the negative procedure, which is consistent with what has been done elsewhere within the penalties regime. As always, HMRC will publish a draft order in advance, which is particularly important if the statutory instrument amends primary legislation. The Government will make sure that there is proper consultation on changes of the law. I hope that he will accept my assurances on that point. 

The provisions have been subject to thorough consultation. They were well supported by most respondents and have been refined to reflect their comments. The result is a major step forward in modernising and aligning penalties. It is important that HMRC supports taxpayers to meet their tax obligations, but it is equally

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important that the consequences of failing to meet those obligations are clear. Effective and proportionate penalties will tackle late filing and reassure the compliant majority that the system is fair. I therefore hope that the Committee will support the clause. 

Question put and agreed to.  

Clause 27 accordingly ordered to stand part of the Bill.  

Schedule 11 agreed to.  

Clause 28 

Recovery of overpaid stamp duty land tax and petroleum revenue tax etc 

Question proposed, That the clause stand part of the Bill. 

Mr Hanson:  I confirm that the Opposition support the clause in principle for similar reasons that applied when it had its genesis under the previous Labour Government. I have no general problems with it. However, it is fair that I outline to the Committee the concerns expressed to me by the Chartered Institute of Taxation about several matters relating to the clause and schedule 12 so that the Minister will have an opportunity to consider and respond to them accordingly. 

The Chartered Institute of Taxation states that it is unclear why proposed new paragraph 34C(2) of schedule 10 to the Finance Act 2003 excludes paragraph 6, which covers the responsibility of partners, and paragraph 8, which includes representative partners under schedule 15 to the Finance Act 2003, and introduces a new concept of relevant persons as claimants for partnerships. Relevant persons are defined under proposed new paragraph 34C(5) as 

“(a) any person who was a partner in the partnership at an effective date of the transaction, and…(b) the personal representative of such a person.” 

That differs from the definition under paragraph 6 of schedule 15 to the 2003 Act, which defines responsible partners in respect of anything required to be done under part 2 of that Act as 

“(a) the persons who are partners at the effective date of the transaction, and…(b) any person who becomes a member of the partnership after the effective date of the transaction.” 

The Chartered Institute of Taxation’s worry about that misty new definition is that the meaning of “relevant person” mirrors the definition of “relevant partner”, but it is unclear why there is a departure from the provisions of part 2 of the 2003 Act. The institute believes that that will add complexity to the administration of stamp duty land tax. 

I should welcome the Minister’s view on that because the institute has ultimately to work with the legislation and advise people on stamp duty. It believes that there is a difficulty with the definition of “relevant person”, and that there are differences in the Bill between the schedule and the Finance Act 2003. I should be grateful if the Minister would comment on that and I hope he can clarify the measure so that those who read our proceedings and interpret them will understand the intention of the schedule and clause. 

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9.15 am 

The Chartered Institute of Taxation has also commented about proposed new paragraph 34C(3)(a), which states that a claim 

“may be made by a relevant person who has been nominated”— 

and it has highlighted the word “may”. However, sub-paragraph (3)(b) states that a claim 

“may not be made by any other person.” 

The provision in question is therefore mandatory, and the institute believes that the drafting should reflect that, with the substitution of “shall” for “may”. 

We have not tabled an amendment to that effect because I did not feel strongly enough to do so. However, it is important to get clarity from the Minister about the concerns that have been raised by the Chartered Institute of Taxation over the interpretation of the new paragraph. Does he think that it is sufficiently clear to enable the institute’s members to deal with the relevant matters effectively as part of their general duties? 

As I have said, the Opposition support the changes to stamp duty land tax and petroleum revenue tax under the clause. However, I should be grateful for the Minister’s response to my comments about the representations that I have received. 

Mr Gauke:  Clause 28 introduces schedule 12, which amends the existing relief for mistakes in stamp duty land tax returns, and error or mistake relief for petroleum revenue tax. That is part of the modernisation of error or mistake relief provisions, which introduces a single route to recover overpaid tax. It extends the scope of the current relief and excludes common law claims in respect of overpaid tax. 

By providing a final opportunity for taxpayers to reclaim overpayments subject to a single time limit—four years, as with other claims—the measure simplifies the process for reclaiming overpayments. It reduces the administrative burden for taxpayers and HMRC, and provides greater certainty regarding public finances. The changes will take effect from 1 April 2011, allowing further time for claims to be made under the current regime. 

HMRC invited responses to the draft legislation in January and February, and when the draft Finance Bill was published in July. We have received comments from the Chartered Institute of Taxation—the right hon. Member for Delyn referred to those and raised a couple of points about them. First, on to the concept of relevant persons as opposed to responsible partners, in the matter of deciding who can make a claim, responsible partners include the current members of a partnership and anyone who was a partner at the date of the transaction. Responsible partners are responsible for making a tax return and for other administrative matters. However, it is the partners at the date of the transaction alone who are jointly and severally liable for the tax that is due. 

Overpayment relief allows those who have overpaid an amount of tax in respect of a land transaction to reclaim that sum. Relevant persons are those who were liable to pay the tax or their personal representatives. Therefore it is those persons who must decide who among them should make the claim, which explains the introduction of the concept of relevant persons in this context. 

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The right hon. Gentleman also raised proposed new paragraph 34C(3), which states that a claim 

“may be made by a relevant person” 

rather than that it shall be made. It is worth pointing out that it is not mandatory for anyone to make a claim. Someone who thinks that they have overpaid stamp duty land tax must decide whether they want to claim overpayment relief, which is why the measure states that the claim “may be made”, not that it shall be made. 

If stamp duty land tax has been paid in respect of a partnership land transaction, all the partners involved, or their personal representatives, must agree who is to make a claim, and the provision ensures that there is agreement between the partners before a claim is made. I hope that that provides some clarity about the thinking behind the provisions to the right hon. Gentleman and those who read our debates with interest, and that I have dealt with the concerns raised by the Chartered Institute of Taxation. 

Question put and agreed to.  

Clause 28 accordingly ordered to stand part of the Bill.  

Schedule 12 agreed to.  

Clause 29 

Excise duties: compliance checks 

Question proposed, That the clause stand part of the Bill. 

Mr Hanson:  Once again—I am sounding like a broken record—I am happy to support the general principles of the clause. 

Although this is not one of the more contentious Finance Bills, we are still required to scrutinise it. I want the Minister to address the concerns that have been raised with me and other members of the Committee by the Chartered Institute of Taxation. I accept that there has been consultation and that these points have been made, but in its submissions to me the institute raised concerns about the need for adequate safeguards in relation to the powers under the compliance checks. It is concerned that the safeguards provided are inadequate. I am not making a judgment on that, but it is important that the Minster should reflect on it and consider whether there is merit to those concerns. 

The Chartered Institute of Taxation believes it would be helpful for there to be guidelines and advice to the officers who will deal with the implementation of the measure, and I would welcome the Minister’s reassurance about that. When officers use the powers that deal specifically with the exercise of subjective judgments, those powers should be reflected in published information about how and on what those judgments were made. The institute believes that the Treasury should accept recommendations to ensure that guidelines for officers are published and that when subjective and marginal decisions are taken, the officers themselves should be open to scrutiny. 

The Chartered Institute of Taxation advises that HMRC will examine in detail the previous recommendations and release draft guidance to the officers who are going to implement the judgments before the powers come into effect. I raise the issue so that the Minister can reflect on it and consider whether she agrees that detailed

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guidance should be provided to officers about how they will be managed downstream, at the coal face of taxation issues. If she does not wish to follow that route, can she reassure those who take an interest in such matters that those concerns are unfounded? 

The Economic Secretary to the Treasury (Justine Greening):  Thank you, Mr Caton. It is a pleasure to serve under your chairmanship on this final day of the third Finance Bill of the year. 

Clause 29 introduces schedule 13, which amends provisions covering excise compliance checks. HMRC has been reviewing powers and safeguards for checking compliance. Previous Finance Acts introduced a modernised and aligned checking framework, which now applies across HMRC’s other taxes and duties. Schedule 13 completes that work. 

Excise is a specialised type of regime. The key risks are in the goods themselves, and therefore access to those goods is crucial. Excise fraud in alcohol, tobacco and oil is a major risk to the Exchequer, to legitimate businesses and to consumers. For that reason, the Government have taken a different approach to the powers and amended them rather than align excise within the framework that applies to other taxes. 

As the right hon. Gentleman said, the proposals have been subject to two full formal consultations since July 2009, and draft legislation was published in January and again this summer. The responses received were broadly positive across all excise trade sectors, including those from the Association of Chartered Certified Accountants, the Chartered Institute of Taxation—I will come shortly to the points that it raised—the Institute of Indirect Taxation, the National Casino Industry Forum, the Scotch Whisky Association and the Tobacco Manufacturers Association. They all recognise the need in future to tackle the illicit market more strongly than we have been able to in the past. 

The changes complete the work so far done on modernising compliance checks. They provide useful new powers that will ensure that HMRC can continue to be effective in tackling the fraud that pervades the excise arena. On the additional powers and the published guidance, I can assure the right hon. Gentleman that, as this measure introduces amendments to existing legislation, the current guidance will be updated to take account of the changes. 

As was promised in the response document issued in March 2010, HMRC will be exposing the guidance for comment, which is in line with the approach to previous changes to compliance-checking powers. We will ensure that the guidance is updated, which will avoid the risk that the powers being changed by the clause might be misapplied. 

Question put and agreed to.  

Clause 29 accordingly ordered to stand part of the Bill.  

Schedule 13 agreed to.  

Clause 30 

Pension scheme under section 67 of Pensions Act 2008 

Question proposed, That the clause stand part of the Bill. 

Mr Hanson:  Again, clause 30 is welcomed by the Opposition, because it ensures that the National Employment Savings Trust will come within the existing

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tax regime for registered pension schemes. As members of the Committee will know, NEST is a new pension scheme that has been established by the Secretary of State for Work and Pensions under section 67 of the Pensions Act 2008. The NEST provisions, which had their genesis under the last Labour Government, will ensure that pension entitlement is provided to individuals across the sector, and that such people are helped to save for their pension with the support of employers and of the state as a whole. 

The changes will have effect from the date on which the Bill receives Royal Assent. In December 2006, the then Labour Government published a White Paper outlining their workplace pensions reform—including the NEST proposal, which was previously called the personal accounts scheme. That led to the pensions reform set out in the 2008 Act, the contributions for which will be phased in over a period of time. In one way—I will return to this in a moment—I am pleased that the new Government have committed themselves to implementing, broadly, the provisions that the previous Government had put in place. 

The provisions introduce automatic enrolment as an effective means of increasing pension savings. The “Making Automatic Enrolment Work” review was announced on 24 June 2010 by the Government, who wanted to look at the commitments of the previous Labour Government to the NEST scheme. The review examined such matters and has concluded, publishing its recommendations on 30 September. Last week the Government confirmed that they would go ahead with the scheme, which I again welcome. The clause ensures that the NEST scheme comes within the existing tax regime for registered pension schemes, and so we welcome it. 

The scheme will ensure that between 5 million and 9 million more people will be saving into a pension from 2012 onwards. It will largely consist of part-time employees, which is particularly welcome for women. It is also welcome for mobile, temporary and contract staff, and for the 70% of individuals from ethnic backgrounds who are not currently saving into a pension. The scheme will bring many more people into pension schemes in future, ensure that their employers contribute to such schemes, and help people to save for their retirement in a much more practical way. That is why the tax regime under the clause is welcome. 

9.30 am 

The Minister will know that there is some controversy concerning the provision. The Daily Mail, which I was reading in the Tea Room this morning, says that some small employers are concerned about the impact of the scheme. I hope that the Government will hold firm on the matter and will not back up on the general scheme; I hope that the tax regime that the clause refers to will reflect the scheme that has been announced and that they will not backtrack on that for small employers. The issue is particularly important for those employed by small firms, because they have just as much right to ensure that they have pension entitlement as those who are employed by the state, or by multinational companies. 

The scheme has been introduced, but I am concerned about some small but significant changes that the Government have made as part of the review. The

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changes relate to the taxation regime in the clause to date and are still important matters that need to be considered. 

Hon. Members will know that the previous Labour Government proposed that the threshold for enrolment into the scheme would be in the region of £5,035 per employee income per year. The review of the scheme has increased that by some £2,000—to £7,475 before individuals will be automatically enrolled into the pension scheme. My colleague Brendan Barber, the general secretary of the Trades Union Congress, has raised two points about that, which reflect on the taxation regime under the clause and also concern the wider scheme. I would welcome the Minister’s comments on that. 

Brendan Barber is concerned that the two issues relating to that increase will have a detrimental effect, particularly on part-time women workers and those on low incomes. In relation to the clause, the hon. Member for Thornbury and Yate (Steve Webb), the pensions Minister, has proposed that there will be a higher salary level of £7,475 before automatic enrolment into pensions, rather than the previous Government’s proposal of £5,035. Also, there will be a three-month waiting period before auto-enrolment takes place for those on that higher salary. Whatever we say about the scheme and however much I welcome it, there is a big difference between having to earn just over £5,000 a year before being auto-enrolled and having to earn £7,475 a year before that happens. 

Sheila Gilmore (Edinburgh East) (Lab):  Some people feel that we should not be a nanny state, but does my right hon. Friend agree that it is important that people have the opportunity to be pensioned? Perhaps he remembers, as I do, when the state earnings-related pension scheme was abolished, and people had more freedom—I certainly did—concerning their pensions. I had a secretary who was fairly typical in saying that she wanted to come out of it. Twenty-plus years on, such people would be much better provided for. 

Mr Hanson:  My hon. Friend makes an important point. I emphasise that under the scheme’s taxation regime, individuals are on higher incomes, of £7,475, before being automatically enrolled, rather than on the previous Government’s proposal of £5,000. That means that there are people earning between £5,000 and £7,000 who would have been enrolled in the scheme automatically, but now will not be. 

Those people are likely to be part-time women workers or people on low incomes who might not know their rights at work or be trade union members. If, as the front page of today’s Daily Mail shows, small employers do not generally support the scheme, they are not likely to advise their employees who earn between £5,000 and £7,000 that they can enrol themselves in the scheme rather than being enrolled automatically, because that will cost the employers contributions towards the scheme. 

There are significant changes. The Labour Government’s proposal would have ensured that people on the lower income, rather than the slightly higher income of £7,500, were enrolled in the scheme automatically. Again, that is a small but significant change. It means that from 2012, people who earn less than £7,475 will have to enrol themselves in the scheme to get the benefits. That means that they will have to know about the scheme and their rights, and know how to exercise those rights. 

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Part-time women workers and people on low incomes might not know about such matters or have access to the available information, and their employers might not tell them. The scheme might not be widely taken up. The taxation regime might not deal with such matters in the same way that it would have if changes had been made appropriately in the NEST scheme, as originally envisaged by the previous Labour Government. 

I wanted to put those important issues on the record. I have two points to make. We recognise and welcome the clause. It establishes, under section 67 of the Pensions Act 2008, that the scheme proposed will be subject to the provisions of the Bill. We have no problem with that and will support the clause, but it is incumbent on the Minister at least to liaise with her colleague, the pensions Minister, to reflect the Opposition’s concerns that the revised scheme will disadvantage lower-paid, predominantly female part-time workers, who would have benefited under the Labour Government’s original proposals. 

I hope that the Minister will also use this opportunity to support her colleague the pensions Minister in giving an indication, to the small firms generating a Daily Mail campaign against the NEST scheme, that she fully supports his proposals, as I know she does, and that she believes that small firms should not be exempt from the scheme and that those who work for small firms have just as much right to a pension as those who work for the state, mid-sized firms, larger firms or multinationals. 

I would welcome such a commitment on paper today, for those outside to read—not least the authors of the Daily Mail article. It would give an assurance that the tax regime will reflect the need for small employers to play their part. Will she also explain why she is short-changing part-time women workers and others who would have benefited from the scheme had the Labour Government been re-elected? 

Justine Greening:  As we have heard, clause 30 provides that the National Employment Savings Trust—NEST, as the right hon. Member for Delyn called it—is to be regarded as an occupational pension scheme for tax purposes. That, in turn, will allow NEST to be registered for tax purposes, another requirement of the Pensions Act 2008. Without the clause, it would not be possible for NEST to start enrolling members in April 2011, as we all want. 

As the right hon. Gentleman explained, the background to the clause is that the Pensions Act 2008 required the Secretary of State for Work and Pensions to establish a pensions scheme that could be registered for tax purposes. NEST has been set up to meet that requirement. It was established on 5 July 2010 as part of the workplace pensions reforms and has been designed specifically to meet the needs of low to medium earners. 

Although the Pensions Act 2008 provides that NEST is an occupational pension scheme, without this clause it would not qualify as one for tax purposes. As a result of the clause, members of NEST will be able to benefit from the tax reliefs available to registered pension schemes on contributions and investment growth. 

The right hon. Gentleman made points about auto-enrolment and the threshold. When we looked at the threshold, it made sense to align it with the level at which the employees start to pay tax, because that will simplify how the system works and remove bureaucracy

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for small employers. As he pointed out, other employees will still be able to join the scheme and there will be a special communications strategy to make sure that employers know about the available pension choice. 

Mr Hanson:  I am grateful that there will be a communications strategy. Will the hon. Lady give some indication as to who is communicating with whom, and when and how? How will a woman who works part time in a small corner shop and earns less than £7,500 a year receive that information? Will it be via her employer? 

Justine Greening:  The right hon. Gentleman would be wiser to address those questions to the Department for Work and Pensions, which is leading this policy area. In respect of the clause, we need to have that aspect within the Bill to enable NEST to be registered for tax purposes, which was a requirement of the Pensions Act 2008. 

Mr Hanson:  I recognise that the responsibility for the NEST scheme lies with the pensions Minister, and I do not expect the Economic Secretary to know every detail of that particular scheme, because she is dealing with the taxation element. 

We are being asked to ally those schemes with taxation purposes accordingly. I am concerned about uptake and the understanding of those who earn less than £7,500 and who would have qualified for the scheme had the original proposal from the previous Government gone ahead. It would be helpful if the Minister could, before Report, at least raise those concerns with the pensions Minister on behalf of the Committee, so that we can have a letter, from either her or him, that indicates how those matters will work out, particularly in respect of a communications strategy. 

Justine Greening:  I am absolutely sure that my colleague the pensions Minister will come forward with more details about how the precise communications strategy will work. The decisions that we have made about the threshold are sensible; even the right hon. Gentleman’s party leader discussed the need to support small businesses earlier this week. As a Government, we are absolutely committed to doing that, which is why, rather than going ahead with an increase in the rate of small companies corporation tax, we chose to bring forward reductions and why, rather than going ahead with rises in employers’ national insurance, we also brought forward reductions. 

In many regions of our country, those setting up new companies, which have the fewest employees at the start, will be getting additional national insurance holidays for extra employees whom they support. We are committed to ensuring that small companies will be able to play their role in boosting economic growth and employment in our country. Clause 30 means that there is a far better chance that employees in these new companies will get the benefit of an occupational pension scheme. 

I hope that we all welcome this clause. I have no doubt that the right hon. Gentleman will continue to pursue his questions with my colleagues at the Department for Work and Pensions. 

Alison McGovern (Wirral South) (Lab):  It is a pleasure to serve under your chairmanship, Mr Caton. 

I want to ask a few questions for clarification and to make a few remarks; I hope that the Minister will be helpful. I did not want to intervene while she was

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speaking, because that can ruin the flow of proceedings. A couple of questions arose from what she said. She mentioned that lifting the level at which people started to be automatically enrolled in NEST was intended to align that level with the point at which people started to pay tax. She said that that would save on bureaucracy. That is easy to say, but hard to measure. 

9.45 am 

What work has been done to clarify how much that would save in bureaucracy? Will she say a little more about why? What costs are we talking about and what scale of administration will be saved? If, on the grounds of savings in bureaucracy, we are depriving core groups with very low incomes of automatic enrolment, it would benefit all the Committee to understand that more. I would be grateful if the Minister said something about that. It concerns me that we might be acting too quickly and I would like to know more. Why will the process be simpler and more straightforward? 

My second point is about the communications strategy. I have worked in communications and am aware that an achievable target is mapped out carefully and clearly before any communications plan goes ahead. Then its impact is measured. The history of pensions policy can be broadly characterised as people trying to communicate the long-term benefits of having a pension and the public, by and large, not always paying attention. I do not believe that the public are aware of any pensions communications strategy that has been as successful as we hope this one will be. 

The Minister has just said that the issue is the responsibility of the Department for Work and Pensions but, again, it would benefit the Committee greatly if we heard a little more about the sort of targets that the communications strategy is expected to play to. In my experience, that is the sort of thing that should be planned out very early on; we would have a sense of the scale of behavioural change that the Government are trying to achieve. I would be grateful if the Minister made some remarks about both those points. 

Justine Greening:  To go back to my earlier comments, small employers in particular will have fewer ongoing admin costs in terms of setting up these schemes during the first year of establishment and, of course, in terms of the ongoing administration involved in running the schemes once they are in place. The cost savings to employees will probably be around £10 million in reductions in first-year administration and £6 million on an ongoing basis in reduced administration. That shows that we are talking about real money. 

If those who run small companies were here representing themselves directly, they would probably say that the time they spend on bureaucracy literally costs money; it is time that they could have been spending on the phone to suppliers and new customers. Unnecessary bureaucracy has very direct consequences, perhaps for smaller companies more than larger companies. We have sought to strike the right balance in the proposals, and I think that we have achieved that. 

The DWP has developed a strategy, and has in its sights small employers and their employees. They are the main target of the measure. I assure the hon. Lady that a communications strategy has been worked on.

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Given her experience, I have no doubt that if she gets in touch with the DWP and feeds in her thoughts in a more detailed manner, Ministers will be interested to hear from her. 

Question put and agreed to.  

Clause 30 accordingly ordered to stand part of the Bill.  

Clause 31 ordered to stand part of the Bill.  

Schedule 14 

Asbestos compensation settlements 

Mr Hanson:  I beg to move amendment 15, in page 106, line 29, leave out ‘24 March 2010’ and insert 

‘the date of Royal Assent to the Finance (No. 3) Act 2010’.

The Chair:  With this it will be convenient to discuss the following: 

Amendment 13, in page 107, line 16, leave out ‘24 March 2010’ and insert 

‘the date of Royal Assent to the Finance (No. 3) Act 2010’.

Amendment 16, in page 108, line 4, leave out ‘24 March 2010’ and insert 

‘the date of Royal Assent to the Finance (No. 3) Act 2010’.

Mr Hanson:  We did not comment on clause 31 because the Opposition support the intention behind it—indeed, we support the intention behind schedule 14. 

Clause 31 and schedule 14 provide an exemption from inheritance tax, capital gains tax and income tax for trustees of trusts dealing with asbestos-related conditions. The trusts that will benefit are those established on or before 23 March 2010 as part of an arrangement made by a company with its creditors specifically to pay compensation to, or in respect of, individuals with asbestos-related conditions. 

The provisions are extremely welcome. They will benefit trusts established to pay compensation to individuals with debilitating conditions that are related to their exposure to asbestos, by and large in the workplace. Although the tax relief on inheritance tax, capital gains tax and income tax is welcome, hon. Members will see that the date determining receipt of the benefit of tax relief in the schedule is 23 March. That was set out by my colleagues in the previous Government in this year’s Budget on 24 March. 

What has happened in relation to the period between 23 March and the Bill’s receiving Royal Assent, which may come at any time between now and the end of December or early January? I would not wish to create an anomaly whereby trusts established after 23 March and before Royal Assent would not be eligible for the exemptions from inheritance tax, capital gains tax and income tax because, although the Bill had received Royal Assent, they had been established after 23 March. 

I confess that I am not aware of any such trusts, but I tabling the amendment because it would allow the Treasury’s great resources to be used to determine whether any trusts had been established between 23 March and today—28 October—and, indeed, so that we could find out whether officials are aware of plans to establish

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trusts between now and the possible date of Royal Assent. If there are any such trusts, or plans to create them, that could create an anomaly in the treatment of the two sets of trusts that would be dealing with the same issue: individuals who have asbestosis or who are dealing with asbestos-related disabilities, injuries and illnesses. Such an anomaly would make the legislation unfair. 

Obviously, people establishing trusts after Royal Assent will understand what will happen at that time. At the moment, however, we have a possible anomaly in that a trust could be established before Royal Assent—next week, the week after or in December—but the conditions applying to it would not be the same as those that would apply to trusts established on or before 23 March. 

Will the Minister indicate whether he is aware of any trusts established between 23 March and now that could be disadvantaged because they are not covered by the clause? Secondly, is he aware of any trusts that might be established before the likely date of Royal Assent? Finally, does he have a view on the tabling of an Opposition amendment—or, if such an amendment would, as usual, be technically deficient, a Government amendment—on Report to reflect my desire to ensure that no trusts are disadvantaged by the fact that the date in the schedule was set before the election and this year’s Budget? 

Perhaps I should have raised this point during our proceedings on clause 31, rather than schedule 14, but just for the sake of clarity, I would welcome it if the Minister would say a few words about what he deems to be an asbestos-related condition. Paragraph 21 of the explanatory notes to clause 31 states: 

“Asbestos related condition is a condition that arises as a result of contact directly or indirectly with asbestos. It is not defined further in these provisions, but includes conditions that are recognised by the courts as arising as a result of contact with asbestos, such as asbestosis.” 

I am concerned that the note gives one example—“such as asbestosis”—but does not clarify what other conditions could be included for a trust established to deal with potential issues of ill health. 

Chris Evans (Islwyn) (Lab/Co-op):  First, I apologise for my lateness this morning, which was down to a diary clash. My right hon. Friend talks about conditions that cause asbestosis. He will be aware of an ongoing campaign to compensate those victims who have pleural plaques and scarring of the lungs. Does he think that the scheme should also include such people? 

Mr Hanson:  I raised the issue because I know that my hon. Friend takes an interest in these matters, given the nature of his constituency. It is for the Minister to expand on what paragraph 21 of the explanatory notes means in practice. It states: 

“Asbestos related condition is a condition that arises as a result of contact directly or indirectly with asbestos.” 

That is fine; I accept that as a reasonable definition. The condition is not defined further in the Bill, but the notes say that it 

“includes conditions that are recognised by the courts…such as asbestosis.” 

That is my concern. If the background note did not state, “such as asbestosis”, I might accept the wide definition. The moment “such as asbestosis” is included, however, one must ask, if it is not a condition “such as

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asbestosis”, what is it? There could be a future debate about the relationship between the definition of asbestos-related conditions and the establishment of the trusts prior to 23 March or, as under my amendment, after 23 March. I would welcome the Minister’s consideration of that date and a short comment about the background note and definition. 

Mr Gauke:  It might be helpful for me to say a word or two about the background to clause 31 and schedule 14. As we have heard, the schedule concerns the taxation of trusts set up in certain circumstances to compensate victims of asbestos. The inhalation of asbestos fibres can cause a number of diseases of the lungs, and prolonged exposure to asbestos exacerbates the risk of contracting such a disease. 

It has come to the Government’s attention that trusts set up in certain circumstances to compensate asbestos victims have been unable to access tax-efficient structures. Consequently, such trusts are facing tax liabilities that will reduce the funds available to asbestos victims who are eligible for compensation. For example, if a trust is set up across more than one national legal jurisdiction, which can happen where compensation arrangements are complex, it can be difficult to rearrange trust structures. Trusts might not be able to obtain charitable status if they are set up specifically to compensate certain victims. 

To help victims of asbestos, the changes set out in schedule 14 will remove past and future inheritance tax, income tax and capital gains tax liabilities from asbestos compensation settlements. The change was announced by the previous Government, and we are happy to confirm it. Many years often elapse between exposure to asbestos and the emergence of symptoms of asbestos-related illnesses. We need to address that point. 

The right hon. Member for Delyn asked about the sort of asbestos-related conditions to which the schedule will apply. As he mentioned, asbestosis is given as an example, but that is not an exhaustive list. It could apply to other diseases and illnesses related to asbestos. It is likely to apply to trusts making payments to those with an asbestos-related condition, which might include those who were engaged in the manufacture, distribution, sale and installation of asbestos products, or the mining of asbestos. The terminology has been kept deliberately wide to allow flexibility in such circumstances. The hon. Member for Islwyn asked whether the list would include pleural plaques. It does; our intention was not to be prescriptive. 

10 am 

I want to turn to the very fair point that the right hon. Member for Delyn raised about his amendments, which would change the latest date by which a trust would have to have been established to benefit from tax relief under the schedule. He proposes that the date should be changed from 24 March 2010 to the day of the Bill’s Royal Assent. 

The date of 24 March 2010 was the date of the first Budget this year, when the measure was first proposed, and it was chosen as the cut-off date by the previous Government. It is my understanding that that was to eliminate any risk of avoidance—however small—due to new trusts being set up to exploit the rules. Of course, the Government would consider representations from

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trusts in similar circumstances that were set up after that date. However, to answer the right hon. Gentleman’s question directly, I should stress that we have not received any such representations. We do not know of any trusts in similar circumstances to those set out in the schedule that have been established after 24 March 2010, and we are not aware of any plans for such trusts to be established. 

It is also worth pointing out that a specific exemption, as we have with the clause and the schedule, is not likely to be necessary in most cases for most trusts in these areas. Generally, when trusts of this nature are set up, exemptions are already available. 

Consequently, although I understand the intention behind the amendment, and while I think that the right hon. Gentleman was absolutely right to ask his questions, it is not necessary that we amend the Bill as he proposes because doing so might leave open an opportunity for avoidance. I therefore ask him to withdraw the amendment. 

Mr Hanson:  I am grateful for the Minister’s comments. As I indicated, the amendment was probing, first to find out the definition of “asbestosis” and, secondly, to ensure that the Treasury had researched whether there were trusts that had been established after 23 March 2010 or that were due to be established. I was sure that the Treasury could research that more easily than me, as my efforts were limited by having only one researcher. Given that the Minister has assured us that there are no trusts in that position, I beg to ask leave to withdraw the amendment. 

Amendment, by leave, withdrawn.  

Schedule 14 agreed to.  

New Clause 1 

Definition of ‘incapacitated person’ 
‘(1) The Taxes Management Act 1970, section 118 is amended as follows.(2) In subsection (1), the definition of “incapacitated person” is substituted as follows:“‘incapacitated person’ means any person who, within the meaning of section 2(1) of the Mental Capacity Act 2005, lacks capacity in relation to tax or financial matters.”’.—(Chris Leslie.)

Brought up, and read the First time.  

Chris Leslie (Nottingham East) (Lab/Co-op):  I beg to move, That the clause be read a Second time. 

The new clause may appear to be a small technical change to alter the definition of “incapacitated person”. However, the more that I look at the current way in which the legislation is written, the more it occurs to me we are proposing quite a significant and symbolic change. 

I should not claim total credit for the new clause. I want to thank the Chartered Institute of Taxation’s low incomes tax reform group for highlighting the issue of the definition of an “incapacitated person”. Digging back, it appears that this issue has been raised from time to time during the consideration of Finance Bills over several years. On this occasion, however, pretty much most of the arguments against making the change proposed in the new clause have been well and truly exhausted. 

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For the benefit of the Committee, especially those who have not been members of Finance Bill Committees before, section 118 of the Taxes Management Act 1970, which is still extant, defines incapacitated persons as 

“any infant, person of unsound mind, lunatic, idiot or insane person”. 

Clearly, those are almost laughable definitions. In fact, they are highly insulting and derogatory to the individuals to whom they refer, and in many ways inaccurate and outdated. Those forms of description were essentially incorporated into the 1970 Act from the 19th century lunacy Acts of days gone by. However, for a variety of reasons the provisions have never been updated or modernised. On the basis that this is not a party political matter but a drafting issue, we thought it was important to be constructive and to bring this new clause before the Committee in the hope that the Government would accept it. 

Section 72 of the Taxes Management Act 1970 provides that an incapacitated person’s tax liabilities should apply to the trustees, guardians, tutors, curators or committees of that incapacitated person as if he were a non-incapacitated person. We are in an era of tax law rewrites, and tax law rewrite Bills come along every decade or so, but it is necessary to make this modest change now. 

This simple and discrete new clause would replace and modernise the definition so that it aligned with the more appropriate meaning set out in the Mental Capacity Act 2005, which defines incapacitated persons in a far better and more sensitive way. The 2005 Act provides that someone lacks capacity in relation to a matter if at the material time they are unable to make a decision for themselves 

“because of an impairment of, or a disturbance in the function of, the mind or brain”. 

That is a much better definition, and we hope that it will also encompass the arrangements on trusteeship that have accrued since 1970. For instance, it would cover donees, the power of attorney and Department for Work and Pensions appointees. 

The arguments against our approach have fallen away over the years. The all-party group on mental health highlighted the fact that UK law still includes this anachronism of using offensive and potentially discriminatory language to describe people with mental health problems. In 2003, the low incomes tax reform group called for the provision to be updated. Such action was pressed for in previous Finance Bills, including that of 2006. Indeed, Her Majesty’s Revenue and Customs fully accepted the case for change four years ago. However, the planned rewrite of the 1970 Act fell by the wayside for various unrelated reasons, so the provision remains on the statute book. 

We believe that this is a good opportunity to update the provision. The new clause would make a minor change. It is discrete and free-standing, and it has no Revenue implications. As I said, we have been promised rewrites by various Governments in times gone by, but they have not been delivered. There is clear evidence that people feel insulted or hurt by these definitional vestiges of a bygone age, and I hope that the Minister will accept the new clause. 

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Mr Gauke:  As we have heard, new clause 1 seeks to change the definition in the Taxes Management Act 1970 of an “incapacitated person”, not substantially, but in a way that would ensure that the Act better reflected the modern understanding of an incapacitated person. 

A definition is required to ensure that the obligations of the 1970 Act properly fall on those acting for children or those with mental health problems. The existing definition can be traced back to at least 1880, and I entirely agree that the wording—it includes words such as “lunatic” and “idiot”—appears more appropriate to the Victorian age than to today. 

I know that a change has been requested for some time by the Low Incomes Tax Reform Group. It pressed the previous Government on the matter from 2003, and I believe that it was promised a consultation on the matter in 2005, but we still have the old definitions. I have a great deal of time for the group; it has been most helpful to me, both in opposition and in government, and I recognise the valuable role that it plays. 

Before addressing some of the technical points in the new clause, I would like to reassure Opposition Members that I broadly welcome the fact that the subject has been raised. It is a change that I will ask my officials to consider. However, I do not think that the new clause would achieve its intention, or that it is an appropriate way to make that change. It seeks to link the definition of an incapacitated person from the Taxes Management Act 1970 to the Mental Capacity Act 2005. The initial amendment referred to section 1 of that Act, but I believe that it has been revised to refer to section 2, as that provides a specific definition. However, referring to section 2 would mean omitting children, and I am sure that Opposition Members do not intend to restrict the definition. 

Although the new clause could be changed in an attempt to address that definitional point better, I believe that there is a better way to do what is intended. As Members will be aware, the Treasury launched at the time of the June Budget a new approach to tax policy making. We wish to avoid the previous experience of making reactive and piecemeal policy announcements that are unexpected and insufficiently thought through. Instead, we believe that appropriate consideration should be given to changes and that opportunities should be provided for those affected to comment and to have certainty about our decisions. Any change to the measures that we are discussing should go through that process, not least to prevent any group of people from being inadvertently moved in or out of any new definition. 

I am sure that Committee members appreciate that it would be inappropriate for me to give a definitive timetable at this stage. None the less, I can assure the Committee that we are keen to address the issue. Any changes will be undertaken in the open and transparent way that we have set out. I appreciate the hon. Member for Nottingham East raising that important point and agree entirely with the sentiments behind the new clause, but I ask him, for the reasons I have outlined, not to press it to a Division. I am sure that he will engage with us on how to make the change that is behind the new clause. 

Chris Leslie:  I am grateful to the Minister for his comments, although I take issue with them slightly. I do not want to make a party political issue of the matter,

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because clearly the previous Administration did not make that change; however, the Minister and his advisers still appear to be a little bit in that groove. I have a couple of points to make. I do not think that we are in a position to talk about “reactive and piecemeal” changes, given the number of years we have been debating this matter, and having pored over it from time to time. I was interested to hear the technical point about whether the reference in the Mental Capacity Act 2005 does not include children; perhaps I should have spoken with the Minister before tabling the new clause to ensure that we covered those points. 

Having been a Minister, I know that it is tempting for both officials and Ministers to get into a habit of resisting all amendment at all costs, no matter what they are. Having a clean Bill go through Committee might be regarded as a feather in the cap. However, I think that it would reflect well on the Department in general, and on the Minister in particular, if we were able to amend the law by the time the Bill is enacted, particularly as we are talking about one, non-contentious issue. If he gives me an assurance that, on Report—we have plenty of days before then in which to look at changing the provision in respect of children—he will bring forward a new clause on the subject, we will be more than happy to praise him and accept that arrangement. That would be a good way of doing it. 

If the Minister makes such a commitment today, which is within his power—that privilege is what being a Minister, albeit a junior one, can be about, and I am sure that the Chancellor is more than happy to concede on the matter—we can all agree on the issue and go away happy. Otherwise, we will try to bring the matter back on Report. I do not think that it would help anyone if we were to divide on the new clause today, so I hope that we can talk about the issue outside Committee and bring forward an amendment on Report, perhaps in his name. 

10.15 am 

Mr Gauke:  Let me assure the Committee that I would have no reluctance in accepting the new clause if we thought that it was technically right, and if there had been sufficient consultation and the opportunity to examine that technical area. The issue was first raised in 2003 by the Low Incomes Tax Reform Group, and a promise was made in 2005 to address it. It is very important, when we examine tax law, that we ensure that we get it right. Too often, under Governments of both colours, we find, in Finance Bill deliberations, that we are debating clauses that amend measures that were passed only the previous year, or two years ago, because something has come to light. That is why it is very important that we have a consultative and deliberative process in making tax law. I accept that the issue is not entirely new, but it is important that officials and outside bodies, as well as the LITRG, can examine the matter. 

I am not able to give the assurance that the hon. Member for Nottingham East, quite reasonably, asked for—that we will come back by Report with a solution—because I cannot confidently state that we will be in a position to do so. In any event, we believe in consulting more fully, as we have done with the Bill across the board. However, he raises an important point, and I can assure him that the Government are determined to address it. The terminology in the current law is archaic

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and offensive. We want to solve the problem, but in such a way that there are no inadvertent, unexpected consequences, which requires a more deliberative approach. 

I am sorry, but much as I respect the intentions behind the new clause, that is why I cannot accept it. I hope that we do not divide on it, because hon. Members on both sides of the Committee want to work constructively to address the issue. It would be a pity if the issue proved to be a dividing line between the parties when we recognise that the hon. Member for Nottingham East has raised a very fair point, and we want to find the right way of addressing it. 

Chris Leslie:  I hear what the Minister says and I accept his honourable intentions in respect of the change. I know that it would be very difficult to make a decision on a potential Government new clause by as early as next week, perhaps, or whenever we come to the final stages of the Bill on the Floor of the House, but the argument about further consultation and more rounds of deliberation has pretty much run its course by now, given the number of years we have pored over the issue. 

For that reason, I will not withdraw the new clause but will press it to a Division, in the hope that when we return on Report, either I will table a technically correct version of the new clause or the Minister, on reflection, will table that new clause himself. That is still my hope. On the Floor of the House, when there are far more people watching, it would be far more embarrassing to have Divisions, but for now, I really feel that we need to take the issue to the next stage, because we have been, to use a famous phrase, faffing around on it for too many years. 

Question put, That the clause be read a Second time. 

The Committee divided: Ayes 7, Noes 9. 

Division No. 2 ]  


Brown, Lyn   

Evans, Chris   

Gilmore, Sheila   

Hanson, rh Mr David   

Leslie, Chris   

McCarthy, Kerry   

McGovern, Alison   


Burt, Lorely   

Elphicke, Charlie   

Gauke, Mr David   

Goodwill, Mr Robert   

Harrington, Richard   

Mordaunt, Penny   

Sharma, Alok   

Shelbrooke, Alec   

Williams, Stephen   

Question accordingly negatived.  

Clause s 32 and 33 ordered to stand part of the Bill. 

Question proposed, That the Chair do report the Bill, as amended, to the House. 

Mr Gauke:  Before we reach the conclusion of our detailed consideration of the third Finance Bill of 2010, I would like to put on the record my thanks to those who have participated in and assisted with our deliberations. As always, the Hansard Reporters, Doorkeepers and police officers have provided essential help in ensuring the smooth running of the Committee, for which I thank them. I also apologise to the Hansard Reporters for troubling them with the name of the Dutch VAT. As

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they say in the Netherlands, “Het spijt me.” It is not the first time that we have heard double Dutch in a Finance Bill debate. 

I thank all the officials from Her Majesty’s Revenue and Customs, the Treasury and other Departments, whose help has been invaluable. They have repeatedly inspired me when I have been clutching for the right words. I am particularly grateful to parliamentary counsel, whose hard work and dedication provided the means for the Government to present our views in the Bill, as well as the means to help those who will benefit from it. As the Committee will be aware, this is the first time that we have consulted on all a Finance Bill’s clauses in draft. It is part of our new approach to tax policy making. I thank all the representative bodies and other interested parties who came forward with suggestions for improving the legislation. They have demonstrated that the new approach makes for better legislation, and I look forward to their participation in future Bills consulted on in the same way. 

Although this is a technical Bill covering a range of minor measures, the Committee has managed, through determined probing, to draw some surprising themes from the Bill. We have travelled far and wide in our deliberations. Although our departure was slightly delayed, we soon had the wind in our sails. We have gone to the cold waters of the North sea in considering both the mackerel wars and the possible red herrings involved in seafarers’ earnings deductions in clause 4. I thought that we risked descending into fish-based puns— 

Chris Leslie:  Not in this plaice. 

Mr Gauke :   Yes, this is not the plaice. I know that some hon. Members put their heart and sole into discussing the issue, maybe with the advice of John Whiting. We considered the aircraft affected by clause 21, the plans for a hydrogen-powered ferry in Bristol harbour, and the cross-country travels of the post bus. We even made

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some hobbit sidesteps into Middle-earth, which might now be further from us than my hon. Friend the Member for Watford would wish. 

However, it would be wrong to think that we have not considered important and difficult issues, from the tax treatment of carers in clauses 1 and 2 to the impact of asbestos exposure in clause 31 and the definition of incapacity in new clause 1. Hon. Members approached those issues in a constructive and non-partisan way, showing the value of these considerations. 

A number of new Members are now dealing with Finance Bill matters. I congratulate the shadow Front-Bench Members, who have taken a robust and considered approach on their first outing on the shadow Front Bench in a Finance Bill Committee. I thank them and other Opposition Members for their dedication and constructive opposition. Despite a shaky start, the hon. Member for West Ham and my hon. Friend the Member for Scarborough and Whitby have helped ensure that the Committee ran smoothly alongside other business in the House, for which I thank them. 

As for my hon. Friends, I see exactly how the coalition Government can benefit from both parties being involved. I wish my hon. Friends the Members for Elmet and Rothwell, and for Dover, well in kicking their smoking habits with the assistance of the hon. Member for Bristol East. I also thank my hon. Friends the Members for Bristol West, for Solihull, and for Reading West, and all my hon. Friends, including my hon. Friend the Member for Putney, for their support. Finally, I thank you for your help, Mr Caton, and I also thank Mr Chope and the Clerk, Mr Patrick. I look forward to further debates on Report. 

Mr Hanson:  In the interests of not bringing us back this afternoon, I agree and wish everybody on the Committee well. 

Question put and agreed to.  

Bill, as amended, accordingly to be reported.  

10.24 am 

Committee rose.