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Oil taxation (anti-avoidance)


(a) the receipts which are to be treated as tariff receipts or disposal receipts attributable to an oil field;
(b) the persons who are to be treated as participators in an oil field; and
(c) the time for payment of petroleum revenue tax.--[Mrs. Roche.]


Queen's recommendation having been signified--



    That provision may be made in the Finance Bill amending section 71 of the Taxation of Chargeable Gains Act 1992.--[Mrs. Roche.]

    Goods for sale on board ships or aircraft

Motion made, and Question proposed, pursuant to Standing Order No. 52(1)(b),

    That provision may be made in the Finance Bill amending section 1 of the Customs and Excise Management Act 1979 as respects stores.--[Mrs. Roche.]

4.26 pm

Mr. Patrick McLoughlin (West Derbyshire): Will the Financial Secretary tell us why she considers the motion to be necessary?

4.26 pm

The Financial Secretary to the Treasury (Mrs. Barbara Roche): I certainly will.

We shall have a number of debates today on the matters covered by the motions, and during those debates, we will explain exactly why we are dealing with them in this way. It is, of course, natural for representations to be made during the passage of a Finance Bill, not only by hon. Members on both sides of the House--

Mr. McLoughlin: Will the Financial Secretary give way?

Mrs. Roche: Not at this stage. It will be my great pleasure to give way to the not-so-silent Whip when the time comes.

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As I was saying, it is right for representations to be made not only by hon. Members on both sides of the House, but by industry. That has been the normal course of events during not only this Bill's passage, but the passage of Finance Bills under the Conservative Administration. Being a listening Government, we listen and take representations into consideration.

4.28 pm

Mr. Oliver Letwin (West Dorset): In due course, we shall debate the substance of the new clauses that deal with goods for sale on board ships and aircraft, but this motion paves the way for that substantive discussion. I think that this an appropriate time for us to ask a number of pertinent questions relating to the amounts of the taxes and duties being raised, which are of some significance, and which we debated to an extent when similar matters dealt with in statutory instruments came before the Standing Committee last week.

Can the Paymaster General--or the Financial Secretary, on her behalf--tell us how much money will be raised by this and associated measures? Can she also say how she envisages the money being used? If, as seemed clear in Committee, it is to go directly into the Consolidated Fund--as we would expect--what projections have been made as part of the forward look, how far have the figures already been incorporated in the Chancellor of the Exchequer's projections, and will any revisions to those projections be required?

In Committee, the Paymaster General waxed eloquent about the Government's difficulty in forecasting the financial effects with any degree of accuracy. [Interruption.] As the Financial Secretary says, from a sedentary position, she explained that it would be difficult to forecast the total effect of the change relating to duty-free sales. I assume that this measure will form part of those arrangements. If there is a difficulty of forecasting, how can appropriate numbers have been figured into the Chancellor's calculations? However, if numbers have been figured into his calculations, how can there be the difficulty of calculation to which she alluded during the Committee's consideration of the measure?

The answers to those questions will be helpful when it comes to consideration of the subsequent matters that are associated with the motion, and which fall to be debated a little later.

4.30 pm

Mr. David Wilshire (Spelthorne): I have a couple of questions to which I would welcome an answer when we debate the substance later. Both relate to the amount of money that will be raised by the measures.

The first relates to something that the Minister said in the Eighth Standing Committee on Delegated Legislation last week. One of the concessions that the Government said that they had obtained was that items that are dutiable, but consumed on board an aircraft or ship, would continue to be "free of tax"--I quote from the Hansard of the Committee. Before we start our debate later, may we be told whether it is free of tax--VAT--or free of VAT and duty? We need to have that point clarified, so that, when we debate the substance, we shall know exactly how much the concession is worth. If it concerns only VAT, it is hardly worth anything. If it concerns VAT and duty, it is a significant concession. That is something that we must debate, but we need the financial facts first.

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On the other matter, I would be enormously grateful if, at the start of the debate on the substantive matters, the Government could let us have a list of those ports and airports that are geographically within the European Union, but to which the measures would not apply. What is the value of that concession, or exemption from the regulations that they seek to bring in? I should be grateful for answers to both those questions before we start the main debate.

4.32 pm

Mr. Michael Fabricant (Lichfield): I, too, would like to express my concern that there has been insufficient analysis of the split between duty and VAT, which my hon. Friend the Member for Spelthorne (Mr. Wilshire) has already mentioned. In particular, I wonder whether the resolutions would apply to airports and ports, or only the vessels and aircraft themselves. If they apply to airports, in the collection of VAT, how will a distinction be made between travel within the European Union and transportation that is undertaken by passengers outside the European Union--where, of course, the issue will be duty free?

The Minister will be aware that, for example, terminal 3 at London Heathrow has aircraft travelling to the European Union, to other parts of Europe that are not part of the EU and to the United States of America. Has she made any analysis of the burden on shops in trying to determine whether a boarding card is for the EU or outside the EU? Has she made any projections of how much extra revenue will be derived gross over the next five years from the collection of VAT and/or duties, compared with the actual disbursements by the state over the next five years as part of our contribution to membership of the EU?

Has the Minister estimated the costs that will be incurred by Government in ensuring that the new regime will be administered properly? Presumably, extra staff will be employed by Customs and Excise to ensure that the duties are maintained correctly. If that is so, what will be the marginal cost of employing extra staff for each of the next five years? For that period, what burden will the state--and, therefore, taxpayers--bear in implementing the measure?

4.35 pm

Sir Teddy Taylor (Rochford and Southend, East): Will the Minister tell us the implications for our further debates of approving motion 5? Motion 1 states that provision may be made in the Bill

However, in the paper submitted on 12 May, in Brussels, to the code of conduct group, the Minister said:

    "This Scheme has been legislated but not yet activated."

If there has been some error, will it have an impact on our further debates, bearing in mind that there is provision for retrospectivity in something that has not yet been--

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I remind the hon. Gentleman that we are debating motion 5, not motion 1. As far as I can see, there is nothing in motion 1 about a retrospective effect.

Sir Teddy Taylor: I am not questioning that point. I am asking the Minister what relevance the motion will have to our future debates. I was simply citing the matter as an example of something that has already happened.

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4.36 pm

Mrs. Gwyneth Dunwoody (Crewe and Nantwich): Has my hon. Friend the Paymaster General had an opportunity to look back over the papers from any previous Government who, 15 years ago, were aware of what would happen on the matter? Has she had access to the calculations that were made then? Will she also tell us whether she has had any access to the terms of reference of BAA plc on its responsibility being divided between the administration of airports and the creation of shopping malls?

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