Mr. Flight: I thank the Paymaster General for her helpful comments. The Law Society as well as KPMG raised the issue. I agree that it is up to those affected to provide significant case evidence to justify pursuing the matter further. The door is open in that respect, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Flight: I beg to move amendment No. 48, in page 249, line 20, at end insert
`( ) Before 31st December 2001 the Board of Inland Revenue shall present to the Chancellor of the Exchequer proposals to bring the law governing the procedure on completion of enquiries into company tax returns into line with that which applies for income tax self-assessment purposes as a result of paragraphs 8 to 10 above.'
The amendment is in no way critical of the changes in schedule 28, which introduces several welcome improvements in the administration of self-assessment for individuals. It is a probing amendment designed to suggest that a similar process could be introduced for companies in respect of corporation tax self-assessment, and to counter the argument that making such changes would mean administrative upheaval. A half-way house and a review is proposed.
Dawn Primarolo: I suggest that the hon. Gentleman withdraws the amendment. He knows full well the differences between income tax and corporation tax self-assessment. The administration and timing is complex. He described his amendment as probing, so he may be trying to ascertain our intentions for corporation tax self-assessment.
It is too early to judge whether changes to the process and administration of corporation tax self-assessment are desirable. We need to scrutinise how the system works. The Government have not turned their face against reviewing how the corporation tax self-assessment inquiry has bedded in, and whether that, too, could do with some tidying up. For many reasons, howeverone being that we are considering the Finance Bill at the momentthe time is not now. Given that I have said that the Government would want to look at the matter in the not too distant future, I hope that the hon. Gentleman will withdraw his amendment. I am sure that he will want to press us on the subject on future Finance Billsfrom the Opposition Benches.
Mr. Flight: As I said, this is a probing amendment, tabled so that when we occupy the Government Benches we shall have some idea of Revenue and Treasury thinking about corporate self-assessment. I thank the Paymaster General for her comments, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Flight: I beg to move amendment No. 49, in page 256, line 28, at end insert
`21A.(1) Section 20B of the Taxes Management Act 1970 (restrictions on powers under sections 20 and 20A) is amended as follows.
(a) after ``any pending appeal by him'', insert ``or any pending referral to the Special Commissioners under section 28ZA of this Act or paragraph 31A of Schedule 18 to the Finance Act 1998 to which that person is a party'', and
(b) after ``a pending appeal by the taxpayer'', insert ``or a pending referral to the Special Commissioners under section 28ZA of this Act or paragraph 31A of Schedule 18 to the Finance Act 1998 to which the taxpayer is a party'', and
(c) after ``a pending appeal by the client'', insert ``or a pending referral to the Special Commissioners under section 28ZA of this Act or paragraph 31A of Schedule 18 to the Finance Act 1998 to which the client is a party''.'.
This is a technical point that has been raised with me by KPMG. The introduction of the new provisions relating to referrals to the special commissioners extends the protection to taxpayers so that a notice under any of the relevant sections cannot oblige a taxpayer to provide documents or information relating to the conduct of any pending appeal by the taxpayer. However, there is apparently no extension of the protection that currently exists in section 20B of the Taxes Management Act 1970 to take account of the proposed referral procedure.
Dawn Primarolo: I am extremely grateful for the opportunity to speak on this amendment again, Dr. Clark, as I have already inadvertently covered the point, in my rush to be helpful to the hon. Gentleman
Mr. Peter Luff (Mid-Worcestershire): Characteristically helpful.
Dawn Primarolo: I am grateful to the hon. Gentleman for saying that.
I inadvertently covered this point in my comments on amendment No. 47. The hon. Member for Arundel and South Downs was characteristically gallant, and did not point that out to me. I therefore refer him to the comments that I made then, and specifically to the assurances about not using section 20 or 20A to obtain the documents or information relating to the conduct of a pending referral. As he was so gracious to accept that as a good explanation in response to amendment No. 47, I hope that he will accept it as an equally good explanation concerning the relevant amendment, and will withdraw that amendment.
Mr. Flight: I thank the Paymaster General, both for her kind words and for putting on the record the underlying point, which others have also raised. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 28 agreed to.
Clauses 87 to 90 ordered to stand part of the Bill.
Schedule 29 agreed to.
Clauses 91 and 92 ordered to stand part of the Bill.
VAT: children's car seats
Question proposed, That the clause stand part of the bill.
Mr. Richard Ottaway (Croydon, South): May I make a serious point before my right hon. Friend the Member for Fylde, who has several points to make, catches your eye, Dr. Clark? [Interruption.] Does the Paymaster General wish to defer the discussion? If she does, no doubt she will let me know.
Paragraph 13 of the explanatory notes rightly states that the EC sixth VAT directive permits member states to apply a reduced rate of VAT to children's car seats. What is significant about the clause is that it does not include the Chancellor's much-heralded proposal for a 5 per cent. rate on the repair of churches. The pre-Budget report trumpeted the fact that VAT would be reduced to 5 per cent. on church renovations.
Dawn Primarolo: May I seek clarification, Dr. Clark? I thought that we were considering clause 94, which is about children's car seats.
Mr. Ottaway: We are also talking about the EC sixth VAT directive, which is referred to in paragraph 13 of the explanatory notes on clause 94. The Government's much heralded proposal to include church repairs in the Bill has not been made because they have fallen foul of that directive. It is inappropriate for the Chancellor to tell spin-like stories when he has not cleared the proposal with the EC. He made claims that he could not deliver. It is a classic case of the Government being all spin and no delivery. [Interruption.]
The Chairman: Order. I believe that the hon. Gentleman was just in order, which is why I allowed him to continue. He was right to stay in order for a minimum period, rather than trying to stay in order for a long time, which might have stretched the patience of the Chair. We are talking principally about VAT on children's car seats, but as the hon. Gentleman said, the clause refers to the 5 per cent. reduced rate, in the context of which he referred to churches. We shall now try to return to VAT on children's car seats.
Mr. Jack: Lest my criticism of the clause be misrepresented or selectively quoted outside the Committee Room, let me say at the outset that I am in favour of any measures that attempt to reduce child casualties and fatalities. If clause 94 contributes to the saving of one life that otherwise might have been taken as a result of a road vehicle accident, it will have had the right and proper effect.
I wish to examine the Government's motives for making the VAT change. I am sure that all right hon. and hon. Members know about extremely worthy causes for which value added tax should be changed. For example, along with other local Members of Parliament, I recently attended a discussion with people who were visually impaired. They asked whether there could be a lower rate of value added tax on a range of products that are of assistance to them. Those who represented the Government at that meeting explained why that was not possible. One could give other examples.
Paragraph 5.100 on page 100 of the ``Financial Statement and Budget Report'' states:
``Around 6,000 children under eight years old are killed or injured each year on Britain's roads.''
Perhaps that statement underpins some of the thinking behind clause 94. The report continues:
``It is vital that child car seats are correctly fitted''
and then makes some other observations. However, no connection is made with the Government's assertion in justifying clause 94 that in some way the position of a substantial number of those 6,000 children is affected by car seats.
I undertook some research on the subject. I pay tribute to the transport statistics section of the Department of the Environment, Transport and the Regions. I asked what data was collected to measure the impact of child car seats on the road casualty figure and how we might know whether the £5 million a year that the measure will cost is the right way to affect the number of child fatalities. I was told that no data is collected on that matter. I probed a bit further and tried to focus on cars. What do we know about cars? For example, is any data collected to establish whether front-seat or back-seat passengers are affected? General data is collected about where people sit, but it does not reveal anything about the car seat itself.
I began to wonder whether the clause was an attempt to improve the quality of child car seats. It attempts to define a child's car seat, but nothing in it differentiates between the good and the bad. In effect, the Government could unwittingly spend £5 million on value added tax reductions on children's car seats on the basis that they are the root cause of saving children's lives, but poorer quality seats would benefit as opposed to better quality ones.
What accounts for child fatalities? According to the transport statistics from DETR
``Child pedestrian fatalities account for half of all child casualties, making this the biggest child safety issue.''
Clause 94 is a well-meaning attempt to improve the safety of children in motor vehicles but, for whatever reason, the Government have driven straight past the biggest single cause of child deaths. How would we, as Members of Parliament, explain to the parents of a child who has been injured in a pedestrian incident the non-use of the £5 million that the measure costs? That money might have been used to develop strategies for child safety that might have had a beneficial effect.
To that end, I examined whether we could justify spending money in that area. In 1990, the Department of Transport produced an interesting document entitled ``Children and RoadsA Safer Way''. It described the scale and nature of child road accidents and set out a strategy to deal with them. It focused on the question of child pedestrians, pointing out evidence that properly funded education to help children develop better strategies to deal with pedestrian safety had a greater effect on child safety matters.
To justify the clause, the Treasury must produce solid facts showing that the use of the £5 million is the best way of dealing with child safety matters. I see no statistical evidence from the DETR that that would help. If a child is involved in a fatal car incident, it is because a car has got into a fatal situation not because there is something wrong with the child safety seat. The Government have produced no evidence that the money might be better directed towards car safety issues. The Government's intention was, on this occasion, well meaning but it is not backed up by any facts from the DETR and it ignores children as pedestrians, which is the situation in which the most child casualties and fatalities are caused.