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Mr. George Osborne (Tatton): So, my hon. Friend is Alfred.
Mr. Prisk: I sincerely hope so.
May I draw the Committee's attention to the impact that the programme will have on the stamp duty land tax? The tax is new and therefore needs particular consideration and scrutiny. There are 82 clauses and 17 schedules related to it. As such, the programme motion compounds a particular problem regarding the tax. Many outside experts believe that the proposal as it is currently drafted is incomplete. For example, sale and leasebacks, which are a very complicated aspect, have been left to secondary legislation.
I am principally concerned not just because we need time to consider the unintended consequences, but because there are many outside experts in taxation, law and property who want to contribute to the process. The programme motion is too short and inconsiderate. It will not allow us to examine the tax, never mind the Bill, in the thorough and professional manner that people outside the House would expect.
The Chairman: So far so good. A very pleasant atmosphere prevails. I trust that that will continue.
Question put:—
The Committee divided: Ayes 18, Noes 10.
Division No. 1]
AYES
Cruddas, Jon
Cunningham, Mr. Jim
Cunningham, Tony
Farrelly, Paul
Healey, John
Hendrick, Mr. Mark
Howarth, Mr. George
Lucas, Ian
McKechin, Ann
Mallaber, Judy
Marris, Rob
Mountford, Kali
Munn, Ms Meg
Pond, Mr. Chris
Primarolo, Dawn
Southworth, Helen
Sutcliffe, Mr. Gerry
Trickett, Jon
NOES
Baron, Mr. John
Djanogly, Mr. Jonathan
Flight, Mr. Howard
Jack, Mr. Michael
Laws, Mr. David
O'Brien, Mr. Stephen
Osbourne, Mr. George
Price, Adam
Prisk, Mr. Mark
Wilshire, Mr. David
Question accordingly agreed to.
Resolved,
That—
(1) during proceedings on the Finance Bill the Standing Committee do meet when the House is sitting on Tuesdays and Thursdays at 8.55 am and 2.30 pm, except on Tuesday 3rd June when it shall meet at 10.30 am and at 4.30 pm;
(2) the proceedings shall be taken in the order shown in the first column of the following Table, and shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table:—
Column Number: 012
TABLE
Proceedings
Time for
conclusion of
proceedings
Clauses 2, 3, 6 to 8, 10 to 13 and 15 to 19, Schedule 1, Clauses 20, 21 and 23, Schedule 2, Clauses 24 to 41, 147 and 149 to 151, Schedule 26, Clauses 152 to 154, Schedule 27, Clauses 155 and 163 to 166, Schedule 30, Clause 167, Schedule 31, Clause 168, Schedule 32, Clause 169, Schedule 33, Clause 170, Schedule 34, Clauses 171 and 172, Schedule 35, Clause 173, Schedules 21 and 22
5.00 pm
on Thursday
22nd May
Clauses 43 to 49, Schedule 3, Clause 50, Schedule 4, Clauses 51 to 55 and 58 to 62, Schedule 7, Clauses 63 to 68, Schedule 8, Clauses 69 and 70, Schedule 9, Clauses 71 to 78, Schedule 10, Clause 79, Schedule 11, Clauses 80 to 91, Schedule 12, Clauses 92 and 93, Schedule 13, Clauses 94 to 99, Schedule 14, Clauses 100 to 104, Schedule 15, Clause 105, Schedule 16, Clauses 106 to 115, Schedule 17, Clauses 116 to 123, Schedule 18, Clause 125, Schedule 20, Clauses 126 to 129, 136, 137 and 140, Schedule 23, Clauses 141 and 142, Schedule 24, Clauses 143 to 146
11.25 am
on Tuesday
10th June
Clauses 156 to 158, Schedule 28, Clauses 159 to 162, Schedule 29, Clauses 174 and 175, Schedule 36, Clauses 176 and 177, Schedule 37, Clauses 178 to 180, Schedule 38, Clause 181, Schedule 39, Clauses 182, 183 and 200, Clauses 185 to 192, Schedule 40, Clause 193, Schedule 41, Clauses 194 to 197, Schedule 42, Clauses 198, 199 and 201 to 213, Schedule 43, Clause 214, new Clauses, new Schedules, any remaining proceedings on the Bill.
5.00 pm
on Thursday
12th June
Clause 2
Rate of duty on beer
Question proposed, That the clause stand part of the Bill.
9.30 am
The Economic Secretary to the Treasury (John Healey): I look forward to serving on the Committee under your chairmanship, Sir Nicholas. You said that you were determined that it will be an ordered, structured and positive Committee and that every effort will be made to ensure that important matters are properly debated. My right hon. Friend the Paymaster General and I share your determination.
The right hon. Member for Fylde noted the number of Committee members from the north-west. As I look down the list, it strikes me that almost one in five of us are from Yorkshire, which will ensure a tough, gritty approach. It is probably appropriate that the first clause that we are to discuss concerns beer duty.
The clause increases the rate of excise duty charged on beer by 2.8 per cent., in line with general inflation. Excise duty and value added tax on alcohol provide a crucial £12.5 billion to invest in essential public services such as schools, hospitals and transport and in tackling crime. Beer accounts for more than 40 per cent. of alcohol duty receipts. This inflation-only increase in duty and VAT, which is equivalent to around a penny a pint, is necessary to maintain an important source of revenue. I remind the Committee that that modest increase, which is a freeze in real terms, comes after actual freezes in beer duty in three of the previous four Budgets. Since coming to power in 1997, this Government, unlike the last, have made no real terms increases in beer duty.
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Some hon. Members may say that any increases in duty rates, even an inflation-only increase, will fuel the smuggling of beer and wine, the duty on which is increased in line with inflation in clause 3. The Government are absolutely committed to tough action to protect the industry against the effects of illegal smuggling and, as we announced in the pre-Budget report, Customs and Excise have continued to have a significant impact on cross-channel smuggling. The modest duty increases take place against a background, in 2002, of a 22 per cent. reduction in revenue evaded through beer smuggling and a halving in revenue evaded through smuggling of wine and spirits for the second year in succession.
I am aware of the pressures on brewers and the pub industry. They play an important part in our economy, our heritage and, for some of us, our leisure time. This modest inflation-only increase in beer duty recognises their concerns but, at the same time, maintains an important stream of revenue that is necessary to maintain our commitment to improving public services.
Mr. Stephen O'Brien (Eddisbury): I, too, welcome you to the Chair, Sir Nicholas, and your colleagues, Mr. McWilliam and Mr. Gale. As one of the proliferation of Members from the north-west, and not least as a Cheshire Member, I find it a particular privilege to serve under your chairmanship.
I thank the Economic Secretary for his contribution in the Committee of the whole House, although we were disappointed that he was not minded to accept any of our amendments. The issues raised were given a fair time for debate, but deep regret was felt on the Opposition Benches, and by many professional advisers and those who take an interest in the City, that the operation of a knife at the end of the first day meant that we were not able to debate the important area of stamp duty. That was a serious omission, and stamp tax was a real victim of the draconian timetabling procedure under which we have to suffer. Having put those comments on the record, I take this opportunity—as it has not been mentioned so far—to wish the Financial Secretary to the Treasury well. I know that she is quite rightly on maternity leave, and we all hope that it proceeds satisfactorily so that she will be able to add to her happy, and already somewhat numerous, family.
Clause 2, as the Economic Secretary has said, provides for an increase in the rates of excise duty charged on beer in line with inflation at 2.8 per cent., which came into effect from midnight on 30 April, on the assumptions that the Committee feels minded to support that proposal and that it will receive the backing and support of the House in due course. Although that is a very important duty, it would be right, in taking account of the proper admonitions that you hope we will be mindful of and abide by, Sir Nicholas, to note that the arguments that we raised in some detail in relation to tobacco products, and the other issues that came up during the new clause debate on the Floor of the House, apply equally to smuggling and cross-border issues relating to beer.
I do not think that it would be proper use of the Committee's time to delve into those issues one more
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time. We have gauged the Government's reaction to what I hope were seen to be considered and responsible proposals, which were an attempt to tackle a genuine issue that affects users, not least, and corner shop owners and others, whether we are talking about tobacco or beer or other drink. Finding where elasticity in approach should fall is an increasing problem.
We all wish to curb smuggling. There is of course the phenomenon of cross-border shopping. The reality of that activity for personal consumption has been recognised, and that has to be considered part of the principle of freedom to shop. The House has seen personal allowances for such shopping raised, but there is concern that the duties that continue to be applied to such products are not bringing about the Government's desired objective by curbing smuggling to the necessary degree.
I shall not seek to spend particular time on that issue, given that we have debated tobacco, especially the proposal for a comparative control group that could test how the Government's strategy is working in relation to smuggling, how we can link it to pricing and differentials to tackle smuggling, and how it connects to the attack on corner shops that the increase in cross-border shopping represents.
I seek the Government's assurance that they will give detailed consideration to the impact of inflationary duty increases on smuggling and cross-border shopping. We are concerned that much information behind the advice given to Treasury Ministers is not being made broadly available, and not to those of us who have to scrutinise the Government's policy. There is a genuine need to protect the revenue raised from those products. I look to the Minister for those assurances so that we may have a detailed commitment to a programme of report on the elasticity of prices, duty and differentials between marketplaces. That would be particularly helpful.
It would also be helpful to ensure that the Government's assessment includes a proper analysis of the effect of duty increases on consumption, particularly in relation to tobacco. Let us not forget alcohol, too, which, while a pleasure in moderation, can result in a serious and damaging condition for some people. The health issue must genuinely be borne in mind with beer, as with tobacco products, about which there has been much fuller discussion.
I would be grateful if the Economic Secretary would share with us any detailed analysis that has been done or ensure that such analysis will be done. I would like to know about any commitment to a continuing programme that supports the fairness of the decision to increase duty on beer and wine, the effect on consumption—taking into account commercial and health issues—and, above all, where the elasticity factors range for each product in respect of smuggling and cross-border shopping.
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