Finance Bill

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The Chairman: Order. Interventions should be just that; that was a bit long for an intervention. I also think that hon. Members will find that Ukrainian people would prefer to be described as from ''Ukraine'', not ''the Ukraine'', which is a Russianism.

Dawn Primarolo: I can see that this debate is fraught with minor difficulties that I did not appreciate.

I can confirm that hon. Gentleman is quite correct: when Ministers travel on Government business, the overnight accommodation costs and certainly their travel expenses are met by the Government. He also made a valid point that this House, Members of this House and the business of this House benefit extensively from the arrangements. The visits might be to forums such as the Interparliamentary Union with other parliamentary representatives in the European countries and are in order to encourage dialogue and understanding. That is precisely what I presume that all Members of the House of Commons wanted to recognise in ensuring that Members were able to travel

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on business if it was relevant. My understanding is that the country concerned must be in the process of accession to the European Union. The answer to the point about Ukraine is that it is not a recognised destination.

The hon. Member for Arundel and South Downs tried to suggest that MPs would be swanning off for weekends in Europe that were not connected with their business. Frankly, trips that are made as a matter of personal choice will definitely not qualify and I am sure that, as guardians of the rules, the Fees Office will ensure that that is so.

On the question of accommodation, which was raised by the hon. Member for Torridge and West Devon (Mr. Burnett), I understand that such costs are included. He asked what happens if a third party were to pay them. As I understand it, that would be declarable—for instance, it would be declarable under the Register of Members' Interests. I am not in a position to say whether it would then become taxable, as I am not a tax adviser. I think that it would depend on the circumstances. The House of Commons has set the provision very narrow. Therefore, although the number of member states and institutions that could be visited has been expanded, the budget has not and the same strict rules apply as before.

Mr. Burnett: Does the clause give exemption only to cash that is paid out by the Fees Office to Members of Parliament? My second simple point was: what do the words ''and other representatives'' mean?

Dawn Primarolo: The answer to the hon. Gentleman's first question is yes. I was coming to the question of other representatives. The provision is concerned not with the level of payments or the allowance but with ensuring that the same underlying tax rules apply to Westminster MPs and Ministers, and to their counterparts in the devolved Administrations—the ''other'' to which he referred.

We need to maintain some perspective. In most circumstances, Members of Parliament are treated for tax in the same way as other employees. The clause does not change that and nor should it. However, specific provisions exist to deal with one or two minor areas where the particular position of Members does not fit easily into the general tax framework. As I have said, there is no more money involved, because the budget for Members' visits to European institutions will remain the same. I presume that that is a matter for the House, Mr. McWilliam, as the budgets and arrangements are set by all Members through a vote on the Floor of the House.

The Chairman: Order. I can rule on that. It is a matter for the House of Commons Commission to compose resolutions for the House to decide on.

Dawn Primarolo: If some hon. Members are not convinced of the efficacy of the system, I assume that they will not approach the Fees Office for reimbursement of expenses for travel connected with parliamentary duties. I am always exceedingly careful, as is the House of Commons as a whole, to ensure that any arrangements for Members of Parliament are

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properly controlled, transparent and connected clearly, specifically and only with their duties as Members of Parliament.

I have noted the opposition and antagonism to the clause of the hon. Members for Arundel and South Downs and for Torridge and West Devon. Although I may be unable to persuade them that it is reasonable, I hope that the rest of the Committee will feel reassured that the House has thoroughly investigated the issue and that the Inland Revenue has confirmed the tax treatment as it currently operates. There are still only three trips. They are still tightly controlled and they must be to the European Union, to its institutions or agencies, or to accession or applicant countries.

Mr. Burnett: The hon. Member for Arundel and South Downs can speak for himself, but I am sure that he shares my view that clauses such as this should not go through on the nod. Of course it is important that Members of Parliament should be able to travel on business to visit other Parliaments and to meet parliamentarians. Nevertheless, the clause needed probing, and I believe that we did that.

Mr. Flight: I thank you for your comments on the constitutional position, Mr. McWilliam. As I mentioned, the issue seemed to be greatly discussed on the Floor of the House, and a majority of our colleagues took a decision.

I congratulate the Paymaster General on presenting the case with great tact. It would be only honest to say that the system is open to abuse, but let us hope that our colleagues resist that temptation. I was prompted to say what I said by a Member from another party, who suggested to me that we could have a nice weekend in Prague by finding a good excuse to see a politician. It is obvious that the system is open to such abuse, although I am sure that the House officials will do their best to query such items duly. It is not my wish to oppose the clause further.

Dawn Primarolo: The hon. Gentleman's final points are a matter for the Fees Office and the House. The clause provides only for the tax position to be maintained with the current scheme. I am sure that the House authorities will pay close attention to his points about reasons for travel. However, they do not relate to the clause, so it would be inappropriate for me to respond to them.

The Chairman: I thank the hon. Member for Arundel and South Downs for his kind words, and hope that hon. Members understand that my comments were merely in response to the Minister's point about how the specific budget is obtained, not its tax treatment.

Question put and agreed to.

Clause 82 ordered to stand part of the Bill.

Clause 83

Giving through the self-assessment return

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

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Mr. Andrew Tyrie (Chichester) (Con): The Paymaster General brought the full weight of her 10 years' experience to bear on the previous clause, but I do not think that the full 10 years of anyone's experience is required for the next clause, with which, I hope, the majority of us agree in principle. However, a number of questions arise from it.

We welcome the clause in principle and think that gift aid is a step forward. It provides that self-assessment taxpayers can donate all or part of any self-assessment repayment from the Inland Revenue to a nominated charity. Under the clause, that will then qualify for gift aid. To qualify, charities must apply to be added to an Inland Revenue list. That is a summary of the scheme. I have seven questions for the Economic Secretary, and shall go through them as fast as I can, although I expect that he knows what most of them are.

Dawn Primarolo: Not too fast.

Mr. Tyrie: I will go at just the right speed and if the Economic Secretary thinks that I am going too fast, he should nod his head or make some gesture. What are the criteria for going on the list? I have not seen them spelled out anywhere. Who is policing the list? About 35,000 charities are on it, so it would be helpful to know what those criteria are.

There are a number of concerns about large, one-off repayments. Prudent taxpayers may want to be generous but may not necessarily want to give all of a large, one-off repayment to a charity, so they will set a limit. Can the Minister consider highlighting the possibility of a limit on the tax return? I have a copy of the guidance in the tax return that is being sent out, which has already been amended to take account of the clause. In order to save time, I shall not read the relevant passages out, but a very long way down, my concern is highlighted—perhaps that is too strong a word—by the paragraph that begins:

''Do you want to nominate a charity to receive all or part of your repayment?''

That must be flagged up. Can the Economic Secretary take a careful look at it? When he has done so, he may agree with me that it must be higher up in the text. We want people to give, but not more money than they might have intended. We do not want them to make a large, one-off payment when they wanted to give only part of it. The fact that the text is tucked away so low will play into the hands of those who have advisers, who will certainly recommend a limit as a matter of course, whereas those who are unadvised and are using self-assessment returns will not.

There is the important question of mistakes. When, as inevitably happens from time to time, a repayment award is made in error—even the Inland Revenue makes occasional mistakes—that money presumably goes to the charity, and the error is discovered. What happens then? I understand that the intention is that the Inland Revenue will claw that money back from the charity, which, in certain circumstances and with certain charities, will be difficult. That raises a number of questions. How in practice will that be accomplished by all 35,000 charities? Are those

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charities vetted to get on the list of those that have the financial capacity to make repayments that have been made in error?

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Secondly, will the Inland Revenue assure us that it will not go back to the taxpayer for that money? Thirdly, in any case, will the taxpayer not need to be informed? If he is a higher rate payer, he will need to know so that he can claim higher rate gift aid tax relief. He must be told.

Fourthly, when the error is by a taxpayer, the Revenue will of course want to recover the money from them as it already does when money is paid to a nominee. In the case in question, the money is to a charity, and it might be asking a lot of a taxpayer to refund in those circumstances. I understand why the Revenue would want to enforce that, but I can see some problems ahead.

When I considered the issue of mistakes, I concluded that not all the angles of the clause had been thought through. I have raised several questions and I ask the Economic Secretary to consider them, even if he cannot answer them now.

I have a few more questions.

 

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Prepared 18 May 2004