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Lord Mackay of Ardbrecknish: My Lords, I should not draw my words to the attention of my friends in the Treasury but rather the Hansard quote, which will be exact. I am sure that the noble and learned Lord is right that that is what he said. I managed to note down just a small part of it.
The noble Viscount, Lord Chandos, took up the point made by my noble friend Lord Cockfield about "ripping wheezes". I was rather worried that the noble Viscount thought that the phrase referred only to some of the business undertaken by my noble and learned friend Lord Howe. The originator of the phrase was the late Lord Lever who suggested to the 1974-79 Labour Government a number of "ripping wheezes" to get round some of the serious financial problems that they had. I read about that with pleasure during the Christmas Recess in an autobiography coming from a member of the government of that time. But I believe that we all agree that we should not base our tax legislation on how many "ripping wheezes" we can find. We should base it much more soundly than that. I am sure that the noble Viscount and I agree about that entirely.
Before I leave the policy principles, perhaps I may refer to an issue raised a number of times by my noble friend Lord Boyd-Carpenter. He seems to object to parts of the Civil Service being dispersed around this country. He seems to feel that all Inland Revenue matters should be dealt with by people in London and the south-east of England in their friendly neighbourhood offices, so to speak.
Slightly later in his speech he also encouraged me to look for economy in public administration. Partly for the sake of economy in public administration and partly based on the principle of attempting to bring jobs to the most seriously disadvantaged parts of the country, for many years now governments of both political complexions have attempted to disperse jobs around the country. Many of the Inland Revenue jobs which have been dispersed are very valuable in the local economies where they are based; for example, in Glasgow. Jobs in my department, the Department of Social Security, have been resited in, for example, the Blackpool area in order to provide important employment opportunities there. The Contributions Agency is based in Newcastle.
I do not subscribe to the view that everything should be based in London and the south-east of England because the majority of people live there. Both for the integrity of the Union and for economy in public administration, to quote my noble friend, it is foolish to base everything in the most expensive part of the country; for example, as regards rent, property and labour costs. Therefore, I am afraid that my noble friend will not be surprised to hear once again that I disagree with him profoundly about the point that he made in relation to the relocation of Inland Revenue offices.
Lord Boyd-Carpenter: My Lords, I am much obliged to the Minister for his reply. Of course, he has no doubt deliberately over-stated what I said. I did not say that all the tax collection machinery should be in the south of England. But I did suggest that to remove the Inland Revenue and so on from an area where a large proportion of the population lives was making the tax system much more oppressive because people could not make quick personal contact with those who interpret the law and interpret what are their liabilities.
It is a fact, which my noble friend has now admitted, that the Government have deliberately moved the Inland Revenue, thereby adding to the costs of administration and to the difficulties of taxpayers in a large section of the country.
Lord Mackay of Ardbrecknish: My Lords, I do not believe that it has in any way added to the difficulties. It has made good sense for the Union and for economy of administration. I do not believe that many people need or want to visit their local tax office. They either want to communicate with it as little as possible or communicate by telephone or letter. I do not believe that it is nearly the problem that both today and in the past my noble friend has made it out to be.
I turn to the point of the two reports; namely, the simplification of tax legislation. The Revenue will not carry out that work alone or in isolation. The widest possible consultation is essential in order to ensure that genuine user-friendly legislation is produced by the rewrite. The Revenue consulted widely with the professions and business when preparing its report and is committed to maintaining that approach. There will also be close consultation and involvement of parliamentary counsel.
It is clear that there will be a formal consultation procedure for the long-term project. The Revenue will discuss the options informally with the representative bodies in the next few months. The Revenue also intends for the final rewrite team to include recruits from the private sector to provide a different and useful viewpoint on that work.
The next major stage in the rewrite project will be the publication of a consultative document later this year. That will give more details on the proposals and seek views of interested parties on the way forward. It will cover such areas as the case for restructuring for the Taxes Acts, drafting styles, priorities for rewriting and consultation arrangements.
In his introductory speech my noble and learned friend Lord Howe suggested a Special Standing Committee of both Houses. We shall have to give attention to how Parliament as a whole deals with the changed legislation as it is brought forward. I am grateful to your Lordships for the suggestions which have been made on how Parliament should be involved. I am grateful also for the suggestion that this House should be involved in consideration of those matters. Because of constitutional arrangements, we are not involved in the consideration of finance matters, but your Lordships have made a good point that we could have a useful role to play in looking at the changes which that rewrite will bring forward.
It will be helpful to have a better idea of how the rewrite is developing and what the rewritten legislation will look like before making a final decision on the most sensible procedures to use in Parliament. There should be very important benefits for business and taxpayers from the project. The overall reaction of the representative bodies, and your Lordships this afternoon, is that quite clearly they see that the benefits should substantially outweigh the costs. The benefit to all users will come from tax law which is easier to understand and can be grasped more quickly. There should also be benefits to taxpayers who use professional advice or guidance material from the improvements in advice from practitioners and the Revenue. The benefits will be of particular importance under the system of self-assessment which starts in April 1997. This system will place more responsibility for getting their tax affairs right on the 9 million or so people it will cover.
The project will contribute to the Government's deregulation initiative aimed at reducing the costs to business of complying with legislation. It will also contribute to the Inland Revenue's continuing efforts to improve customer service.
In conclusion, there is clearly a lot of work being done, and needing to be done, and it will take time to get it right. The first tranche of rewritten legislation should be ready around the end of 1997. It is a major task, but this project is clearly a worthwhile one which deserves the widespread support it has attracted, and I am pleased to see that that widespread support was echoed from all parts of your Lordships' House this afternoon.
Lord Howe of Aberavon: My Lords, in closing the debate, I thank all noble Lords who have joined in the proceedings and in particular those who have extended their thanks to me for initiating the debate. I particularly appreciated the generosity of the language used by two of the most--if I may borrow the adjective--Jurassic ex-Treasury Ministers who joined in the debate; namely, my noble friend Lord Boyd-Carpenter and the noble and
As always, I enjoyed the contribution made by my noble friend Lord Cockfield. He did not disappoint me because, as usual in our many discussions, he was able to refer to his experience in dealing with the management of taxes dating back to World War I, World War II and the Korean War. My noble friend has never been lacking in depth of experience of that kind. In fact, my noble friend was in an unusually Elysian mode for him. He talked almost hopefully about the prospect of our being able to achieve such a simple, allowance-free low tax system. I entirely agree with my noble friend about its desirability. I also very much value the help that he gave me in trying to move in that direction in the simplifications that we did make; for example, in abolishing the reduced rate ban, which was reversed some time later.
However, we struggled in vain to challenge the principle of mortgage interest relief, which is an allowance of huge size with huge complications, because it is relatively popular. I was also struck by my noble friend's visionary insight into the world in which we might actually tolerate a general anti-avoidance provision of the kind visualised by the noble and learned Lord, Lord Simon of Glaisdale. Indeed, it would be marvellous if public opinion reached the point where such a provision became tolerable. But I hesitate to believe that it will be with us very quickly.
I recollect the occasion when the then chairman of the Board of Inland Revenue was giving evidence to the committee in the other place which deals with Treasury and Civil Service matters. He was asked the rather telling question, "Tell me Sir Lawrence"--for that was his name--"do you pay your window cleaner in cash?". He was compelled to answer that in the way in which I suspect all of us would be obliged to do. Nevertheless, that is the right objective to set ourselves.
Two of the non-Treasury Ministers--the minority taking part in the debate--were in fact my noble friend Lord Ashburton and the noble and learned Lord, Lord Brightman, who both focused on capital gains tax. It is now far too long a time since I last wrestled with the subject for me to begin contending with them on the detail. My noble friend Lord Ashburton is only relatively innocent when compared with former Treasury Ministers, but, as a former chairman of a merchant bank, a former chairman of an insurance company and a former chairman of our large oil company, he is quite a sophisticated fellow. He drew from CGT two points: first, that our noble friend Lord Lawson had got it wrong by simplification; and, secondly, he put forward proposals to improve the situation--the graduation of CGT--which would have added greatly to its complexity. It was a remarkable but nevertheless stimulating and interesting contribution.
I was delighted that the noble Lord, Lord Taverne, and my noble friend Lord Hayhoe also endorsed--as, indeed, did the noble Baroness, Lady Seear--the idea of a special Standing Committee as being the right vehicle for tackling the matter. I very much hope that that central point will be taken on board. I believe that it was endorsed by the noble Viscount, Lord Chandos, in a speech, if I may say so without undue condescension, of high quality from the Front Bench of the party opposite in summing up such a debate.
However, I am glad to say that it did not match the quality that we have long since come to expect from my noble friend the Minister who wound up the debate. I was struck by my noble friend's modesty and I share his instinct in preferring reference to be made to explanatory memoranda rather than to speeches made by Ministers. I particularly welcome, as I am sure the whole House did, the firmness of his commitment on behalf of the Government to proceed with the matter with the seriousness and the urgency that it deserves.