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Lord Saatchi: My Lords, does the Minister agree that one of the main recommendations that the institute makes in its report is that this second Chamber could perhaps play more of a role in the scrutiny of financial legislation? Will he therefore consent to join myself and other interested Peers in an attempt to see if we can obtain cross-party consensus to examine ways in which the procedures of your Lordships' House can be modernised in the area of tax and other Treasury affairs?

Lord McIntosh of Haringey: My Lords, I welcome the return of the noble Lord, Lord Saatchi, to a theme which he has pursued quite legitimately for a considerable period of time. He will understand that, whatever I might say as a citizen, it is not easy for me to respond when I speak on behalf of the Treasury in this House. It would be difficult therefore for me to join a group of the kind he suggests.

However, perhaps I may say that I feel I was somewhat abrupt in my response to the noble Lord when he raised the issue of simpler tax structures in the debate on the Pre-Budget Report. I was over-simplistic in my replies. The noble Lord deserves a fuller response at some stage, which I hope I shall have an opportunity to give him.

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Lord Barnett: My Lords, as someone who has put much complex tax legislation on the statute book, I declare an interest. Can my noble friend tell the noble Lord, Lord Saatchi, that, while a number of us may be interested in joining such an all-party committee, the plain fact is that most tax legislation, under any government, will be complex? It would be foolish to pretend, as the noble and learned Lord, Lord Howe of Aberavon, pointed out in his excellent report, that tax legislation is other than complex and, therefore, by its nature, difficult for any committee, however good--even one chaired by the noble Lord, Lord Saatchi--to simplify.

Lord McIntosh of Haringey: My Lords, I share with my noble friend Lord Barnett admiration for the noble and learned Lord, Lord Howe, and his chairmanship of the steering committee of the tax law re-write project. The project goes back over tax laws for a period of 200 years. Inevitably there will be an accretion and matters to be put right. It rather reminds me of the bursar of an Oxford college who rejected the college's investment policy on the grounds that the past 200 years had been wholly exceptional.

Lord Northbrook: My Lords, will the Minister admit that under the current Government capital gains tax was made much more complicated by the introduction of the taper relief? If he will not admit that, will he explain how it has become simpler?

Lord McIntosh of Haringey: My Lords, the taper relief replaced the previous relief, which was not called "taper". There was no addition in complexity. There was a short-term addition in complexity when the two forms of relief operated concurrently, but that time passed quickly.

Lord Haskel: My Lords, will my noble friend agree that one of the reasons why tax legislation is so complicated is the huge tax avoidance industry operated by many members of the accountancy profession who continuously call for tax simplification?

Lord McIntosh of Haringey: My Lords, tax experts, both accountants and lawyers, are paid substantially more than those in the Inland Revenue and the Treasury who have to counter their attempts to minimise the tax burden of business and individuals. It is in taxpayers' interests that we should continue effectively to counter them.

Baroness O'Cathain: My Lords, does the Minister agree that one of the major benefits of having a complex tax system is that it is easier for any government to introduce stealth taxes?

Lord McIntosh of Haringey: My Lords, no, I am not a supporter of stealth taxes, and I shall not be trapped into the suggestion that I am.

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European Union: Forthcoming Council Business

2.52 p.m.

Lord Blackwell asked Her Majesty's Government:

    Whether they will undertake that the Prime Minister will not agree any significant changes to the powers and decision processes of the European Union at the forthcoming European Council unless they have been debated and approved by both Houses of Parliament.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, the treaty to be agreed at Nice will require ratification by all member states before it can enter into force. The necessary legislation must be passed in the UK before we can ratify the treaty. Parliament will therefore have its chance to decide whether or not to accept the result we achieve at Nice.

Lord Blackwell: My Lords, I thank the Minister for that Answer and ask her to go a little further. Does she accept that there are significant changes on the table at Nice which have not yet been agreed by governments; for instance, the extension of qualified majority voting, reweighting of votes in the Council and so forth? Does she also accept that experience has often shown that the preamble to treaties turns out to be as important as the articles themselves and in many cases opens the door to the extension of Community competence? In the light of that need for scrutiny, will she give an undertaking on behalf of her colleagues on the Front Bench that this House will not be told that we do not have the right to debate or vote on details of the treaty as it is brought to us?

Baroness Scotland of Asthal: My Lords, I agree that it is likely that some changes will be made at Nice. The whole purpose of the negotiations is for us to find a way forward. It is right that the matter will come before the House--indeed, both Houses will have an opportunity to debate the issue. The Nice treaty will have to be approved by both Houses of Parliament, by the passage of a Bill, before ratification. It is anticipated that an oral Statement will be made on 11th December by the Leader of the House on the outcome of Nice. Therefore, we will have a proper opportunity to discuss the matters.

Perhaps I may remind the House that the Amsterdam treaty was discussed for some five months before it was finally ratified.

Lord Tomlinson: My Lords, does my noble friend agree that if, following the Nice summit, there is no agreement on, for example, qualified majority voting and the extension of that principle, the size of the Commission and the weighting of votes in Council, we shall have failed the applicant countries which are seeking to join the EU, those changes at Nice being the imperative precondition to an EU which can accommodate such an enlargement?

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Baroness Scotland of Asthal: My Lords, my noble friend is right in saying that those are extremely important issues. The House will know that Her Majesty's Government have been at the forefront in arguing for a proper enlargement, and the new countries are anxious that we should be in good form before they join us.

Lord Elton: My Lords, is it necessary for all the member states to ratify the treaty before it comes into effect? If it is not, what is the status of those countries which do not ratify it?

Baroness Scotland of Asthal: My Lords, it is important for countries which may at Nice agree in outline a draft treaty to ratify it thereafter. Parliament will have to approve the treaty so, in theory, it would be possible for this House and the Parliament of any other country to reject it. If that were to happen, there would be a partial or incomplete renegotiation of the text with other member states, as happened when the Danes rejected the Maastricht Treaty in their referendum. Therefore, it is possible for countries to do that, but we are hopeful that the arrangement we arrive at in Nice will prove capable of being ratified by all member states.

Lord Wallace of Saltaire: My Lords, will the Minister accept that as we intend to continue to be a full and co-operative member of the EU, with some Conservative sniping from the sidelines, the most important point is to ensure that national parliaments are able effectively to undertake their scrutiny role? Does she recognise that there have been a number of occasions, particularly in the past year, when the Government have accepted decisions within the Council of Ministers without allowing for national scrutiny? Are the Government considering how they can improve their relations with Parliament in discussing the agenda of the meetings of the Council of Ministers?

Baroness Scotland of Asthal: My Lords, I understand the premise on which the noble Lord, Lord Wallace, makes his statement but I do not necessarily agree with it. We have had an opportunity to discuss these issues and it will be important after the meeting at Nice to have a proper opportunity to debate the matter. As I have already said from the Dispatch Box, we shall have such an opportunity and I am sure that, like Members of the other place, noble Lords in this House will feast themselves on that opportunity.

Lord Bruce of Donington: My Lords, can my noble friend give an assurance on behalf of the Government that, notwithstanding any question of the consideration by both Houses of Parliament of any significant changes, the right of the appropriate Standing Committees to examine European legislation will not thereby be prejudiced in any way? Will she also give an assurance that any proposed legislation will come before the appropriate Standing Committee both in this House and in another place?

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