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Lord Norton of Louth: My Lords, perhaps the noble Lord will give way. I want to put forward an idea that has been prompted by what he said. I believe that there is a way of meeting the problem without necessarily going fully down that route. The other place is used to separating out Finance Bills. They send the more technical details to a Standing Committee while the broader political issues are dealt with in the Chamber. One solution may be for this House to accept that it would look only at matters sent to the Standing Committee in the other place. That would leave the other place, in effect, to decide what would be considered here. Therefore, that might be acceptable and we may not necessarily have to go down the route suggested by the noble Lord.

Lord Newby: My Lords, that is an extremely interesting option. However, as this debate is taking place, we are having new ideas. That demonstrates the fact that the ideas are not completely formed and that there is no consensus. We must build a consensus within Parliament if the proposal is to take place.

As other noble Lords are aware, we on these Benches do not object to the overall level of taxation. That is not our problem. However, we despair about the complexity of tax legislation. In our view, letting the House of Lords loose on the detail of tax legislation offers an opportunity to simplify and clarify the tax system. It should be a high priority in the next Parliament.

8.28 p.m.

Lord Kingsland: My Lords, I am sure that my noble friend Lord Saatchi, the noble Lord, Lord Newby, and, indeed, the noble Lord, Lord McIntosh of Haringey, will agree that, although we have had few speeches from the Back Benches, they have been of the highest quality.

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I refer, of course, to my noble friend Lady Noakes, who has had such a distinguished career in her own profession in the City and whose observations on tax matters carry great weight in your Lordships' House; to the noble and learned Lord, Lord Simon of Glaisdale, whose characteristically invigorating and apposite remarks reminded us once again that he is simply the finest constitutional lawyer in your Lordships' House; to my noble friend Lord Blackwell, whose time in government brought him closer to the centre of power than many Cabinet Ministers; and, last but certainly not least, to the noble Lord, Lord Norton of Louth, whose speeches so frequently remind us of his masterly grasp of our political institutions. We have benefited enormously from hearing the views of all four today.

I echo the words of the noble and learned Lord, Lord Simon of Glaisdale. It is not the intention of this Bill to usurp the rightful powers of another place. If your Lordships would care to glance once more at the two clauses of the Bill, your Lordships will see that it is made perfectly plain that the type, rate and incidence of tax on a person's transactions or properties remain exclusively a matter for another place. It is only in those other areas of taxation that my noble friend Lord Saatchi seeks to enhance the powers of your Lordships' House.

That is not to say that your Lordships' improved ability to deal with tax management issues will not in the long term influence the way in which future governments shape the taxes that they bring forward. I would like to think that the work of simplifying and rationalising tax management matters will happily infect the way in which governments plan their political approach to taxation, so that its incidence will be easier for us all to understand.

Perhaps I should, briefly, refer to the second clause of the Bill. The first clause will be extremely familiar to your Lordships, because most debates on constitutional matters dealing with finance tend to be cast in terms of money Bills. But, as many of your Lordships will be aware, in recent years Finance Bills, more often than not, have not been certified as money Bills by the Speaker of another place. That is because they contain measures that do not fall exclusively within the definition of money Bills.

Finance Bills that are not money Bills are dealt with in the context of another place's privileges to aids and supply. Those privileges have always prevented your Lordships amending such Bills. However, ever since the privileges were first enunciated as constitutional conventions, your Lordships have retained the right to vote against tax Bills. That happened on more than one occasion at the end of the 19th century. Indeed, under those same aids and privileges, your Lordships today still retain the right to reject tax Bills, but not to amend them. In the early 20th century the Government got round this embarrassment by creating the Finance Bill, which accumulated a large number of tax Bills under its umbrella, thereby making it practically impossible for your Lordships to assert your Lordships' constitutional rights. Under Clause 2,

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the noble Lord, Lord Saatchi, seeks to reintroduce flexibility for your Lordships in those areas that are not politically sensitive or controversial.

A number of your Lordships have addressed the question of the appropriate procedures to be introduced once the Bill finds its way on to the statute book. The Opposition's proposal is that the Finance Bill should proceed through another place as usual; and that when it is published for consideration by another place, a new Select Committee of your Lordships' House, building on the successful Monetary Policy Committee, should be established to review the Bill.

That Select Committee would be a cross-party committee, empowered to take evidence. It would not consider the type, incidence or rate of tax, but would consider the technical issues of tax administration and whether the legislation could be clarified or simplified. It would publish a report on its findings and recommendations in time for the Second Reading of the Finance Bill in your Lordships' House.

Your Lordships' House would have power to amend the Finance Bill in order to incorporate any, or all, the recommendations of the Select Committee. After amendment, the Bill would return to another place, where your Lordships' amendments would be considered in the usual way. Should the other place disagree, we envisage that your Lordships would not insist on your amendments, and the Bill would progress to become law as another place had determined.

However, in the event of any disagreement over particular amendments, your Lordships' Select Committee would reconvene after the passage of the Finance Bill. Your Lordships' Select Committee would then prepare a supplementary report, again taking evidence as your Lordships saw fit, on matters that were unresolved by agreement and on which your Lordships believed that the Government should, none the less, think again. That supplementary report would be submitted to the right honourable gentleman the Chancellor of the Exchequer and be published, simultaneously, before the beginning of the next Budget cycle. The supplementary report would be the subject of debate in your Lordships' House. It would be expected that the right honourable gentleman the Chancellor of the Exchequer would publish a formal response to any supplementary report of the Select Committee.

That seems to us to be an appropriate response to the new powers of amendment that we seek. I see no reason at all why what is contained in this Bill should perturb, or, worse, frighten the Government. On the contrary, with their declared vision about the greater legitimacy of your Lordships' House, this Bill would represent an appropriate reflection of that admirable political philosophy.

8.37 p.m.

Lord McIntosh of Haringey: My Lords, with his customary command of publicity, the noble Lord, Lord Saatchi, has been preparing for this moment for

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two years, ever since he took over the Treasury portfolio on the Opposition Front Bench. On a number of occasions he has warned us-- sometimes in more anguished terms than others--that something is terribly wrong with the way in which we enact our taxes, and that the House of Lords has an answer to this problem. Now we have the answer to the problem.

It has been fascinating to hear the way in which the noble Lord, Lord Saatchi, has orchestrated the debate in your Lordships' House. Perhaps he has not. Perhaps it has all been entirely spontaneous, in the same way as a fascinating article previewing the provisions of the Bill appeared in The Times.

All those matters pay tribute to the noble Lord, Lord Saatchi's, command of his profession. I, too, join in paying tribute. Of course, it reached a peak most recently in the consideration of the Capital Allowances Bill on 26th February when many of the arguments that we have heard today were set out at some length. We therefore come to this matter not entirely unprepared.

I should make it clear, as is always my duty from this Dispatch Box, that the Government do not oppose Private Member's Bills in this House. We shall do nothing to impede the progress of the Bill through the House. However, I should also make it clear that if the Bill reaches the House of Commons, the Government will take such steps as are necessary to oppose it in the House of Commons. But is that needed? I really must ask the Opposition Front Bench whether this is official Opposition policy. I have been looking for evidence of support from the Conservative Front Bench in the House of Commons and all I find is silence. I may have missed the evidence of support but I have not seen it yet.

On the contrary, a number of ex-Conservative Front Benchers in the House of Commons have expressed themselves very firmly on the issue. I quoted some of them on the Capital Allowances Bill. Perhaps your Lordships will allow me to do so again. Mr Eric Forth said:


    "When I see the words 'tax' and 'Lords' mentioned together in one motion, I become suspicious and wonder why we have all suffered from collective amnesia on the history of this place and the relative roles of the Commons and the Lords, especially in respect of tax matters".

He went on to quote Erskine May in order to,


    "illustrate the constancy and consistency of the attitude of the House of Commons over the centuries--that it is to this House alone that the raising of money and revenues, and the disposing of tax matters should rest".--[Official Report, Commons, 15/1/01; col. 54.]

Mr John Redwood, discussing the Joint Committee which examined the Capital Allowances Bill, said that increasing the numbers of Members in the House of Commons required for the Joint Committee to be quorate would,


    "reinforce the message, which I am sure the Paymaster General wants to send, that the House of Commons is in charge of taxation matters".--[Official Report, Commons, 15/1/01; col. 72.]

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