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"PROCEDURE FOR ORDERS UNDER SECTION 20
(1) The Commissioners must not make regulations under section 20(1)(b) unless
(a) a draft of the regulations has been laid before Parliament and approved by a resolution of each House, and
(b) each of the resolutions for approving the draft was agreed more than 60 days after the day on which the draft was laid before the House in question.
(2) No draft regulations under subsection (1)(b) are to be laid before Parliament unless
(a) the Commissioners have prepared and published a report containing proposals for the making of such provisions,
(b) the report sets out the Commissioners' reasons for making the proposals,
(c) the report has been laid before Parliament and each House has approved the proposals contained in the report, either with or without modifications, and
(d) they give effect to the proposals so far as approved by both Houses.
(3) An approval given in either House satisfies the requirements of subsection (2)(c) only if it was given in that House on the first occasion on which a motion for the approval of the proposal was made in that House by a Minister of the Crown after
(a) the laying of the report, or
(b) if more than one report containing those proposals has been laid before that House, the laying of the most recent one.
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(4) The Commissioners must not make an order which contains any provisions that they are authorised to make under subsection (1)(b) unless a draft of the order has been laid before Parliament and approved by a resolution of each House.
(5) In determining a period of 60 days for the purposes of subsection (1), no account shall be taken of a day for which
(a) Parliament is dissolved or prorogued, or
(b) the House in question is adjourned for more than four days."
The noble Lord said: My Lords, perhaps I should declare a past interest. Somebody suggested to me that I was moving the amendment standing in my name and that of my noble friend Lord Sheldon only to reward my old friends. This is, of course, totally untrue. I would not dream of such a thingnot through the public purse, anyway.
The amendment relates to the current rewards apparently paid by both the Inland Revenue and Customs and Excise. The figures previously given to us indicated that Customs and Excise rewards were in excess of £900,000, whereas the Inland Revenue gave rewards of only about £100. There is therefore some discrepancy. I am not seeking to help noble friends in the accountancy profession, or even in the legal profession where I still have friendsperhaps even including my noble and learned friend the Attorney-General. My friends in the legal profession whom I have used have never been quite as distinguished as my noble and learned friend, but I would not dream of suggesting that they should get rewards for their own sake.
I seek to ensure that those with direct knowledge of legitimate tax avoidance and, in particular, illegitimate tax evasion should be more helpful in ensuring that the public purse is less burdened. In my experience, most accountants and lawyers have nothing to do with tax evasion, as I am sure is still the case, but they will have knowledge on the border. I am sure that the noble Baroness, Lady Noakes, will have no knowledge of tax evasion, at least not in her direct experience, I hope and believe.
Legitimate avoidance is often not disclosed. I have in mind the recruitment of retired professional people with direct knowledge of major tax avoidance schemes, about which it takes the Inland Revenue a long time to learn. It might get to know about them earlier with the help of rewards in the appropriate direction. Nobody could have rewarded me in those circumstances to provide that information, but I am sure that the noble Baroness, Lady Noakes, would be only too happy to oblige, now that she has retired from the senior professional position that she held.
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It often takes the Inland Revenue a long time to learn about major schemes in general of tax avoidance. So somebody with direct experience in those fields could be very helpful. They may find a few pounds even more helpful once they have retired. I am not referring to the noble Baroness because I know that she will have had both a huge salary and a huge pension in her retirementor semi-retirement nowbut others might find it useful.
I do not seek to use public money to help the professions. In net terms it would be a great help to the public purse if disclosure were made at an early stage to the Inland Revenue in particular. Given that I have been so helpful to my noble and learned friend during these debates and in the past, I hope that he will agree to the amendment. I beg to move.
Lord Shutt of Greetland: My Lords, I thought that the proposed provision was very attractive and that perhaps on this occasion I might renew my practising certificate. But it is entirely different from how the noble Lord describes it. It refers to practising accountants, not retired ones. I find it surprising that we want to give "substantial rewards" to practising accountants and legal advisers, even though they may be hard up.
In my time in practice, there were some clients on the wrong side, and the Inland Revenue often pointed the finger at them. One then had to have meetings with them and say, "This is what you have told me. I am afraid that I have to tell that to the Inland Revenue"; or, "I can no longer act for you". If you said that you could no longer act for a client, he then found another accountant, who would write to ask whether there was any professional reason why he could not act for that person. I would then respond, "Yes, there is. These are the circumstances". The client would therefore get stranded. I would therefore be very surprised if substantial rewards were needed.
Baroness Noakes: My Lords, when I first saw the amendment I thought that it contained the "Barnett-Noakes benefit clause". I had read it too quickly and thought that it referred only to accountantsthe noble Lord, Lord Barnett, and I are both qualified accountants. But it refers to practising accountantsneither of us is that at presenttherefore we do not benefit from it.
The noble Lord referred to the need to induce accountants to report tax evasion. I do not think that any accountant bound by proper ethical rules needs such an inducement. Furthermore, I believe that the Chancellor has done quite a lot to ensure disclosure of things amounting not even to tax evasion but to tax-avoidance schemes. I wonder whether the purpose that the noble Lord had in mind for substantial rewards exists. It was a nice try but I do not think that it benefits us quite enough.
Lord Sheldon: My Lords, my noble friend made the very important point that we are bringing together two completely disparate bodies with enormous powers, which deal with large sums of money, so we must have
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a way of finding out the errors that may occur as a result. There will be new arrangements and requirements, so we want somebody with direct experience. The eventual outcome of merging the Inland Revenue with Customs and Excise will be good in the long run. But it will be quite a number of years before it settles down and we can be assured that the standards that we have enjoyed for so many years can be maintained.
Speed here will be dangerous. It is very hard to overstate the dangers with the different traditions, so we need some new safeguards. They need to be fairly unusual, and they may not be entirely welcome, but we need people who know what is going on. There must be provision for assisting those with that knowledge to come forward. We need some help to deal with the uncertainty that will arise. My noble friend's amendment is very suitable and apt.
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