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Dawn Primarolo: The right hon. Gentleman has been informed on Second Reading, in my speech today and in the very full comments made by the right hon. and learned Member for Rushcliffe (Mr. Clarke), that the changes are extra-statutory concessions. They are published and taxpayers are already aware of them. One point that the Committee had to deal with was that, for the reasons that the right hon. Gentleman has just given, the tax law rewrite process will result in no changes in the law. The process is not a Budget. Changes to basic, underlying policy can be made only in Finance Bills, with the appropriate announcements and information that they entail, and not in a tax law rewrite process. Moreover, the process was established before the previous general election by the previous Conservative Government, of whom he was a member. We have merely implemented that process.
Mr. Redwood: Although I am very grateful to the Minister, I am not entirely reassured. My point is not that she has failed to inform the House. She has been very courteous, devoted time and provided much documentation to accompany her remarks to ensuring that the House is aware of the changes. My right hon. and learned Friend the Member for Rushcliffe has been his usual courteous and fulsome self in explaining them as well. However, I doubt whether our proceedings today or on Second Reading will be widely reported. My point is that a Budget by its very nature attracts enormous press and publicity which are followed up when the Finance Bill detail is seen.
Dawn Primarolo: When each exposure draft was released, it was accompanied by a press release. The explanatory notes accompanying the Bill show that the information was published and that all the relevant organisations were notified. They were given every opportunity to comment on the draft, and changes in the draft were pointed out to them. They were asked if they saw any problems at all with the Bill--that is, whether it changed the law or clouded the interpretation of the law in a way that would put the taxpayer at a disadvantage.
Mr. Redwood: Again, it comes as no surprise that the Minister has behaved properly--unlike many other Ministers in the Government--and that she has gone through due process. I only wish that her colleagues in other Departments would do as much. I am delighted to hear what she has to say, but my point is that the publicity, hubbub and interest generated by a Budget will not be aroused by the changes contained in the Bill. If the Bill is enacted, the Minister may have to take further action to ensure that people are aware of the changes--people who are not consultees and do not belong to the professional bodies, but who run businesses and will be affected by them.
Mr. Kenneth Clarke: My right hon. Friend seems to have got the impression--probably from what I said--that the Committee was not averse to accepting changes that would effect a substantial benefit for taxpayers rather than the Treasury. That was not the test that we applied. The test that we were enjoined to apply under the procedures laid down by the Select Committee on Procedure was whether the changes were minor and necessary. Had we found that any of the changes were of substantial benefit to a group of taxpayers, we would almost certainly have decided that the matter was one for the whole House and that it should be referred back to Parliament as a whole.
The 66 changes are minor. Questions were asked about whether the shift in the burden could be quantified. In almost all cases, it was impossible to quantify the shift in the burden as the practical effect was so insignificant. For example, we referred details of the relevant changes to the oil industry. The industry went over them, and its response was totally relaxed, as the changes were considered to be insignificant.
Mr. Redwood: I am grateful to my right hon. and learned Friend for that clarification. I think that I had understood that the Committee, quite properly, tried to avoid any material change in tax legislation. I had thought that he said that, where a change of a minor nature was being made, the Committee had tried to ensure that it was in favour of the taxpayer. That was the case with the extra-statutory concessions on which the Minister implied that all the changes are based.
I offer no criticism of my right hon. and learned Friend or his Committee. I merely want to make the point to the Minister that a difficult dividing line is being drawn--between a change that is made with all the publicity and hubbub attendant on a Budget, and one that is made as a
In contrast, clause 26 applies where 'the last use of the plant or machinery was for the purposes of trade'. So there is no risk of taxpayers being excluded from the beneficial treatment of demolition under this clause, because the plant or machinery has ceased to be in use at the time when the demolition occurs."
I would like to feel that as there are people outside who will benefit from this change, the Minister will take action to tell them. The Government are always keen to explain new schemes and new sums of money that they are spending. Should they not also be keen to say that, in this minor but important way, the legislation provides a beneficial change for a few businesses?
Mr. Bercow: I am indeed getting worried, and would be grateful if my right hon. Friend could reassure me. Does he agree that whereas one could probably safely take it for granted that most large businesses affected one way or another by the change would be aware of it because of their extensive in-house resources and access to professional advice, small businesses might not be? As they constitute 99.6 per cent. of British businesses, employ 57 per cent. of the private sector work force and produce two fifths of the national output, should they not be told?
Mr. Redwood: I thought that my hon. Friend was getting worried because I was highlighting a small benefit from the Government. It is most unusual to find the Government providing a benefit, and perhaps I was too generous. However, I am delighted with my hon. Friend's intervention. He identifies the bulk of the business community that could not be expected to retain tax lawyers, read the latest exposure drafts or be in contact with the grand consultees to whom the Government go on these matters. Yet those are exactly the types of businesses that might be affected by the legislation.
Such businesses have to be even more careful because the legislation has an impact on whether a business is deemed to be small or medium-sized for the purpose of entitlement to a first year allowance. That is an important question because there is a different regime, depending on the size of the company. The argument is set out--with great clarity and in exemplary prose, according to Liberal Democrat Members, I am sure--on pages 5 and 6 of the explanatory memorandum. It says:
I do not want to bore the House, but I hope that I have shown that there are a number of changes--66 in all--that will definitely impact on the tax liability of a number of businesses and people. That is, after all, why they are flagged up as changes. The Government assure us that these are sufficiently minor not to warrant finance legislation. I do not quibble with that, but I think that the Minister owes us an explanation. Given that there will be changes that will have an impact on business, how will she make up for the publicity deficit which, as my right hon. and learned Friend the Member for Rushcliffe says, seems to have dogged this important legislation throughout its passage so far?
I think that we deserve an answer explaining why Ministers are so reluctant to be rather more radical and enterprising and understand that the reason that so much gobbledegook is left in the Bill, even after these fine, learned accounting brains have been applied to it, is because the underlying complexity of the law is inherent in it. We have to sort it out not by rewriting it, but by substantial amendment or, even better, substantial repeal.
We cannot have a simple capital allowance regime with nine types of capital allowance. We cannot have a simple regime if we have different definitions of small, medium and large enterprises and they are treated differently. We cannot have a simple regime if businesses are different from enterprises and companies. We cannot have a simple capital allowance regime if we have calculations and computations on complicated formulae. I have not troubled the House with those, but there are many in the Bill, and some of my right hon. and hon. Friends may wish to mention them if time permits and they catch your eye, Mr. Deputy Speaker.
A great deal of time, money and energy has been spent on the measure, but I should be surprised if it was welcomed by the business community. Many business people will be worried that they have to wade through a further 333 pages of tax legislation that might then all be changed in a few weeks by the Budget. The measure will result in more cost, more regulation and more difficulty rather than the simplification that my right hon. and learned Friend the Member for Rushcliffe so wisely wanted. That is not being delivered by the Government and the Bill.