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Finance Bill

The song was No. 1 in the US in 1970, but that is another matter. This complex and highly technical Bill is once more before the whole House, but the sparsely occupied Chamber means that it would be stretching credulity to suggest that Parliament is actively considering each and every aspect of the Bill. That is not to say that there has not already been careful consideration during the lengthyish Committee sittings. Our debate was sometimes heated, and on occasions that had little to do with the generally clement summer weather. Her Majesty’s Opposition have benefited from comprehensive briefings from an array of interested parties, including the Law Society, the Association of British Insurers and the Chartered Institute of Taxation. They have all provided us with useful ammunition with which to put forward our case as gamely as possible, given the circumstances. As I said, we are considering the second Finance Bill to come before Parliament this year. The intervening general election provided us all with a welcome respite from endless Committee sittings and gave the Government an opportunity—a relatively small one, admittedly—to make minor amendments to their original proposals. I understand that tax practitioners have breathed a collective sigh of relief, not because of the apparently mouth-watering prospect of a second Finance Bill in a year, but because of their satisfaction that this year the Chancellor of the Exchequer has spared the tax practitioner fraternity from a Finance Bill such as that of 2004, which weighed in at a record-breaking 637 pages. New clause 4 stems from concerns that have been widely expressed about the growing complexity of our tax laws. The amount of legislation grows greater and faster and let us be in no doubt that that is true of not only primary legislation, but the plethora of statutory instruments that appear with breathtaking frequency throughout the year. We hope to establish a tax law commission that would mirror the Law Commission and review and modernise UK tax legislation. As the Minister will be aware, I am a relative newcomer to Front-Bench Treasury affairs and I have had something of a baptism of fire. This highly technical Finance Bill and the Regulation of Financial Services (Land Transactions) Bill have certainly kept me busy over the past month. I have no complaints about that, but in addition to grinding through legislation line by line, I have seen an ever-greater amount of guidance material, such as statements of practice, tax bulletins, concessions and frequently asked questions. It is perhaps ironic that, in moving new clause 4, I need first and foremost to acknowledge the tremendous assistance that I have received from the indefatigable John Whiting, the tax partner with PricewaterhouseCoopers and past president of the Chartered Institute of Taxation. Without his help, I fear that even this new clause might never have seen the light of day. Although I do not detect too many tears at that prospect from either the Government Front Bench or, dare I say, their nearest and dearest in the civil service, it is important to put many concerns on the record during the course of what I suspect will be a brief debate. A great deal of the seemingly exponential growth of the raw material that makes up our tax laws is clearly due to the increasing complexity of life and business. However, at the same time the tax authorities doubtless argue that they need continually to endeavour to plug what would otherwise be loopholes that could be exploited by tax planners and avoiders alike. A commission for taxation along the lines that we have set out would solve four main problems. First, the commission would address complexity. UK taxation is meant to work along fairly simple principles: all employment income is subject to pay-as-you-earn and national insurance contributions; companies are taxed on their accounting profits at 30 per cent. after certain adjustments, or less if they have profits of less than £1.5 million in any year; stamp duty land tax is at 4 per cent. on property sales; and VAT on the supply of goods and services is generally levied at 17.5 per cent. How difficult should it be to enact tax law on the basis of those straightforward and simple principles? One needs only to witness the flat tax regimes of most Baltic states to realise that it should be relatively straightforward.