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Finance Bill

My Lords, there is a balance involved. I hope that the noble Viscount will forgive me; I must make progress. I shall have to reply in writing to some of the points raised. If one looks at what happened in the stock market immediately after the announcement in 1997 about the withdrawal of that tax credit, it increased for about three years. The noble Lord, Lord Northbrook, raised a series of questions. I hope that he will forgive me; I do not have time to deal with them all here, but I shall follow up on each of the points that he raised. He and other noble Lords referred to flat taxes, with which I have already dealt. On arbitrage, it is not right that it will hit unsuspecting parties. It is about those who try to avoid tax, and it is the sole objective of the arrangements. HMRC has said that it will agree to an informal clearance procedure, which should give the sort of protection required. The noble Lord, Lord Sheldon, touched on the golden rule issues and the tax avoidance industry. We live in an increasingly complex world where sophisticated financial instruments are unpicked and unbundled to achieve tax advantages. The noble Lord, Lord Newby, referred again to a flat-rate tax system, and I sure that we shall return to that issue. This is not about moving back to the start of the economic cycle arbitrarily, but is on the basis of NAO statistics, which has updated the projections. The Bill is a consequence of that, and the position will be kept under review. The noble Baroness, Lady Wilcox, talked about tax simplicity. Again, we are on the flat-rate tax system. The cost of the Adam Smith Institute proposal was £50   billion per year. In closing the debate, I thank noble Lords for their insightful and wide-ranging contributions. The Bill will endorse legislation that ensures tax simplification and fairness. It takes the logical and proper approach of reducing tax avoidance, while providing support for key activities such as scientific research organisations. It is imperative to remember that the amount of tax potentially at risk from avoidance schemes runs into hundreds of millions of pounds. The Government’s reforms will protect revenue for investment in public services and will ensure that a unfair tax burden does not fall on the vast majority of taxpayers who pay their fair share.