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Finance (No. 2) Bill

I am grateful to my right hon. Friend, as Chair of the Treasury Committee, for the report, which was published at 11 o’clock. I have a copy of it here. No doubt the fact that he has quoted part of it will give licence to many hon. Members to take advantage of the significant work that the Committee has done. He can look forward to the Government’s response to the report being made in the normal manner. He is right to record that by dint of significant engagement with, and additional support to, local government, we have managed recently to sustain increases in council tax that reflect that support and indicate that there is now efficiency that was not there before. I am sure that hon. Members on both sides of the House agree that we have a duty to act swiftly, yet proportionately, to prevent abuses due to avoidance and fraud. After all, as we all know, such tax avoidance can undermine the funding of public services and is unfair on those who pay their fair share. Minimising its impact on the majority of taxpayers is vital. However, fraud is a complex area and our response to it must be sophisticated. For example, on missing trader fraud, the Bill provides for a change in accounting procedures for certain goods in clause 19. It clarifies the power to inspect goods in clause 20. It will also enable Her Majesty’s Revenue and Customs to target businesses’ record-keeping requirements to help to identify fraud. On a matter that is more widely reported, clause 2 will make it harder for smugglers to source illicit cigarettes and hand-rolling tobacco. The tax system will be significantly simplified for small businesses by replacing the starting and non-corporate distribution rates of corporation tax with a single banding for small companies set at the current small companies rate, which will allow small companies to spend less time dealing with their tax affairs and more time growing their businesses. As the Institute of Directors noted when it welcomed the announcement, that will also increase the fairness of tax treatment between small businesses that operate in different legal forms. Fairness extends to a range of areas. For example, many employees have benefited from the home computer initiative exemption to get a computer in their homes for personal use. The initiative has worked well, but times have changed and are changing rapidly, so the Bill repeals that exemption for a loan of computers to employees for personal use. However, I make it clear that personal computers and mobile phones provided for business use are not affected by the change. If a person already has a PC, the arrangements will not be affected by the change. We are making the change to reflect the reality on the ground. The cost of computers has fallen dramatically, and for the vast majority of those using the exemption, access to information technology has improved, too. In the interests of fairness, we must now target resources on those who need them most: the poorest groups in society, which cannot always access IT. That is why we are looking to build on the success of our UK Online centres, which now number more than 6,000 throughout the country; it is why the Department for Work and Pensions is examining how to improve access to IT for the elderly; and it is why we will continue to consider this area throughout the comprehensive spending review. Fairness is also about giving a fair deal to hard-working families, which is why clause 156 raises stamp duty thresholds. That takes some 40,000 home buyers out of stamp duty each year and, when added to the doubling of the threshold last year, means that some 400,000 home buyers are now out of the stamp duty range.