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Legislative and Regulatory Reform Bill

We mentioned the matters covered by the amendments earlier, so I shall be brief. Clause 6 restricts the powers in clauses 1 and 2. It prevents an order from imposing or increasing taxation. Concerns were raised on Report in the Commons and in Committee in the other place that, unamended, the Bill would leave it open for a Minister, by order, to reduce or remove taxation. As with several other matters that we have discussed, it was not the intention that orders should be used to reduce or remove taxation. Other parliamentary mechanisms have always been in place for dealing with taxation, but amendment No. 18 makes it clear that an order under part 1 cannot be used to impose, abolish or vary any tax. The second amendment concerns potential tax liabilities that could arise from the merger of regulators. When transferring regulatory functions from one regulator to another, it may be necessary also to make provision in an order to transfer assets and liabilities from the old to the new regulator. In certain circumstances, without further provision, a transfer could result in inappropriate tax consequences for the transferor or transferee body which would arise solely because of the transfer.