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Income Tax Bill

My Lords, I hope that I can be sympathetic without being too docile. I congratulate the noble Lord, Lord Newton of Braintree, and his team on the tremendous amount of work that they have done on the Bill. It is a huge intellectual and administrative effort, and they certainly deserve all our thanks and congratulations. One of the interesting opportunities which the Bill gives people like me who do not normally look at tax legislation except the Finance Bill, is simply to flick through it. Some of it at least is extremely clear and comprehensible to the layman who in the past has found such legislation almost totally impenetrable, although I must say that I had difficulty with the clarity of the manufactured payments part of the Bill. No doubt it was there, but my mind was not up to the complexity. That brings me to my main point—the point on which the noble Lord, Lord Newton of Braintree, concluded. Given that we have Finance Bills of 400 or 500 pages every year, what we have here is not a complete job but a sort of Forth Bridge job in that no sooner has the team got through the raft of taxes than there is a huge accretion of new taxes. I had very much hoped that that message would get across. One of the things that very much frustrates me in my work in the Liberal Democrat tax working group is that everyone to whom one talks about taxation, whether in politics, in the City or in business, says that the tax system needs to be simplified. My plea to them is, ““Well, tell me how you want it to be simplified””. Very often they have no answer to that. However, one principle of simplification could save a considerable amount of the existing tax code—the adoption of a general anti-avoidance rule. We have raised this issue before in your Lordships’ House and I do not intend to expand on it at any great length. However, if HMRC and the Chancellor could be persuaded to adopt such a policy, I am informed that it could probably enable us to reduce the tax code by more than 1,000 pages. That would be a major simplification, against which many other suggestions for simplification would look relatively small. I urge the Minister to have a gentle word with his colleagues in the Treasury and suggest to it that it should at the very least re-examine that principle. It did so earlier in the life of this Labour Government, but did not proceed with it. One of the joys of all the documentation accompanying the Bill is two volumes called ““Table of Origins”” and ““Table of Destinations””, which sound a little like a railway timetable. The table of destinations is, in a sense, a sad document, because it lists all the things that are being repealed. It would be helpful, if only to demonstrate what a valuable project this is, if all the repeals could be added up and the Minister and the Treasury could say, ““As a result of this work, we have reduced the tax code by X pages””. The noble Baroness, Lady Noakes, shakes her head; perhaps the effect has been to increase that tax code by X pages. If, however, the effect has been to reduce it by X pages, that would help people to realise the value of the project, and no doubt cheer them up in a minor way. That would be very helpful. With that minor caveat, I support the legislation.