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Business Rate Supplements Bill

My Lords, like my noble friend, I was once a Treasury Minister. It is 22 years since I gave up being the Minister responsible to Parliament for Customs and Excise, long before the marriage of Customs and Excise with the Inland Revenue in their new and present form as HMRC. I mention this because, as my noble friend Lord Jenkin said, the guts of this matter is the attitude of HMRC as expressed in the letter to which my noble friend has alluded, which has come from the noble Baroness, Lady Andrews, arising out of Committee. I recognise that she was being guided by HMRC, and I share my noble friend’s regret that the Government’s position is as the letter he referred to implied. I appreciate that HMRC has to interpret the legislation that it is asked to enforce, and the legislation is our responsibility in Parliament. In the circumstances of Crossrail, which underlay my noble friend’s contribution in Committee and today, I hope that sensitive interpretation, in terms of the case-by-case formula, will apply, and I will briefly enlarge on that hope. To go back to those days when Inland Revenue and Customs and Excise were separate, some identified the difference between them in their character as revenue departments. The difference was that Inland Revenue was preoccupied with the precise letter of the law, while Customs and Excise, in dealing with business, was capable of taking a broader view and of seeking to maximise revenue by simplifying procedures more roughly and readily on the time-honoured grounds that the best deal in business is one which is good for both sides. I left my responsibilities for Customs and Excise two precise centuries after Pitt the Younger invented the Consolidated Fund and simultaneously slashed excise duties in a manner which dramatically raised the proceeds from the duties which remained, because of course smuggling disappeared overnight. Of course, I recognise that deductibility will involve a subsidy from HMRC, but common sense sends us back to Pitt. Crossrail, as my noble friend alluded, is going to need all the help it can get to make sure that it actually has the funds to carry out this enormous project. I have composed my notes for this speech around a draft of the speech which my noble friend has just delivered, so I have to pause for a moment while I recover my place. If non-deductibility prevails, there is the risk that voluntary contributions will not come in. If, however, the response is sensitive, the chances improve that business will support the obvious arguments that exist for Crossrail and put their hands in their pockets disproportionately. There are good precedents for believing that bread being cast on the waters does produce a return after many days. I have no hesitation in supporting my noble friend’s amendment.