VALUE ADDED TAX (Hansard, 11 July 1972)

§ The Financial Secretary to the Treasury (Mr. Terence Higgins)
I beg to move Amendment No. 1, in page 2, line 2, leave out from 'Commissioners' to end of line 6.
The Amendment arises from the first discussion we had in Committee on the Floor of the House, when my right hon. Friend the Chancellor of the Exchequer, referring to the passage which is covered by the Amendment, said that there had been a misunderstanding about the effect of subsection (2) as drafted. He pointed out that it was based closely on the purchase tax precedent, and its purpose was solely to make value added tax an assigned matter within the meaning of Section 307 of the Customs and Excise Act, 1952. In common parlance, it was something for the Commissioners of Customs and Excise to deal with. The effect of making VAT an assigned matter is to give the Commissioners certain general powers and duties and to bring into operation certain general legal provisions as set out in the 1952 Act.
We are now advised that this purpose is sufficiently achieved by the words at the beginning of subsection (2): The tax shall be under the care and management of the Commissioners without the passage which the Amendment seeks to delete.
The passage which the Amendment seeks to delete gave rise to misapprehension that the broad enforcement powers of the Commissioners would be incorporated by it into the Bill, whereas, as the House will understand more fully after our debates in Committee upstairs on the various enforcement provisions, the position is that those powers are taken explicitly in the various Clauses concerned with collection and enforce- 1412 ment—Clauses 30 to 39, and Clause 40, which deals with appeals.
My right hon. Friend recognised that there was some misunderstanding about this. We feel that the Clause with the Amendment will meet the point we wish to make and, at the same time, set at rest the fears which were expressed. I hope that the House will feel it right to approve the Amendment which is a direct response to the views expressed in Committee on the Floor of the House.

§ Mr. Ian Percival (Southport)
I am one of those who felt some apprehension about the Clause as it was originally drafted, and I therefore thank my hon. Friend and my right hon. Friend the Chancellor of the Exchequer for the attitude which they have adopted and the action they have taken. Yesterday the Government introduced two new Clauses to meet points raised by hon. Members on both sides of the House, and it is refreshing to find this attitude of co-operation and a willingness to give ground when they are satisfied that genuine apprehension is felt.
I do not want my hon. Friend to feel that this will terminate the correspondence that I and others have had with him and his right hon. Friend on other points. At the same time, I wish them to know that I and others of my hon. and right hon. Friends who raised the point met by the Amendment greatly appreciate this refreshing attitude of seeking to meet genuine apprehensions.

§ Mr. Robert Sheldon (Ashton-under-Lyne)
The hon. and learned Member for Southport (Mr. Percival) spoke of the refreshing nature of the Government's willingness to give ground. I wish that the Opposition had been likewise refreshed. During the whole of our discussions on VAT the abiding impression that remained with us was of the inflexibility of the Government and their feeling that they had achieved a perfection rarely to be found in any legislation coming before the House.
I express my welcome for the Amendment, although the Financial Secretary must be aware that the apprehension to which he referred was not allayed as we went on to discover what lay in the rest of the Bill. We saw that in Clause 1 1413 there was a degree of overkill and excessive severity. When we came to Clause 39 we saw that it enshrined Section 290 of the Customs and Excise Act, 1952. I remind the House that this Measure provides that when the Commissioners decide to bring a defendant to court he shall be guilty unless he is able to prove his innocence. Although that provision is repugnant to all, it applied only to just over 50,000 people, whereas now it is to apply to about 2 million people.
In Clause 38(3) we found that if it had been deduced that a person's conduct must have involved the commission of offences, even if those offences were not known, he could be found guilty. Clause 34 imposes an immense burden upon small firms to keep records, and the Commissioners have power to enter and to seize articles. Under Clause 36 the Commissioners have power to take away samples from any trader and to keep them if they so wish. The Commissioners have all these powers, and, in addition, they have the powers in Clause 1. It is unnecessary to have these powers in Clause 1 when they are already scattered throughout the Bill.
If the hon. Member for South Angus (Mr. Bruce-Gardyne) were here, no doubt he would say that I should congratulate the Financial Secretary on presenting the House with a "crock of gold". But what has happened is that the Treasury has become a little ashamed of the excessive power it has been claiming in the Bill. It has been shamed by the arguments put forward both in Committee and in the House and is now seeking to do something about the situation. It is not a matter on which we should be overjoyed, but we should accept it. We must congratulate ourselves on the effect of our arguments on the Chancellor of the Exchequer.