ADVANCE PAYMENTS OF TAX (Hansard, 17 July 1980)

§ Sir Graham Page
I beg to move amendment No. 96, in page 76, line 5, leave out subsection (4).
This clause deals with advance payments of tax in respect of the oil taxation provisions. This amendment is by way of a protest at a breach of principle. It provides for taxation by statutory instrument. While it provides that the statutory instrument, if it increases the percentage figure for the tax, shall not be made unless a draft has been laid before the House and approved by resolution of the House, it is the wrong way to deal with such an important and massive tax.
1839 Even worse, if the percentage is to be reduced, it can be done by statutory instrument, which, as I read the clause, does not even have to be laid before the House. Therefore, even though it may provide for a reduction in taxation, it is a matter that the House should not sanction. The House is conscious of its power in matters of taxation, whether it is increasing or reducing the burden on the taxpayer. We should take great care not to slip into the Finance Bill, in connection with a form of taxation that may not affect many people, a subsection that breaches the privilege of the House. Therefore, I propose the deletion of that subsection from the clause, and the Bill.

§ Mr. Peter Rees
My right hon. Friend is a stickler for constitutional proprieties, and rightly so. I hope that I shall never be allowed to fall short of the high standards that he sets for the administration of this country. However, I take issue with him on this point. We debated the matter at considerable length in Committee because of the constitution and because of the implications of principle. Subsection (4) does not provide for an increase of tax. It provides for an increase in the amount of tax that may be made by way of advance payment. As my right hon. Friend will recognise, if there is an increase in the rate of advance payments for petroleum revenue tax it will ultimately be caught up by the payment in due course of the main tranche of petroleum revenue tax. Therefore, it will increase the amount that an oil extractor has to pay in advance, but it will not affect the overall tax paid on the profits from the extraction of oil in our waters.
An increase can be made only by way of statutory instrument, subject to the affirmative resolution procedure, so the matter can readily be brought before the House for debate. As my right hon. Friend and the House will recognise, there is a precedent which goes a little further. I have in mind the regulator provisions, which allow the Administration of the day, subject to safeguards, to increase the amount of indirect taxation. This provision falls short of that, but I hope that the House, arguing from that precedent, and accepting the safeguards that are built in, will recognise that this is 1840 proper, that there is a sound precedent for it, and will be able to accept it.
We owe a debt of gratitude to my right hon. Friend for having brought the matter into the open again, but we should never be party to any unprincipled, unconstrained increase in taxation by the Executive. That is certainly not the Government's intention, and we have hedged the provision around with a great number of safeguards, which I hope at the end of the day will make it acceptable not only to my right hon. Friend but to the House as a whole.

§ Sir Graham Page
I appreciate that my argument is not so strong when there is the precedent of the regulator. I was hoping that we should not set more precedents by this subsection. I wish my hon. and learned Friend could have given me another answer, but I shall not press the amendment.
I beg to ask leave to withdraw the amendment.