§ `Extra-statutory concessions granted by the Boards of Inland Revenue and of Customs and Excise shall be subject to approval by a motion containing a list of all such concessions accompanied by an explanatory memorandum laid before the Commons House of Parliament not later than 1st March of each year.'.—[Mr.Terry Davis.]
§ Brought up, and read the First Time.
§ 12 midnight
§ Mr. Terry Davis (Birmingham, Hodge Hill)
I beg to move, That the clause be read a Second time.
It should be common ground between both sides of the House that control over taxation has been one of the most important responsibilities and duties of the House over the years, and it should also be a matter of agreement between both sides that the Finance Bill must always receive very close scrutiny.
This year's Finance Bill has spent longer in Committee than any previous one, but that is not the point. Whatever the Government and whatever the Opposition, there has always been close scrutiny of the Finance Bill in Standing Committee, in Committee of the whole House and on Report. Finance Bills probably receive closer scrutiny than any others. That happens every year. There are several taxation measures that need to be reviewed each year. The Finance Bill contains taxes and tax reliefs, and they are examined scrupulously and carefully by the Opposition, whether they be Conservative or Labour.
We have all heard of mysterious concessions that are known as extra-statutory concessions. When prepairing for this debate, I was surprised to find how many are given by the Inland Revenue. We are discussing tax reliefs that are allowed by the Inland Revenue or by Customs and Excise without any authority from Parliament. I can discover no authority for the concessions, either as a group or individually. That stands to reason. Why else would they be called extra-statutory concessions? They are given by the Boards of Inland Revenue and Customs and Excise without any ministerial approval. That should be common ground, as many of the concessions have been given, whichever party has formed the Government or the Opposition.
It is not fair to say that the concessions are kept secret. They are made public, as a list is published albeit infrequently, by the Inland Revenue. It is significant that it is not published by the Government as a White Paper, a Blue Book, a Red Book or some other colour book which is put before the House. The list is published every four or five years and annual supplements are made available to show additions to the list. I remind the House that we are discussing tax concessions made by the Inland Revenue and Customs and Excise. When the list was last published—in 1980—the total was 122 separate extra-statutory concessions on tax. Before the last comprehensive publication, 23 concessions had been added during the previous 12 months. The concessions might be entirely desirable and reasonable and would be approved by the House if they were put before us. That is the point of new clause 7. The Opposition believe that the list should be put before and approved by Parliament.
1163 We are not questioning the propriety of the concessions. We are saying that hon. Members should be able to comment on them and to suggest amendments and additions, just as we go line-by-line through the Finance Bill. The Board of Inland Revenue or the Board of Customs and Excise might discover some quirk or anomaly that has been overlooked by the House and it might be thought right and desirable that that quirk or anomaly should be catered for by an extra-statutory concession. We do not deny that that should happen. We merely say that that concession should be approved by the House some time during the next 12 months. We suggest the beginning of March because that fits in with the Budget statement and the Finance Bill.
Having examined the list that was published in 1980, I believe that there are some concessions that the House would wish to ask questions about. Some of my hon. Friends who have obtained a copy of the list will know that there is one extra-statutory concession that affects policemen and firemen who are forced to retire as a result of being disabled in the course of duty. If they receive a pension as a result of being disabled in the course of duty, that pension is higher then policemen or firemen receive if the retire as a result of ill-health. It is felt that these men —and women—who have been disabled in the course of their duty, should be taxed at a lower rate on the extra pension that they receive.
I am not objecting to the extra-statutory concession, but I am sure that many hon. Members on both sides of the House would want to ask some questions about that extra-statutory concession. Why is it, for example, that such an extra-statutory concession applies only to police officers and firemen? Why should that extra-statutory concession not be given to other people who retire as a result of disablement through an injury that they have received in the course of duty? Why should a police officer or a fireman be treated differently from an ambulance man? Why should a police officer or a fireman be treated differently from a prison officer who is forced to retire as a result of disablement following an injury received in the course of duty in a prison? Why are members of the armed forces who are forced to retire as a result of disablement apparently treated differently from police officers and firemen?
Those are the sort of questions that would be asked in Parliament if we had an opportunity on an annual basis to debate the system of extra-statutory concessions. There may be good answers to those questions. The point of the clause is that hon. Members should have an opportunity to put such questions, and the Minister should have an opportunity to explain why the concessions are given, and why those same concessions are not given to other people who apparently are equally meritorious and deserving because they have been disabled in the course of duty.
Some extra-statutory concessions appear to cover points that have been overlooked by Parliament in the past. I will give one example. In the past, three extra-statutory concessions have applied to life assurance premium relief, which, as we know, is to be abolished. One concession provides that someone shall enjoy life assurance premium relief on an insurance policy that has been taken out in expectation of marriage. That concession appears to cover a point that was overlooked when Parliament was considering the Finance Act 1976. Eight years have 1164 passed, and no Government, Labour or Conservative, considered that it was necessary to legislate on that point in that time. There may be a good explanation for not including that concession and relief in a Finance Bill. Nevertheless, hon. Members should have an opportunity to inquire about it, and to ask the Minister to explain why it has not been included in a clause in a Finance Bill.
Although I would not challenge any of these extra-statutory concessions without giving the Minister an opportunity to explain them, some of them seem to be open to abuse. Some of them could be vehicles for tax avoidance. I do not say that they are, but I want to have the opportunity to cross-examine a Minister in the House, or in Committee, as to why the extra-statutory concessions are being given. I want to have the opportunity to discuss the wording of such a provision. We are at present denied that opportunity.
One example is the concession which provides for mortgage interest relief on marriage. Mortgage interest relief already exists on marriage, but the concession applies to people who buy houses before marriage. This provision means that the interest paid is tax-relieved if two people marry who have bought two separate houses. It is possible to abuse that concession. It is possible for two people intending to be married to purchase two houses, with no intention of living in them both, and then to be able to speculate on the basis of tax relief that would not be given to someone who already has one house and wants to buy a second.
§ Mr. Maxton
I am following what my hon. Friend is saying carefully. Presumably, as these are extra-statutory arrangements, if the Inland Revenue believes that they are being abused, they can be withdrawn. When someone has been receiving a benefit that the Inland Revenue withdraws, can that person challenge that decision in the courts? Can he say that, as he has had that benefit for five years, it should continue?
§ Mr. Davis
There is no doubt that the Chief Secretary has heard my hon. Friend's point, and I hope that he will answer it. I suspect that the answer is that there is no possibility of challenging the withdrawal of a concession in a court. It is an extra-statutory concession or an ex gratia concession given by the Inland Revenue or the Customs and Excise. If those departments decide that one does not merit the concession, one will not receive it. If the word means anything at all, it means that it is at their discretion, because it is an extra-statutory concession.
I am not challenging any of these extra-statutory concessions. I am not saying that any of them should be abolished or removed — some of them may be unnecessary—because they provide the cement that fills the gaps in our legislation. However, there cannot be any objection to putting the list before the House of Commons and providing an explanatory memorandum to tell us why these concessions are necessary. Many hon. Members would argue that if the Inland Revenue or the Customs and Excise discover some anomaly in the legislation, that should be corrected in the next Finance Bill or the appropriate legislation. However, the list of concessions should be made available to the House, and should be subject to debate.
It is true also that many individuals benefit from these extra-statutory concessions. Before I looked at the list, I 1165 had the idea that the only people who had such things were miners who had coal or an allowance in lieu. I have heard many references to that by Conservative Members. However, that concession is only one of 40 separate concessions affecting individuals. I have already mentioned some, but there are others. I emphasise that I do not wish to challenge them.
There are concessions dealing with interest-free loans for up to 12 months for people who need to buy a house because they are taking a new job or are moving with their job to a different part of the country. We are all familiar with the practice of an employer giving a loan to an employee to finance a bridging loan to purchase a second house. That concession must add up to a tremendous amount in a year. Even in the present climate of unemployment, there are still people moving about the country in the course of their work and changing their houses, and that must be expensive for the Inland Revenue. I do not oppose that concession, but it should be discussed by the House.
Another extra-statutory concession benefits men—it is usually men—who are tax exiles paying maintenance to an ex-wife—or it may be on ex-husbands—out of income in this country under a court order made in this country. I should want to question that concession to people who are living in tax havens. It may be justified —I do not know—but hon. Members should have the opportunity to question Ministers, through debate.
There are 22 extra-statutory concessions for business men. 12 for companies liable for corporation tax, and another 12 for tax on capital gains. There are—this may not surprise some of my hon. Friends—extra-statutory concessions that apply to CTT and estate duty. One concession struck my imagination. I was surprised to learn of an extra-statutory concession known as El. It means that relief is given as an ex gratia payment by the Board of Inland Revenue for the costs of a funeral as well as for reasonable costs for mourning the deceased person. I am not sure how "reasonable" is defined in the context of mourning.
Having recently organised a funeral, I arranged for the funeral expenses to be paid from the estate—an estate not liable to capital transfer tax. I was amazed to learn that anyone was suggesting that we could deduct from the estate the cost of mourning the person who died. I should have thought that that was my responsibility.
I was even more surprised to learn that the concession allows for the cost of mourning by servants, as well as relatives, to be charged to the estate. I do not know how one would decide the reasonable costs of a butler or a house-maid mourning their dead master. But that is given as an ESC, without the approval of Parliament. It may be quite right, as the hon. Member for Macclesfield (Mr. Winterton) said. I do not have the experience of servants to know whether it is customary for them to look to their employer to meet such costs. However, I know that such tax relief should be given by Parliament, not by the Board of Inland Revenue, Customs and Excise or by any other extra-parliamentary body. The point is that the issue contains an important constitutional principle.
§ Mr. Ian Mikardo (Bow and Poplar)
Has my hon. Friend given any thought to the question of how people would know of these concessions and that they have a right to claim them? Does he not think that someone with a lot of servants probably has good professional advice to tell 1166 him what he can claim, whereas an ordinary bod, in my hon. Friend's constituency or mine, would not claim the concession because he would not know that it existed?
§ Mr. Davis
I take my hon. Friend's point. To be fair, it is not the fault of the Inland Revenue. It publishes a booklet every four or five years, with annual supplements, in straightforward English, that is easier to understand than much of our legislation. I have obtained a copy. I did not know that a list of concessions existed before. I had not seen one in my constituency. One of my hon. Friends went to buy a copy of the booklet in Her Majesty's Stationery Office but got hold of an out-of-date copy. It is not widely available. Until I began some research for the new clause, I did not know that the list existed. I hasten to add that I do not think that I would benefit from any of the extra-statutory concessions, not being a business man or liable to CTT or capital gains tax. The point is not that the concessions may be wrong — they may be entirely justified — but that they should be given with the authority of the House of Commons.
§ Sir Raymond Gower (Vale of Glamorgan)
I ask the hon. Gentleman for guidance. Could he say whether the most common and obvious concession is that which permits people coming from abroad to bring certain goods into the country, subject to duty? Is that among the concessions?
§ Mr. Davis
I do not think that it is. As I said, there are 122 concessions, and I read the list with great interest. It illuminates several nooks and crannies of the nation's social life. I should have remembered the concession mentioned by the hon. Member for Vale of Glamorgan (Sir R. Gower). I have taken advantage of it, as have most hon. Members.
§ Sir Raymond Gower
The hon. Gentleman has doubtless seen the document supplied by Customs and Excise. The concession is purely an act of grace. Customs and Excise is not bound legally to give it. Therefore., it must be in the same category as the concessions mentioned.
§ Mr. Davis
I do not remember whether it is in the same category. I do not recall that it was in the list of 122 that I read. No doubt the Chief Secretary can tell us whether it was included in the pamphlet in 1980. It is a Customs matter. Although the list includes concessions given by the Customs and Excise, I do not remember anything applying that to that concession. No doubt the Chief Secretary will tell me whether that is included, although it is not a major point.
Some of the concessions apply to working people. My hon. Friend the Member for Bow and Poplar (Mr. Mikardo) is absolutely right. For example, there is an extra-statutory allowance for tools used by workmen; but I assure my hon. Friend that a business man would find many more such concessions of which he could take advantage.
These concessions should be considered by the House of Commons. There should be better authority for them than the extra-statutory decision of the Board of Inland Revenue or the Board of Customs and Excise. It is not enough for them simply to be approved by a Minister.
I hope that this modest new clause will commend itself to the Chief Secretary and the Government. We are merely 1167 asking for the opportunity for these extra-statutory concessions to be listed and approved by the House of Commons.
§ Mr. Barron
I wish to support briefly what my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) has said. If these concessions are considered by the House, they may be of benefit to our constituents, although I doubt whether many of my constituents or those of my hon. Friends the Members for Hodge Hill and for Bow and Poplar (Mr. Mikardo) are likely to benefit from many that are listed in the Inland Revenue booklet.
These concessions are remarkable. I shall mention only a few so that hon. Members can get a grasp of the areas into which Parliament could look, perhaps on an annual basis.
My hon. Friend the Member for Hodge Hill was right about the allowance for the cost of tools and special clothing, which at present applies to certain industries. Meal vouchers are also listed. I am sure that many Conservative Members have benefited from those over many years, but many ordinary people from industrial backgrounds have yet to be provided with a meal voucher rather than a shovel.
The list also includes directors' travelling expenses. The general rule on travelling expenses is that the cost to a taxpayer of travelling to and from his place of business is not allowable as a deduction in computing his tax liability. Consequently, the full amount of an allowance paid by a company to a director or senior employee in respect of such expenses is chargeable to tax.
Like me, many hon. Members will have been told by constituents "I am now travelling much further to work and should like to be able to claim some tax relief." The Inland Revenue has said that that cannot be done, but the rule is modified for directors and senior employees.
A director, whether whole or part-time, of two or more companies within a group of parent and subsidiary, or associated companies, whether or not entitled to separate remuneration, can claim tax relief on travelling to and from work. But if he is getting two salaries from two or more companies, he can surely afford to pay for such travel more easily than many millions of ordinary people.
Where the directorship is held as part of a professional practice, travelling expenses incurred by the director can be claimed against tax. It is remarkable that such a provision does not cover many other people who face financial hardship when travelling to and from work, especially given some of the expensive bus services that now operate.
Hon. Members will find that expenses, allowances and benefits in kind are mentioned on page 3.
§ Mr. Barron
If the hon. Gentleman wants to intervene, instead of speaking from a sedentary position, he can do so. Page 3 states that expenses, allowances and benefits in kind that are received, again, by directors and senior employees are assessable for tax. That is interesting.
The first area covered by chapter 5 consists ofremoval expenses borne by the employer where the employee has to change his residence in order to take up a new employment or a … transfer.1168 I could perhaps understand that, if someone transfers within a company, the employer is likely to bear some of the costs, but it is remarkable that someone who is leaving a company may be able to come to some sort of deal. He may be able to say that, if the employer will pay for his expenses in moving 150 miles—perhaps travelling by bike, as the Secretary of State for Trade and Industry wants so many people to do—the British taxpayer will pay for that.
It is also stated that if a director or senior employee falls ill or suffers injury whilst performing duties abroad, and so has to go into hospital, thus incurring medical expenses abroad, his employer can pay them and claim that against income tax. That is really just paying for private medicine elsewhere, at the expense of the taxpayer. It is remarkable. I should have thought that an insurance company could cover it, and that the British taxpayer would not have to pay for medical fees abroad.
No doubt some hon. Members are aware that under this extra-statutory concession, where a director or senior employee is fit enough to perform his job in this country but is not deemed to be fit enough to go abroad on behalf of his company and so needs his wife to be with him, so that he can perform his duties while abroad on behalf of his employers, tax relief can be claimed. Again, it is remarkable that British taxpayers' money can be used to help people who are fit enough to work in an office here, but who find it much more difficult abroad, and so have to take along their wives. Perhaps we should discuss such concessions in more detail.
The hon. Member for Leeds, West (Mr. Meadowcroft) shouted about miners' coal from a sedentary position, but he did not want to get up to intervene. However, although that one concession applies at present, and comes under chapter 2 of part III of the Finance Act 1976, some mineworkers, because of their earnings, pay income tax for coal received from the National Coal Board. Not all miners get free coal.
§ Dr. Marek
Extra-statutory concessions are many and varied. I have seen the Inland Revenue booklet. It is readily understood. Most people who are able to peruse information usually have sufficient funds to employ someone to do it for them. The information is not generally available to the ordinary man in the street. Perhaps the booklet should be sent to everyone with their tax return in case it is of use. I have no doubt that anyone who asks for the booklet at a tax office will be given it, but that is not good enough. Information should be offered to the citizen so that use can be made of it if appropriate.
It is not quite right to say that the concessions are made on a grace and favour basis, but they are made by the Inland Revenue or Customs and Excise and can be withdrawn by them for reasons of their own. They do not have to give reasons. Concessions are withdrawn if there is a hint of tax avoidance. That is right.
Parliament is supposed to be supreme, but in practice it is not. The estimates do not always add up, and money disappears. I referred earlier to an article in the Financial Times describing the disappearance of £3 billion of Government expenditure. We know that various sums disappear into various projects connected with national security and Parliament does not know how such sums are used. That is one area where Parliament is not supreme. 1169 If we had a freedom of information Act, at least we would know where the boundaries were. We should know about many things that we do not know about.
I have described only half the problem. Extra-statutory concessions are not generally available, but there is nothing secret about them. Everyone can find out about them, but Parliament cannot comment upon them, vet them or try to change them. Perhaps allowing extra-statutory concessions is the most convenient and best way of tying up the loose ends of revenue collection, but Parliament should be able to comment upon them and decide whether they should be modified.
The new clause seeks a simple change. It does not suggest that we should not operate extra-statutory concessions or make them the subject of an order. All that it suggests is that proposals should be presented to Parliament with an accompanying memorandum. At least then we could have a one-and-a-half hour debate to discuss them and hon. Members' views could be taken on board by the Government.
That is not completely satisfactory, but it is a halfway house. Hon. Members should be entitled to comment. Once legislation is drafted, we are not responsible for the nitty-gritty of government, but we should be able to comment on what the Government are doing.
I should like to know what the Chief Secretary thinks about this. It is reasonable, and I would say that whether the Labour or Conservative party was in government. It is a non-political point. I hope that the Chief Secretary will take the matter on board, and I look forward to his comments.
§ Mr. Maxton
In common with many right hon. and hon. Members I must declare an interest. Many hon. Members are beneficiaries of an extra-statutory tax concession in the form of a car travel allowance. It is accepted that if an hon. Member lives less than 20 miles from his constituency and his home is outside the constituency, any money claimed as mileage allowance is not chargeable to tax. That is not written into the statute. Therefore, it is an extra-statutory concession. It is not listed, but most hon. Members benefit from it. I openly confess that I do. I live 12 miles outside my constituency and therefore benefit from that tax concession.
The concessions worry me, because the point about tax —it is as true for tax as for law—is that it should be even handed, open, and known to be available to all. However, the point about an extra-statutory concession is that it is available only on application. Even when it is open to application, it may and can be refused, not on the basis of a statute or because the law states reasons why a particular tax inspector will refuse that allowance to that person, but at a whim of a tax inspector, who may decide on a certain occasion that he will not grant the concession.
In a company 20 employees may receive a tax concession which is refused to the 21st employee. If it is an extra-statutory concession, he has no right of appeal because it is not covered by law. He cannot appeal and say, "But 20 people here get the concession. Why should I not get it as well?", but he can say that about any other tax benefit, because he can refer to the statute and the law.
That is a bad system and a bad way of operating. Such loopholes may occur or there may be an obvious case for giving concessions, but in that case the Inland Revenue should grant it. It should report that fact to Ministers and to the Exchequer, the matter should be reported to the 1170 House during proceedings on the following Finance Bill and, if necessary, be incorporated in the next Finance Bill. For six or 11 months a person may receive a non-statutory benefit, but it would not be for longer than that, and it should not be. If, at the end of the day, Parliament says that the concession should not have been granted, we should not say, "You have not been paying the tax, so you must make up for that now", but, "You will pay the tax from now on because Parliament has decided you should."
There are some extraordinary items on the list, which I have not studied in great detail because, like my hon. Friends, I was unaware of its existence. None of my constituents benefits from those non-statutory tax concessions. There may be some, but they do not write to me or visit me, because they employ qualified tax accountants—
§ Mr. Maxton
As my hon. Friend says, they probably did not vote for me and would not wish to talk to me about their problems. They employ tax accountants to do the job for them.
Why, on estate duties, should the non-statutory concession be extended on the death of a member of the Royal Ulster Constabulary? Many other people are killed while doing their jobs, including miners, who undertake extremely hazardous work. Why are there no tax concessions on their estate duties? I appreciate that few of them would be paying capital transfer tax anyway. There are some anomalies on the list.
Another category is the income of contemplated religious communities or their members. I do not even know what a contemplated religious community is. Perhaps someone can explain it to me.
An item that one would have thought would be automatically written into law is compensation for the compulsory slaughter of farm animals if they contract diseases, such as foot and mouth. A statutory order insists that the animals are put down, and then compensation is paid according to legislation. But then they get a non-statutory tax concession. It must be possible to insert a clause into a Finance Bill to take care of that. The rest of the procedure—the slaughter and the compensation—is carried out under statute, so why not include the tax concession? It is nonsense to have it on this list, which could mean that a tax collector could refuse to grant the concession.
The Government should be worried about the lack of even-handedness in this matter, because I understood that they were trying to achieve an even-handed approach to taxation. The list gives power to people who are not elected and not responsible to the House to take decisions. A Government official should always ultimately be responsible, through legislation and Ministers, to the House. The list shows that that does not happen in many cases. Therefore, we should do something about it.
§ Mr. Peter Rees
The hon. Member for Wrexham (Dr. Marek) said that this was not a partisan point. I agree with him, and I take the amendment in that spirit. That is not surprising, because the practice of extra-statutory concessions goes back to before the turn of the century, and most of them—indeed, most of those cited tonight 1171 —antedated the Conservatives' arrival in power in 1979. At precisely what point in our fiscal history they emerged, without notice I could not say.
The basis for them is, however, statutory in that both the Inland Revenue and the Customs and Excise are charged statutorily with the care and administration of their taxes, and from that statutory power their authority for putting forward these extra-statutory concessions is thought to derive.
I cannot speak for previous Administrations. Under the present Administration, and under Conservative rule since 1979, every new statutory concession has been vetted, passed and authorised by a Minister. I appreciate that that does not entirely meet the point that various hon. Members have made, in particular the hon. Member for Birmingham, Hodge Hill (Mr. Davis). It is not true to say that they emerge autonomously, as it were, from a body of civil servants who are not responsible to this House. They are probably put up by the experts in those Departments; few Ministers, if it were not, perhaps, for their postbags, would have knowledge of the circumstances that called for these concessions. However, as I said, under this Administration they have in every case been cleared by a Minister of the Crown. More than that, it is not accurate to say that no Minister of the Crown is responsible for them. Any Minister can be questioned about them by way of oral or written questions, by letter or by being summoned before a Select Committee.
§ Mr. Rees
I am not aware that during the time when I answered for these aspects of the Revenue departments the hon. Member for Rhondda (Mr. Rogers) ever wrote to me on any of these points. If he can point to any cases where requests have been put to Ministers and not been answered, I shall have them looked into. It is possible, therefore, for the House to probe these matters, as I said. It is possible for any Back Bencher to probe them in debate; time is readily available for that.
It has been found convenient for 80 or 90 years to deal with matters in this way at what I would call the margin of the tax codes, possibly raising points of only transient interest covering limited numbers of taxpayers. In an ideal world, in strict theory, one should go through and see how far they could be translated into statutory form. Such a perfect solution has evaded all Administrations up to now, for the good reason that, as I say, they are often marginal, obscure points covering a limited number of people possibly for a transient period of time.
Hon. Members will see that the concessions cover a wide range of situations. They are not in favour of any category of our fellow countrymen.
§ Mr. Mikardo
If they are not angled in favour of any political category, may I ask the right hon. and learned Gentleman to explain why the superannuation contributions of doctors and dentists attract tax relief, but not those of nurses?
§ Mr. Rees
We could go through each one, but that is not the point of this debate. I could demonstrate that some benefit certain categories of people for whom Opposition Members may feel a particular concern. If it is said that they are angled in a certain direction, as the vast majority of them have been in force since long before 1979, it would be difficult for Opposition Members to substantiate that charge, and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) might have something to say about the attitude of the last Labour Administration. I am not challenging him; only saying that this is not, I hope, a partisan debate, although certain hon. Gentlemen are trying to turn it into one.
The hon. Member for Hodge Hill was right to direct our attention to these issues, and I appreciate that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) has raised the matter in questions.
§ Mr. Rees
I was not aware that the hon. Gentleman had been in the Chamber for the greater part of the debate. This is a serious issue and if the House will allow me to develop it I think that we shall have a more coherent exchange of views. I have conceded from the beginning that it is an important issue which should be treated seriously.
We are dealing with a long-established practice and the question whether it is right is one that we shall have to review from time to time. It is not true that we adopt a hole-in-the-corner approach. The document to which the hon. Member for Hodge Hill referred is available to tax offices free of charge. Similarly, an equivalent document is available to Customs and Excise offices. The chairman of the Board of Inland Revenue and the chairman of the Board of Customs and Excise report any new concessions to the Comptroller and Auditor General every year and the PAC grills, if that is the appropriate word, the chairmen of the two Revenue departments from time to time. The idea that concessions pass without scrutiny is inaccurate.
§ Mr. Tony Banks
Are the concessions considered regularly with a view to being reviewed? Some of them seem not to make much sense and I should like to know whether they are considered in their totality.
§ Mr. Rees
There is not a formal process of review in the way that there is a formal public expenditure round in preparation for a Budget, but the concessions are considered. If the hon. Gentleman cares to write to me about any concessions that can be pruned. I shall consider his representations as sympathetically as possible. I agree that it is not desirable that the administration of taxes should be overload with too many concessions. However, it is not right to suggest that they are not exposed to public scrutiny.
I shall be happy to consider whether it is possible to produce an explanatory memorandum. I shall ensure, in so far as it is possible to do so, that it is in coherent, lucid and succinct terms, as I do not want to overburden the House with too much detail. The memorandum will be placed in the Library and if hon. Members on either side of the House feel that the concessions can be more properly and conveniently translated, they can table appropriate new clauses to subsequent Finance Bills.
We have spent a considerable time on the Bill—I am sure that that has been to the profit of the legislation and those who will be subject to it—and I think that it will 1173 be generally agreed that we do not want to overburden the House, but in deference to the powerful case that has been argued by Opposition Members I shall consider whether we can produce an explanatory memorandum.
§ Mr. Rooker
The new clause was tabled as a result of our debate on clause 11 in Standing Committee, when Ministers could not tell us where a concession was to be found in written form. Following that debate, have the Government found any more concessions that are operating but are not to be found in written form?
§ Mr. Rees
I must tell the House in all candour that the Government have been fairly occupied in dealing with all the issues that arose when the Bill was considered in Committee and in tabling new clauses and amendments. I cannot say with my hand on my heart that we have been combing through the darker places of the administration of Customs and Excise and Revenue law. However, I give the hon. Gentleman the assurance that we shall carry out an examination of the concessions. If we find any of a substantial kind that can be regarded as important in statutory terms, we shall ensure that they are published so that the House knows exactly what is afoot.
I hope that Opposition Members will feel that this has been a useful debate as a first step. It does not prejudge whether we can take the matter further. We shall put an explanatory memorandum—
§ Mr. Maxton
The Minister has referred to the book which contains all the relevant information. How many copies of the book were printed last year and how many were taken up? Has he any idea whom they went to?
§ Mr. Rees
If the hon. Gentleman will contain himself, I shall answer the question. I shall endeavour in my letter to the hon. Member for Glasgow, Cathcart (Mr. Maxton) to include a rough estimate of the cost.
I hope that the hon. Member for Hodge Hill, who has initiated an important and interesting debate, will feel that justice has been done to his points and that he can leave the matter there.
§ 1 am
§ Mr. Terry Davis
I do not cavil at the way in which the Chief Secretary has replied to the debate. He has conceded that the Opposition are making a partisan and important point. I shall comment on one example that was given about the extra-statutory concessions — the superannuation contributions of doctors and dentists. I take the right hon. and learned Gentleman's point about nurses being covered by a statutory scheme for superannuation and doctors and dentists being regarded as self-employed. A self-employed pharmacist or optician might argue that his superannuation contribution should also have the benefit of an extra-statutory concession.
I direct the Chief Secretary's attention to the extra-statutory concession known as A33. That interesting concession applied to life assurance premium relief before it was abolished by the Government. Under the Finance Act 1976, it was possible 1174for life assurance premium relief to continue after divorce in respect of premiums paid by one party on the life of the other if they were married when the policy was taken out but were divorced … By concession this post-divorce treatment is extended to premiums on policies taken out in anticipation of the marriage.That is a case in which Parliament legislated to say that there shall be tax relief on the life assurance premiums paid by one spouse on the life of another if the policy was taken out during the marriage.
The Board of Inland Revenue—presumably, with the authorisation or approval of the Minister—decided that that measure should be extended to policies taken out before a marriage. There is a difference. If that was considered right by the previous Labour Government or the present Conservative Government, it is reasonable to have included the measure in a Finance Bill. That has not been done.
The Chief Secretary told us that there was no secret about the list. I made that point in my opening remarks. I must correct the right hon. and learned Gentleman on one point and tell him something that has not been drawn to his attention. He referred to his willingness to put in the Library an explanatory memorandum about each of these extra-statutory concessions. It might interest the right hon. and learned Gentleman to know that the Library did not have such a list when asked for one earlier today. The Library had to send to Somerset house to obtain a document that was published four years ago. The Library did not even have that principal document, let alone the documents that have been issued since, at the rate of one a year. I am not complaining about the Library; I say only that the document has not been made as publicly available, even to Members of Parliament, as it should have been.
The Chief Secretary has given me cause for concern, because he has implied that there may be evidence that some extra-statutory concessions have not been included in the Green Book which was published in 1980, or in the annual supplements which have been issued since. On 10 May 1984, in Standing Committee A, the Chief Secretary was unable to give us an assurance that all extra-statutory concessions had been made publicly available. I refer the right hon. and learned Gentleman to his own remarks:I emphasise that the Commissioners of Customs and Excise are not under any obligation to publish an extra-statutory concession." — [Official Report, Standing Committee A, 10 May 1984; c. 238.]What other extra-statutory concessions exist that are not known to the public or, more importantly, to Members of Parliament? It is reasonable to say to the right hon. and learned Gentleman that we believe that once a year a complete list—the Minister should assure us that it is a complete list—should be put before the House for its approval.
When pressed, the Chief Secretary said that the authority for the extra-statutory concessions lies in the authority for the administration of taxes, which is given in an Act of Parliament. It is stretching it to some extent for the Chief Secretary to suggest that the authority to administer taxes should be extended to include an authority to give tax relief. That goes beyond what Parliament previously understoood in legislation.
I accept entirely the Chief Secretary's point that the extra-statutory concessions existed before the Conservative Government came to office. I accept that many of them have existed for many years, but that does not alter the point. They should be put before the House 1175 of Commons. This is a murky corner, which should be illuminated. We ask only for information. I accept that most, if not all, of the concessions are justifiable and desirable. Our point is the constitutional one that the list should be provided for the House of Commons to approve once a year.
I am very disappointed that the Chief Secretary has not simply accepted this modest new clause. Let me remind him that the Government were elected on a manifesto that included the statement:We stand firm for the supremacy of Parliament".This is one small point on which Parliament is not supreme at present. The Opposition will therefore press the new clause to a Division.
§ Question put, That the clause be read a Second time:—
§ The House divided: Ayes 99, Noes 273.1177
|Division No. 403]||[1.10 am|
|Ashdown, Paddy||Lewis, Ron (Carlisle)|
|Ashton, Joe||Lewis, Terence (Worsley)|
|Atkinson, N. (Tottenham)||Litherland, Robert|
|Banks, Tony (Newham NW)||Lloyd, Tony (Stretford)|
|Barron, Kevin||Lofthouse, Geoffrey|
|Beckett, Mrs Margaret||Loyden, Edward|
|Beith, A. J.||McDonald, Dr Oonagh|
|Bell, Stuart||McTaggart, Robert|
|Bennett, A. (Dent'n & Red'sh)||McWilliam, John|
|Bermingham, Gerald||Madden, Max|
|Blair, Anthony||Marek, Dr John|
|Bray, Dr Jeremy||Maxton, John|
|Brown, Gordon (D'f'mline E)||Meadowcroft, Michael|
|Brown, N. (N'c'tle-u-Tyne E)||Mikardo, Ian|
|Bruce, Malcolm||Mitchell, Austin (G't Grimsby)|
|Campbell-Savours, Dale||Nellist, David|
|Canavan, Dennis||O'Brien, William|
|Carlile, Alexander (Montg'y)||O'Neill, Martin|
|Clay, Robert||Park, George|
|Cocks, Rt Hon M. (Bristol S.)||Penhaligon, David|
|Cohen, Harry||Pike, Peter|
|Cook, Frank (Stockton North)||Powell, Raymond (Ogmore)|
|Cook, Robin F. (Livingston)||Randall, Stuart|
|Corbett, Robin||Richardson, Ms Jo|
|Corbyn, Jeremy||Robertson, George|
|Cowans, Harry||Rogers, Allan|
|Cox, Thomas (Tooting)||Rooker, J. W.|
|Craigen, J. M.||Ross, Stephen (Isle of Wight)|
|Cunliffe, Lawrence||Rowlands, Ted|
|Dalyell, Tam||Sedgemore, Brian|
|Davies, Rt Hon Denzil (L'lli)||Sheerman, Barry|
|Davies, Ronald (Caerphilly)||Short, Ms Clare (Ladywood)|
|Davis, Terry (B'ham, H'ge H'l)||Skinner, Dennis|
|Deakins, Eric||Smith, C.(Isl'ton S & F'bury)|
|Dormand, Jack||Smith, Rt Hon J. (M'kl'ds E)|
|Evans, John (St. Helens N)||Spearing, Nigel|
|Ewing, Harry||Strang, Gavin|
|Fields, T. (L'pool Broad Gn)||Straw, Jack|
|Fisher, Mark||Thomas, Dr R. (Carmarthen)|
|Foulkes, George||Thompson, J. (Wansbeck)|
|Golding, John||Wainwright, R.|
|Hamilton, James (M'well N)||Wallace, James|
|Hardy, Peter||Wardell, Gareth (Gower)|
|Hattersley, Rt Hon Roy||Welsh, Michael|
|Haynes, Frank||Woodall, Alec|
|Hogg, N. (C'nauld & Kilsyth)||Wrigglesworth, Ian|
|Holland, Stuart (Vauxhall)||Young, David (Bolton SE)|
|Home Robertson, John|
|Hughes, Sean (Knowsley S)||Tellers for the Ayes:|
|Johnston, Russell||Mr. Allen McKay and Mr. Don Dixon.|
|Aitken, Jonathan||Gardiner, George (Reigate)|
|Alexander, Richard||Goodhart, Sir Philip|
|Alison, Rt Hon Michael||Goodlad, Alastair|
|Ancram, Michael||Gorst, John|
|Arnold, Tom||Gow, Ian|
|Ashby, David||Gower, Sir Raymond|
|Atkinson, David (B'm'th E)||Grant, Sir Anthony|
|Baker, Nicholas (N Dorset)||Greenway, Harry|
|Baldry, Anthony||Gregory, Conal|
|Banks, Robert (Harrogate)||Griffiths, E. (B'y St Edm'ds)|
|Batiste, Spencer||Griffiths, Peter (Portsm'th N)|
|Beaumont-Dark, Anthony||Grist, Ian|
|Bellingham, Henry||Ground, Patrick|
|Bendall, Vivian||Gummer, John Selwyn|
|Benyon, William||Hamilton, Hon A. (Epsom)|
|Best, Keith||Hamilton, Neil (Tatton)|
|Bevan, David Gilroy||Hanley, Jeremy|
|Biffen, Rt Hon John||Hannam, John|
|Biggs-Davison, Sir John||Hargreaves, Kenneth|
|Blaker, Rt Hon Sir Peter||Harris, David|
|Bonsor, Sir Nicholas||Harvey, Robert|
|Boscawen, Hon Robert||Hawksley, Warren|
|Bottomley, Peter||Hayes, J.|
|Bottomley, Mrs Virginia||Hayhoe, Barney|
|Bowden, A. (Brighton K'to'n)||Hayward, Robert|
|Bowden, Gerald (Dulwich)||Heathcoat-Amory, David|
|Brandon-Bravo, Martin||Heddle, John|
|Bright, Graham||Henderson, Barry|
|Brinton, Tim||Hickmet, Richard|
|Brittan, Rt Hon Leon||Hind, Kenneth|
|Brooke, Hon Peter||Hirst, Michael|
|Brown, M. (Brigg & Cl'thpes)||Hogg, Hon Douglas (Gr'th'm)|
|Browne, John||Holland, Sir Philip (Gedling)|
|Bruinvels, Peter||Holt, Richard|
|Buck, Sir Antony||Hooson, Tom|
|Budgen, Nick||Howard, Michael|
|Burt, Alistair||Howarth, Alan (Stratf'd-on-A)|
|Butterfill, John||Howarth, Gerald (Cannock)|
|Carlisle, John (N Luton)||Howell, Ralph (N Norfolk)|
|Carlisle, Kenneth (Lincoln)||Hubbard-Miles, Peter|
|Carttiss, Michael||Hunter, Andrew|
|Cash, William||Jessel, Toby|
|Chalker, Mrs Lynda||Johnson-Smith, Sir Geoffrey|
|Chope, Christopher||Jones, Robert (W Herts)|
|Churchill, W. S.||Jopling, Rt Hon Michael|
|Clark, Dr Michael (Rochford)||Kellett-Bowman, Mrs Elaine|
|Clark, Sir W. (Croydon S)||Key, Robert|
|Clarke, Rt Hon K. (Rushcliffe)||King, Roger (B'ham N'field)|
|Cockeram, Eric||King, Rt Hon Tom|
|Colvin, Michael||Knight, Gregory (Derby N)|
|Conway, Derek||Knight, Mrs Jill (Edgbaston)|
|Cope, John||Knowles, Michael|
|Cormack, Patrick||Lang, Ian|
|Couchman, James||Latham, Michael|
|Currie, Mrs Edwina||Lawler, Geoffrey|
|Dickens, Geoffrey||Lawrence, Ivan|
|Dicks, Terry||Leigh, Edward (Gainsbor'gh)|
|Dorrell, Stephen||Lennox-Boyd, Hon Mark|
|Douglas-Hamilton, Lord J.||Lester, Jim|
|Dover, Den||Lightbown, David|
|du Cann, Rt Hon Edward||Lilley, Peter|
|Dunn, Robert||Lloyd, Peter, (Fareham)|
|Emery, Sir Peter||Lord, Michael|
|Evennett, David||McCurley, Mrs Anna|
|Fairbaim, Nicholas||Macfarlane, Neil|
|Fallon, Michael||MacGregor, John|
|Favell, Anthony||MacKay, Andrew (Berkshire)|
|Fenner, Mrs Peggy||Maclean, David John|
|Fletcher, Alexander||Major, John|
|Forman, Nigel||Malins, Humfrey|
|Forsyth, Michael (Stirling)||Malone, Gerald|
|Forth, Eric||Maples, John|
|Fowler, Rt Hon Norman||Marland, Paul|
|Fox, Marcus||Marshall, Michael (Arundel)|
|Franks, Cecil||Mates, Michael|
|Freeman, Roger||Mather, Carol|
|Fry, Peter||Maude, Hon Francis|
|Gale, Roger||Mawhinney, Dr Brian|
|Galley, Roy||Maxwell-Hyslop, Robin|
|Mayhew, Sir Patrick||Sims, Roger|
|Merchant, Piers||Skeet, T. H. H.|
|Meyer, Sir Anthony||Soames, Hon Nicholas|
|Miller, Hal (B'grove)||Speller, Tony|
|Mills, Iain (Meriden)||Spencer, Derek|
|Mills, Sir Peter (West Devon)||Spicer, Jim (W Dorset)|
|Miscampbell, Norman||Spicer, Michael (S Worcs)|
|Mitchell, David (NW Hants)||Stanbrook, Ivor|
|Moate, Roger||Stanley, John|
|Monro, Sir Hector||Steen, Anthony|
|Montgomery, Fergus||Stern, Michael|
|Moore, John||Stevens, Lewis (Nuneaton)|
|Morris, M. (N'hampton, S)||Stevens, Martin (Fulham)|
|Morrison, Hon C. (Devizes)||Stewart, Allan (Eastwood)|
|Morrison, Hon P. (Chester)||Stewart, Andrew (Sherwood)|
|Moynihan, Hon C.||Stewart, Ian (N Hertf'dshire)|
|Mudd, David||Stokes, John|
|Murphy, Christopher||Stradling Thomas, J.|
|Neale, Gerrard||Taylor, John (Solihull)|
|Needham, Richard||Taylor, Teddy (S'end E)|
|Nelson, Anthony||Tebbit, Rt Hon Norman|
|Neubert, Michael||Temple-Morris, Peter|
|Newton, Tony||Terlezki, Stefan|
|Nicholls, Patrick||Thomas, Rt Hon Peter|
|Norris, Steven||Thompson, Donald (Calder V)|
|Onslow, Cranley||Thompson, Patrick (N'ich N)|
|Oppenheim, Philip||Thurnham, Peter|
|Ottaway, Richard||Townend, John (Bridlington)|
|Page, Richard (Herts SW)||Townsend, Cyril D. (B'heath)|
|Parkinson, Rt Hon Cecil||Tracey, Richard|
|Parris, Matthew||Trippier, David|
|Patten, John (Oxford)||Twinn, Dr Ian|
|Pawsey, James||Viggers, Peter|
|Porter, Barry||Waddington, David|
|Powell, William (Corby)||Wakeham, Rt Hon John|
|Powley, John||Waldegrave, Hon William|
|Proctor, K. Harvey||Walden, George|
|Raffan, Keith||Walker, Bill (T'side N)|
|Rathbone, Tim||Wall, Sir Patrick|
|Rees, Rt Hon Peter (Dover)||Waller, Gary|
|Renton, Tim||Ward, John|
|Rhodes James, Robert||Wardle, C. (Bexhill)|
|Rhys Williams, Sir Brandon||Watson, John|
|Ridley, Rt Hon Nicholas||Watts, John|
|Ridsdale, Sir Julian||Wells, Bowen (Hertford)|
|Roberts, Wyn (Conwy)||Wheeler, John|
|Robinson, Mark (N'port W)||Whitfield, John|
|Roe, Mrs Marion||Wiggin, Jerry|
|Rossi, Sir Hugh||Winterton, Mrs Ann|
|Rowe, Andrew||Winterton, Nicholas|
|Rumbold, Mrs Angela||Wolfson, Mark|
|Ryder, Richard||Wood, Timothy|
|Sackville, Hon Thomas||Woodcock, Michael|
|Sainsbury, Hon Timothy||Yeo, Tim|
|Sayeed, Jonathan||Young, Sir George (Acton)|
|Shaw, Giles (Pudsey)|
|Shelton, William (Streatham)||Tellers for the Noes:|
|Shepherd, Colin (Hereford)||Mr. David Hunt and Mr. Tristan Garel-Jones.|
|Shepherd, Richard (Aldridge)|
§ Question accordingly negatived.