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§ Mr. Michael Stern (Bristol, North-West)I beg to move amendment No. 4, in page 11, line 26, leave out clause 15. I wish to make a procedural point, and I hope that you, Mr. Deputy Speaker, will allow me a couple of minutes to develop my argument.
Clause 15 is the first example in the Bill of a regrettable practice that has grown up in recent years: adding to the Finance Bill in Committee clauses—often with schedules attached—that are frequently never discussed on the Floor of the House or mentioned in the Budget speech, and are neither urgent nor uncontroversial. In 1984, two clauses were added to the Finance Bill in Committee. In 1986, 11 clauses were added in Committee; in 1989, 16 clauses were added in Committee; in 1990, 30 clauses were added in Committee, and the numbers have remained in double figures ever since. Increasingly, as the Finance Bill emerges from the House, it bears less and less relation to the Budget speech that is supposed to introduce the fiscal measures or to the Finance Bill as it was first introduced to the House and made available to the public to study a matter of only two to three months previously.
I accept that there are occasions when the Chancellor or the Chief Secretary in opening the debate on the Finance 395 Bill will tell the House that proposals are to be introduced, but the Bill's drafting is incomplete, so those proposals will be introduced into the Bill later. That is perfectly legitimate, because at least the public who follow our debates are aware that proposals such as those in the current Bill that relate to rents are to be introduced. Equally, as with new clause 1, which was introduced yesterday on Report, there are occasions when, in order to stop a gap in the Treasury's tax-gathering powers, it is necessary to introduce a clause urgently. However, it is worrying that much of the legislation introduced in such a way has not fallen into either of those categories.
Over the years, a number of highly contentious matters have been introduced into the Bill in Committee. Section 49 of the Finance Act 1986 reversed the decision in the case of Collard's Mining and Industrial Holdings. Schedule 11 of the same Act introduced the controversial provisions on the taxation of foreign entertainers and sportsmen. Anti-avoidance provisions against charities were introduced in section 31 of the 1986 Act.
Section 109 of the Finance Act 1988, introduced in the name of my right hon. Friend the Prime Minister when he was Chief Secretary to the Treasury, contained provisions on gains from settled property that are still controversial. Section 105 of the Finance Act 1989 restricted the availability of small companies' corporation tax rate.
Such clauses, often introduced only after discussion in Committee, involved matters of great public interest. Section 73 of the Finance Act 1991 deals with relief of company trading losses. Sections 23 and 87 and schedule 4 of the Finance Act 1990 introduced various provisions relating to company cars. Sections 25 and 27 of the Finance Act 1990 introduced provisions on tax relief on charitable donations.
Often clauses were introduced that seemed to have no great urgency, and could have been delayed until the next Finance Bill—for example, clauses 110 to 112 and virtually the whole of part IV of the 1991 Act, relating to non-contentious stamp duty changes. The same is true of section 76 of the same Act, relating to the treatment of annuities.
One assumes that, following today's debate, the current Bill will proceed to be given Royal Assent after only cursory discussion in another place. Protection against clauses introduced into a Bill in Committee or on Report is that they are subject to further discussion in another place, but that is not true of the Finance Bill.
Matters introduced into the current Bill in that way include changes in the rules relating to qualifying maintenance payments, foreign earnings, equity notes, double taxation on interest, films, farmers—the subject of the present clause—and the promised provisions on tax-free rent of furnished accommodation. Anyone who is vaguely interested in taxation legislation but who does not personally receive a weekly tax intelligence report or who does not subscribe to all Inland Revenue press releases will be unaware that such legislation has ever been contemplated, let alone that it is just a couple of days from becoming law.
The procedure is made even worse because new clauses introduced in that way are discussed in Committee only when the entire Bill has been studied and there is extreme time pressure on the Committee's business. Committee 396 members, having spent many evenings, nights and often mornings on the Bill's original provisions, are anxious to complete their business and get back to normal life. Not surprisingly, many of the new clauses added in that way receive only cursory discussion in Committee and are never discussed on the Floor of the House.
The hand of the Treasury on such clauses is weighted even more heavily, as it can supply Committee members with information that is not now, was never and never will be available to anyone else. Whenever a new clause is tabled to a Finance Bill, a few days later—possibly only 48 hours before the clause is discussed—Committee members will receive notes on it explaining its intentions line by line. Those notes are never published: they are secret to members of the Committee, and it is expected that those Members will destroy them once the Committee has deliberated on the relevant clause.
§ Mr. TylerThe hon. Gentleman suggests that the notes were secret. I have been a member of the Committee discussing the Finance Bill and I do not think that that is the case. It was perfectly possible for Committee members to discuss the matter with all interested parties. I have great sympathy with the case being made by the hon. Gentleman, but I hope that he will not overplay it.
§ Mr. SternI must assure the hon. Gentleman that those notes are provided only for Committee members. While it is expected that at least the sense of them may be discussed outside the Committee, they never appear in print in the form in which they are handed to Committee members.
Whatever the reasons for the procedure, I believe that it now goes too far—particularly when one considers the growth in the number of such clauses. In the tax sphere above all others—because of the lack of discussion in another place—legislation that is rushed through, without an effective opportunity for public comment, cannot be part of our system. At the very least, there is surely now a case for the publication of the notes on clauses. That would at least enable those interested in the subject being discussed in Committee to receive full information on what is being added to the Bill.
I should like the Government to go further. I hope that, when it becomes necessary to introduce a new clause to the Bill, they will not simply introduce it in Committee, but will consider proceeding in the same way as they do with every other minor Government announcement: by way of a reply to a written question.
§ Dr. MarekI have some sympathy with the views of the hon. Member for Bristol, North-West (Mr. Stern), although some clauses have to be brought in quickly. There is no such thing as a fixed rule which can never be varied.
The hon. Gentleman referred to the publication of notes on clauses. I do not find them very helpful; they tend to be rather perfunctory. If the hon. Gentleman reads them—I am sure he does—he will agree that they should be rather more informative and helpful, so that not only the experts affected but a reader with an average education and some knowledge of the subject can understand them. Some clauses are, after all, technically difficult. The Government should perhaps take action on this, whether or not they publish the notes on clauses.
A great deal of financial legislation is not really a cause of party division. When the Government of the day introduce changes in tax rates, they are likely to be the 397 cause of political division. I suspect that our confronta-tional system will continue, but many clauses are not the subject of party political dispute. I always feel that it is a great pity that Her Majesty's loyal Opposition have to try to oppose everything. Equally, when Ministers introduce new clauses, they try to get them through without changing a single comma. Their briefs from civil servants instruct them to resist all attempts to amend such clauses, often listing 20 reasons why amendments should be rejected.
Perhaps we could have a more collaborative Committee stage for some of these proposals—I wonder whether the hon. Gentleman would agree. I suspect that this is all part of a much wider subject: the reform of the procedures of the House, which is proceeding slowly in certain areas. I await the day when we can turn our attention to reforming the ways in which we scrutinise legislation which is not controversial.
Certainly many of the clauses and schedules to which the hon. Member for Bristol, North-West referred were not controversial. Clause 15, for instance, is by and large uncontroversial—I could find nothing in it to oppose. On the other hand, the Opposition could certainly have commented on it constructively, and would have done so had we felt that the Government would be constructive in return. Our Committee system is not set up like that, unfortunately. It is a confrontational replica of the House of Commons Chamber. Committee Rooms are full of parallel Benches facing each other, making it difficult if not impossible to scrutinise these clauses in the way that I suggest.
I hope that the hon. Gentleman will join me in suggesting wherever and whenever he can that we need to look at this whole matter and to find a better way of scrutinising legislation.
§ Sir John CopeMy hon. Friend the Member for Bristol, North-West (Mr. Stern) will find a good deal of sympathy for his views. He has used this clause and this amendment as a vehicle to express his views on the management of legislation and on the insertion of new clauses in the Finance Bill.
The clause was the subject of considerable consultation by my predecessor, now Secretary of State for Employment, when she was doing largely the same job as I do now before the general election. That consultation involved the Chancellor of the Exchequer and various outside interests connected with the matter.
At the time of the Budget it was not thought helpful to proceed with the scheme outlined in the clause. Such was the view of many of the organisations consulted and it was a view accepted by my right hon. Friends in the Treasury. That is why the scheme did not appear in the Budget.
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When I arrived at the Treasury after the general election the scheme had moved down in the scale of priorities, so it was not included in the Bill as originally published. Consultations had nevertheless continued; we were still in discussion with outside interests, and it became apparent that it would be desirable to include the scheme, which is why we tabled the clause.
As the hon. Member for Wrexham (Dr. Marek) said, the clause is not a matter of terrific controversy between 398 the parties. Indeed, it has been generally welcomed—by the National Farmers Union and other involved interests —as a helpful move.
I do not apologise for having inserted the clause. I should have preferred to insert it in a proper manner when the Bill was first published, but events did not turn out that way. It was desirable to introduce the scheme this year rather than to leave it until next year's Finance Bill partly because of the arrival of the single market on 1 January 1993. The clause is not essential for the creation of a single market, but it is helpful to have the scheme to which it refers up and running—if we can—by 1 January.
When we decided to include the clause we issued a news release which I hope will have helped to draw the attention of those outside to what we are proposing. Besides tabling the clause, we also did our best to ensure that those in the House who had taken an interest in these matters, in Committee and elsewhere, knew what we were doing and why.
In Standing Committee we had what I hope was a useful discussion. Today we are holding another debate in which we could, if hon. Members chose, discuss the detail of the clause. There will also be further opportunities for debate on the clause. It is, after all, an enabling clause permitting the flat-rate farmer scheme to be introduced. Treasury orders subject to the affirmative procedure—and, I anticipate, Customs regulations subject to the negative procedure—will have to come before the House.
I assure the House that we shall be exposing for comment later this year details of the scheme that we have in mind to enable the views of those interested in the clause and the scheme to be taken into account before we place the necessary secondary legislation before the House. We have thus gone to some trouble with the outside interests concerned in this clause.
My hon. Friend the Member for Bristol, North-West made, quite fairly, a more general point about the number of clauses being inserted into this and other Finance Bills, drawing attention to some of them in particular. He said that notes on clauses were secret to members of the Committee. I have never regarded them as secret to members of the Committee, who are certainly at liberty to share their copies or to copy notes on clauses at any time. They frequently share them with those who advise them or with whom they are in touch about the different matters involved in Finance Bills. It is true that they are not published in the form in which they are sent to hon. Members and receive a fairly wide distribution. We could consider doing that, but I do not think that it would add a great deal to the knowledge of those outside. Similar information is usually available, sometimes through the written parliamentary question and frequently through press releases.
§ Mr. SternMy right hon. Friend is being most generous in his reply. However, I have frequently heard criticisms, particularly within the accountancy profession—of which, as my right hon. Friend is aware, I am a member—that notes on clauses are not published. Those who study tax law consider them to be of some value in understanding the purposes of clauses. Would my right hon. Friend consider, in addition to what he has been describing, placing a copy of the notes on clauses in the Library?
§ Sir John CopeCopies are available in the Vote Office. These can be taken away and given to people. That is 399 sometimes easier than having papers in the Library. If hon. Members wish us to do so, we can consider other ways to disseminate this information more widely.
§ Dr. MarekI do not know whether this will assist the hon. Member for Bristol, North-West (Mr. Stern), but if he thinks that people outside should see the notes on clauses, perhaps they should be put in the Sales Office where people can buy them. Does the Paymaster General know whether that happens?
§ Sir John CopeSo far as I know, that is not the case, but I am speaking entirely off the cuff. If my hon. Friend would like to pursue that, he should take it up with the House authorities rather than with us. This goes much wider than the Finance Bill, although my hon. Friend the Member for Bristol, North-West made a special point about the Finance Bill in relation to the other place.
Apart from the clause which is the subject of this amendment, other clauses have been inserted in the Bill, some of which I hope that my hon. Friend will agree are entirely helpful to the interests concerned, and many of which were introduced after considerable consultation with those interests.
In Committee, I had a little to do with the four new clauses relevant to the taxation of companies producing films. Those are now clauses 41, 42, 43 and 68. Those clauses were the subject of considerable consultation with the industry concerned and were much discussed in advance. They were mentioned in principle in the Budget speech but, due to the complexity of the consultations which had to take place, they were not drafted in time to be included when the Bill was published initially. That is an example of the consultations preventing the system being followed in the conventional manner that my hon. Friend would wish.
Clauses 57 and 58 and schedule 10, which set up the rent-a-room scheme, were introduced in Committee. They were the subject of considerable discussion outside and formed part of the manifesto on which my hon. Friend and I fought the election, as well as press releases, and so on.
One could evolve a special case for all the new clauses which are inserted into the Bill but the fact that one can advance a special case for each and every new clause does not detract from the soundness of my hon. Friend's basic point—that there are too many in total even if each can be justified. My hon. Friend raises a good point about the difficulties, for those outside the House as well as for those inside, of dealing with Bills which change, through the introduction of new clauses, as they follow their stages through the House. I can only say that we shall try to avoid that where possible in the future.
§ Mr. SternI am grateful to my right hon. Friend for that reply, and in particular for his comments about notes on clauses. I emphasise my assurance to him that anything that he can do to disseminate these wider will be welcomed, at least among those who study legislation in detail. We have had a useful debate and a mild warning shot has been fired across the bows of my right hon. Friend. In those circumstances, I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.