ADJUSTMENTS OF CONTRACTS (Hansard, 23 April 2001)

§ Mr. Ottaway

I have a small point to make. I am grateful to the Royal Institution of Chartered Surveyors for highlighting a concern that has no doubt been drawn to the Minister's attention. The clause deals with contracts that are in existence at the commencement date. On subsection (2), the institution states: While we appreciate that this provision must be read with the wide definition of 'agreement' set out in clause 48(1), we remain concerned that certain arrangements reached before the commencement date may not be covered by the clause. The implication is that there is a hangover after commencement date. It continues: The kind of arrangements which we have in mind are: options to extend either the leased area or the term/duration of a mineral working lease … options or conditional contracts to acquire interests in mineral working land, conditional on the grant of planning permission … way-leave agreements in respect of haulage of minerals extracted from third party land'. I hope the Minister gets the message that several agreements relating to leases, land and long-running mineral rights might overlap the commencement date. The RICS believes: All of these arrangements fall within normal commercial dealings", 122 the implication being that they are quite common. In its opinion, they should be brought within the scope of the provision. I am not making a political point. The Conservative party does not want more people to be covered by the tax, but it seems that a loophole exists. How does the Minister intend to deal with that?

§ Mr. Timms

The clause provides for the adjustment of contracts in two types of case to take account of agreements made prior to the commencement date of the levy, and to allow for the levy to be accounted for after the commencement date, where that is appropriate. Where an agreement is made to supply aggregate before the commencement date, any levy due after that date will be payable not by the supplier of the aggregate, but by the recipient. Where an agreement regarding the use of land is made before the commencement date, the cost of the aggregates levy may be ignored in calculating the turnover or the price of the land.

We are aware of the point that has been raised by the Royal Institution of Chartered Surveyors. Our initial view is that there is not a problem, and that the clause can deal with concerns that will arise. As the hon. Member for Croydon, South (Mr. Ottaway) raised the matter, I will reflect on it further. If we conclude that we need to take action to tackle it, we will do so at a later stage.