AGGREGATES LEVY: REGISTRATION (Hansard, 23 April 2001)

§ Mr. Ottaway
I shall make only a couple of points about the schedule. My hon. Friend the Member for West Dorset (Mr. Letwin) brilliantly exposed the flaws and weaknesses in the introduction of the register. The first few lines of the schedule, which are at the heart of the matter, state: An unregistered person who … has formed the intention of carrying out the taxable activities … shall notify the Commissioners of that fact. My hon. Friend ruthlessly exposed the flaws in the use of the word "intention". Whose intention is required? The schedule refers to an "unregistered person", but who decides what the intention is? The Financial Secretary rightly looks puzzled, as this is a serious question. However, as any lawyer in his first year of law will know, the question concerns the difference between mens rea and actus reus—the difference between "Does he have the intent?" and "Is he deemed to have had the intent?" The Minister laughs, but I shall provide an analogy from criminal law. If a man sets out to kill someone, that is classed as mens rea, and he is charged with murder. However, if a man drives a car dangerously and accidentally kills someone, that is manslaughter, and is classed as actus reus. That is a fundamental principle of law.
Let us relate that to the aggregates levy. The question of intention is fundamental because the schedule provides for substantial fines. Someone can be fined up to 5 per 90 cent. of the relevant levy. However, let us consider the other end of the spectrum. The Financial Secretary said that there was no de minimis provision—no minimum tonnage to qualify for the levy. Yet there is a minimum fine of £250. If aggregates are 12.50 a tonne, that fine applies to anyone who produces 20 tonnes of aggregates, which would probably be approximately the size of the Table before us. That is not much; as a by-product, it is insignificant.
Someone who produces something that is not taxable, but has a by-product, may have no intention of evading the aggregates levy. There may be a little mound of some substance around the place that makes him liable for a fine. I assume that that attracts a criminal record. The amount is not great, and the Financial Secretary is right to smile. However, there is an important point about intention; its determination is important.
My hon. Friends may wish to raise other points, but I want to discuss only one further matter, which relates to the Data Protection Act 1998. The schedule gives commissioners the power to publish specific information from the register. The interaction with the Data Protection Act is serious and could involve criminal activity. The commissioners could be guilty of that unless their actions complied with the Act. It would therefore be helpful if the Financial Secretary could give some idea of the way in which the information will be published, and deal with the serious points about criminality and intention.

§ Mr. Tyrie
I want to concentrate on paragraph 7, which is entitled "Publication of information on the register". Following the comments of my hon. Friend the Member for Croydon, South (Mr. Ottaway), it is interesting that sub-paragraph (3) states: Information may be published in accordance with this paragraph notwithstanding any obligation not to disclose the information that would otherwise apply. I presume that that is a waiver of the Data Protection Act 1998. If not, I should like to know what it means.
I shall comment on some of the points that my hon. Friend the Member for West Dorset (Mr. Letwin) made about the reason for the register. I agree that perhaps the tax deserves a register, but I am not convinced that it needs to be published. I should be grateful if the Financial Secretary explained the reason for its publication. I understand the reason for a register of companies, and why the public should be able to consult it. I notice that the Financial Secretary feels the need for some advice, and I look forward to hearing it; I shall keep going for long enough for him to receive it. Is the VAT register publicly available as a consultable document? I do not know the answer. Clearly, there should be a VAT register, but is it publicly consultable? Does Customs and Excise have the discretionary power to publish information on it? Do clause 24 and schedule 4 thus follow precedent?
What information should be published? Paragraph 7 states that the commissioners may publish … any information which—

(a) is derived from the register; and

(b) falls within any of the descriptions set out below."

In other words, the commissioners may publish only information that falls into both categories. Is that interpretation correct, or may they publish any information derived from the register, with (b) as an additional clarification? What is the limiting factor on the amount of information that may be published?
91 Why is the power to publish discretionary? The wording makes it clear that that is the case. Paragraph 7 states: The Commissioners may publish, by such means as they think fit, any information", and so on. If some information is to be in the public domain, would not it be sensible to establish what information is to be placed there, provide a list and state that that will be done at a given time—perhaps once a year, or more frequently on the internet?
I do not follow the logic of the provision. As in so many measures introduced by the Government—and, occasionally, by previous Conservative Governments—the provision is unnecessarily wide. It grants a huge amount of power to the commissioners. I should be grateful if the Financial Secretary answered my points. Why do the commissioners need to publish? Why not list the information that is to be published? Why not remove the discretion from the commissioners? Does the provision follow a precedent set by the VAT register and others?

§ Mr. Timms
I do not understand the difficulty with paragraph 1, which is clear. If the individual does not intend to sell the aggregate, he is not required to register. If he intends to sell, he should register. That seems straightforward to me. I do not share the difficulty that the hon. Member for Croydon, South (Mr. Ottaway) has with that.
Now let me deal with some of the other points. The names and business addresses of people who exploit aggregates commercially are already in the public domain. I refer to the statutory declaration that is already required. Customs and Excise will produce a consolidated list of those people whose details are already available, which should not give rise to any alarm.

§ Mr. Letwin
Perhaps what the Financial Secretary has just said shows that I have entirely failed to understand the articulation of clause 19. Certainly either I have done so, or he has. Clause 19(1)(a) seems to make it clear to the ordinary reader that a quantity of aggregate is subjected to exploitation if it is removed from a site falling within subsection (2)". Sites included in subsection (2) include the originating site of the aggregate". There is nothing in the provision about selling the aggregate. If the concept of "removal" will do, the Financial Secretary has just given a misdescription of his own Bill and his own tax.

§ Mr. Timms
The position is as set out in clause 19. Normally, commercial exploitation will involve selling. There might be occasions on which that is not the case, but normally it will be.

§ Mr. Letwin
That really will not do. This is not some sort of general discussion about how to run a kindergarten. This is the law of the land, and if the Bill becomes law, it will say that a quantity of aggregate that is removed from a site is, ipso facto, commercially exploited. If it is thereby commercially exploited, it is prima facie the case 92 that if someone intends to cut rock to make dimension stone, with a by-product that he never expected but which, nevertheless, exists under the definition of aggregate, and he removes it from the site simply to rid himself of the stuff, he is commercially exploiting it. That is not what the Financial Secretary said, and I do not think that it is what he intends to achieve. The problem of intention here is the mismatch between the Financial Secretary's intention and the words of the Bill.

§ Mr. Timms
The circumstances that the hon. Gentleman is seeking to construct, in which some unfairness would be perpetrated as a result of the measure, do not exist. Clause 19 sets out what constitutes commercial exploitation, and that is the way in which Customs and Excise will apply the requirements.
The reason why a register is needed is that customers of those in the aggregate industry have a right to know whether the person supplying aggregate to them—and possibly increasing the price accordingly—is registered for the purposes of the levy. Even without that provision, they would be able to ask Customs and Excise whether a particular person was registered, and Customs and Excise would tell them. That is the position that currently applies with the landfill tax, which, even if it was not supported by the shadow Chief Secretary, was introduced by the previous Government.
The time and manner of notification, and the information contained in it, will be prescribed in the regulations and will also be set out in a public notice prior to the commencement date. I say to the hon. Member for Chichester (Mr. Tyrie) that that is an entirely conventional procedure, exactly following those relating to the landfill tax. Indeed, a large part of the wording in the schedule and in the other technical parts of the measure is taken word for word from the measures that deal with the landfill tax.

§ Mr. Tyrie
Perhaps some mistakes were made in the drafting of the landfill tax legislation—who knows? I do not know, because I was not around. Before the Minister finishes, will he answer the questions that I asked? Why has a discretionary power been given, rather than an order to publish the lists, if the reason given is that customers need to consult the lists to ensure that they are dealing with bona fide suppliers? Are there Data Protection Act implications, and does paragraph 3 act as a waiver to that Act? Why are we not setting out in the Bill what information is to be provided, rather than allowing the commissioners to make up their own minds what information to put into the public domain?

§ Mr. Timms
As I said earlier, much of the wording in the schedule was taken from the legislation dealing with the landfill tax. I imagine that similar circumstances will almost certainly apply in this instance, although I will check that and drop the hon. Gentleman a line addressing that point and the others that he has raised.
Let me say a little more about commercial exploitation, because some misunderstanding may be creeping in here. As the hon. Member for West Dorset (Mr. Letwin) said, clause 19(1) says that aggregate is subjected to exploitation if it is removed from a site. However, aggregate is commercially exploited only if the conditions in clause 19(3), too, are met. In all those circumstances a 93 person might be registrable, but if it is clear that no tax will be due, despite all that, Customs and Excise will not need to include the individual on the register.

§ Mr. Letwin
I am afraid that that does not answer the question either. The Financial Secretary should look at clause 19(3). Incidentally, it is not clear whether paragraphs (a), (b), (c), (d) and (e) are, as it were, exclusive, but I assume that there is, in conceptual terms, an "or" after each paragraph. There is neither an "and" nor an "or" in my text.

§ Mr. Timms
In fact, there is an "and" at the end of paragraph (d).

§ Mr. Letwin
Indeed there is. Perhaps this is helpful. Is the Financial Secretary telling us that commercial exploitation of something that is exploited under clause 19(1) occurs only if all the conditions in paragraphs (a), (b), (c), (d) and (e) of subsection (3) apply simultaneously?

§ Mr. Timms
Yes.

§ Mr. Letwin
That is genuinely helpful.