PARTNERSHIPS AND OTHER UNINCORPORATED BODIES (Hansard, 23 April 2001)

§ Mr. Letwin

Again, I begin by asking the Financial Secretary to confirm that the provision parallels standard clauses in previous legislation. How will that work in the case that we are considering? Representatives of the industry have told me that several people would be caught by subsection (1)(a) and (b). They include sole traders who busy themselves with a quarry; some of them carry out their business in partnership. I stand to be corrected, but I believe that subsection (1) has a wide application to the smaller end of the industry. That is not true of the great aggregates companies—the half dozen or so that comprise the great bulk of production—but of the tail, which must never be forgotten or ignored if we care about our economy. The tail includes many traders who would be caught by subsection (1).

It is therefore unsatisfactory that we are told only: The Commissioners may by regulations make provision for determining by what persons anything required to be done under this Part is to be done where, apart from those regulations, that requirement would fall on people who are caught by subsection (1)(a) or (b). The position would be less unsatisfactory if the Financial Secretary could give us some idea of the contents of the 109 regulations. The smaller businesses have no idea of them or their potential effect. That is bad enough for big businesses. Indeed, the levy's effect on big business is a large part of the problem. For small business, the worst thing will be uncertainty about the regulations, and not knowing what is about to hit it. I hope that the Financial Secretary will give us a clear idea of what the regulations will look like, and of how those who are unincorporated or carrying on a partnership, or both, will be treated.

In particular, it would be good to know what will happen in the odd cases, and how they will be dealt with. The Minister will, of course, tell us that such cases are very unlikely to occur and highly hypothetical. However, let us suppose that two people, both unincorporated, are knocking away at two parts of the same quarry. When we come to the interesting question under clause 19(1) of when the exploitation occurs or to the difficult questions about which substance we are concerned with when mixtures of substances occur in complicated ways and some materials are encased in others, how will we know which party involved is responsible for what? How will the regulations produced by the commissioners deal with such cases?

Those are not straightforward cases. We are dealing with complex processes, in which the levy forces a disentangling of substances and times from one another that is unprecedented and that has been unnecessary for other purposes. The regulations will, therefore, have effects that similar regulations relating to most other taxes would not be expected to have. Will the Minister, therefore, give us a clear guide as to what he expects the regulations to look like? Perhaps he might care to deposit a draft of them before the House, before the end of the deliberations in Standing Committee.

§ Mr. Timms

These provisions have a great deal in common with other indirect taxes, on which they are based. The wording is lifted directly from the provisions in the legislation for the landfill tax and for VAT. I do not have data about the number of businesses in this sector to which the provisions will apply. However, I do not accept—although this might be splitting hairs—that it is important to get the provisions right only if many businesses are involved. Even when only small numbers of people are affected, the provisions can have a considerable impact on them. It is therefore important to get them right, and that is the view that we take in this case.

Just as the clause is taken directly from the arrangements for landfill tax and for VAT, so I expect the regulations to look like the regulations that apply to partnerships and other unincorporated bodies in the case of landfill tax and VAT. I would advise the hypothetical individuals to whom the hon. Gentleman referred to look at those regulations. They can be pretty confident that these provisions will look rather like them.