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Parliamentary Debates House of Commons Official Report General Committees PARLIAMENTARY DEBATES HOUSE OF COMMONS OFFICIAL REPORT GENERAL COMMITTEES Public Bill Committee FINANCE (NO. 2) BILL Fifth Sitting Thursday 28 October 2010 CONTENTS CLAUSE 27 agreed to. SCHEDULE 11 agreed to. CLAUSE 28 agreed to. SCHEDULE 12 agreed to. CLAUSE 29 agreed to. SCHEDULE 13 agreed to. CLAUSES 30 and 31 agreed to. SCHEDULE 14 agreed to. CLAUSES 32 and 33 agreed to. Bill, as amended, to be reported. PUBLISHED BY AUTHORITY OF THE HOUSE OF COMMONS LONDON – THE STATIONERY OFFICE LIMITED £4·00 PBC (Bill 072) 2010 - 2011 Members who wish to have copies of the Official Report of Proceedings in General Committees sent to them are requested to give notice to that effect at the Vote Office. No proofs can be supplied. Corrigenda slips may be published with Bound Volume editions. Corrigenda that Members suggest should be clearly marked in a copy of the report—not telephoned—and must be received in the Editor’s Room, House of Commons, not later than Monday 1 November 2010 STRICT ADHERENCE TO THIS ARRANGEMENT WILL GREATLY FACILITATE THE PROMPT PUBLICATION OF THE BOUND VOLUMES OF PROCEEDINGS IN GENERAL COMMITTEES © Parliamentary Copyright House of Commons 2010 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ Enquiries to the Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 131 Public Bill Committee28 OCTOBER 2010 Finance (No. 2) Bill 132 The Committee consisted of the following Members: Chair: MARTIN CATON † Brown, Lyn (West Ham) (Lab) † Harrington, Richard (Watford) (Con) † Burt, Lorely (Solihull) (LD) † Leslie, Chris (Nottingham East) (Lab/Co-op) † Elphicke, Charlie (Dover) (Con) † McCarthy, Kerry (Bristol East) (Lab) † Evans, Chris (Islwyn) (Lab/Co-op) † McGovern, Alison (Wirral South) (Lab) † Gauke, Mr David (Exchequer Secretary to the † Mordaunt, Penny (Portsmouth North) (Con) Treasury) Shannon, Jim (Strangford) (DUP) † Sharma, Alok (Reading West) (Con) † Gilmore, Sheila (Edinburgh East) (Lab) † Shelbrooke, Alec (Elmet and Rothwell) (Con) † Goodwill, Mr Robert (Scarborough and Whitby) † Williams, Stephen (Bristol West) (LD) (Con) † Greening, Justine (Economic Secretary to the Simon Patrick, Committee Clerk Treasury) † Hanson, Mr David (Delyn) (Lab) † attended the Committee 133 Public Bill CommitteeHOUSE OF COMMONS Finance (No. 2) Bill 134 This is a fairly strong Henry VIII power. It is incumbent Public Bill Committee on the Minister to explain the circumstances in which he would use it, in the same way as, when I was a Thursday 28 October 2010 Minister, I had to explain the circumstances in which I would use a power. I remind the hon. Gentleman of that because I served for 13 years as a Minister in the [MARTIN CATON in the Chair] previous Government and on numerous occasions, in relation to numerous Bills that granted similar powers, Finance (No. 2) Bill Opposition Members questioned me on exactly how I would use the powers downstream. Therefore, it is only fair that I give the Minister the opportunity to reflect on Clause 27 these matters accordingly. Subsection (6) states: PENALTIES FOR FAILURE TO PAY TAX “An order under this section is to be made by statutory instrument.” 9am It is important that we know whether the Minister believes that such a statutory instrument would be Question proposed, That the clause stand part of the subject to the affirmative procedure. Alternatively, would Bill. the Opposition be required to pray against the instrument if we want to examine matters in a more detailed way? Mr David Hanson (Delyn) (Lab): Good morning, Again, we have no objection to the clause in principle, Mr Caton. Whatever happens, this is our last day in but we want clarification on certain points. Committee. We shall debate from clause 27 to clause 33, Subsection (7) states: as well as the new clause tabled by my hon. Friend the “A statutory instrument containing an order under subsection (4) Member for Nottingham East, and I hope that we shall which includes provision amending or repealing any provision of make progress as speedily as we can. an Act is subject to annulment in pursuance of a resolution of the The Opposition have no problem with the policy House of Commons.” objectives of clause 27, but I would like to test the Will the Minister give some indication of how that will Minister, because the clause gives him and the Treasury work? wide powers to implement provisions at a future date. I do not wish to cause the Minister too much grief on Subsection (2) states the principle of the clause. We support it, because “Schedule 11 comes into force on such day as the Treasury may penalties for failure to pay tax are important. Schedule by order appoint.” 56 to the Finance Act 2009 is important; it was passed Will the Minister say which day and which time the by the previous Government. Given the wide-ranging Treasury might by order appoint for implementation of nature of the powers that we are seconding to him, the said provision following Royal Assent? I ask that however, will the Minister give some indication of how because the clause gives him a wide implementation he might choose to exercise them? power. The Exchequer Secretary to the Treasury (Mr David Subsection (3) states: Gauke): It is a pleasure, Mr Caton, to serve under your “An order under subsection (2)…(a) may commence a provision chairmanship for one last time on the Bill. generally or only for specified purposes, and…(b) may appoint Before dealing with clause 27, I return briefly to different days for different provisions or for different purposes.” schedule 2, which we considered earlier in our proceedings. That, too, gives the Minister a wide power to reflect on We did not debate the schedule, and as a consequence I the issues and bring in, at different times, provisions have failed to mention something that could be usefully relating to the specified purposes under clause 27. I put on record: the changes to venture capital schemes would welcome an outline of his thinking on introduced under that schedule will made through a implementation of the clause. commencement order, and it is our intention to bring in Subsection (4) is also a very wide provision, so the the changes from next April. I hope that the Committee Minister needs to put on record his approach to the will forgive me for digressing. issues. The subsection states: I now turn to clause 27 and the points made by the “The Treasury may by order make any incidental, supplemental, right hon. Member for Delyn. As we heard, the clause is consequential, transitional, transitory or saving provision which part the ongoing review of Her Majesty’s Revenue and appears appropriate in consequence of, or otherwise in connection Customs, and it marks the completion of the third stage with, that Schedule.” of penalties reform under the review. There are currently I know that it is probably common practice to put in a variety of different penalties for late payments across place such a wide power, but it is important that the different taxes, and some have no sanction for late Minister gives some indication of the circumstances in payment. The changes before us add 15 further taxes which he would exercise it. In the event of the clause and duties to the new aligned structure that was legislated receiving the approval of both Houses, we will be giving for last year. As with the changes made in clause 26, him great power to vary the penalties for failure to these new taxes are all indirect taxes or excise duties. pay tax. The new penalty structure will be more effective in Subsection (5) states: influencing behaviour, as well as fairer and more “An order under subsection (4) may…(a) make different provision proportionate. It is important that HMRC makes every for different purposes, and…(b) make provision amending, repealing effort to support taxpayers in meeting their tax obligations, or revoking any Act or subordinate legislation whenever passed but it is equally important that the consequences for or made (including this Act and any Act amended by it).” failing to meet those obligations are made clear. 135 Public Bill Committee28 OCTOBER 2010 Finance (No. 2) Bill 136 An extensive series of consultations led to the first important that the consequences of failing to meet tranche of legislation in the Finance Act 2009. Following those obligations are clear. Effective and proportionate that Act, HMRC published a draft of the current penalties will tackle late filing and reassure the compliant provisions on 9 December 2009 and invited comments. majority that the system is fair. I therefore hope that the We listened to the many responses from key stakeholders Committee will support the clause. and representative bodies and made changes as a result. Question put and agreed to. For example, we refined the VAT payments on account Clause 27 accordingly ordered to stand part of the Bill. mechanism to be as easily understood as possible. Throughout the consultation, the reforms were broadly Schedule 11 agreed to. supported by key stakeholders and representative bodies. The new penalty structures and safeguards will require changes to HMRC’s IT systems and business processes. It will also require substantial advance publicity to Clause 28 taxpayers and their advisers to ensure that people are ready for the changes. That is why the schedule is to be brought into force by Treasury order, which will allow RECOVERY OF OVERPAID STAMP DUTY LAND TAX AND for implementation in stages. HMRC plans to implement PETROLEUM REVENUE TAX ETC the changes as and when resources permit and when Question proposed, That the clause stand part of the sensible opportunities arise.
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