National Insurance Contributions Bill

My Lords, we also support the purpose of the Bill. The noble Lord, Lord Skelmersdale, said that the Treasury needed all the revenue that it can get. As an ex-Customs and Excise man, my approach is that the revenue department should get all the revenue to which it is entitled. We are talking specifically about contrived schemes. I realise that there is a debate to be had on what ““entitlement”” means in certain circumstances. But if, as here, we are talking specifically about highly complicated and sophisticated schemes, the sole purpose of which are to avoid taxation, there is no doubt that we are referring to a systematic attempt to reduce the amount of money which should legitimately go into Revenue coffers. It is very important, not just in stopping unfair beneficiaries of such schemes, but for the overall credibility of the tax system. If we expect, as we do, citizens to pay their taxes relatively unquestioningly and as individuals not to go to great lengths to avoid them, it is important that the legislature is seen to be taking steps to bear down consistently on those at the top end of the income scale, who as a result of that position, can employ people who can go to great lengths to reduce their tax liability. I was very pleased to hear the Minister pray in aid of the Bill the support received from the Economic Affairs Select Committee. My recollection is that when I was a member of that committee’s sub-committee dealing with finance Bills, the Treasury did all it could to avoid your Lordships’ Select Committee and treated it at times with near, if not actual, contempt. I only hope that the welcome that the Minister gave to its recommendations in this case signals a broader acceptance of the Committee’s validity and work. I was also pleased to hear the noble Lord say that there would be proper consultation on all secondary legislation in the Bill. He mentioned a 12-week consultation period. As I have said before in your Lordships’ House, it gives me no great comfort to hear Ministers say that secondary legislation will get proper scrutiny because it is introduced under the affirmative resolution procedure. Given that secondary legislation cannot be amended in any event, the fact that it comes forward under the affirmative resolution procedure is of absolutely no help, in technical matters such as this, in getting the best possible legislation. The Minister says that the Government intend that all secondary legislation will have a 12-week consultation period. I hope that they will stick rigidly to that promise. We are talking about very technical matters which, frankly, very few Members in your Lordships’ House or in another place can look at in huge detail. It needs time for the relevant experts to opine on it. A question was raised in another place to which I am not sure a satisfactory answer was given. I apologise if I missed it. It relates to national insurance being claimed back from employees who have now left the company in which they were employed in December 2004. What route is followed in those circumstances, and how easy or difficult is it to get at those employees who may be employed elsewhere in the UK or who may have retired? I would welcome the Minister’s comments. I also welcome the Minister’s thoughts on the comment of the chairman of the Treasury Select Committee that, given the general nature of the legislation, it amounts to a general anti-avoidance rule. The Minister will be aware that there is a debate among tax experts on whether there should be a general rule as opposed to very large amounts of primary and secondary legislation dealing with specific schemes. We on these Benches are looking at this. I see some attraction in moving towards such a general rule, but I wondered whether the nature of this legislation presaged a change of thinking about it on the Government’s part. Finally, on the relevance of this legislation to the tax system as a whole, does the Minister agree with the views expressed by Edward Troup, a leading authority on British tax law who advises the Select Committee in another place. He said:"““The aim of Government should be to . . . do its best to ensure that the ‘return’ from tax planning is as low possible . . . a simpler tax system with fewer reliefs, exemptions and discontinuities would, in the long term, frustrate most of the tax evaders’ ploys . . . Management has to decide between whether £10,000 of tax planners’ fees is likely to give a better post-tax return than the amount spent on, say, advertising. This judgment is not immoral, it is inevitable””." I am sure that is the case and I hope that the Minister will impress on his Treasury colleagues the need to devote the same kind of priority to simplifying the tax system which latterly they have devoted to clamping down on tax avoidance schemes.