Finance Bill

I shall speak to amendments 13 and 14, tabled by me and my hon. Friends. Amendment 14 is a probing amendment. I have no particular problem with a reduction in the VAT rate relating to the restrictions in the value of imported goods, but I am seeking to probe to ensure that the necessary changes will definitely be in place so that businesses are not charged more than they should be when the provision comes into force. When the Conservatives were in opposition, they quite rightly used to berate the Government for the size and complexity of the tax code. They would pile up Tolley's tax guides as evidence that it was complicated, so I want to make sure that they have dotted the i's and crossed the t's on this particular change. One might imagine that importing something into this country would be reasonably straightforward, and that a modest change to the VAT rate would be simple to make. If something is imported by air or sea, however, it requires a certificate. It can be done under the single administrative document; it can be manually processed with an SAD authenticated copy 8; it can have a trader input computerised process with a weekly VAT certificate issued by the customs computer under report TW-AH or TW-BH; and it can have a post-entry correction form C18. Removal from a customs warehouse would require a form C259, and an excise or customs warehouse requires a duty payment form W5, W6 or W20—and so on and so forth. Of course, VAT is far from simple even on imports from the EC. The VAT territory of the European Community in respect of Denmark excludes the Faroes and Greenland—and there is much more of this to come. For Germany, Busingen and the isle of Heligoland are excepted; while for Italy, there are the communes of Livigno and Campione d'Italia, and the Italian waters of Lake Lugano. Portugal includes the Azores and Madeira. Spain includes the Balearic islands, but excludes Ceuta and Melilla. The United Kingdom includes the Isle of Man. Then there are the overseas French départements and Mount Athos in Greece. I am merely trying to explain the extraordinary complexities that will have to be addressed in advance to ensure that this modest VAT reduction can be implemented and that businesses can operate fully and safely. Other Members may have identified other weaknesses in the reduction, but I will allow them to make their own cases. As I said on Second Reading, the real damage done by this Finance Bill relates to the Government's determination to raise the standard rate of VAT from 17.5% to 20%. Amendment 13 seeks to delete that VAT increase—an increase that is wrong precisely because it directly contradicts the stated intention of both the coalition parties, which say that they want to create a fairer society. I think that, on balance, the Liberal Democrats were right when, before the election, they warned of the Conservatives' "VAT bombshell". It is no less threatening and fateful today. Looking at the serried ranks of five Liberal Democrats who are sitting here, I wonder whether this is the time for them to stick with principle, and perhaps forgo the possibility of having a ministerial Mondeo one day.