Finance (No.2) Bill

As we have heard, new clause 5 seeks to change the definition in the Taxes Management Act 1970 of an ““incapacitated person””. I appreciate that the purpose of the new clause is not to change the scope of the definition, but to ensure that it better reflects the modern understanding of an ““incapacitated person””. Members of the Committee will recall that we debated a similar proposal at the end of the Committee stage. As I explained then, a definition is required to ensure that the obligations of the 1970 Act properly fall to those acting for children or for those with mental health problems. The existing definition can be traced back to at least 1880, and I reiterate that I agree that the wording used, such as ““lunatic”” or ““idiot””, no longer feels appropriate, belonging as it does to the Victorian age, rather than to today's times. Before I address the wording used in this new clause, I wish to reiterate to Opposition Members that I welcome this issue having been raised and am willing to take action. That is not an empty promise: I asked my officials to explore quickly what they thought was possible with the low incomes tax reform group. We now better understand what that group wants to achieve and the complexities involved. My officials are working with LITRG and are willing to listen to it and to others about how best to achieve these objectives. LITRG thought that it should be feasible to change the definition in the next year or two, and I am confident that the Government can work to that timetable in a carefully considered way. In contrast, I do not think that the new clause achieves its objective, nor do I think it is the most appropriate way to make this change. It, like its predecessor debated in Committee, seeks to link the 1970 Act definition of an ““incapacitated person”” to the Mental Capacity Act 2005. The provision debated in Committee failed to take into account the fact that children were also included within the existing legal definition of an ““incapacitated person””. The revised new clause seeks to remedy that position by including"““any person under the age of 18””." Once again, I point out that the provision remains deficient, as the definition would inadvertently include Scottish people between the ages of 16 and 18, who are not included within the current definition for most purposes of the 1970 Act. I do not think that the reclassification of that group in a way that is contrary to the position in Scotland is the intention of Labour Members. In addition, our preliminary discussions have revealed that the reference to the 2005 Act may well create a different definition in practice. The current definition refers to a person's general mental condition, whereas this provision would depend upon an analysis of a person's capability at a specific point in time, and the implications of such a change may be significant. It would be irresponsible to make such a change without considering these potential differences thoroughly with the appropriate representative bodies. The repeated technical difficulties demonstrated in the new clauses serve only to reinforce the point I made in Committee that such changes should not be made in haste, for fear of inadvertently moving groups of persons in or out of the definition. As hon. Members will be aware, the Treasury launched a new approach to tax policy making alongside the June Budget.