Finance (No. 2) Bill

Penny Mordaunt Excerpts

Monday 11th October 2010 Commons Chamber

[Penny Mordaunt (Portsmouth North) (Con)]

Historically, it has been argued that the secrecy surrounding Budget measures has hindered proper scrutiny, especially as Parliament has but little time to consider their broader implications. Those implications have not always been positive for the Government of the day. Indeed, had a previous Chancellor not guarded his Budget measures so jealously, his blushes might have been spared over the abolition of the 10p tax rate. I remember that time well—in Portsmouth, the average wage was £18,500, and anyone earning below that and above £5,000 was absolutely clobbered. That is why I will never take lessons in fairness from those who now find themselves on the Opposition Benches.

The Government’s publication of the measures in the Bill on 12 July is therefore a welcome departure from the norm, opening a consultation and inviting comment. That is an innovation in the interests of good and transparent government, and I hope that, in future consultations, a broad audience beyond the usual tax practitioners will let its views be known to Her Majesty’s Treasury.

The many people in Portsmouth North who suffer from asbestos-related illnesses are part of that broader audience. The proposals in clause 31 to facilitate compensation payments to those people are a proper response to the tax liability to which many well-intentioned trusts have found themselves exposed.

Asbestos-related industrial diseases are sadly a common occurrence in all our constituencies. The long period from exposure to presentation of symptoms, as well as lack of awareness, means that we will see new cases for decades to come. Indeed, in the next 10 years, the number of cases emerging each year will peak at about 2,500. As a dockyard city, Portsmouth can expect to contribute disproportionately to that number.

Currently, the trusts established to pay compensation to asbestos illness sufferers can be liable for inheritance tax, capital gains tax and income tax on their assets. Clause 31 will introduce a retrospective exemption for trusts established between 6 April 2006 and 23 March this year. That will mean more money going to victims, and will be very welcome in Portsmouth. It will be a relief to sufferers from asbestosis, cancer and even relatively benign conditions such as pleural plaques, which can nevertheless be a precursor of more serious complaints. The extra resource is much needed, as it will also help meet the cost of care. Often, only 35% of the cost of that care—particularly hospice care—is met by the NHS. The provision happily complements the High Court ruling in August this year, which asserted that insurers’ compensation should be used for the care that victims have needed. I am encouraged that the unwitting exposure to tax liability of an essentially charitable endeavour is to be put right, and that the problem can be avoided in the future if new trusts consult fully the Charity Commission and HMRC.

It is a happy coincidence that the launch of the consultation period on Finance Bills comes with a Bill that offers so many positive measures. In addition to clause 31, I welcome the amendment to collection procedures for income tax for individuals and the harmonisation of administration regimes for different taxes—a further advance towards simplification and transparency. We must all recognise the exasperation that many individuals and businesses in our constituencies have felt in their dealings with HMRC, and measures to ensure that taxation is fair, straightforward and transparent are always to be applauded. However, I hope that the Economic Secretary will dwell on clauses 26 and 27 about the failure to make returns and late payments. Given HMRC’s track record, I seek assurance that those measures will not over-burden taxpayers or impose disproportionate penalties. I am especially anxious that the size of fixed penalties for small businesses be given careful consideration.

I also applaud first-year allowances for zero-emission goods vehicles, a genuine incentive for logistic firms to pursue a green agenda and a sign of the Government’s determination to reward green behaviour.

It is also worth noting what the Bill omits. The long period of consultation has afforded us adequate time to enjoy the absence of some measures favoured by the last Government. Happily, we can pass this Bill without unfairly impinging on the landline user or the cider drinker.