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Prepared: 18:40 on 8 July 2008
Point of Order
3.36 pm
Dr. Julian Lewis (New Forest, East) (Con): On a point of order, Mr. Speaker. Is there any way in which, within the rules, I can convey the House’s congratulations to Sir Igor Judge, who has just been appointed Lord Chief Justice? As you will recall, Sir Igor was one of the judges who decided that MPs’ home addresses should be made publicly available. Does not this promotion illustrate the fact that one silly mistake need not wreck a promising professional career?
Mr. Speaker: I think the hon. Gentleman is trying to draw me into an argument. As for his first point about congratulations, he could always table an early-day motion, at which he is very expert nowadays.
Public Contracts (UK Tax Requirements)
3.37 pm
Nia Griffith (Llanelli) (Lab): I beg to move,
That leave be given to bring in a Bill to place certain requirements relating to payment of tax in the UK on companies bidding for public contracts; to prohibit the transfer of such contracts overseas; to require companies bidding for public contracts to provide certain information relating to tax payments; and for connected purposes.
I am glad to have the opportunity to present a Bill that is motivated by fairness and justice—values that are, I am sure, important to every hon. Member. I am not the first to raise the matter in the House: my hon. Friend the Member for Great Grimsby (Mr. Mitchell) tabled early-day motion 1108, for which I commend him.
Let me begin by informing the House of the Bill’s bald and brief title. It is called the Public Contracts (UK Tax Requirements) Bill. If I wished to translate that into the vernacular, I could do no better than direct Members’ attention to an article by Professor Prem Sikka on the private finance initiative that appeared in the May edition of the magazine Chartist. Prem Sikka is professor of accounting at the University of Essex, and I am indebted to him and his research on the complex workings of the PFI for much of the illustrative detail that I shall use to explain the purposes of my Bill.
I referred to the vernacular. The main heading that appears over Professor Sikka’s article reads “Biting the hand that feeds them”. As if that were not sufficiently clear, the subheading is even snappier and more explicit: “Prem Sikka on the tax avoidance scam operated by some PFI companies”. Not much ambiguity there! Furthermore, tax avoidance is readily understood by the general public, and, in the United Kingdom, condemned as being unfair and unjust.
That is important. One of the selling points about PFI among the general public is how easy it is to understand in terms of our own lives in a modern, property-owning democracy. The vast majority of people, when buying a house or a flat, take out a mortgage. They agree to pay off their loan plus interest over a period of years, according to the terms of the mortgage. That is why many of the opponents of PFI talk in terms of mortgaging the future of our country. Be that as it may, the concept of borrowing and paying off the loan plus interest has become acceptable to the vast majority of the British people, who, until comparatively recently, even trusted the lender to behave both honourably and competently.
The private finance initiative is a partnership between public services and private companies. Private companies are paid from the public purse to build, and often to maintain, projects for what may well be a period of 30 years—a bit like our mortgage, the general public might be thinking. The problem is that some companies that have won PFI contracts would appear to have transferred their ownership to a tax haven. In this way, they could avoid paying UK tax on their income and profits. What I find particularly outrageous—and I think the electorate do, too—is that these profits come from the public purse; in other words, the untaxed profits come from hard-earned taxpayers’ money.
The real difficulty is that there is a lack of transparency, and that currently those awarding contracts in the public-private partnerships or PFIs are not required to request sufficient explanation and detail about the tax arrangements of the companies bidding for these contracts. We all understand that large companies will have projects and businesses in many different countries, but the British public want to be sure that their tax money is not going to fund schemes by paying companies that are somehow not paying their full dues in UK tax. There will always be a suspicion that an investment company such as 3i Infrastructure Ltd—which has a 50 per cent. equity stake in Alpha Schools, a company formed to bid for a £134-million project to build and refurbish 11 schools in the Scottish highlands—has a specific reason for being registered in Jersey. A company spokeswoman is reported as saying:
“Alpha Schools is a company registered in the UK and liable to UK tax. It has two main shareholders: 3i Infrastructure Ltd and Galliford Try—a leading construction firm.
3i Infrastructure is a Jersey-based investment company. However, the PFI companies in the portfolio of that company are registered and taxed in the UK in the normal way. The post-tax profits from these PFI companies are simply aggregated by 3i Infrastructure, before being passed on to investors.”
Is this really sufficient to allay the public’s fears? I suggest not, and that is why we need this ten-minute Bill.
It is not sufficient that Treasury rules state that Government Departments should pay attention to the “propriety of tax arrangements” of companies involved in public-private partnerships or PFI deals. To reassure the public that such firms are paying the appropriate UK tax for the money that they make on public-private partnerships, we must require firms to make more information available. It is important to note that these proposals do not impose any additional costs on companies, as they already have the information that is required.
A few minutes ago, I gave what I described as the “bald and brief title” of my Bill. Let me now describe what the Bill would mean in practice. It would mean that public contracts could not be awarded to companies or investors resident outside the UK for tax purposes. It would mean that companies would be forbidden to transfer any aspect of PFI contracts to a location outside the UK. It would mean that all companies bidding for public contracts would have to include a public account of tax payments for the preceding five years. This account would have to include copies of their tax returns and a table showing the jurisdictions that they operate from, together with sales, costs, profits, employees, liabilities and assets in each.
In conclusion, my Bill is not only designed to tidy up an accounting anomaly. It is, rather, motivated by a sense of the unfairness and injustice that can be allowed by the current arrangements, and, perhaps just as importantly, by a wish to restore the public’s confidence that the accounting is transparent and that untaxed profits cannot come from hard-earned taxpayers’ money.
Regardless of what anyone thinks of the underlying principles of PFI, it cannot have been the intention of those who originally gave us the concept to have allowed such tax-funded tax avoidance, but that, in effect, is what we have. This, surely, is a blatant example of the law of unexpected consequences. Having had it brought to our attention, it is surely our duty to put right what has gone wrong, and to replace injustice with justice and inequity with fairness. I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Nia Griffith, Gordon Banks, Ms Karen Buck, Mr. David Chaytor, Michael Connarty, Linda Gilroy, Kelvin Hopkins, Mr. Kevan Jones, Ian Lucas, Rob Marris, Ann McKechin and Dr. Alan Whitehead.
Public Contracts (Uk Tax Requirements)
Nia Griffith accordingly presented a Bill to place certain requirements relating to payment of tax in the UK on companies bidding for public contracts; to prohibit the transfer of such contracts overseas; to require companies bidding for public contracts to provide certain information relating to tax payments; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 17 October, and to be printed [Bill 135].
Orders of the Day
CONSOLIDATED FUND (APPROPRIATION) (NO. 2) BILL
Order for Second Reading read.
Question, That the Bill be now read a Second time, put forthwith, pursuant to Standing Order No. 56 (Consolidated Fund Bills), and agreed to.
Bill accordingly read a Second time.
Question, That the Bill be now read the Third time, put forthwith, and agreed to.
Bill accordingly read the Third time, and passed.
Criminal Evidence (Witness Anonymity) Bill (Allocation of Time)
3.47 pm
The Parliamentary Under-Secretary of State for Justice (Maria Eagle): I beg to move, That the following provisions shall apply to the Criminal Evidence (Witness Anonymity) Bill:
Timetable
1.–(1) Proceedings on Second Reading, in Committee, on consideration and on Third Reading shall be completed at this day’s sitting in accordance with the following provisions of this paragraph.
(2) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.
(3) Proceedings in Committee, on consideration and on Third Reading shall (so far as not previously concluded) be brought to a conclusion six hours after the commencement of proceedings on the Motion for this Order.
Timing of proceedings and Questions to be put
2. When the Bill has been read a second time—
(a) it shall (notwithstanding Standing Order No. 63 (Committal of bills not subject to a programme order)) stand committed to a Committee of the whole House without any Question being put; and
(b) the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
3.–(1) On the conclusion of proceedings in Committee, the Chairman shall report the Bill to the House without putting any Question.
(2) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
4. For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1, the Chairman or Speaker shall forthwith put the following Questions (but no others)—
(a) any Question already proposed from the Chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment moved or Motion made by a Minister of the Crown;
(d) any other Question necessary for the disposal of the business to be concluded.
5. On a Motion so made for a new Clause or a new Schedule, the Chairman or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
6. If two or more Questions would fall to be put under paragraph 4(d) in relation to successive provisions of the Bill, the Chairman shall instead put a single Question in relation to those provisions.
Consideration of Lords Amendments
7.–(1) Any Lords Amendments to the Bill shall be considered forthwith without any Question being put.
(2) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.
8.–(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 7.
(2) The Speaker shall first put forthwith any Question already proposed from the Chair and not yet decided.
(3) If that Question is for the amendment of a Lords Amendment the Speaker shall then put forthwith—
(a) a single Question on any further Amendments to the Lords Amendment moved by a Minister of the Crown, and
(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.
(4) The Speaker shall then put forthwith—
(a) a single Question on any Amendments moved by a Minister of the Crown to a Lords Amendment, and
(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.
(5) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown that this House disagrees to a Lords Amendment.
(6) The Speaker shall then put forthwith the Question that this House agrees to all the remaining Lords Amendments.
(7) As soon as the House has—
(a) agreed or disagreed to a Lords Amendment, or
(b) disposed of an Amendment relevant to a Lords Amendment which has been disagreed to, the Speaker shall put forthwith a single Question on any Amendments moved by a Minister of the Crown and relevant to the Lords Amendment.
Subsequent stages
9.–(1) Any further Message from the Lords on the Bill shall be considered forthwith without any Question being put.
(2) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.
10.–(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 9.
(2) The Speaker shall first put forthwith any Question which has been proposed from the Chair and not yet decided.
(3) The Speaker shall then put forthwith the Question on any Motion made by a Minister for the Crown which is related to the Question already proposed from the Chair.
(4) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown on or relevant to any of the remaining items in the Lords Message.
(5) The Speaker shall then put forthwith the Question that this House agrees with the Lords in all the remaining Lords Proposals.
Reasons Committee
11.–(1) The Speaker shall put forthwith the Question on any Motion made by a Minister for the Crown for the appointment, nomination and quorum of a Committee to draw up Reasons and the appointment of its Chairman.
(2) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which it is appointed.
(3) Proceedings in the Committee shall (so far as not previously concluded) be brought to a conclusion 30 minutes after their commencement.
(4) For the purpose of bringing any proceedings to a conclusion in accordance with sub-paragraph (3), the Chairman shall—
(a) first put forthwith any Question which has been proposed from the Chair but not yet decided, and
(b) then put forthwith successively Questions on motions which may be made by a Minister of the Crown for assigning a Reason for disagreeing with the Lords in any of their Amendments.
(5) The proceedings of the Committee shall be reported without any further Question being put.
Miscellaneous
12. Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply so far as necessary for the purposes of this Order.
13.–(1) The proceedings on any Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.
(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to those proceedings.
14. Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.
15.–(1) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken or to recommit the Bill.
(2) The Question on any such Motion shall be put forthwith.
16.–(1) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.
(2) The Question on any such Motion shall be put forthwith.
17. The Speaker may not arrange for a debate to be held in accordance with Standing Order No. 24 (Emergency debates)—
(a) at this day’s sitting, or
(b) at any sitting at which Lords Amendments to the Bill are, or any further Message from the Lords is, to be considered,
before the conclusion of any proceedings to which this Order applies.
18.–(1) Sub-paragraph (2) applies if the House is adjourned, or the sitting is suspended, before the conclusion of any proceedings to which this Order applies.
(2) No notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.
19. Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
The motion provides for all the stages of this Bill to be taken today. It provides for six hours of debate in two segments: the first three hours for the debate on this motion and on Second Reading, and the second three-hour segment for Committee, Report and Third Reading. I would be the first to acknowledge that six hours to debate the important issues addressed in this Bill is less than ideal, and it would certainly be undesirable if the emergency legislation today were not to be superseded by a Bill in the next Session allowing much fuller parliamentary scrutiny. However, I would like to explain briefly why we need to press ahead at such speed.
Following the decision by their lordships in the case of Davis, there is a broad consensus—indeed, we saw it at the time of the statement to the House by my right hon. Friend the Secretary of State for Justice and Lord Chancellor following that judgment—that we need to legislate urgently to restore the power of the courts to make witness anonymity orders in appropriate cases. That is widely accepted by Front Benchers in both Houses, by outside commentators and experts of various kinds, and by the Law Lords themselves. They, in the leading judgment by Lord Bingham, said that urgent legislation may be appropriate. I accept that not everybody would think that, but there is a broad range of people who do. Failure to act quickly could lead to a significant number of ongoing and pending trials having to be abandoned and, potentially, to a large number of appeals against convictions secured, to a greater or lesser extent, on the basis of evidence provided by anonymous witnesses. That is the basis of the need for urgency and the reason the timetable motion is as it is today.
Sir Patrick Cormack (South Staffordshire) (Con): I completely understand the general drift of the hon. Lady’s argument and do not quarrel with it. However, I understand that the House of Lords will have two days for the Bill and we have only one. Surely the elected House should have at least as much time as the House of Lords?
Maria Eagle: The hon. Gentleman is slightly misinformed. The other place will have two half days, equating to one full day, so there is a basic equality in the time allowed. I appreciate his general point about the undesirability of having a short time, but we need to move swiftly.
Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): Having read the Davis judgment and listened to the beginning of the Minister’s speech, I agree that time is of the essence. Would it not be appropriate, therefore, to have a sunset clause? We know that the Bill will be superseded at some point, but we could make absolutely sure—belt and braces—through a sunset clause. I think that that would be accepted on both sides of the House.
Maria Eagle: The hon. Gentleman is stealing my thunder. The Government have tried to act consensually, given the need for speed, and in consultation with other parties we have accepted the principle that the Bill should contain a sunset clause. If the House agrees, it will be added to the Bill later. No doubt, we will have some discussion about what form it should take, and we have several options to consider.
Philip Davies (Shipley) (Con): We all agree that it is a good idea to provide protection for brave witnesses who want to give evidence to put criminals into prison. However, does the Minister agree that legislation passed in such haste can cause more problems than it provides solutions? Will she reflect on the fact that slightly more time might be needed to get it right? It could still go through relatively quickly.
Maria Eagle: I appreciate the general point that the hon. Gentleman makes in that there is some danger in hasty legislation. We have said, and will say again later, that the Bill will be a stopgap. There is to be a sunset clause, as I have said, and we will consider amendments to include it in the Bill later. My right hon. Friend the Lord Chancellor has made it clear that further legislation will be introduced next Session—the law reform, victims and witnesses Bill—that will subsume the contents of this Bill and enable full parliamentary scrutiny. At the same time, we will have cover for the urgent problems caused by the sudden arrival of the judgment in Davis.
The amendments tabled by the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) have not been selected, but I know the substance of what he suggests—and he will no doubt make his own contribution later. He suggests that we should take the summer recess to consider the issues raised by the Davis judgment in more detail and not take the Lords stages of the Bill until the spill-over in the autumn. I fully understand his concern about the undesirability of hasty legislation, as I have already said, and about the timetable motion we are considering, but I cannot commend such a delay to the House as it would cause added distress and worry to many vulnerable and intimidated victims and witnesses, and undermine confidence in the criminal justice system generally, which none of us would be happy to see. Such confidence is vital if justice is to be done and the guilty brought to book.
The right hon. and learned Gentleman says that courts should adjourn these cases for four months, while we take the time to consider more fully, and ask the Law Commission and other experts for their views. But many victims of serious violent offences, or their relatives, or intimidated witnesses looking forward to the day when the trauma of giving evidence is behind them, would not agree that four months is a short delay. They would want the trial completed as soon as possible. What of a defendant remanded in custody? He, too, would want justice to be done with appropriate speed. While it may be true that if found guilty he will get credit for the time that he has spent inside, not all those tried are found guilty. Therefore, in some circumstances, people could be locked up for longer than necessary, even if they are not found guilty. Moreover, such a delay would leave the whole issue of anonymous evidence in legal limbo. That is not a sensible or acceptable way, in my judgment, to proceed.
We have, I believe, a sensible way forward that will meet the concerns of the right hon. and learned Member for Sleaford and North Hykeham about the speed with which the timetable motion seeks to take the Bill through all its stages. As I have mentioned, my right hon. Friend the Lord Chancellor has given a firm undertaking that he will repeal and subsume the provisions of the Bill into next Session’s law reform, victims and witnesses Bill. That will allow further and fuller debate of these important provisions, but with the cover of the arrangements in this Bill to prevent the mischief of courts having no power to grant anonymity to witnesses in the intervening period.
I hope that I have explained the urgency that we face today.
Mr. David Heath (Somerton and Frome) (LD): I fully understand why the hon. Lady wants to accelerate proceedings. I have listened carefully to her, but I do not entirely understand why the apparent desire to finish proceedings at 10 o’clock should take precedence over the need to scrutinise every clause of the Bill. Why do we not simply accelerate but maintain our proceedings until such a time this evening when every clause has been properly scrutinised and every amendment has been considered?
Maria Eagle: I am grateful to the hon. Gentleman for those comments. The workings of the usual channels have always been a complete mystery to me, as I have never been a part of them, but there we are. There has been some sort of agreement and it is incumbent on us to get along and debate the important points of the Bill as swiftly as we can. On that basis, it is probably time I resumed my seat.