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Dawn Primarolo: The right hon. Gentleman's view about fairness is central. The overwhelming majority of taxpayers pay their tax. Following repeated attempts by this Government and the last Government to stop inheritance tax avoidance schemes, we are giving the taxpayer two options. We are not backdating the provision. Under the Bill, either there will be a charge to income tax on people's new arrangements or they can revert to inheritance tax and pay what is due. That will start in 2005. As I have said, there is no retrospection. All Governments change laws in Budgets, and that is all that is being done in this case.
I am sure that the Paymaster General has studied rhetoric. If we agree with the first of her statements, everything else becomes rhetorical truth. Her first statement, however, is not correct. That first statement was "We, in retrospect, have decided that something that was perfectly acceptable at the time is now unacceptable." To unbundle a past decision is not the same as not having made the decision at the time. If
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what the Paymaster General has said were true in the past, my constituents and others might well have made a series of different decisions.
Equity is not just about saying, "A lot of people think that a lot of other people are getting away with it, and we are going to stop a lot of people getting away with it." Equity is about clarity, and clarity is not something that can be introduced in retrospect. Clarity is about where we are now. The Government are saying that, because they would prefer that people do not do what they did back then, they insist that they undo it. But of course, such people are not in a position to make arrangements of the kind that they might have made in 1970. That is why the provision is retrospective; indeed, it would always have been regarded as such until this Government invented a new definition of retrospection that certainly has not been accepted by the law thus far.
Mr. Burnett: The right hon. Gentleman is making a perfectly valid point: that because of this provision, transactions entered into after 1986 that would have been free of tax will now be subject to tax, one way or another. If that is not retrospection, I do not know what is.
Mr. Gummer: The hon. Gentleman makes the point clearly and I hope that the Paymaster General will think this issue through. In terms of the moment, decent people made particular decisions that were legal. Now, many years later, they are being told that, one way or another, as a result of those decisions, they will be taxed, yet when they made them they would not have been taxed. Had they known at the time that that would happen, they might well have done all manner of things differently, but they cannot now do so because of a decision that was perfectly proper and legal when they made it. Whether the Paymaster General likes it or not, the provision is in that sense retrospective.
I am happy for the Paymaster General to say that she believes in retrospection and considers it perfectly reasonable, but she would be wrong. Such an argument is offensive, but what is more offensive is for her to argue that the provision is not retrospective and that we should therefore accept it. It is a great pity that she has taken that line.
Complexity is indeed the proper word to use in respect of this provision. It is difficult to accept the argument that the people affected are those who have access to advice and are familiar with such matters. Certain people do not fall into that category. There are those whom the Paymaster General suggested need not be worried about the provision, even though they have never had help from specialist advisers. I would be happy to accept the Paymaster General's argument if she were saying that in no circumstances would such people be charged. However, she said that they would not normally be chargedthat it is "unlikely" that they would be charged.
There is no word in the English language more frightening to anyone who has been a Member of this House for more than two minutes than the word "unlikely". Let us remember the number of Ministers
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both Labour and Conservativewho have told the House that a certain thing was "unlikely" to happen. I remind the Paymaster General of what was said about the European convention on human rights. I was not one of those who took an extreme view about it, but it must be said that a lot of "unlikely" things have become very likelyas in certainas a result. Curiously enough, in the courts, people are not being given the assurances that they expected in that regard.
If the Paymaster General were to say that the charge will not happen, there would at least be some reason to suppose that she has taken proper advice. But she has used the word "unlikely", and I still wish to stand up for those who cannot rely on any advice other than hers. Such people deserve from her a statement that is without reservation.
The real reason why I find the whole Bill and the various amendments to it profoundly distressing is that, as a result of such legislation, it will be even more essential for people who own a house to obtain professional advice.
I will stray for a moment into the court of the hon. Member for Wolverhampton, South-West (Rob Marris) to say that I do have a prejudice about the profession of solicitors. I think that there are too many of them, that they make too much money and that their operations should be restricted by having laws that are clearly comprehensibleinsofar as it is possibleto all of us.
There is another profession about which I have even greater doubtsthe accountancy profession, which has been given more jobs under the present Government than under any previous Government ever. The opportunities for accountants to make money have been raised by the constant complications introduced by the Government, but I want those accountants to earn their money in useful ways.
I believe that what brought down the Roman empire was not, as we all know, sodomy but a very significant increase in bureaucracy and in the number of people who did not actually earn wealth. The Government are great organisers of people who do not earn wealth. I am not talking just about 600,000 more civil servants, but about all the others besides who make money without making wealth. That is why I want a simpler system and why I support the proposals.
Rob Marris: I am sure that you, Mr. Deputy Speaker, would not let us stray too far into the decline and fall of the Roman empire, but the undermining of the rule of law was what led to the decline, as evidenced by the sack of Rome by the Visigoths. I declare myself to be a solicitorthough a non-practising one because, unlike many Conservative Members, I do not believe in moonlightingand solicitors are essential to the rule of law.
My point about realty was that almost all those who engage in transactions involving its sale or lease do so with legal advice, and that the right hon. Gentleman's Government tried to simplify it by getting the solicitors out and introducing what became known as registered conveyancers. I venture to suggest that it is still the casethough I cannot prove it without going to the Librarythat well over 90 per cent. of the realty transactions in England and Wales, and
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probably in Scotland, are carried out with professional advisers, either solicitors or licensed conveyancers, in attendance.
Mr. Gummer: The hon. Gentleman makes my point. Those people have their professional advisers at a particular point in time. When there were such advisers, professional advice was given, which in large measure seems to have been true. The Government are changing the rules and professional advice may not be necessary at this point. Curiously enough, these people feel that everything is all right. They have had their professional advice and think that things are okay. They do not know that the Government have shoved into the legislation all these complicated matters that totally change their position retrospectively. If they get frightened, perhaps with no need, what do they have to do? They have to go again, perhaps 20 years later, to professional advisers to secure the latest deal.
Those people have never had to do that before in these circumstances. What happened in the past was that the information was necessary only if something was being done afresh. What is wrong is that the professional advice is necessary when something is not being done afresh. That is why the provision is manifestly retrospective. It does not need to be argued in the delicate way of the Paymaster General. The truth is there. Professional advice has to be got when someone is not doing anything. That is retrospective.
I have expressed my concern about the professions in a fairly jokey way, but I mean what I say about the weight that the Government place on them. The amendments are designed to help a little with the problem of the weight that the Government are placing on the productive economy.
I am one who believes that Members of Parliament are better off if they do something else outside this House because it makes them a bit more in touch. Otherwise they have only their memories and theories. I wish that the hon. Member for Wolverhampton, South-West were practising as a solicitor because he would then be able to tell us a little about the real world. It is about time that we fought on that basis. I feel very strongly about it, as do my constituents. It is all very well for the hon. Gentleman to say what he did, but the fact of the matter is that there are too many people who earn their living without adding to the wealth of this nation. A system that means that people need all sorts of help to get through their lives is going to be expensively top heavy.
The proposals in the Bill are complex, unfair and retrospective. They will impose additional costs and reduce the country's effectiveness by making life unnecessarily complicated for ordinary people. The Paymaster General cannot get away with that. She is part of a Government who cannot get houses built and whose policies in other areas have increased house prices significantly. It is her fault that nothing has been done about inheritance tax levels to deal with that.
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That is a great pity, as Britain desperately needs to be competitive. The Government are not in the real world: their members have not had to live in the real world for a long time. They have not had to deal with ordinary people in a detailed way, and so do not realise how difficult the proposals will make their lives.
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