Clause 48 - Disclosure of information contained in land transaction returns

Finance Bill – in a Public Bill Committee am 2:45 pm ar 30 Mehefin 2005.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Mark Francois Mark Francois Shadow Paymaster General 2:45, 30 Mehefin 2005

I beg to move amendment No. 93, in clause 48, page 40, line 15, after '1988', insert 'and'.

Photo of Frank Cook Frank Cook Llafur, Stockton North

With this it will be convenient to discuss amendment No. 94, in clause 48, page 40, line 19, leave out from '1977' to end of line 21.

Photo of Mark Francois Mark Francois Shadow Paymaster General

Thank you for your understanding earlier, Mr. Cook.  

The amendments seek, in effect, to remove subsection (1)(d) of new section 78A, which as it is drafted provides a broad power for the passing on of information disclosed in land transaction returns. Clause 48 enables information on stamp duty land tax returns to be made available to the persons determined by Ministers by regulations—principally the Valuation Office Agency in Great Britain and its equivalent in Northern Ireland. However, new section 78A(1)(d) expands the definition considerably to include the potential use of such information:

''by such other persons or for such other purposes as the Treasury may by regulations prescribe.''

The explanatory notes on the clause say:

''The Inland Revenue was, and HM Revenue and Customs is, under a duty of confidentiality as regards information in its possession relating to the affairs of individual taxpayers. It follows that disclosure of such information is not permitted without statutory authority.''

So far, so good. It is nice to have that reassurance, but I am concerned that, in effect, the clause confers that statutory authority to pass such information to anyone whom Ministers deem fit to have it for whatever purpose they deem necessary at the time. That is an extremely broad definition that our amendment would rescind by returning to the narrower definition in the rest of the subsection.

On a related point about timing, subsection (5) points out that the powers under the clause may

''come into force on such a day as the Treasury may by order appoint.''

That could happen very quickly if the Treasury so chooses. However, the Economic Secretary's letter to the Committee of 16 June says:

''The Treasury have no plans at present to exercise this power.''

That letter then provides partial reassurance by promising full consultation with practitioners and other interested parties before any such changes are made, and holds out the potential for publication of a regulatory impact assessment in such circumstances. That is all well and good as far as it goes, but it still prompts the question why Ministers are so keen to bring in such a broad power to pass on taxpayer information given their present claim that they are reluctant to use it.

Perhaps the Minister could provide further information in his reply as to what is really behind all this to persuade we on the Opposition Benches not to press the amendments to a vote. As things currently stand, we are genuinely concerned by the brevity of the subsection.

Photo of Stephen Williams Stephen Williams Shadow Minister (Health)

Just for novelty I thought that I would say something.

We share the misgivings of the Conservative Opposition and wish to probe the Government's intention behind the insertion of new section 78A(1)(d) into the Finance Act 2003. I think the hon. Member for Cities of London and Westminster made a passing reference to Trafalgar earlier this afternoon. Of course, Nelson's fleet was partially financed by an innovation of William Pitt called   income tax, which was so unpopular with our predecessors that they insisted that no official of the Crown should be privy to every source of an individual taxpayer's income. That is largely why we have the schedule system of income tax that is to this day remains relevant in corporation tax. However, it looks like the subsection sweeps away the important principle that information should be provided by a taxpayer to the Government for a defined and narrow purpose, and for that purpose only.

It is a puzzle why new section 78A(1)(a), (b) and (c) narrowly define which officials of the Valuation Office Agency should be allowed to have this information, and why the Government feel it necessary to add a broad scope under paragraph (d) for information to be provided to all other persons whom the Treasury may prescribe. We already know that many taxpayers and citizens are sceptical of official forms that they have to fill in for the Government. For example, people are often reluctant to give full details on census returns because they are suspicious of the use that government will make of it. The clause is another example of that. As the hon. Member for Rayleigh said, it appears to give the Government very wide powers to use information for whatever future purpose they might determine.

Photo of Mark Francois Mark Francois Shadow Paymaster General 3:00, 30 Mehefin 2005

I am following the hon. Gentleman's argument, and it seems to me that he is broadly in agreement with us. As a member of the blue fleet, may I ask him as a member of the yellow fleet whether, if we were to press the clause to a Division, he would combine with us to assault the red fleet?

Photo of Stephen Williams Stephen Williams Shadow Minister (Health)

Yes, I suppose we would, and with all guns blazing. If we were to liven up proceedings thus, it would help to keep us going. However, in proposed new section 78A, I would like the Minister to explain why, following the narrowly defined powers in subsection (1)(a), (b) and (c), paragraph (d) provides such wide powers. Why do the Government need such a broad definition of that power?

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

I welcome the Liberal Democrats to the Committee. If they had been leading us in the battle of Trafalgar, we would never have stood a chance of winning because they would not have turned up.

Reassurance is required for the points made by hon. Members and I will endeavour to supply it. I appreciate that there is concern that the clause gives powers that are too wide ranging. On the timing issue, I assure Members that we feel that it is important to consult thoroughly, and we will do so; we have no intention of rushing this legislation through.

The purpose of clause 48 is to preserve the existing situation whereby information on land transaction returns can be used by the Valuation Office Agency in Great Britain and the Valuation and Lands Agency in Northern Ireland for various purposes, including keeping valuation lists for council tax and rating purposes up to date. There is nothing new about provisions permitting the disclosure of such information; they have existed since 1931. However, we recognise that over time—you may be able to   confirm this, Mr. Cook—the information requirements of the VOA and the VLA might change, and it is in the interests of all property owners and tenants that the two agencies continue to have access to high-quality information.

The clause includes a power to vary by regulation the persons to whom information may be disclosed and the purposes to which information may be put. For example, legislation currently permits information to be disclosed in the context of an appeal against a council tax valuation, but only in England and Wales. It might be appropriate to permit disclosure in the context of an appeal in Scotland, or an appeal against a business rates valuation. The use to which the VLA in Northern Ireland can put the information is restricted, as, unlike the VOA, it is not part of HMRC. It might be appropriate to extend the permissible uses, so that the VLA can provide a better valuation service to Government Departments in Northern Ireland.

I appreciate the concerns of the hon. Members for Bristol, West (Stephen Williams) and for Rayleigh about the disclosure of taxpayers' confidential information. However, much information about property transactions—for example, about purchase prices in Great Britain—is already in the public domain. It certainly is not our intention to allow the disclosure of information that is only of interest to HMRC; I hope that that reassures hon. Members. I can also assure the Committee that any regulations will not permit the disclosure outside HMRC and the valuation agencies of any personal information about the parties to the transaction, such as names, addresses, telephone numbers or tax references, nor will they permit disclosure outside HMRC and the valuation agencies of information about the amount of stamp duty land tax paid or payable or about any relief from that tax that has been claimed.

I hope that I have been able to reassure hon. Members, and that the hon. Member for Rayleigh will withdraw the amendment.

Photo of Mark Francois Mark Francois Shadow Paymaster General

I have listened carefully to what the Economic Secretary has said, but I am not entirely convinced. The amendment does not stop information being passed on to the respective valuation office; it just stops it being passed on much more broadly by ministerial fiat, by virtue of regulations that we do not have in front of us now. There is no suggestion that if our amendment were agreed to that the valuation officers would not be able to do their job: they will, and we are not trying to impede that process. We are trying to ensure that Ministers do not slip into the Bill a much broader and more wide-ranging power that is indicative of a trend that runs throughout the Bill.

A point made in earlier sittings by my hon. Friend the Member for Runnymede and Weybridge was that there is a trend for the Government to legislate broadly—giving themselves Henry VIII powers in certain clauses—but to provide some reassurance on the record when such matters are debated. Our preferred method would be to draw the legislation tightly in the first place so that those reassurances are not required.  

I have listened to the Economic Secretary, but he has not convinced me so I give him notice that we on the Conservative Benches intend to engage the enemy more closely and will press this matter to a vote.

Photo of Stephen Williams Stephen Williams Shadow Minister (Health)

Following on from what the hon. Gentleman said, the Economic Secretary gave good reasons for paragraphs (a), (b) and (c), but he did not address the need for paragraph (d). I should like him to return to that.

He said that since 1931 the stamp duty office has been able to pass to the valuation office details of house prices. I did not know that but it may be true. However, it could not pass on to income tax inspectors, for instance, somebody's purchase price for a house, whereas under the power in the Bill it seems that all departments of the Inland Revenue could be privy to information about people's purchasing power as they buy property. That could lead to an investigation against somebody's self-assessment income tax return, whereas at the moment the Inland Revenue would not be privy to that information.

Will the Minister address the question that the hon. Member for Runnymede and Weybridge and I asked him? Why do we need the broad powers in paragraph (d), rather than in paragraphs (a), (b) and (c)?

Photo of Ivan Lewis Ivan Lewis The Economic Secretary to the Treasury

As far as I am aware the purchase price of a property is already in the public domain at the Land Registry, so I am not sure what the hon. Gentleman is getting at. In the interests of all Committee members, and since the hon. Member for Rayleigh wants to engage the enemy, Mr. Cook, let's get engaged. [Laughter.]

Photo of Frank Cook Frank Cook Llafur, Stockton North

There are some quite astonishing questions coming up in this Committee.

Question put, That the amendment be made.

The Committee divided: Ayes 8, Noes 12.

Rhif adran 4 Nimrod Review — Statement — Clause 48 - Disclosure of information contained in land transaction returns

Ie: 8 MPs

Na: 12 MPs

Ie: A-Z fesul cyfenw

Na: A-Z fesul cyfenw

Question accordingly negatived.

Clause 48 ordered to stand part of the Bill.

Clause 49 ordered to stand part of the Bill.