Social Security, Occupational Pension Schemes and Statutory Payments (Consequential Provisions) Regulations 2007

Without going into the most abstruse detail, I do not know how I could identify the nature of the processes of consultation and effective changes, but I assure the noble Baroness that the coherent set of regulations we have today are the result of some considerable work. We took into account both the drafting refinements from the original draft regulations and the consultation process. I was seeking to emphasise to the noble Lord, Lord Newby, that he will know that from time to time a range of strategies are pursued, in which remuneration is offered to often rather well remunerated individuals in any case by a whole range of stratagems to avoid tax contributions. We all remember the bottles of wine and the gold bars at one stage. We are now looking at schemes that are different from those. Our strategy is designed to reduce the taxation impact of certain kinds of bonuses. The Government’s objective is quite straightforward. If an individual receives this remuneration by dint of their employment, they owe tax on that, and the employer also has an obligation to meet any payments with regard to contributions on it. That is an item of principle. I do not think we disagree across the Committee on this matter. It may be that the noble Baroness has a strategy for how one could anticipate such developments in a way that one would develop legislation that was all-encompassing, farsighted and all-foreseeing but still short enough for the noble Lord, Lord Newton, elsewhere to bring it within a compact Act with regard to the finance legislation as a whole, and all this would be encompassed by a skilful Government. We have the best skills to deploy at our disposal. We have very clear objectives, and we are prepared to put the resources in to reach them. But we do not find it quite as easy as the noble Baroness does; perhaps because she is putting the proposition from opposition while we are dealing with the reality in Government while also meeting all our requirements in terms of consultation and proper response. I hear what she says. I agree with her entirely that regulations with a retrospective aspect to them are more urgent than may be the case with other regulations. We ought to seek to minimise the time factors involved, because by definition the aspect of retrospection is bound to increase as time goes on. I share that objective with her. I am merely indicating that it is no easy matter to produce regulations consequent upon legislation as significant as the 2006 Act. I also emphasise in this context that the regulations are now in place. That has given us the chance to present with great clarity what we are seeking to achieve. That may help to meet the point that the noble Lord, Lord Newby, identified. Existing tax laws do not appear sufficiently comprehensive or well enough drafted to inhibit tax avoidance strategies. We have made it absolutely clear that we intend to be firm in this area. We have legislation on this, which the regulations reinforce. That sends a very clear signal to the wider world that no avoidance strategy is likely to be successful. We hope that we shall see a great deal fewer such strategies. We all recognise that in the past year certain members of our society have received significant bonuses. Everyone wishes those who rise to a high position in society or in the City well. Nevertheless, we expect them to meet their obligations in full and not to become involved in stratagems to avoid tax, or for employers to avoid paying national insurance contributions. I accept that the noble Baroness wishes that we had reached this point six months earlier. However, here we are on this day of grace with this coherent set of regulations which, if endorsed by the Committee, will enable us to act effectively to achieve the objectives that Her Majesty’s Government desire. On Question, Motion agreed to.