Finance Bill

As always, I very much appreciate advice and guidance from more experienced Members of the House, but I will go on. In the absence of firm data about those who are likely to be affected, let us take time to undertake a thorough study, and hold off on a potentially damaging change until we are fully informed of its consequences. I am not advocating complacency as a solution, and neither is the amendment, but year after year we see well-intentioned changes fall victim to the law of unintended consequences. There is a proverb involving fools and angels that is probably of some use in this instance, and if the Government claim that they have not rushed in, the Minister will already be able to answer all the questions posed by the amendment. My second point is about the adequacy of the proposed solution. In his written evidence to the Treasury Committee, John Whiting, to whom the hon. Member for Twickenham (Dr. Cable) referred, commented instructively that,"““more discussion is needed to ensure the targeting is precise with no collateral damage.””" That ““collateral damage”” is of most concern to the Opposition. IT contractors often work through managed service contracts, and the industry will feel the full force of the changes. As one contractor said in his response to a poll by an industry website:"““I have no idea why I have to play this game; in most other countries the taxation is far, far simpler for temporary professional work.””" As we all know, small business people, unlike large businesses, have much less mobility: they cannot go overseas; they are stuck here with whatever the Government throw at them. We are quickly into dangerous territory, because anti-avoidance measures sooner or later come down to subjective moral judgements about ““fair shares”” or ““genuine”” companies and so on. But when the ““collateral damage”” is ordinary people—the constituents of the hon. Member for Wirral, West (Stephen Hesford), the hon. Member for Twickenham, my hon. Friend the Member for Chipping Barnet (Mrs. Villiers) and even mine in Braintree—who may be blissfully unaware that they have transgressed against the Revenue, there is surely some room for caution, if not for outright forbearance. That leads me to my third point, on the problem of publicity and awareness of changes that, by any estimation, will affect a great number of people. The amendment proposes a delay for further study—a delay that will also offer the Treasury a further opportunity to ensure that all those who work through managed service companies are fully apprised of the changes. I appreciate that the Treasury needs to prevent forestalling when dealing with anti-avoidance provisions, but that need must be balanced against the potential impact on a large class of ordinary workers. The Treasury’s consultation document admitted that there are cases in which workers do not benefit from operating through managed service companies and do not understand the implications of doing so. It admits: "““HMRC compliance units have anecdotal evidence of this happening to vulnerable workers such as recent immigrants.””" There is also a further warning on the infringement of employment rights represented by coercing workers into managed service companies. As the Institute of Chartered Accountants submitted to the Treasury Committee,"““we are concerned that the workers employed by MSCs do not usually have a choice when they accept work, about how the engagement is structured. Indeed many will not even realise that they are involved in MSCs.””" It cannot be right to press on regardless, with the prevention of forestalling the only justification, and I have no hesitation in supporting the amendment tabled by my hon. Friends pressing for a full report on the various impacts of schedule 3.