Finance Bill

I was expecting more, but the consensus appears to have broken down at an early stage in the afternoon. I am sympathetic to the principle behind new clause 2. It is important to have openness and honesty about retrospective taxation and, in fact, any changes in the tax system. I was reassured by the comment of the hon. Member for Wycombe (Mr. Goodman) that the objective of the new clause is not to remove at a stroke all retrospective taxes, but to state as a principle that there should be an effort to ensure that such taxes are introduced for all the right reasons. I am sure that the hon. Member for Bishop Auckland (Helen Goodman) remembers that both this year and last year the Finance Bill included some retrospective taxes, which it was necessary to introduce without consultation because of significant abuses of the taxation system and loopholes that needed to be closed. On that basis, such measures are entirely necessary. However, there are examples—air passenger duty is not the only one—where it is not clear whether a loophole needed to be closed or that avoidance was taking place. On air passenger duty, people who paid for their tickets before the changes were introduced found out that there was an additional charge only when they arrived to catch their flights. It would have made much more sense to examine whether the measure fulfilled the criteria before its implementation. Retrospection might cause problems for taxpayers in two other areas, which might need to be looked at more widely, and where greater openness might be preferable. The first concerns the agricultural buildings allowance, which was dealt with in this year’s Finance Bill, changes to which will have an impact on investment decisions that were made anything up to 24 years previously. In theory that affects only taxation going forward, but it will have an effect on decisions that people made many years previously with regard to buildings that it is not easy to dispose of if the tax liability represents a significant problem to the businesses involved. I hope that the Minister will be able to assure us that there is at least agreement in principle that clarity on such issues would be welcome. The second area where there are concerns about people being caught by changes to the taxation system as a result of a lack of awareness arises from changes in last year’s Finance Bill to the inheritance tax treatment of trusts to which people had signed up. To this day, many people may not realise that they have been caught by some of those changes. Those are our broad areas of concern and we are sympathetic to the point made by the hon. Member for Wycombe.