Finance Bill

I wish to speak briefly in support of the principle of good practice for retrospective taxation enshrined in new clause 2. I draw Members’ attention to my entry in the Register of Members’ Interests. Debating the principles of retrospective taxation reminds me of the heady days of Standing Committee D considering the National Insurance Contributions Bill. The debate revolved to a large extent around this principle and its boundaries, although, as we found out, the principle was being made up on the hoof and the boundaries were anyone’s guess. Fine wines and platinum sponges featured strongly, and they certainly made for hedonistic debate, although since the latter have a more prosaic function in catalytic converters, it is perhaps appropriate that the catalyst for new clause 2 was the introduction of retrospective environmental taxation. I spoke then about the dangerous precedent of backdating tax changes to coincide with an expressed intention to legislate. We should not be encouraging a state of play whereby tax changes are effectively implemented by ministerial statement and then rubber-stamped by legislation at a later date. Worse still, we should not require sections of the financial services industry routinely to thumb through Hansard to check whether the Paymaster General has said anything threatening—which I know is not her usual practice, but which has occurred from time to time. I am pleased that subsection (4) addresses specifically the practice of announcing things to Parliament and using them as the peg on which to hang retrospective taxation. It might make for convenient government, but it sends all the wrong signals.