On a point of order, Mr. Speaker. Have you received any notice of a statement from the Secretary of State for Scotland on events surrounding the Gleneagles summit? I understand that there were outbreaks of violence in Stirling and the Perthshire villages this morning, caused by anarchist factions which should be roundly condemned, that road and rail routes to Gleneagles have been disrupted or blocked, and that the police have been unable to protect the right to hold legitimate and approved demonstrations at Gleneagles today.

These are crucial matters, Mr. Speaker. They touch on public safety, freedom of assembly and freedom of speech. Would it not be appropriate, especially as the Scottish Parliament is not currently sitting, for the Secretary of State to keep the House involved and informed of developments as they happen?

The hon. Gentleman asked me at least two questions. [Interruption.] Order. Hon. Members who are leaving should not walk in front of the hon. Gentleman who has the floor.

The hon. Gentleman asked whether I had received an approach from the Secretary of State for Scotland; the answer is no. He also asked my opinion on whether the Secretary of State should come to the House. That is a matter for the Secretary of State's judgment.

On a point of order, Mr. Speaker. You will know that during the suspension of the Northern Ireland Assembly, which has continued for some time, the Government have resorted to the use of statutory instruments and Northern Ireland Grand Committees to conduct the governance of the nation. The problem is that neither of those two vehicles enables legislation to be amended in any way. On every occasion, there must be a simple yes/no decision.

Is there anything we can do, Mr. Speaker, to make the governance of Northern Ireland more democratic and flexible, rather than disrespecting the will, the interests and the preferences of the House because the Government are unwilling to give Northern Ireland politicians and representatives of the respective Northern Ireland parties any chance to amend legislation in the Chamber?

Further to that point of order, Mr. Speaker. May I associate myself with the comments made by the hon. Member for Montgomeryshire (Lembit Öpik) and put it to you that it is a denial of the democratic rights of the people in Northern Ireland for their representatives to be unable to move amendments and debate in detail matters that, were they to affect other parts of the United Kingdom, would be the subject of full legislative procedure? Is it possible for you to use your offices to encourage cross-party discussion, within the parties represented in the House, about alternative ways forward?

Further to that point of order, Mr. Speaker. I would like to support the hon. Gentlemen who have spoken. It is a great source of difficulty to us not to have the Northern Ireland Grand Committee meeting in Northern Ireland, which is because Social Democratic and Labour party Members are refusing to co-operate.

I do not want to be drawn into that particular argument. Obviously, as a parliamentarian, I want to see the democratic institutions being used throughout the United Kingdom. The matters that the hon. Gentlemen have raised, however, are not within my powers. I know, however, that the Secretary of State for Northern Ireland has been present in the Chamber, and will have heard the concerns expressed by Members from the parties concerned.

On a point of order, Mr. Speaker. You will be aware that last November the then Secretary of State for Health ordered a report into serious allegations that the British Pregnancy Advisory Service had been encouraging women to go to Spain to undergo abortions after 24 weeks. That report has now been completed and is with the current Secretary of State for Health. In response to several written questions about when that report will be published, however, she will only say that it would be inappropriate to comment further. Because of that, the Table Office refused to accept any further questions about the matter. Can you advise new Members how we can encourage Ministers to maintain the commitment to openness and transparency that they often trumpet, and how we can persuade them to publish the report and answer questions about it?

The matter that the hon. Gentleman raises is not a matter for me, except to say that his more senior colleagues will help him to draft more and more questions and to seek an Adjournment debate, on which a ballot takes place and on which I have discretion, but I make no promises. He must pursue those matters as a Back Bencher.

On a point of order, Mr. Speaker. I seek your guidance as to whether you have had an indication from the Foreign Secretary that he wishes to make a statement to the House about the size and composition of his ministerial team. Given the enormous importance, on which Members throughout the House agree, of tackling global poverty on the one hand, and the fact of the G8 summit at Gleneagles on the other, is not it extraordinary that the Minister exclusively responsible for Africa and answerable to this House has been sacked and replaced by a Minister who is not exclusively responsible for Africa and who is not answerable to this House?

The sacking of Ministers is absolutely nothing to do with me.

I beg to move,

That leave be given to bring in a Bill to amend the Representation of the People Acts in respect of deceased candidates.

Obviously, I should begin by declaring a recent interest in this subject. May I also say to you, Mr. Speaker, and to Members in all parts of the House, how grateful I have been for the welcome that I have received on my delayed return to the House? Although I realise that that welcome has been genuine, it has also been partly prompted by the fact that every Member knows that there but for the grace of God could he or she have gone. I seek to save any colleague in any part of the House from having to face the sort of long ordeal that I had to face in May and June. I am grateful to the Minister of State, Department for Constitutional Affairs both for her helpful encouragement and for her presence here today.

I shall explain briefly why I seek to bring in the Bill. On 1 May I became the victim of a law drawn up in an era when most election contests were either straight fights or three-cornered ones, before the proliferation of candidates that is now so common in almost every constituency.

There are four main defects in the law. First, the party affected by the death of the candidate has no chance either to field a substitute or to withdraw from the election. Secondly, the law does not distinguish in any way between candidates. If any one of the Prime Minister's 14 opponents had died, right up until the declaration of his result, he could not have been elected on 5 May. And if Catherine Taylor-Dawson of the Vote for Yourself Rainbow Dream Ticket party had died, there would have been chaos in Wales. She obtained one vote—presumably her own—in Cardiff, North, but she also stood in all three other Cardiff seats, polling a total of less than 300 votes in all four. If she had died, Cardiff would not have been represented in the House at all—and I remember the day, in 1974, when the Government had an overall majority of four. Colleagues should reflect briefly on the consequences of such an action. And what if a single candidate stood against every Member for the Cabinet and then committed suicide? [Hon. Members: "Any volunteers?"] Those are all practical possibilities.

Thirdly, the length of the delay is surely inordinate. Twenty-eight days after the proof of death the writ is reactivated, which gives a minimum of seven weeks' delay before the new election.

Fourthly, new entrants are allowed into the field. Although the new election is supposed to be, and indeed legally is, part of the general election, new candidates who had not signified their original intention to stand are allowed to enter.

My Bill does not propose to allow dead candidates to be elected, as in the United States, but I propose that the party affected by the death should have the choice of withdrawing or substituting a candidate, and that if necessary, a delay of 72 hours would be allowed for the reprinting of ballot papers.

I am also suggesting that the law should not apply to any independent candidate. An "independent" candidate—three of the Prime Minister's opponents were designated merely by that word—is by definition sui generis, unique, so if such a candidates dies, that is the end of the matter; nobody can substitute. That should not hold up an election. The law should not apply to any party that polled less than 10 per cent. in the constituency concerned at the previous general election, or less than 5 per cent. nationally, if the party did not contest the constituency concerned. That would solve the problem of maverick or mischievous candidates bringing constitutional chaos to the country. I also suggest that no candidate should be allowed to stand in more than one constituency.

My final main proposition is that the delay between the death and the new polling day should in no circumstances be more than 28 days. Last time such a thing happened was in 1951, and in those days the law said that no more than 14 days should pass. Perhaps that timing was a little tight, but 28 days should be ample even for a major party to find another candidate.

Finally, no new candidate who had not signified an intention to stand in the original election should be allowed to stand in the rescheduled election. Nor should any major party be allowed to substitute its original candidate without the certification of the returning officer that the reason is a genuine and acceptable one. I had a new Labour opponent and I am not suggesting that the reasons for the substitution were anything other than genuine and entirely acceptable, but I do not believe that substitution should be automatically allowed.

As it stands, the law at the moment qualifies for Mr. Bumble's famous description that the law "is an ass". It needs changing because the case that I have illustrated has brought to wider public attention what can be done by mischief makers or malevolent people. I am most anxious that, before the next general election, we should have tidied up the law.

What I am proposing is a partial repeal of that worst of all laws—the law of unintended consequences. I very much hope that all Members on both sides of the House will feel able to join me and my distinguished sponsors and give the measure a fair wind.

Question put and agreed to.

Before I formally read out the list of supporters, I want to thank my hon. Friend the Member for Lichfield (Michael Fabricant), to whom I am most grateful for having the opportunity to present my Bill today.

Bill ordered to be brought in by Sir Patrick Cormack, Mr. Alan Beith, Sir Menzies Campbell, Mr. Robin Cook, Mrs. Gwyneth Dunwoody, Michael Fabricant, Chris Grayling, Mr. Austin Mitchell, Mr. Mark Oaten, Rev. Ian Paisley, Ms Gisela Stuart and Sir George Young.

Representation Of The People (Amendment) Bill

Sir Patrick Cormack accordingly presented a Bill to amend the Representation of the People Act in respect of deceased candidates: And the same was read the First time; and ordered to be read a Second time on Friday 28 October, and to be printed [Bill 41].

I beg to move, That the clause be read a Second time.

With this, it will be convenient to take new clause 8—Inheritance Tax (No. 2)—

'The Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 (S.I., 2004, No. 2543) are amended, in Regulation 6, line 4, by omitting "must" and inserting "may".'.

New clauses 1 and 8 take a slightly different approach to a problem while delivering, in essence, the same outcome. I shall explain during the course of my remarks why we have chosen to table two different solutions to the problem that we have identified.

New clause 8 amends the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004—a snappily named little piece of secondary legislation—that was made with respect to section 256 of the Inheritance Tax Act 1984. It is designed to amend the provision by omitting "must" and inserting "may", thus making the delivery of a return permissive. New clause 1 adopts a rather more radical approach by disapplying regulations 6 to 10, dispensing with the requirement for returns altogether.

The regulations that the new clauses amend make provision in relation to the delivery of accounts and other information for inheritance tax purposes. As is often the case, the 2004 regulations were presented as a deregulatory measure—and to some extent they are. Prior to the 2004 regulations—[Interruption.] Judging by the noises off, Mr. Speaker, I suspect that we have a result from Singapore. Before those regulations, estates just below the inheritance tax value were required to deliver a full account to the Revenue.

On a point of order, Mr. Speaker. Please forgive me for interrupting the hon. Gentleman, but I am sure that he would like to know that the successful bid for the Olympics is London. [Hon. Members: "Hooray!"] I should like to take the opportunity, on behalf of the House and the country, to thank all those involved in the preparation and delivery of a fantastic bid. I am sure that all of us look forward to welcoming the Olympics to London, to ensuring that this country represents itself and the Olympic spirit to the very best of our ability, and that it makes us proud.

Further to that point of order, Mr. Speaker. May I associate the Opposition with the right hon. Lady's remarks and pay tribute to everybody who has worked so hard to ensure that this bid was successful? I pay tribute in particular to my noble Friend the Lord Coe—[Hon. Members: "Hear, hear."]—who has done so much to ensure that the bid was successful, and who has worked tirelessly with members of all parties and with members of the Government.

rose—

Order. I hate to put a dampener on any celebrations and I am personally delighted, but I cannot take any more points of order on this matter. There will be an opportunity for the appropriate Minister to come before the House and for us to discuss the matter fully. Standing Orders tell me that we must get on with the business in hand.

Thank you, Mr. Speaker. The challenge that the House now faces is how to make the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulation 2004 seem remotely interesting. But we will do our best.

The regulations that the new clauses seek to amend make provision for the delivery of accounts and other information for inheritance tax purposes. As I have said, the 2004 regulations were presented as deregulatory, and to some extent they are. Before their introduction, estates that were just below the inheritance tax value were required to deliver a full "account" to the Revenue, and were known as "excepted estates". Regulation 3 provides that a person is no longer required to submit an account under the terms of section 216 of the Inheritance Tax Act 1984 if the property is an excepted estate. This is in fact a perfectly sensible measure, reducing the compliance burden on some 30,000 estates valued between £240,000 and £275,000 every year.

However, what was billed as a relieving measure is not so in practice. As so often with this Government, the deregulating instinct has been swamped by the regulating instinct of bureaucracy, and what regulation 3 gives, regulation 4, I am afraid, takes away—in spades. The 2004 regulations provide that all estates below the inheritance tax threshold, and which are valued at more than £5,000, are now classed as excepted estates. Regulation 6 provides that

"a person who by virtue of these regulations is not required to deliver to the Board an account under section 216 of the 1984 Act . . . must produce the information specified in paragraph (2) to the Board in such form as the Board may prescribe."

In other words, the Government have scrapped the requirement to return an account for 30,000 excepted estates on form IHT200, but they have introduced a new requirement for some 300,000 estates per year. All those 300,000 estates are worth less than the IHT threshold and have no tax to pay, and all of them had no requirement whatsoever to make a return of any kind until the 2004 regulations were introduced. A requirement has now been introduced for those estates to make a return

"in such form as the Board may prescribe".

The prescribed form is in fact form IHT205.

I have a copy of form IHT205 in front of me. It is a four-page document in the typical style of a tax return. It is laden with complicated and intrusive questions—so much so that there are 23 pages of accompanying guidance notes and 16 pages of annexes. The information required by the form includes details on the deceased's occupation and that of surviving relatives; gifts given by the deceased over the past seven years; overseas assets; pensions; cash, including money in banks, building societies and national savings; value of household and personal goods; stocks and shares quoted on the stock exchange; stocks and shares not quoted on the stock exchange; insurance policies, including bonuses and mortgage-protection policies; money owed to the deceased; residences; partnerships and business interests; debts of the deceased; and funeral expenses.

That is just what a grieving relative needs! We should remember that this requirement applies to estates below the inheritance tax threshold—to so-called excepted estates. It would be quite interesting to know what the Treasury understands by the term "excepted". In case anyone is tempted not to treat this intrusion with the seriousness it deserves, the document warns that there may be

"financial Penalties if the answers to the questions or figures given are wrong".

So before one completes the form, one must make "full enquiries" as to the value of the deceased's household and personal goods. Estimates are explicitly unacceptable. Gathering this information could take a bereaved relative weeks or even months, and cause quite unnecessary stress at a time of personal grief.

Given the form's complexity and jargon-laden language, and given the difficulty that most lay people will have in distinguishing between the different classes of assets and liabilities that they are required to record in different parts of the form, many—if not most—relatives will seek the help of a solicitor in completing it. However, they will have no choice but to assemble the bulk of that information themselves, as a solicitor would be unable to aggregate it for them. Based on last year's figures, an extra 246,872 estates now have to file a return. Based on an average solicitor's hourly rate, and assuming approximately one hour's-worth only of work and correspondence, this provision will cost the average estate between £150 and £250. That equates to between £37 million and £62 million in legal bills alone each year, and for what? This is not a return of inheritance tax due; it is a regime that applies exclusively to estates below the inheritance tax threshold.

This is a massive and intrusive fishing expedition that involves trawling, collecting and storing information—in minute detail—on those who are supposed to be outside this particular tax net and free of the hassle of compliance. It turns on its head the previously accepted position that the details of an estate below the IHT threshold were not a matter for the Revenue.

New clause 1 removes the regulations requiring reporting of excepted estates on form IHT205 altogether, thus relieving 300,000 bereaved families each year of this insensitive and unnecessary burden. New clause 8 seeks to achieve the same objective by a slightly different route. It leaves the provisions in regulations 6 to 10 in force, but makes compliance with them optional by omitting "must" from line 4 of regulation 6 and inserting "may". Giving taxpayers "permission" to make a return to the Revenue might seem a curious approach, but we are told that in some cases, professional executors, with a view to their own potential liability, might wish to have the comfort of having made a return on IHT205, thus enjoying the Revenue's confirmation—if a notice has not been issued within a certain period under the regulations—that no tax is indeed payable.

So new clause 8 leaves the provision force for the benefit of those professional executors who wish to use it, while removing the element of compulsion for the rest of us. We have no difficulty with a solution to this problem that allows those professionals who want to make use of the provisions to continue to do so. Our purpose today is to ensure that this burden is not imposed on ordinary bereaved families who are seeking to act as executors for the will of a deceased person.

It is our contention that people who are dealing with modest estates—of as little as £7,000 to £10,000, and thus way below the inheritance tax threshold—should not be subjected to this additional burden at a time of bereavement or have to waste time and money completing a form whose only point is to feed the seemingly insatiable desire of the big brother state for information on every aspect of our lives.

Today, the Liberal Democrats and the Conservatives are speaking out together on inheritance tax. That must be an event almost as momentous as London's success in winning the Olympic bid. As a former London mayoral candidate, I welcome that success on my party's behalf.

The new clauses address a matter that exercises us very much. The Bill breaks a principle, referred to in the past by my hon. Friend the Member for Bristol, West (Stephen Williams), that the Revenue should not go on fishing expeditions and seek by intrusive means information that does not apply directly to its ability to levy tax. The new clauses would remove the information requirement in relation to people who the Government do not believe should be subject to inheritance tax. The Bill would require them to fill out extensive forms at a time of great bereavement to prove that no tax should be paid.

The Revenue's fishing expedition will expose almost no evidence of tax avoidance. The Chancellor has said with great pride on many occasions that only about 6 per cent. of the estates left after people die in this country are liable to inheritance tax. The vast majority are not liable, and I am sure that all parties share common cause that that should remain the case. The intrusive search for detailed information required by the Bill is therefore unacceptable.

The concept of "excepted estates" applies to estates worth £275,000 or less, or to transfers to a spouse. That should be the appropriate benchmark, and we therefore associate ourselves with the new clauses.

I hope that the House will excuse the pun, but I have grave concerns about proposals to increase the powers of the nanny state. Her Majesty's Revenue and Customs has all-seeing powers over British taxpayers from the cradle to the grave, and now in the afterlife as well.

I support new clauses 1 and 8 as a way to restore sanity to families and professionals who have to deal with the immediate effects of the afterlife and sort out estates after people die. That is a very distressing time, and the Government's introduction last year of statutory instrument No. 2543—the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004—made it immeasurably more distressing. As my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) said, that order extended the requirement to file inheritance tax return form IT205—which he illustrated so eloquently—on all estates worth more than £5,000. Essentially, that requirement applies to every estate that requires probate.

That is a huge extension of bureaucratic form filling. Previously, one could file a nil return for inheritance tax unless one was within £30,000 of the inheritance tax threshold. Now the form will have to be filed in respect of all estates of over £5,000, and very detailed information on the value of assets will be sought. That information will include details of household and personal goods, and so will require the valuation of the furniture and jewellery, for instance, in an estate. All of that information has to be provided after a full inquiry has been made.

I hope that my hon. Friend will forgive me for correcting him, but there was no requirement under the previous regime to file a nil return. People were required simply to swear a declaration that no tax was due.

I am grateful for that correction, and my hon. Friend is right to say that it was possible for solicitors to swear an affidavit, although they could choose to file a nil return.

The requirement would be reasonable if there was a good prospect that additional revenue would be raised, but my hon. Friend has noted already that most estates will be below the threshold and so will not qualify. As a result, the proposal has no revenue-raising potential.

What is the point of the proposed exhaustive form filling? How many people will be affected? My hon. Friend has given some statistics, but I have some other data that might help Labour Members understand the implications of what is being proposed. About 535,000 people die each year. I learned that statistic in a debate on fallen livestock, when the subject of human death was touched on. Only 35,000 estates pay inheritance tax, so it does not take great mathematical skill to work out that, if all estates were to be affected by probate, a very significant number of people will be affected.

Presumably, a not insignificant number of forms will land in the HMRC's offices, and will need to be checked. Some errors might be detected where there is a possibility that an estate goes over the threshold, but it is most likely that the forms will sit and gather dust after being collected. Therefore, many people in the bureaucracy will do very depressing work to no purpose.

My hon. Friend mentions bureaucracy, but is not the problem even worse than he sets out? In Committee, the Paymaster General talked several times about the need for anti-avoidance measures and the need to close the tax gap. Would not the money spent on this fishing exercise be better spent on other measures that would close the tax gap?

My hon. Friend makes a good point. The HMRC work force is being reduced, so we should look carefully at the tasks that people there are asked to undertake. I hope that the Minister will consider that point.

There is a wider point in respect of the extension of the inheritance tax net. House price inflation means that more and more people in my constituency are falling into its clutches, with estate values reaching the duty threshold despite the increase introduced in the Budget earlier this year. The Land Registry reports that the average price of properties sold in the south Shropshire district in the first quarter of the year was £208,000. In the Bridgnorth district, the average was £214,600. In the same period, the average price of detached houses—that includes most of the village properties in my largely rural constituency—was £264,000 in south Shropshire and more than £307,000 in the Bridgnorth district council area. As a result, the average houseowner in my constituency is likely to be caught by the inheritance tax threshold.

Inheritance tax was originally intended to be a tax for the wealthy. It is increasingly hitting the average householder across the country. That is certainly the case in the Ludlow constituency. It is time that we looked at the tax as a whole, and stopped tinkering with extending it at the edges.

My final point has to do with the direction in which the Government are heading in respect of inheritance tax, which is in stark contrast to the direction that our major economic competitors are taking. I was in Washington DC last month and I discovered that legislation is passing through Congress and they are debating whether the American equivalent of inheritance tax—they call it death tax, rather starkly—should be scrapped or substantially reduced. If our major competitors are planning to scrap inheritance tax, we should think carefully about whether it is appropriate for us to extend the net. Instead, we should perhaps accept the increasingly competitive nature of the global economy in which we all live and consider scrapping inheritance tax.

It is important to put on the record a few points before responding to the debate. Unfortunately, some of the contributions that we have heard show that hon. Members have failed to appreciate how the system worked under the rules that were in place and how it will work under the rules before us. The hon. Member for Ludlow (Mr. Dunne) mentioned nil returns, and I shall come back to the issue of excepted estates. We are talking not about the entire inheritance tax system but about a special procedure for very small estates that will remove them from the normal procedure. For some 30,000 estates, it will be necessary to fill in only a very short form instead of the full form, over which—incidentally—the Conservative Government were happy to preside for years and years.

The approach taken in last year's Finance Bill, which was accepted by the House, was for the smaller estates to be subject to the excepted estates procedure. One does not have to be a genius to work out that it is simpler if only a short form needs to be filled out—only four pages, of which the first page and a bit is simple and straightforward stuff such as name and address, followed by yes/no questions and an estimate of the value of the estate, to ensure that it is within the limits of the excepted estates procedure—instead of the full inheritance tax procedure. It is difficult to see why the Opposition have a problem with that.

Nil returns are not needed, because such estates do not require probate. I shall return to that when I address the issue of the Court Service, which is also part of the new procedure and further deregulates the process. All that is being asked of people is to indicate whether they have properly calculated the size of the estate to ensure that it comes under the smaller estates procedure.

I apologise to the House for not being in my place for the contribution by the hon. Member for Runnymede and Weybridge (Mr. Hammond), although I did hear the contribution by the hon. Member for Ludlow (Mr. Dunne). Based on what he said, does my right hon. Friend agree that the Opposition are really sniping at the fairness agenda? He gave the game away that the Tories' aim is to do away with inheritance tax.

To be fair to the hon. Member for Runnymede and Weybridge (Mr. Hammond), he did not say that he wanted to abolish inheritance tax, but it has been a feature of such debates in the past that Opposition Members have advocated that approach. The fairness that they are attacking is the fairness that says that whether an individual does their own return through the excepted estates procedure or a solicitor does a return on behalf of someone, the information required is the same and they are treated equally.

The Opposition also argue that the Government should enable taxpayers to represent themselves and not force them to have recourse to professional advice if that is not necessary. I suspect that the role of solicitors, and what they will be required to do, is at the heart of the Opposition's objection, rather than the information that has to be provided by the taxpayer.

The thrust of the argument made by my hon. Friend the Member for Ludlow (Mr. Dunne) was the form-filling culture—something that the Government pledged to change and reduce. Why will people be required to fill in forms for estates with a net worth of £5,000, which is a huge difference from the inheritance tax threshold of £275,000? Those forms will also require more and more bureaucrats to assess them.

I hope that when I explain how the process works now, the hon. Gentleman will realise that that question is based on a basic misunderstanding of what is required under the inheritance tax system. I am sure that he would accept that it is not unreasonable for any Government to require people to go through certain steps to ensure that the estate with which they are dealing should go through the excepted estates procedure, rather than the full inheritance tax procedure. That is all that is happening.

I find it odd that the Conservatives did not struggle with this point last year, because all these procedures were in last year's Finance Bill—[Interruption.] I appreciate that the hon. Gentleman is a new Member, but his Front-Bench colleagues are not. There has been wide discussion of the issue and none of the suggestions made have caused any difficulties. Indeed, the connection with the Court Service is a further deregulatory measure that has helped enormously.

Will the Paymaster General give way?

No, because I wish to reply to the points made by the hon. Member for Richmond Park (Susan Kramer). The hon. Gentleman can reply at the end of the debate.

The hon. Lady suggested that the proposals were fishing trips, but that is not the case. It is careless talk to accuse the tax authorities of that when they are simply requiring people to answer questions to ascertain whether an estate comes under the excepted estates procedure. People had to fill in forms before, so it is not as if that is new. The issue is the length of the forms and the information that is collected. We are talking about small estates, which have always, as I said when I began my remarks, had to show the Revenue that they were entitled to use the excepted estates procedure. Applicants without a solicitor filled in a form that was much like the present form, so it is not true to suggest that there are additional burdens.

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No, I shall not give way to the hon. Gentleman at this point.

New clauses 1 and 8 would both amend the 2004 regulations, known as the excepted estates regulations, which are subject to that procedure. The hon. Member for Runnymede and Weybridge said that the new clauses offered two different solutions. They are interesting solutions. One of his new clauses completely abolishes the procedure and the other gives the Inland Revenue discretion to decide when the procedure would work. As the hon. Member for Richmond Park was so concerned about fishing trips, I should, on her behalf, be a bit worried about supporting new clauses that allowed the Inland Revenue, or Her Majesty's Revenue and Customs, to decide in such cases.

New clause 1 removes the current obligation on executors applying for probate to give details to the Court Service about the deceased person, their assets and values, when using the excepted estates procedure, whereas new clause 8 is apparently designed to give HMRC discretion over which details have to be given in such cases. I would have thought that either solution was rather undesirable. The aim in either case—

rose—

The aim in either case seems to be—

On a point of order, Mr. Speaker. I am sorry to have to raise this on a point of order, but the right hon. Lady will not give way to me. She has, I fear, inadvertently misled the House by saying that new clause 8 would provide that the Inland Revenue has the option of requiring a return to be made. In fact, it gives the taxpayer the option of making a return if he chooses to do so, and I should be grateful if she could confirm that that is the case.

That is not a point of order. The hon. Gentleman knows that he will have an opportunity to reply to the Paymaster General and he can then put the record straight, if he so wishes.

Thank you, Mr. Speaker. What the hon. Member for Runnymede and Weybridge thinks his new clause may do and what I am advised by my officials that it will do, on which basis I advise the House, is always a matter for debate when amendments are proposed, but I shall repeat what I have said.

New clause 8 is apparently designed to give HMRC discretion over which details have to be given in those cases. The aim of both new clauses seems to be to reverse or modify the changes that the Government made last year, and to go back to the previous system whereby personal applicants—those not represented by a solicitor—had to fill in forms about the estate, whereas legally represented estates did not have to do so.

The House may find it helpful if I provide some details about the administrative arrangements for such estates. The excepted estates procedure is a streamlined process for estates that are relatively small and relatively simple. If the estate qualifies, the executors are allowed to fill in a simple form and get probate immediately. Delivery of the form to the Court Service also satisfies their inheritance tax obligations, so they need have no direct contact with HMRC—so how having no direct contact with HMRC empowers HMRC to go on a fishing trip beggars belief. Executors otherwise have to fill in a much more comprehensive form and send it to HMRC before they can get probate. The process thus provides links with probate, which ensures that it would be speedy for small estates, and relates exactly to the point that the hon. Gentleman made about the importance of speed in such cases.

The excepted estates procedure has always been restricted to estates that satisfy tests of size and complexity as set out in HMRC regulations. I think that we would all agree that eligibility should be limited in that way, as there is always a risk that large estates might slip through untaxed. We are getting the balance right by ensuring that there is speed for excepted estates, especially at probate, and that there is one point of delivery to the Court Service, with the ability to monitor the proper use of that process through HMRC.

The questions for this afternoon relate to how executors should establish that they qualify for the excepted estates procedure and what they have to tell HMRC about their workings. Before I move on to the detail of the changes that the Government made last year, it may help the House if I briefly describe the probate and IHT reporting system as it stood before the changes made in 2004.

Estates fell into three broad categories for reporting purposes. If the estate was worth more than £240,000, a full IHT return was required—not the short form in use at present. If the estate was worth less than £240,000 and the executor was a personal applicant, they had to fill in a short form very much like the one in use now. If the estate was worth less than £240,000 but a solicitor was acting for the executor, the executor simply had to swear an oath that the estate was worth £X,000 to demonstrate that it qualified for the excepted estates procedure. Under the old rules many executors had to fill in a full IHT return even though the estate paid no tax. The Government changed the rules last year primarily to bring most of those cases—about 30,000—into the excepted estates procedure, thereby reducing their compliance costs whether or not they were represented by solicitors. We moved them from the more complicated system to the excepted estates procedure. However, extending that procedure to bring in many more cases, many of them much bigger than those that were previously clearly eligible, increases the risk of non-compliance; so in striking the right balance, the Government took the opportunity to streamline the detailed procedure, improve co-ordination between HMRC and the Court Service, and update IHT protection against non-compliance.

As part of that process, the Government unified the two existing procedures for executors using the excepted estates procedure, so that they all now fill in the same short form whether or not they are advised by a solicitor. As I said, the form contains the minimum number of questions needed to show that the estate is entitled to use the excepted estates procedure and to allow HMRC to make a risk assessment.

The new clauses seem intended to reverse all those changes, so that some or all executors would be entitled to claim access to the excepted estates procedure without giving even basic information about the facts that would justify their using it. The Government's view is that that is misconceived. To qualify for the excepted estates procedure, executors have always been required to know the total value of the estate and key points about what it contains, and solicitors will always have to establish those basic facts.

The form that executors must now fill in only sets out systematically the questions that solicitors have been asking their clients already, before putting them through the excepted estates procedure. They are already collecting such information to satisfy themselves that their clients could use the excepted estates procedure. To be fair to solicitors, the overwhelmingly majority of them clearly took those obligations seriously. However, there have been indications that there were issues on different occasions, but none has been demonstrated with the new procedure.

I can assure the right hon. Lady that I feel unable to do any such thing, having heard no such thing.

Let me deal with a couple of specific points. The right hon. Lady suggested that it was bizarre that such issues were being raised now and asked why they had not been raised in greater depth during the consideration of the Finance Act 2004. She will have information to hand, but I understand that form IHT205 and the guidance notes for completing it were published only in November 2004, after the Finance Act 2004 had completed its passage. On the basis of what we have seen published, what we have seen in practice and what practitioners and, indeed, non-professional executors are reporting, we have sought to raise the issue today.

The right hon. Lady told the House that new clause 8 would give the Revenue the option to require a return. In response to my attempt at a point of order, Mr. Speaker advised me that I should address this question in my closing remarks. Perhaps the best thing that I can do is to read out the opening paragraph of regulation 6 of the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004, as it would be amended by new clause 8, and let the House decide whether or not she is correct. Paragraph (1) would say:

"Subject to paragraph (3), a person who by virtue of these Regulations is not required to deliver to the Board an account under section 216 of the 1984 Act of the property comprised in an excepted estate, may produce the information specified in paragraph (2) to the Board in such form as the Board may prescribe."

That does not suggest any doubt at all to me that the option lies with the taxpayer, not with the Revenue.

The right hon. Lady has confused the question of the change to treatment for what were approximately 30,000 excepted estates under the old rules—those estates that fell just below the inheritance tax threshold of between £240,000 and £275,000. I acknowledged quite readily in my opening remarks that the compliance burden on those estates has been reduced, by allowing them to complete the shorter—everything in terms of Inland Revenue forms is relative—form, IHT205, rather than the full return form, which is IHT200.

The right hon. Lady has deliberately ignored the fact that the definition of an excepted estate has been widened to include all estates above £5,000, which require probate. The practical effect is that, while 30,000 estates will enjoy a reduction in the compliance burden, some 270,000 estates, according to the most recent year's figures, will suffer an increase in the burden by having to make a return using IHT200.

Contrary to what the right hon. Lady says, the minimum number of questions required is not set out. I have already listed the questions that must be answered: details of the deceased's occupation and surviving relatives; gifts that the deceased has made; pensions; assets overseas; cash, including money in the bank, building society and national savings; value of household and personal goods; quoted and unquoted stocks and shares; insurance policies; bonuses; mortgage protection policies; money owed to the person who has died; residences; partnerships and business interests; debts of the deceased; and funeral expenses. That is not the minimum information required.

We understand the need for a return of information for estates that are just below the margin, but in broadening the scope of excepted estates under the 2004 regulations to include all estates that require probate which are below the inheritance tax threshold, the right hon. Lady has, deliberately or otherwise, swept into the net hundreds of thousands of very small estates and created a huge new burden, however she seeks to dress it up today.

By interchanging the old definition of an excepted estate, which refers only to the 30,000 estates just below the IHT threshold, and the new definition, which includes some 300,000 estates that require probate and are below the IHT threshold, the right hon. Lady has effectively thrown up smoke around the debate, but she has not answered the challenge that we have put to her.

The right hon. Lady says that all that is being asked is that people make a return to show they have done the calculation. Of course people must do the calculation before asserting that an estate is not chargeable to tax—a prudent person would always expect to do so—but sadly, for many small estates people will not have to spend very long computing whether the estate is worth £275,000; the question will be whether the estate is worth £10,000 or £12,000. In those cases, the imposition of completing such a form is an unnecessary and onerous burden at what will be a very difficult time for bereaved families dealing with these matters. I intend to ask my hon. Friends to support the new clause in the Division Lobby.

Question put, That the clause be read a Second time—

I beg to move, That the clause be read a Second time.

As Paul McCartney and John Lennon might have said, we are now reaching the end of the long and winding road of this second Finance Bill of the year.

When was it No. 1?

The song was No. 1 in the US in 1970, but that is another matter.

This complex and highly technical Bill is once more before the whole House, but the sparsely occupied Chamber means that it would be stretching credulity to suggest that Parliament is actively considering each and every aspect of the Bill. That is not to say that there has not already been careful consideration during the lengthyish Committee sittings. Our debate was sometimes heated, and on occasions that had little to do with the generally clement summer weather.

Her Majesty's Opposition have benefited from comprehensive briefings from an array of interested parties, including the Law Society, the Association of British Insurers and the Chartered Institute of Taxation. They have all provided us with useful ammunition with which to put forward our case as gamely as possible, given the circumstances.

As I said, we are considering the second Finance Bill to come before Parliament this year. The intervening general election provided us all with a welcome respite from endless Committee sittings and gave the Government an opportunity—a relatively small one, admittedly—to make minor amendments to their original proposals. I understand that tax practitioners have breathed a collective sigh of relief, not because of the apparently mouth-watering prospect of a second Finance Bill in a year, but because of their satisfaction that this year the Chancellor of the Exchequer has spared the tax practitioner fraternity from a Finance Bill such as that of 2004, which weighed in at a record-breaking 637 pages.

New clause 4 stems from concerns that have been widely expressed about the growing complexity of our tax laws. The amount of legislation grows greater and faster and let us be in no doubt that that is true of not only primary legislation, but the plethora of statutory instruments that appear with breathtaking frequency throughout the year. We hope to establish a tax law commission that would mirror the Law Commission and review and modernise UK tax legislation.

As the Minister will be aware, I am a relative newcomer to Front-Bench Treasury affairs and I have had something of a baptism of fire. This highly technical Finance Bill and the Regulation of Financial Services (Land Transactions) Bill have certainly kept me busy over the past month. I have no complaints about that, but in addition to grinding through legislation line by line, I have seen an ever-greater amount of guidance material, such as statements of practice, tax bulletins, concessions and frequently asked questions.

It is perhaps ironic that, in moving new clause 4, I need first and foremost to acknowledge the tremendous assistance that I have received from the indefatigable John Whiting, the tax partner with PricewaterhouseCoopers and past president of the Chartered Institute of Taxation. Without his help, I fear that even this new clause might never have seen the light of day. Although I do not detect too many tears at that prospect from either the Government Front Bench or, dare I say, their nearest and dearest in the civil service, it is important to put many concerns on the record during the course of what I suspect will be a brief debate.

A great deal of the seemingly exponential growth of the raw material that makes up our tax laws is clearly due to the increasing complexity of life and business. However, at the same time the tax authorities doubtless argue that they need continually to endeavour to plug what would otherwise be loopholes that could be exploited by tax planners and avoiders alike. A commission for taxation along the lines that we have set out would solve four main problems.

First, the commission would address complexity. UK taxation is meant to work along fairly simple principles: all employment income is subject to pay-as-you-earn and national insurance contributions; companies are taxed on their accounting profits at 30 per cent. after certain adjustments, or less if they have profits of less than £1.5 million in any year; stamp duty land tax is at 4 per cent. on property sales; and VAT on the supply of goods and services is generally levied at 17.5 per cent. How difficult should it be to enact tax law on the basis of those straightforward and simple principles? One needs only to witness the flat tax regimes of most Baltic states to realise that it should be relatively straightforward.

Was the hon. Gentleman on the trip?

I hasten to add that I was not on the trip, although I am sure that one could be arranged at some time in the future. I am glad that the Chancellor is not in the Chamber to hear me say that.

The UK Government have created a great collection of legislation that makes this country's tax regime one of the most cumbersome in the world.

Subsection (2) of new clause 4 outlines the purpose of the putative tax law commission, but I cannot see anything about tax avoidance. Does the hon. Gentleman think that any review of the tax laws should take account of tax avoidance?

I was rather hoping that the hon. Gentleman might have been the chairman of the all-party group on Estonia or something. Let me answer his point seriously. There is little doubt that much of what has been discussed during the consideration of the Bill—and previous Finance Bills, I suspect—has related to tax avoidance and ways in which we can try to find a balance between legitimate tax planning and contrived tax avoidance. The new clause would create an independent tax commission—that is important—and tax avoidance would be dealt with head on by the Treasury.

I hesitate to ask whether the new clause is an excuse for further trips to Estonia to build broader support for possible flat tax proposals. However, putting that to one side, do we not already have a tax law rewrite project? My memory is that that project, chaired by Lord Howe of Aberavon, would regularly send voluminous reports to the Government for consideration and that many of them would be taken into account when drawing up Finance Bills. Is the hon. Gentleman saying that the current tax law rewrite project is not doing a satisfactory job, or that he would like his commission to go beyond the remit of that project and start making policy, rather than just trying to simplify tax legislation and make it more effective?

The hon. Gentleman makes an entirely legitimate point. I shall address specific aspects of the tax law rewrite project later because it has not achieved quite as much as we might have hoped.

Someone needs to stand back and realise that when UK legislation on direct tax is bursting out of some four volumes of statute, something must be inherently wrong with the approach on writing and reforming tax legislation. It is worth noting several facts, such as the sheer number of personal tax returns that are filed incorrectly or late. A National Audit Office report last year said that such returns accounted for some 29 per cent. of all PAYE codings. The last consolidation Act on tax goes back 17 years to 1988. Government Members make a meagre contribution to Committee debates on Finance Bills, which makes it difficult to suggest that there has been full consultation on such matters.

Since 1997, the Government have introduced major new taxation policies on intangibles, share schemes and other employee-owned securities—they have done that several times—stamp duty land tax, the climate change levy, tonnage tax, IR35, transfer pricing, windfall taxes, derivatives, VAT grouping, international financial reporting standards, double tax relief, general insurance and substantial shareholdings. They have changed the date of payment of tax and introduced new policies on the taxation of pensions and enterprise investment schemes. Therefore, complexity is key to our concern and we hope that a tax law commission would rectify that.

It passes the simplicity test.

Yes, the title passes the simplicity and certainty test. Of that there can be no doubt.

The working party's report would be germane to the report mentioned in the new clause. Also, the Chartered Institute of Taxation has proposed the idea of a tax practice committee, which would, in concept, have three main functions: first, the oversight of the consultative process for new tax laws to ensure that new laws are properly consulted on, subject to anti-avoidance constraints; secondly, the proposing of sections of existing tax law in need of review; and thirdly, oversight of the tax law rewrite project.

The tax practice committee is envisaged as being a group that is drawn from all those involved with the taxation process—the professions, business, tax authorities and, hopefully, academia. As part of the review, commentators have called for the House of Lords to be given a greater role in the scrutiny of Finance Bills. I appreciate that that is a controversial idea—it was last tried 95 years ago—but it is an interesting proposal. For historical reasons, the House of Commons has had sole charge of money Bills since the Budget of 1909–10, but a second revising Chamber would have a part to play in improving the way in which tax law is maintained. We hope that that change could take place during the course of this Parliament.

It would be wrong to ignore the role that the other place could play. It has plenty of expertise, which would be useful in the consideration of tax changes, as one or two Ministers have realised in previous debates. The Lords cannot currently alter a money Bill and I am not seeking to go down that path. It was intriguing, however, to see the establishment last year of a Sub-Committee to look at administrative aspects of the Finance Bill. Its remit may be narrow, but we may wish to build on that. I accept the sovereignty of the Commons in matters of taxation. [Interruption.] I do not have much choice, I am afraid. It is time, however, to look again at the way in which tax law is put together and how we operate under the paramount rule of the Commons in this area.

I am trying to understand the nature of the hon. Gentleman's proposal. In the case of the Bank of England, we decided that independence was the right thing. In the end, with the support of Opposition Members—it took a little time—we decided that it was right to hand over the power to take month-by-month interest rate decisions to a group of independent experts. There is a material difference, however, between making monetary policy decisions with a single instrument and a single target and tax policy decisions. The hon. Gentleman is proposing to move tax policy decision making away from the House of Commons and elected Members of Parliament and instead asking independent experts to make policy decisions about tax. Is he proposing that Parliament should give up power in that way, not merely to unelected Members of the other place but to entirely unelected individuals?

The hon. Gentleman has misunderstood what we are trying to achieve. We think that establishing such a commission is a sensible way forward, given the sheer amount of taxation legislation and the fact that little of it is regularly reviewed. That does not mean that policy matters would be in the hands of that body. Its remit would be determined once it has been set up. No one would suggest that law policy should be made by the Law Commission. It makes recommendations about changes in the law and assists the Commons and another place to initiate debates. The Law Commission influences the agenda on an independent basis, and I envisage a tax law commission operating in the same way. However, there is a great distance between that proposition and the proposition that policy decisions should be made by such a commission.

I understand the concerns that have been set out, but I hope that the broad proposals that I have tried to set out will lead to a debate on the matter. Whatever route is eventually taken, the new clause aims to highlight the need for a mechanism for a proper review of our tax law.

I support the proposal for a tax law commission. If we had some weighing scales and put the current tax statutes on them we would find that there has been an increase of almost 50 per cent. since the influence of the hon. Member for Normanton (Ed Balls) began to be felt in the Treasury in 1997. I cannot believe that he thinks that the increase has had the desired effect. I accept that there is a tax law rewrite project, which has the desirable goal of helping to simplify matters, but the Liberal Democrats do not want policy to be determined by anyone other than elected Members of the House of Commons. However, the great ship of tax statute has become so barnacled that a short spell in dry dock with a good amount of scrubbing and cleaning is thoroughly desirable. The attempt to simplify, modernise, review and improve tax statute is an experiment that is worth trying. The Liberal Democrats therefore support the proposal. I hope that Government Members who are aware of the extent of tax statutes will do the same.

I noted the hon. Gentleman's seeming agreement about the commission with the members of the Opposition party—

The Conservative party.

I was trying to work out whether I could say that or not—the learning experience is hard. Does the hon. Gentleman also agree with the Conservative proposals on expanding the role of the House of Lords to scrutinise and interfere with tax policy?

The hon. Gentleman will know that our proposals for changing the role of the House of Lords go rather further, and start with a directly elected Chamber. I hope that he will have the opportunity to support them at some point. However, in a second-best world, the proposal to establish a tax law commission is a useful attempt to deal with the simplification of tax statutes. The Liberal Democrats usually sign up to campaigns such as Quash a Quango, so the hon. Gentleman might find it ironic that we are recommending the establishment of a quasi-autonomous non-governmental organisation.

Has any consideration been given to the appointments system for the future tax law commission?

The hon. Lady will see that the new clause would give the Treasury the opportunity to present details of the way in which the commission would work. I can see that the Paymaster General is warming to that excellent idea.

The hon. Member for Cities of London and Westminster (Mr. Field) was clearly attempting to spin things out to allow time for the hon. Member for Runnymede and Weybridge (Mr. Hammond) to return from lunch and introduce the next item on the agenda, but it is not necessarily right for me to participate in that game. We have dealt with the main objections to the new clause and the Liberal Democrats will support it.

I appeal to the House to support new clause 4 for common-sense reasons. We have an excellent Law Commission, but there is no rational explanation for having a commission that examines all laws except tax law. Why is tax law so different that the Law Commission's excellent record should not be applied to it? Can the Government explain what is so distinctive about tax as to justify that gap, when the rest of the law is covered by the process of review, rationalisation and simplification undertaken extremely well by the Law Commission?

As we have heard, one of the main advantages of setting up a tax law commission is that it could assist in the simplification of our tax law. The increasing complexity of tax is one of the major weaknesses in the Government's economic policy. I admit that it is not an issue that people are talking about on Barnet high street, but the complexity of our tax system is now doing significant damage to our economy.

The Chancellor has tended to use the tax system far too much for micro-management, to try to pick winners in terms of economic growth, and for social engineering. This has increased the complexity of the system exponentially since his stewardship of the economy began in 1997. That complexity has been compounded by the need to correct previous legislation, and by the Chancellor's attempts to hide the number of tax increases that he has chosen to inflict on the British public.

I am following closely what the hon. Lady is saying, but as the hon. Member for Cities of London and Westminster (Mr. Field) said, the tax law commission, if it came into existence, would not deal with policy. Does she agree that it therefore would not deal with her suggestions about social engineering and the like, even if the House accepted that as a proposition, because that is policy, not tidying up.

It is always difficult to draw a clear line between technical changes and policy, but the commission would make recommendations, they would be debated in the House and we would decide whether we wanted to go in that policy direction or not. It is as simple as that. The commission would make recommendations to simplify the system.

The tax system of any modern economy will be complex, but ours has reached heights of Byzantine complexity. The Finance Act 2004 holds the record for being the longest, with 328 sections and 42 schedules. The standard textbook on tax law hits the bookshops as a behemoth of about 11,000 pages. We need to address the problem urgently for a number of reasons, the first of which is lack of transparency, which my hon. Friend the Member for Cities of London and Westminster spoke about.

Complexity is such that the tax system is incomprehensible to the vast majority of ordinary people, and fairly unintelligible even to the most numerate of taxpayers. That is damaging for our democracy. People should be entitled to understand with clarity how much they are taxed, why they are being taxed and on what they are being taxed. Complexity also increases costs for taxpayers: it is costly for them to get the professional advice that they need to complete their tax returns and the paperwork needed to ensure that they are paying the correct amount of tax. The taxpayer suffers a double hit, because the public purse is put under pressure by the need to employ more civil servants and bureaucrats to tackle the complexity of the system.

Ministers will no doubt say that detail and the dense text of our tax law is needed to give certainty. In fact, complexity can lead to less certainty as people find it increasingly difficult to understand the tax system. That is made worse by the Government's refusal to accept any form of pre-authorisation scheme, as urged on them by the Opposition. Furthermore, complexity can produce more opportunities for aggressive and artificial avoidance mechanisms. The more complex the system, the more places there are to hide. That leads to more complex anti-avoidance provisions, producing a vicious circle of complexity.

A complex, opaque and uncertain tax system deters foreign investment and drives jobs offshore in a globalised economy. A simplified, rational, coherent tax system is a magnet for jobs and employment, so our competitiveness is under threat from a tax system that is overly complex. Lastly, tax simplification will enhance our democracy.

I agree wholeheartedly with the hon. Lady's desire for greater scrutiny, understanding and public debate about tax matters. I commend to her membership of the Standing Committee that considered the Finance Bill. All members of the Committee and people in the Public Gallery had the opportunity to understand and scrutinise in a transparent way tax policy decision-making, which was most illuminating. The hon. Lady said in answer to my hon. Friend the Member for Wirral, West (Stephen Hesford) that it was impossible to distinguish clearly between technical aspects of tax policy discussion or cleaning up, and policy decisions. Given her point about democracy, does she accept that because of that ambiguity, if we were to accept the proposal for a commission, it would mean that scrutiny of policy decisions would move from the House to the commission?

No, I do not accept that at all. I repeat my response to the other intervention on the matter: the House remains sovereign on tax matters. Whether there is a tax commission or not, we are the sovereign body. We can accept the commission's advice or reject it. I believe that simplification will enhance democracy because it will make our scrutiny process much easier and much more effective.

In a recent paper for the Centre for Policy Studies, the distinguished tax lawyer David Martin described our tax law as "obscure and ramshackle". The Institute of Chartered Accountants described our tax system as "spiralling out of control". The complexity of the system is making it increasingly difficult to ensure effective, democratic scrutiny. As I said, every citizen is entitled to understand why they are being taxed, on what they are being taxed and how that tax is calculated. Our amendment will bring a little closer the day when that is true. That is why I commend it to the House.

I had not intended to speak, but I shall contribute briefly to the debate. Among the Members present, I probably have the unique experience, having spent the past 15 years in the profession, of seeing Finance Bills from the other side of the fence, and for the past month or so of seeing how the Finance Bill is put into practice as a legislator.

With every Finance Bill that is published, various institutes have to publish commentaries. My own institute, the Chartered Institute of Taxation, will shortly send, with a large thud through my letterbox at home, a commentary on the present Finance Bill when it is enacted. The Treasury publishes its explanatory notes, and we all miss the presence of the hon. Member for Wolverhampton, South-West (Rob Marris) to point out aspects of the notes to us. Many other bodies and individuals will offer expert commentaries on the Bill.

Earlier speakers referred to the remit of the tax law rewrite committee that has been established for some time. As I understand it, the committee's original remit was to render into plain English the existing body of tax law. If the committee came across inconsistencies in the English while it was doing that, it would point them out, but its remit was not to rewrite the meaning of that tax law.

From what the hon. Member for Normanton (Ed Balls) was suggesting, this proposal is quite different. In no way does it conflict with the work of the tax law rewrite committee. There is a need for some standing commission to examine tax law as it accumulates with every Finance Bill—this year there have been three, in total—to make sure that the legislation that we have in place works for a modern 21st century economy.

In the absence of my hon. Friend the Member for Wolverhampton, South-West (Rob Marris), perhaps as his neighbour I could take up the baton. There seems to be a parallel discussion taking place—on one side about complexity and on the other side about a commission. The new clause calls for proposals for review, modernisation and improvement, as well as simplification. Surely with such a remit, we would be establishing a system with two masters, which would lead to more complexity, rather than less. What is it about the establishment of a commission that will deal with the parallel discussion about the complexity of a system?

I am sure that this House is very jealous of its privileges and would always be the master, as the hon. Gentleman puts it, of tax legislation. We already receive representations from many outside bodies. It has been abundantly clear to me as I have witnessed the Bill's progress through the House, including in Committee, that Treasury Front Benchers, prestigious though they must be in matters of tax law, rely heavily on the Box for their advice. Conservative Front Benchers rely heavily on professional advice, as the hon. Member for Cities of London and Westminster (Mr. Field) acknowledged. I felt sorry for my hon. Friend the Member for Eastleigh (Chris Huhne), because the hon. Member for Cities of London and Westminster read out the briefings so well that my hon. Friend had little left to say. We should recognise that we already rely on many people from outside who contribute to the formulation of our tax law. As politicians, we are all generalists and amateurs, and we need as much help and clarification as we can get from outside bodies and experts to improve the quality of legislation on the statute book.

We have had a good debate on the new clause. I particularly welcome the contributions by my hon. Friends who served on the Standing Committee and have come back for more this afternoon.

The hon. Member for Cities of London and Westminster (Mr. Field) introduced his new clause with such a wide-ranging speech that I thought that we had suddenly moved on to the Third Reading debate. He sparked an interesting succession of points about the role of the second Chamber, if any, in finance legislation. He said that that chamber has extensive experience; it does indeed, and it is based on extensive interests. However, I utterly reject the proposition that a non-elected chamber should have a role in any tax matters, tax scrutiny or tax policy decisions. That would overturn a centuries-old principle of this House. The hon. Member for Cities of London and Westminster should be aware, in making sometimes fairly light comments, that the financial privilege of the Commons dates back to the 17th century.

The Minister may be aware that as new clause 4 makes no mention of the other House having any overview of tax legislation, this is a tremendous red herring. Only the extraordinary forbearance of Madam Deputy Speaker has allowed us to trespass so far off the beaten track. I hope that he agrees that a tax law commission has nothing to do with the powers of the House of Lords.

I am not sure that the hon. Gentleman is following the debate as well as he has followed the written advice that the professional bodies supplied for it. I am responding to the points that were raised during a fairly wide-ranging debate.

The hon. Member for Cities of London and Westminster asserted that tax matters should be determined only by Members of this House, but that directly contradicts the new clause and the sentiments that underpin it.

The hon. Member for Chipping Barnet (Mrs. Villiers) made an interesting contribution to the debate and spoke very fluently for a new Member. She expressed concern about the competitiveness of the British economy and tried to harness that to an argument in support of the new clause. She may not be aware that independent surveys consistently show that the UK has among the lowest administrative burdens for business in the world. This year, the World Bank published a survey that showed the UK to be top of the league of major countries in terms of regulatory quality.

I turn specifically to the simplification of the tax system, which is a regular subject of debate in this House and elsewhere and has been recurrent theme in our proceedings on the Bill in Standing Committee and at other stages. Most people want a tax system that is simple but also certain, efficient, competitive and fair. Certainty is particularly vital when it comes to matters of, and decisions about, tax. The Government want a tax system that contributes towards a stable economy, helps to raise productivity, increases employment opportunities for everyone, and helps us to build a fairer society. We need to strike a balance between all those things while ensuring that the system remains manageable.

That said, we are always keen to simplify where we can, where that can be done consistently with our other policy—not technical—objectives for the tax system. That can be particularly difficult when maintaining tax yield is of central importance—as it is for any Government—because anti-avoidance measures may always also be needed. Many of the complexities in the Bill, which other Finance Bills have had to include, are a direct result of the complexity of the schemes that the tax planning industry suggests to its clients as ways of avoiding the tax that their clients should be paying.

The hon. Member for Cities of London and Westminster dwelled on the work of the tax law rewrite project, which, despite his somewhat lukewarm description, is a very substantial piece of work: it has rewritten income tax Acts. It has drawn high praise from the professional bodies that brief the hon. Gentleman and his colleagues on the Bill, and from employers' organisations such as the CBI. Its benefits are clear: less time needed to get to grips with legislation and fewer errors caused by misunderstandings of legislation; fewer issues on which time needs to be spent obtaining specialist advice; fewer queries about interpretation; and fewer disputes with Her Majesty's Revenue and Customs about the meaning of legislation. In due course, better legislation can lead to better taxpayer guidance.

The project has produced three Acts and rewritten the pay-as-you-earn regulations. Its work continues and further legislation is in prospect. The next Bill will comprise the third and final Bill on income tax, and the following Bill will cover a large part of the corporation tax system. As the hon. Member for Cities of London and Westminster recognised, it is a project that has consistently had all-party support. It was set up under the right hon. and learned Member for Rushcliffe (Mr. Clarke) when he served as Chancellor, and has been ably chaired by Lord Howe of Aberavon. The project makes the law clearer and easier to use. That may not be regarded as simplification in its fullest sense by all parties, but the law should be simple to understand and practical to comply with, and that is precisely the impact of the project's work.

In addition, we have made many substantive improvements and simplifications to the tax system. I will not prolong the debate significantly by listing them.

Let me be clear that the Government recognise that complexity can bring additional costs and burdens on taxpayers. We are committed to a tax system that keeps the burden of regulatory requirements to a minimum, and we take every possible opportunity to reduce that burden, particularly on small businesses. That is why the new HMRC has a specific remit from the Chancellor to reduce the tax system's administrative burden on small firms.

The hon. Member for Cities of London and Westminster said that regulatory impact assessments were never followed up and that the Government never reverted to them to check their accuracy or the cost that a specific measure had imposed in practice. My right hon. Friend the Paymaster General and I gave evidence to the Treasury Committee when it examined those issues last year. When it considered tax compliance cost, we set out the RIAs' post-implementation reviews, which it was keen to study. They have been conducted in consultation with outside interests and subjected to external scrutiny. I hope that the hon. Gentleman will reflect on his earlier comments when he reads those reports.The merger of the Inland Revenue and Customs and Excise gives us the opportunity and scope to build further on the work that we have already completed.

The hon. Gentleman knows that any Government maintain a constant and continuous review of the tax system. For us, that includes the objectives of modernisation, improvement and simplification of tax, as well as the reduction of administrative burdens. The process benefits from regular and effective consultation with all the interested parties. There is therefore no gap, as the hon. Member for Chipping Barnet argued, in the system.

New clause 4 would trigger a further review process, conducted by a new commission. That would add little, and would duplicate something that is probably the task of Government. It is unnecessary and inappropriate to franchise out that task to a separate body.

The Government are already simplifying the tax system and we have set out our objectives for the tax system. We report regularly on progress against those objectives and consult widely across the spectrum on a range of issues. It is the fundamental job of Government to do that, and we are held to account for it. I hope that the hon. Gentleman will not press the new clause to a vote. If he does, I shall have to ask my hon. Friends to reject it.

I suspect that consideration of clause 4 always brings out a certain sensitivity in Labour Members. However, I thank the Financial Secretary for his considered reply.

As ever, my hon. Friend the Member for Chipping Barnet (Mrs. Villiers) made an excellent contribution based on her great experience as a Member of the European Parliament. She rightly stressed the uncertainty and complexity that has crept into domestic tax law. Let us be honest: that has not happened only in the past eight years; the problem goes back many years. However, as I said earlier, there has been no consolidation measure since 1988.

I thank the hon. Member for Eastleigh (Chris Huhne) for his support. I must make a small confession about his somewhat belated entry into the House. I first voted in the 1983 general election when I lived in my home town of Reading. The constituency was Reading, East and the SDP/Alliance candidate was none other than the hon. Gentleman. Four years later, when I was at university in Oxford, in the constituency of Oxford, West and Abingdon, the hon. Gentleman was also the candidate. I hope that he will not move to the Cities of London and Westminster because that would make it a hat trick.

I thank the hon. Member for Bristol, West (Stephen Williams) for his brief contribution, despite his exposure of the fact that not all the thoughts that I expressed were entirely mine.

I accept the Financial Secretary's comments about the second Chamber. My remarks were slightly obiter dicta. I simply tried to speak a little about modernising the House of Lords and part of the contribution that it could make. I did not suggest that it could do fundamentally more than perhaps consider aspects of financial and tax legislation. However, I accept that many of the concerns that we have expressed go back beyond 1910. I know from my role as Member of Parliament for the City of London about the privileges that exist to this day in the City. In this place, they relate to financial power having moved away from only one side of Parliament.

I accept that complexity is a two-way street. Inevitably, accountants, tax advisers, lawyers and so on have a large vested interest. However, the Financial Secretary rushed too quickly over my earlier point that the obscurity and complexity of many new laws and regulations on tax encourage avoidance.

I beg to move, That the clause be read a Second time.

New clause 5 addresses an anomaly—indeed, I might call it an injustice—that is estimated to affect about 30,00 people, and which we believe was not intended to arise. We recognise that there may be ways of achieving the relief that the new clause seeks other than amendment of the underlying primary legislation, but this is the route that we have chosen. I hope that I shall be able to secure a commitment from the Paymaster General, if not to accept the new clause as drafted, at least to provide relief from the double charge that I shall describe by whatever means the Revenue finds most appropriate, so that those 30,000 people can get on with their lives with some certainty about their position in relation to inheritance tax.

Does my hon. Friend agree that the tax at the current threshold penalises most people living in the east and south-east who might be on moderate incomes and have moderate homes? Does he believe that the original intention of the tax when introduced was to hit such people?