My Lords, I begin by joining most noble Lords in mentioning the rather ludicrous nature of this debate. It has to be said that this week is a particularly good one in which to be talking about the ludicrous nature of activities in your Lordships' House, as we have seen many such examples in the past few days. Indeed, there has been a growing and increasingly vociferous agreement among noble Lords on all sides of the House that to debate a Finance Bill at a point when it has gone through the House of Commons and cannot be amended is an exercise in futility that we could better do without.

Many could draw the same conclusion about the efforts of the last 18 months: "an exercise in futility"

I would disagree, through hard graft, by thousands of individuals, changes have been wrung from the Government, on both IR 35 and RIP.

With regards to IR 35 the rules have moved from Supervision, Direction and Control to the Self employed tests. The former would have ensured a postman would have been caught. I have to agree however with the statement made by Geoffrey Page MP in 1981 when the Revenue last attempted to bring this in

I have concluded that there were two strands of thought behind its activities. There was the Machiavellian approach, in which, while asking for a whole loaf, it might be satisfied with half a loaf as the scheme was watered down slightly.

The measure this time was introduced by stealthy means - a press notice tacked on to many others. Before bringing maximum pressure to bear, some groups offered up various deals which

a) confirmed to the Revenue they had hooked a fat catch
b) allowed the Paymaster General to state that consultations had taken place.

My advice at the time (which was ignored) was that it was a classic case of a sales technique called the "final choice close." Do you want the car in red or black? The answer should have been “Sorry, we do not want the car.”

From our list of sigs, Thomas Sowell put it much better:--
No matter how disastrously some policy has turned out, anyone who criticizes it can expect to hear: 'But what would you replace it with?' When you put out a fire, what do you replace it with

The Paymaster General, AKA "Red Dawn" was always easy prey for the Revenue to push the right political buttons after this. As an example of how far they wound her up, she sent her husband's union to picket the PCG Ir 35 seminar in Bristol!

The problem for the Government is they refused to engage in proper consultations. The rules governing these are set out clearly and would have allowed a proper debate and rigorous analysis of the problem and possible solutions.

All parties agreed there was abuse, All parties offered to help in a genuine consultation process.

Instead we had a mockery, of a sham, of a cut and paste, stitch up.

It is perhaps the breathtaking arrogance with which this was carried out that has created so much anger. The final demonstration of this attitude was to be called to a meeting, supposedly to discuss IR 35, only to be told that a decision had already been made:

My statement at the time refected the anger of many PCG members:

Andy White, Chairman of the PCG, said: "Inviting people to sit around a table and then tell them what the Revenue intends to do regardless of their opinions is not genuine consultation by anyone's standards. And it's certainly not consultation as spelt out in the Government's own Better Regulation Guidelines.

"The process has been a sham. There have been poor proposals, ignored letters, false promises and no genuine consultation, Gordon Brown and Dawn Primarolo have repeatedly ignored the people who will be affected by this. Now they have replaced the unworkable with the illogical.

"The consequences of their actions will be to kill the enterprise culture and the fine words about promoting enterprise and appointments of an e-czar, an e-Minister and are not going to change that.

"They have shown astonishing naivete in dealing with a part of the economy that generates added value the size of a small country. The only winners in this are the large foreign companies who compete with our members and the losers are the genuine British entrepreneurs who have set up their own businesses. The American multi-nationals will be laughing all the way to the bank as the British Government destroys their home-grown competition.

"The irony is that at the end of the day, the proposals are unlikely to generate a penny extra tax and are more likely to reduce overall tax revenue."

That arrogance continues with the news that the existing law has defects that are "unfair" according to the Revenue, but presumably the political fall out of the Government tabling amendments on their own bill was too much to bear, hence the letter admitting this failure was sent after the final reading in the House of Commons.

Many of us, who have had little to do with Politics or Government have been astounded at the process. They have motivated an intelligent and hard working “can do” "stuff you” section of the population, many of whom voted for New labour. Come the next election they will be surprised at the sight of pensioners being bought to the Polling stations to vote, in the back of Porsches :-))

The focus now shifts to the courts.

The Judicial Review will test the overall law.

The rules are set by Case Law, not the Government. It will take years, but the PCG is putting in place a contract review system that will use the formidable Command, Control and Communication network developed over the last 12 months; to rapidly iterate case law that improves the fit with the way we work. This will also give members access to “best practice” advice .

The focus also shifts to the commercial arena. The bar has now been set. The uncertainty created by IR 35 will create massive change in the market place.

Shout99 will continue to supply independent and informed analysis to help you meet these challenges.

Kind regards

Andy White

"The power to tax involves the power to destroy"
-John Marshall