Clause 180 - Controlled foreign companies and foreign permanent establishments

Part of Finance Bill – in a Public Bill Committee am 4:30 pm ar 19 Mehefin 2012.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Stephen Williams Stephen Williams Democratiaid Rhyddfrydol, Bristol West 4:30, 19 Mehefin 2012

I apologise to you, Mr Bone, and to Committee colleagues for not being as prepared as I should have been this morning. When we adjourned last week, we were on clause 54. It did not occur to me that in one fell swoop we would go from clause 54 to clause 179 this morning; that is why I did not have my notes with me. We had been moving at glacial pace; I think we had a taste of warp speed this morning.

I tabled amendment 2 after meeting ActionAid and Christian Aid simply to test how joined up policy making is, particularly in the context of a coalition Government; some might say that in a coalition Government, policy making is not always as joined up as it should be. We know that the attitude that the Treasury always knows best has been prevalent throughout many Governments of many political colours over many decades. I tabled the amendment to encourage the Treasury to work closely with a spending Department whose spending envelope is expanding at a great rate over the next few years.

In his helpful remarks, the Minister said that he did not want the Treasury to become the world’s tax policeman—I think that was the phrase he used and, if I may say so, it is Blairite in the scope of its ambition. I agree with him; we would not want our Government to be the world’s policeman in any context. That would be bad in principle, and I do not think that it would work in practice. Indeed, when I discussed the parameters of this amendment with ActionAid, I made it clear that I do not think it fair or reasonable to expect the UK Government to carry out an in-depth assessment of, potentially, 190 tax regimes around the world that might be affected by the provision, and I therefore accept what the Minister says on that point.

I do, however, want to hear that it is the Treasury’s intention to work closely with the Department for International Development to build up capacity among overseas tax authorities so that they can collect the taxes that their Governments decide are due but that are often avoided—I think I heard the Minister mention that issue, and perhaps he will confirm that when he sums up. Tax avoidance has been much in the news today, and as some regimes are perhaps susceptible to corruption and have tax authorities that are likely to be less developed or sophisticated than those in the UK, taxes are even more easily avoided in developing countries than they are in this country.

Since tabling the amendments I have discussed the position with my right hon. Friend the Member for Gordon (Sir Malcolm Bruce), who chairs the Select Committee on International Development. That Committee has since initiated its own inquiry and investigation into the impact of British tax policy and the tax capability of overseas Governments, and we wait with interest to see what the in-depth investigation by that cross-party Committee comes up with when it produces its report later this year.

The Minister has said many useful things that are now on the record and will be useful to ActionAid and other charities and non-governmental organisations that campaign on these issues. I hope that he will write to the Committee and set out in detail what the Treasury is doing in conjunction with DFID, and I am sure that there will be an opportunity to give the issue another airing on Report.