Taxation (International and Other Provisions) Bill

It is almost tempting to deliver essentially the same speech that I delivered a couple of moments ago, but that would break the heart of the Government Whip and I would hate to do that. I am also very tempted to say, "I refer the House to the speech I gave some moments ago," but perhaps that would go to the other extreme. The international aspect of taxation is hugely important for an outward-looking economy such as the UK's. We witnessed great difficulties in 2008, when a number of companies moved their head offices out of the UK because of concerns over international taxation, in particular the Government's consultation with regard to controlled foreign companies that was published in 2007. We touched on that point on Second Reading. We welcome progress towards greater clarity in this respect, but we touched on the issue of controlled foreign companies in the Second Reading debate of 15 December. The Minister made it clear then that a consultation document was to be published in the new year, which would lead ultimately to legislation that I presume will be incorporated in this Bill when it becomes an Act. The consultation document was published in January, and the early indications that we have seen are encouraging. The Government are moving towards a more territorial system, and it is worth putting it on record that the Opposition believe that that is something that we need to pursue. Of course, the real test will come when we see the details in the consultation document and what will follow from it. It might be useful to mention that one of the points raised with us is that we need to know how the new user-friendly motive regime contained in the consultation document will operate in practice. The outcome must avoid causing difficulties with HMRC and placing an administrative burden on multinationals that are looking to locate in the UK. It is important that we have a competitive tax system that encourages business to locate here. Many of the remarks that I made earlier also apply equally to this Bill, and I should like to add my thanks to the various organisations and individuals that the Minister mentioned in his remarks, but I want to make a final point that I could also have made about the previous Bill. That is that witnesses at the Committee stage observed that the engagement by consultees seems to have fallen away slightly. As I noted in the earlier debate, the tax professions and businesses want legislation that goes further than merely clarifying and simplifying the language. They want something that starts to address the substance as well. I make that point again but, those comments apart, we support this Bill.