Corporation Tax Bill

I have not had the advantage, or indeed the pleasure, of being on the Committee, but I pay tribute to all the people who have laboured long and hard to bring the Bill before the House. This kind of legislation takes me back to my days as a council leader when members were annually shown for comment long papers on treasury management that were full of algebra, rather like pages 13 to 16 of the Bill. They were always passed without undue comment, and I note in passing that hon. Members have not exactly been fighting to get into this debate. If the truth were told, only a few pointy-headed people in the Treasury have complete mastery of the entire legislative feast that confronts us—and that includes the Minister, whose knowledge is encyclopaedic, so I assume that he understands it. There is a real case, as the hon. Member for South-West Hertfordshire (Mr. Gauke) said, for expert advice in certain areas in which Members' background knowledge is deficient. The measures before us are, in part, highly technical, and largely uncontentious. The document is one for tax lawyers to work with as much as one for politicians to mull over. It is largely a tax rewrite and consolidation, rather than ground-breaking, innovative legislation that we need to get excited and argumentative about. It is, however, important, and it would be wrong and foolish of us to pretend that we could do justice to it all here in the time available, so I shall content myself with probing the Minister simply about the general thrust and shape of the legislation, bearing in mind that I wear another hat as a member of the Public Accounts Committee. The Committee recently did an excellent report on corporation tax, which is an odd tax because research shows that raising it does not necessarily raise the total take and that lowering it does not necessarily reduce the take. I think that we can all conclude from that observation that it is easily avoidable. One point that the Committee made in its report follows from what the hon. Member for South-West Hertfordshire has just been saying. Conclusion two of the report states:""Businesses in the United Kingdom can legitimately reduce their Corporation Tax payments by claiming a range of reliefs and allowances. In some cases, the liability may reduce to zero, even though the businesses have made profits. The amount of tax foregone is likely to be substantial, but is not visible."" I cannot tell whether the Bill has been crafted to do what the Committee wants the Government to do, which is ensure that a proper balance is achieved between allowances and overall liability, but I welcome the Minister's assurance that he is mindful of that point. The Committee also pointed out that the Department does not have""a robust measure of the Corporation Tax gap"," by which we mean the difference between what large businesses pay and their theoretical liability. The report makes another point that is worth making now, given the long evolution of the legislation—that, in a change from recent times, about half the growth in global trade now comes from transactions between subsidiaries of multinational companies. However, recommendation eight states:""In the United Kingdom, groups of companies are not required to prepare consolidated Company Tax returns so the Department cannot assess the effective Corporation Tax rate across a group of companies."" It then cites Australia and Canada as counter-examples of where things are done a little better. I do not suppose that the legislation was crafted to resolve all those issues, but can we have an assurance from the Minister that those anxieties require a legislative response, and will he ponder whether vehicles such as this Bill provide an appropriate opportunity for that? I have other concerns, including concerns about the development of bespoke tax avoidance schemes. The Minister is acutely aware of those concerns, and I know that he is working hard to close loopholes where and when they appear. Corporation tax matters are generally controversial, and no issue to do with taxation and this Government is simple. However, corporation tax is a valuable piece of the fiscal jigsaw, and we have to hope that this legislation has got things right.