HC Deb 02 July 1953 vol 517 cc559-60
1. Mr. Braine

asked the Chancellor of the Exchequer if, in view of representations made to him concerning the ill-effects of the United Kingdom tax practice, whereby companies registered in this country but operating in the West Indies are denied the benefit of tax concessions specifically designed by West Indian Governments to encourage economic development, he will state what action he is proposing to take.

The Economic Secretary to the Treasury (Mr. R. Maudling)

This matter was fully discussed during the Committee stage debates on the Finance Bill. As I then explained, my right hon. Friend could not include in this year's Finance Bill the complicated legislation which would be necessary to carry out the recommendation which the Royal Commission on the Taxation of Profits and Income made on this point in their interim Report. He has not, however, closed his mind on this subject, and will consider it again as soon as the Royal Commission have made their final report.

Mr. Braine

While thanking my hon. Friend for that reply, as far as it goes, may I ask whether he will not agree that this practice does militate against economic expansion in the Colonies, and, to overcome these difficulties, would he consider whether the Treasury could not regard remissions of colonial tax as capital profits, which, indeed, they are?

Mr. Maudling

I think there would be considerable difficulty in the way of adopting that suggestion, but my right hon. Friend's mind is not closed on the matter, and he would be very glad to consider any suggestions which hon. Members like to put forward.

Mr. N. Macpherson

Could my hon. Friend say whether it would be necessary to include a provision of this sort in a Finance Bill before starting negotiations with the Governments of the territories concerned for this facility to be given?

Mr. Maudling

I should like notice of that question, but my impression is that it would be necessary.