§ 41. Mr. Gresham Cooke
asked the Chancellor of the Exchequer if he will consider establishing an independent committee, along the lines of the Capital Issues Committee, to which could be referred applications for the sale to foreign companies of British companies which produce raw materials.
§ Sir E. Boyle
My right hon. Friend has considered this interesting proposal, but has come to the conclusion that no useful purpose would be served by such a committee. He is satisfied that present arrangements secure for him all the advice he needs in making decisions in these cases.
§ Mr. Gresham Cooke
Would it not be best to have an independent committee looking at these applications from British companies using raw materials and wishing to sell out to foreign companies, particularly having regard to the fact that there is another company, the Trinidad Petroleum Development Company, that is coming forward? Is he also aware that, if the Russians came forward with a big offer of gold for our Malayan rubber fields, I would have no confidence that the Treasury would turn it down?
§ Sir E. Boyle
Reverting to the question on the Order Paper, my right hon. Friend has considered this proposal carefully and thinks that the weight of advantage is against it.
§ 55. Mr. Beswick
asked the Chancellor of the Exchequer if he is aware that the take-over of British companies by United States concerns is assisted by the Profits Tax concessions made available under the provisions of the Finance Act, 1947; and if he will amend those provisions.
§ Mr. H. Brooke
Section 39 of the Finance Act, 1947, gives relief from the higher Profits Tax rate on distributions made by a United Kingdom company to a foreign company which controls not less than half its voting power. This relief is in fact the counterpart of reliefs given to United Kingdom companies in corresponding circumstances by the United States and other countries under double taxation agreements. I do not think that its withdrawal would be justified.
§ Mr. Beswick
While the taxation provisions may be reciprocal, the economic arrangements between the two countries are hardly of a parity today. In view of the fact that in the case of the Trinidad Oil Company about £200,000 of last year's taxation would not have been paid by the American holding company, does he not think that this advantage makes it possible for companies in the United States and elsewhere to make these bids? Does he not think that in the present circumstances there is a case for looking at this matter again?
§ Mr. Brooke
With respect, I do not think that this would make a substantial difference in the taxation position of the Trinidad Oil Company. I was aware of this point before the hon. Member put it down as a Question and I have given a considered reply, but I grant that it is a matter on which there might be differences of opinion.
Would not my right hon. Friend agree that this is another indication that the general level of taxation in this country is too high?
§ Mr. S. Silverman
When the right hon. Gentleman talks about reciprocity in the law between the two countries, can he tell the House of any instance of an English company which will profit by such reciprocity? Does he know of any English company which proposes to take over any United States concern in the way in which the Trinidad Oil Company was taken over? If so, will he tell us which are these companies?
§ Mr. Brooke
If I may say so, this Question has very little relevance to the case of the Trinidad Oil Company. There are many United Kingdom companies which are benefiting from the reciprocal arrangements. I would point out to the House that this difficulty would entirely disappear if the Chancellor of the Exchequer were at some time to accept the recommendation of the Royal Commission about having a flat rate of tax instead of a differential tax, and that question is under consideration.