HC Deb 01 April 1976 vol 908 cc1558-60
10. Mr. Ridsdale

asked the Chancellor of the Exchequer what is his estimate of the number of companies which have recently moved their headquarters from London to the Continent for tax reasons.

The Minister of State, Treasury (Mr. Derail Davies)

Treasury consent is not given where a move is planned for tax reasons. So far in 1976 three moves by companies to the Continent have been approved on commercial grounds.

Mr. Ridsdale

Is it not very disturbing? Is it not because of the vindictive tax rates in the higher income brackets introduced by the Chancellor? Should not we give an incentive to foreign companies to come and work in this country instead of driving them away?

Mr. Davies

I do not know to what the hon. Gentleman refers when he says that it is very disturbing. In fact, the figures are quite low and there is strict control on the movement of company headquarters from this country. I do not accept what the hon. Gentleman said about high tax rates.

Mr. Geoffrey Finsberg

Does not the hon. Gentleman agree that a fair number of companies are also leaving London because of the growing crippling burden of local rates?

Mr. Davies

That is another question entirely. We exercise strict control on income tax and exchange control.

Mr. Anthony Grant

Does the hon. Gentleman know how many companies are moving their headquarters from London to the development areas as a result of his policies?

Mr. Davies

That is another question. Our development policies have produced some equalisation in wealth of productive capacity between London and other areas. That is a proper policy to adopt in a country in which there has been a considerable concentration of wealth in London and the South-East.

Mr. David Howell

Does the Minister support the view expressed by the Chancellor in the Wall Street Journal of 2nd March this year that the levels and burdens of taxation have no effect on economic growth and performance in this country?

Mr. Davies

The levels and burdens of taxation are not the only factor. Levels of taxation impinge on all ranges of income. People at the lower as well as at the higher end of the scale suffer from the high burden of taxation.

Mr. George Rodgers

Is it not true to say that many commercial and industrial undertakings in the City of London are deliberately withholding payment of rates, appealing against them and so avoiding payment for up to three years?