§ 13. Mr. Weetch
asked the Chancellor of the Exchequer what representations he has received about his recent statement on American depositary receipts.
§ Mr. Weetch
Is not the Treasury's recent announcement of a reduction in the tax on conversion of depositary receipts from 5 to 1½ per cent. a straight post-Budget tax 847 handout to the City of London? When the Chancellor framed his Budget fixing the rate at 5 per cent., was that not a quid pro quo for tax forgone for a lower rate of stamp duty? What has happened to the Chancellor's calculations now? Is this not yet a further example of a Chancellor fixing policies, and well-placed strategic groups in the City of London weakening his resolve and ultimately destroying it?
§ Mr. Stewart
No. It is not any of those things. In the light of representations that we received following the Budget, my right hon. Friend the Chancellor was satisfied that our objectives would be achieved in relation to preserving the revenue from stamp duty with a rate of 1½ per cent. instead of 5 per cent. Under those circumstances, it was a perfectly proper change to make.
§ Sir William Clark
Does my hon. Friend agree that depositary receipts are an admirable way of funding, particularly expansion overseas, and that that applies not only to American but to European depositary receipts? In view of the fact that our American colleagues are against the tax, does my hon. Friend think that that will jeopardise the negotiations that are now going on for the abolition of the unitary tax system?
§ Mr. Stewart
I am sure that there is no direct connection between those two matters. If British companies wish to raise funds abroad, I have no reason to think that there will not be a satisfactory and active market in ADRs at the rate of 1½ per cent., since they were growing very rapidly indeed in the months before the Budget at the rate of 1 per cent.
§ Mr. Blair
Does the Economic Secretary to the Treasury recall that his right hon. Friend the Chancellor of the Exchequer sold this proposal to cut stamp duty and give away £70 million on the basis of this special rate of 5 per cent.? How does he intend to make up the revenue? Why is it that whenever the pensioners knock on the Government's door the Government are hard with them, as they are hard with the sick, the unemployed and the disabled, but are always soft with the City?
§ Mr. Stewart
If I had time, Mr. Speaker, and if I were in order, I should like to explain at length the many things that this Government have done to help the disabled. When my right hon. Friend the Chancellor of the Exchequer made his announcement, subsequent to the Budget, about stamp duty changes, he pointed out that they would be revenue-neutral and that therefore there would be no loss of revenue to the Exchequer.