§ 2.30 p.m.
§ LORD DENHAMMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether they are aware of the anxieties of foreign investors, both companies investing in British associates and private investors in British companies, as to the amount of United Kingdom tax they will be called upon to pay after the next Budget, when the proposed corporation tax may have been introduced and the standard rate of income tax will have been increased to 8s. 3d. in the pound; and that the present uncertainty is delaying direct investment in this country, particularly from the U.S.A.; and whether Her Majesty's Government will give favourable consideration to the introduction of a non-residents' tax at a lower rate in lieu of income tax, in order to avoid the diversion of foreign investment to other countries, such as Germany, where the taxation arrangements would be more favourable to them.]
§ LORD SHEPHERDMy Lords, there is No 1nformation to indicate whether or not there are any grounds for the suggestion in the first part of the Question that uncertainty is delaying direct investment in this country from overseas, particularly from the United States. In 1150 regard to the last part of the Question, I cannot add to the answer which my right honourable friend the Chancellor of the Exchequer gave on December 8, but I will convey the noble Lord's views to my right honourable friend.
§ LORD DENHAMMy Lords, I am grateful to the noble Lord for that Answer. Will he also convey to his right honourable friend the fact that if a corporation tax of, say, 40 per cent. is introduced, a foreign company investing in a subsidiary in this country would be faced, after the new standard rate of income tax, with total taxation of 6¾ per cent., as against the ¾ per cent. they are paying at the moment in income tax and profits tax?
§ LORD SHEPHERDMy Lords, I happily give that assurance. I have already given it on a previous occasion, and I would draw the noble Lord's attention to what my right honourable friend said on December 8, when he suggested that any representations regarding this tax should be made to Somerset House.