§ Lord Pearson of Rannoch asked Her Majesty's Government:
§ Further to the Written Answer by Lord McIntosh of Haringey on 13 June (WA45–46), whether they intend to execute the European Union tax package if other countries, such as Hong Kong, Singapore, Switzerland and the United States, have not adopted strictly similar regimes by 31 December 2002. [HL4827]
§ Lord McIntosh of HaringeyAdoption of the tax package by ECOFIN is dependent on sufficient reassurances being obtained from the United States of America, Switzerland, Liechtenstein, Monaco, Andorra and San Marino that they will adopt equivalent measures to those which member states propose on the taxation of savings.
Lord Pearson of Rannoch asked Her Majesty's Government:
Further to the Written Answer by Lord McIntosh of Haringey on 13 June (WA45–46), whether the City of London revealed in its discussions with them that it would have preferred to continue without either a witholding tax or an exchange of information; and if so, what they mean by their statement that the City "indicated clearly that an approach based on exchange of information rather than a witholding tax was the right way to proceed." [HL4829]
§ Lord McIntosh of HaringeyThe Government support the principle agreed by the Helsinki European Council on 10 to 11 December 1999 that all citizens resident in a member state of the European Union should pay the tax due on all their savings income. Tax evasion puts an unfair burden on honest taxpayers. And the development and liberalisation of financial markets cannot deliver all their benefits if savers' decisions are affected by the possibility of evading tax, instead of being taken in the light of a comparison42WA between investment alternatives based on their intrinsice merits.
It was against this background that discussions took place with interests in the City of London. The discussions showed clear support for the Government's initiative in proposing automatic exchange of information on savings income to combat tax evasion.
Lord Pearson of Rannoch asked Her Majesty's Government:
Further to the Written Answer by the Lord McIntosh of Haringey on 13 June (WA45), whether they propose to implement Clause 88 of the Finance Bill if the Parliaments in Jersey or Guernsey do not accept the European Union tax package, if so, how they would reconcile that with the statement made by the Prime Minister in Jersey on 14 June 2001, that "Jersey has its own rights in this situation and we will, of course, protect them. We are not trying to affect tax rates." [HL4830]
§ Lord McIntosh of HaringeyClause 88 concerns the UK tax liability of UK resident companies. It gives the UK the reserve power to introduce regulations in the UK to protect the UK tax base. The Government hope that it will not be necessary to exercise the reserve power. If in the future the Government felt that it was necessary to exercise the power, they would explain the reasons for reaching that decision, and the regulations would be subject to parliamentary approval under the affirmative resolution procedure. The clause does not affect the constitutional arrangements with the Channel Islands.
The tax package concerns the exchange of information in respect of savings income and the abolition of harmful tax measures.