§ Mr. Hugh Jenkinsasked the Chancellor of the Exchequer if he is aware that consultancy groups are advising multinational companies and others on how they may nullify pay restraint and taxation on the remuneration of higher management employees by the introduction of such methods as the cafeteria system of fringe benefits and other forms of individual reward; and what action he is taking to frustrate the consequences of this advice.
§ Mr. Denzil DaviesI am aware that consultants may be giving advice related to certain shortcomings in the present rules for taxing fringe benefits provided for directors and higher paid employees. There are proposals in the current Finance Bill to make these rules more effective. If such advice is being given I trust it also includes a reference to the sanctions which can be used against those who breach the pay policy.