G7 Global Tax Agreement

Lord Tomlinson Excerpts

Tuesday 8th June 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, as I have said, a lot of the detail is still being worked out. However, I reassure my noble friend on a number of fronts. As part of the work on the detail of the agreement, we are considering how pillar 1 will apply to groups that might have different business lines, some of which may fall within the criteria and others outside them. I would say to both my noble friends, as indeed I did, that the agreement is designed to address specific concerns about digital companies, or companies that do not have physical presences in the countries where they have activities. We are doing other work to address concerns around online retailers; for example, I mentioned the fundamental review of business rates that the Government are currently undertaking.

[Lord Tomlinson (Lab)]

My Lords, as the Minister has said, these are very early days. From the information that she has given us today in reply to very specific questions, we are not sure whether we have a framework that is good, bad or indifferent. It is a bit like the curate’s egg: it is good in parts. Could she give us some idea of when the discussions will be sufficiently refined so that Chancellors of the Exchequer in national countries can begin to consider the income stream that they have to assist with their own domestic problems of fixing a budget?

[Baroness Penn (Con)]

My Lords, perhaps I can clear up some ambiguity. The Government view the agreement that we have reached this week as completely good and in the interests not just of developed countries but of developing countries. It is a significant agreement. It is the first time that there has been G7 alignment on the core parameters of a two-pillar solution to this issue. It sets out the scope and effect of pillar 1, a minimum rate of corporation tax across the world and the application of that minimum rate on a country-by-country basis. So there is a level of detail but there is more work to do. As I have said, the next stage of that work is in July at the meeting of the G20.