Thursday 21st October 2021

(3 years ago)

Lords Chamber
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Lord Callanan Portrait Lord Callanan (Con)
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My Lords, we benefit in global terms from being an open and accessible economy. That brings in billions of pounds-worth of inward investment. My noble friend Lord Grimstone, who is in charge of the Office for Investment, works extremely hard to attract overseas investment. We must be very careful not to send out the message that we do not welcome inward investment into this country. That was something recognised by the previous Labour Government and certainly something recognised by this Government. Of course we keep these matters under review. We have introduced the National Security and Investment Act, which gives us additional powers to intervene on national security grounds, and we extended the grounds on which the Secretary of State can intervene under the Enterprise Act.

Baroness Wheatcroft Portrait Baroness Wheatcroft (CB)
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My Lords, some private equity companies are good managers of businesses, others rather less so. Does the Minister agree that, given the need of the Treasury to bring in extra cash, the treatment of carried interest—the favourable tax treatment of private equity operators—is no longer sustainable?

Lord Callanan Portrait Lord Callanan (Con)
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My Lords, I have never noticed any lack of interest from the Treasury in extending the tax base whenever it possibly can, but the current tax rules reflect the hybrid nature of this reward. If investment managers realise their carried interest gain within three years, that gain is treated as income and taxed accordingly. This approach is also followed by other comparable jurisdictions.