Oral Answers to Questions

Debate between David Gauke and Michael Connarty

Tuesday 10th December 2013 Commons Chamber

[Mr Gauke]

This is coming from the party that has opposed every single measure we have taken to reduce the deficit. If we had taken the approach that the Labour party advocated, we would have borrowed a further £200 billion. That is not responsible or fair on future generations; that would put our economy at risk.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

11. If he will introduce limits on debt interest deductions used by private equity companies to reduce their corporation tax liabilities.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The UK tax system, as with those of most other OECD countries and in accordance with international accounting standards, gives reductions for interest as a business expense. The UK already has a variety of defences that protect against excessive interest deductions. These include the worldwide debt cap, transfer pricing rules, anti-arbitrage rules, unallowable purpose rules, distribution rules and withholding tax on interest under certain circumstances.

[Michael Connarty]

I thank the Minister for that extremely interesting answer. We all use Boots, but is he aware that Alliance Boots, which is now equity-owned, was funded by £9 billion of loans, which allowed it to write off £1 billion of corporation tax? There is now a complaint by War on Want and Change to Win at the OECD about the company breaking the OECD’s rules by engaging in self-dealing, which allowed the owner of the new company, Stefano Pessina, to make £400 million in profit. What will the Government do about that fraud, as well as the abuse of the taxpayer’s money?

[Mr Gauke]

I am not going to comment on individual cases, but as I have said, there are a number of protections in the UK system to stop abuse in this area. We have strengthened the capacity of Her Majesty’s Revenue and Customs, and it is also worth pointing out that the UK has led the way in the OECD’s work on base erosion and profit shifting, which is also looking at interest deductibility.

Oral Answers to Questions

Debate between David Gauke and Michael Connarty

Tuesday 8th June 2010 Commons Chamber

[Mr Gauke]

We are keen for the independent commission to design the scheme, but one of the points that we have made clear is that the dependants of deceased policyholders should be included in the scheme to address that point. Clearly, however, my hon. Friend highlights the need to move quickly, after 10 years of inadequate progress.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

On the question of Equitable Life, there can be few constituencies that do not contain people who are waiting for payment or people who have died while waiting for payment. Is it not shocking that one of the main perpetrators of the Equitable Life fraud—for that is what it was—will, after last weekend, be able to take up a senior position in a financial institution? Can the Government re-examine what happened in that process, so that these people are not allowed to have senior financial positions in future?

[Mr Gauke]

I hope that the hon. Gentleman will understand that I am not going to be drawn on an individual case without all the information in front of me. He has made his point very clear.