Income Tax: Top Rate

Lord McFall of Alcluith Excerpts

Tuesday 15th July 2014 Lords Chamber

[Lord Newby]

My Lords, the Government are very keen to ensure that the tax regime is internationally competitive. That is the effect of the corporation tax changes. As the noble Baroness said, it is having a number of beneficial effects.

[Lord McFall of Alcluith (Lab)]

My Lords, Martin Sorrell of WPP said that for large corporations, corporation tax is a voluntary activity. Is that what the Minster meant by his answer to the last question?

[Lord Newby]

It certainly is not. As the noble Lord knows, we have taken the lead internationally to make sure that companies—which for many years in some cases have not paid much tax—will pay a proportionate amount. We have taken the lead in the G20 and the OECD to make sure that we have different rules in place, rather than rules that were designed more than 100 years ago. We are going to see the first fruits of that in September; the long-term effect will be that some companies that have been able to avoid paying tax in the past almost altogether by deciding where they were domiciled will not be able to avoid it in future.