Select Committee on Treasury Minutes of Evidence

Examination of witnesses (Questions 80-99)



  80. Why did they remove it?
  (Dawn Primarolo) I understand that the study is not complete.

  81. Sorry?
  (Dawn Primarolo) I understand that the study is not complete. The Commission have not given a detailed explanation of why they have withdrawn it except that they are still working on it. I am sorry, I cannot help you any more than that because we have not had the reasons.

  82. On 12 January they presumably thought that work was sufficiently well under way to put it as agenda item number six and it does not now appear.
  (Dawn Primarolo) Indeed, yes. I can only imagine that the pressure of work on the Commission is such that—

  83. When were you notified that it was not going to be an item?
  (Dawn Primarolo) If I could finish the sentence. That is the only speculation I can make as to why it is not on the agenda.

  84. Let us not deal with speculation. Can I ask you a simple question: when was your Department notified that this would not be taken as an agenda item on 7 May? When were you told? The date will be quite sufficient.
  (Dawn Primarolo) I realise that the date will be quite sufficient. At the first Coreper that discussed the agenda in preparation we would have been notified.

  85. What date was that?
  (Dawn Primarolo) I have not got that to hand but, Mr Ruffley, I can get it to you. I would not want to conceal it from you. I promise this Committee that I will give you the date. I will just need to check that when I go back to the Treasury. Apologies, that was not something I thought I would need today.[1]

  86. Did you want it discussed on 7 May?
  (Dawn Primarolo) The discussion of the Commission study has been outstanding for some time and their bringing forward their report. Quite frankly, whether they brought it forward on 7 May or not was not an issue for us. As I said, we made no representations on it.

  87. Sure.
  (Dawn Primarolo) It is absolutely up to the Commission when they make their studies available. I do not know what was in their mind and I am sure you would not want me to speculate.

  88. No, let us deal with the facts in this Committee. How many corporate taxes have you harmonised since you became Minister, or agreed to? How many UK corporate taxes have you either harmonised or abolished since you became Minister?
  (Dawn Primarolo) None. Harmonise and abolish what?

  89. Corporate taxes or corporate tax allowances or reliefs?
  (Dawn Primarolo) None. All the decisions we have made with regard to corporate taxation and reliefs have been specifically connected with the decisions that the Chancellor has continued to take about reforming the corporate tax system to make sure that the UK is a competitive place for business.

  90. Can you tell me about the Monti Group, because you were agreeing to the removal of certain UK corporate tax allowances and reliefs, were you not?
  (Dawn Primarolo) Can I seek clarification here. Are we talking about the Code of Conduct Group here?

  91. Yes.
  (Dawn Primarolo) No UK regimes within the Code of Conduct, which we have discussed at length in this Committee on a number of occasions, were found to be harmful and no action was suggested on any of the UK regimes.

  92. What was likely to be the content of the discussion on 7 May when the 12 January draft agenda was put together? What was in anticipation?
  (Dawn Primarolo) I cannot specify that. The Commission set up two panels, one of industry representatives and one of tax and accountancy advisers. They were specifically, as I understand, looking at the operation of the single market and barriers to business but I am afraid the Commission have not shared, to date, the likely outcome of that study. They were asked by Ecofin to report to Ecofin and in fact, if my memory serves me right, they were supposed to have reported some time ago. This is not the first occasion on which this particular study has not been ready for discussion when the Commission had initially indicated it would be. There is no conspiracy here. This study has slipped a number of times.

  93. What specifically is within the remit of this study?
  (Dawn Primarolo) The remit of the study and the mandate was agreed in July 1999. It had been circulated to this Committee before. I have it in front of me. It is, as texts tend to be, rather long but, Chairman, I am happy to circulate it. It has been part of the outcome of the European Council decisions.[2]

  94. That would be helpful. Are there any measures or proposals flowing from that which would approximate to any tax harmonisation?
  (Dawn Primarolo) No.

  95. Any removal of relief or allowances?
  (Dawn Primarolo) No.

  96. No tax harmonisation of any description?
  (Dawn Primarolo) No, not as far as I am aware on any one of those questions. The Government's policy is clear on that.

  97. When does Ecofin discuss tax harmonisation?
  (Dawn Primarolo) It does not.

  98. Why not?
  (Dawn Primarolo) Because determination of tax matters is a Member State's determination and any decisions which are taken with regard to tax measures, for instance taxation of savings—if I may say so a triumph for this Government—are taken on the basis of unanimity. A specific point on "shall we harmonise tax" is not an issue at Ecofin, as the Chancellor has repeatedly made clear and indeed as other Member States have made clear, in terms of the way forward for the efficient operation of the single market.

  99. This agenda item on company taxation, this study, which has been delayed, about which you purport to know very little, you do not think it is a bit fishy, do you, it has been pulled before the expected General Election in this country?
  (Dawn Primarolo) No, I do not consider it to be—

1   See p. 16. Back

2   See p. 16. Back

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