Low and No-Tax Jurisdictions

My second example relates to the use of affiliates and subsidiaries in low or no-tax jurisdictions to shift profits. Starbucks, Microsoft, Google, Amazon, oil, gas and numerous other entities use complex corporate networks to shift profits. Apple’s profits are parked mostly in Jersey, where it really has no physical presence. Transnational corporations have huge opportunities for profit shifting and tax abuse. A microchip company has its product designed in country A, manufactured in B, tested in C and patented in D, and has its marketing rights located in E. Determining the cost, profits and allocation to each country is highly problematic.

Companies adjust their import and export prices and shift profits, especially as around 60% of world trade is internal to companies. The OECD’s transfer pricing rules require the use of arm’s-length prices, but in the absence of active independent markets such prices are almost impossible to ascertain. The top 500 companies in the world control around 70% of world trade; 80% of global sales of coffee are attributed to just three multinational corporations; and two companies control 40% of the global commercial seed market. Around 10 companies dominate the global pharmaceutical industry, four dominate the agricultural commodities market and around 14 dominate global auto manufacturing. This gives them huge opportunities for profit shifting and tax abuse.

I will illustrate this with an example relating to bananas. I am sure that all noble Lords have had bananas and have wondered where exactly most of the UK’s bananas come from. The UK’s bananas come from an island that does not grow any bananas and which no banana-laden ship has ever visited—that is, Jersey. Companies such as Chiquita, Dole, Fresh Del Monte, Fyffes and Geest control banana production in west Africa and Latin America, but all the paperwork is routed through Jersey.

For bananas selling for £1 in a UK supermarket, 13p goes to the growing country, of which 10.5p is for the cost of production, 1.5p is for labour and 1p is profit. After that, the games begin: 8p goes to a purchasing network located in the Caymans, within the same group of companies; 8p goes to a Luxembourg subsidiary for providing financial services, including interest payments on intragroup loans; 4p goes to Ireland for the use of a brand name; 4p goes to the Isle of Man for providing insurance; 6p goes to Jersey for management services; and 17p goes to Bermuda for providing a distribution network, even though no ship ever visits there.

By the time the bananas are unloaded in the UK, the 13p-worth of bananas magically has a cost of 60p and is sold in the supermarket for £1. The supermarket incurs costs in selling those bananas and will eventually declare a profit of 2p, which if taxed at the rate of 25% will yield half a penny for the Chancellor, out of the £1 that the customer has spent. So 47p of the profit made from UK customers is booked in low or no-tax jurisdictions and those profits are not taxed anywhere in the world. These numbers do not form part of HMRC’s tax gap calculation. Almost every multinational company is engaged in this type of profit shifting and tax abuse. I used to work for an oil company; another day I can maybe give the House examples of what the oil companies get up to.

Profit shifting requires urgent attention. The Companies Act 2006 does not require company accounts to provide any information about profits shifted. Accounts are totally opaque. Can the Minister say what plans the Government have to give visibility to profit shifting? Some visibility can be provided by public country-by-country reporting, which would enable proper transparency on both the amount of taxes avoided by multinationals and how far the UK’s measures have been effective in tackling that.

Section 122 of the Finance Act 2015 contained a requirement for multinationals operating in the UK to publish a public country-by-country report. But the legislation was never implemented and was subsequently repealed by the Finance (No. 2) Act 2023. The UK is now way behind other countries. The EU and Australia now require companies to make these disclosures through public country-by-country reporting. Can the Minister explain why the UK shuns tax transparency?

The UK Government have signed up to the OECD global tax deal, requiring a 15% minimum effective tax rate on multinational corporate profits, but President Trump has withdrawn from that agreement and threatened sanctions against Governments which levy 15% minimum tax on US companies operating in their countries. There is a way forward in the UN framework convention on international tax co-operation, but, unfortunately, last November the UK Government voted against it. It would be helpful to know what their strategy is.

Finally, it would be helpful if corporate tax returns are made publicly available, so that we can all see how they are shifting profits and what kind of taxes are being abused. That would empower the Public Accounts Committee to scrutinise those corporations and any sweetheart deals done by HMRC. I beg to move.

As a family, we were all involved at some point in the Conservative Party in Liverpool, where I grew up in Grassendale, leading to its inclusion in my longer title. My political awareness was triggered by Militant Labour’s running of my home city, when, yes, my parents, as teachers, were part of the thousands who received their redundancy notices. That was when I realised that politics—who ran the council or country—mattered.

I certainly enjoyed my time as a Back-Bencher representing the people and businesses of Suffolk, and I reflect my love for Suffolk in my longer title with the town of Saxmundham, where I live. I should alert your Lordships that, when I left government, I became the Back-Bencher who spoke the most in the final six months of the last Parliament. I think it was the ability to speak for the first time on any topic that inspired me to pronounce on a variety of issues, recognising that I had been a Minister continuously for over nine years—two-thirds of my parliamentary career there. But I have that out of my system and I expect to be able to focus on some particular areas—but those will be of my choice in this House. Prime Ministers have made choices for me, on where I specialised and gained most experience and expertise, particularly in three departments—Defra, Health and Social Care, and Work and Pensions—where I had the privilege of being Secretary of State. I will endeavour, to the best of my ability, to really embrace the huge positivity of this House in its key role of scrutinising legislation and the Executive.

I know government is hard. I actually want the Government to do well, for the sake of the great people of our great nation. While I am sure we will disagree on certain aspects of policy or how we can improve the performance of our public services, I am united in wanting a strong NHS, a strong economy and for our country to succeed. I have long admired the tone of this House, with keen and courteous scrutiny at its heart, somewhat in sharp contrast to the other place where, sadly, the focus has become the social media clip rather than the social discourse and debate we used to have.

I hope that I have already accrued some credits in my apprenticeship for this place, by learning from all the Lords Ministers with whom I worked in government. There are several to name. However, I will save that for another day, but I can assure noble Lords that I recognise both how hard Lords Ministers work and the contribution to scrutiny made by this House, with its gentle peer pressure in trying to improve the legislation and performance of government for the greater good, even if, at times, it did not feel quite so gentle.

I am conscious that beyond the Chamber there is a wider community of Parliament in which I seek to play to a role. I have already started attending APPG events on the ocean, nature, trees and energy, and I look forward to the annual tug-of-war for charity. I certainly hope to provide some balance—if not some ballast—to help the Baronesses defeat the Commons for the first time.

We also know that Governments require steady tax receipts in order to provide good public services. It was my tax training and business experience that gave me the confidence early on in my parliamentary career to point out to the then Chancellor, George Osborne, that several of the banks, particularly RBS, probably would not pay any corporation tax for a very long time as they could roll over all their losses from the financial crash, year after year. I am pleased to say that then led to a change in policy, so tax losses can only be rolled over for six years.

It is important that tax be fair. We should recognise that corporate tax rates and the overall tax burden on companies need to be fair and competitive if we want the economy to grow. We saw how the economy of the Republic of Ireland was massively boosted when it cut its corporation tax rate to12.5% and many companies flocked there, particularly IT companies. That is why the work on transfer pricing, to which the noble Lord, Lord Sikka, referred, has been so important, as ultimately businesses can choose where their headquarters or their science and innovation hubs, or their other key assets, are.

Transfer pricing is a fundamental concept in international taxation and corporate finance. It is the way that profits are shared around the world. It involves the pricings of goods, services and intangible assets when they are exchanged between related entities within a corporate group—inter-company transfers of goods or services. Transfer pricing delivers the necessary compliance on taxation and it can be a valuable tool for companies to become more efficient, to manage risk and to bolster economic development in countries and communities.

Importantly, especially with the OECD guidelines, transfer pricing is designed to ensure fair competition. It was the Conservative-led Government, using their leadership of the G8 back in 2013, who first brought this issue to task on the global stage after the financial crisis of the late noughties. It was agreed at the G8, and then at the G20 later that year, to have the OECD establish guidelines, as the useful Library briefing points out. The OECD completed its guidelines on BEPS—base erosion and profit shifting. A significant element was introducing the arm’s-length principle, which suggests that intercompany prices should align with those charged between unrelated parties in a competitive market. This principle serves as a cornerstone for many countries’ transfer pricing regulations, promoting fairness and transparency.

By appropriately allocating profits and costs among subsidiaries, companies can mitigate the risk of double taxation, which occurs when two or more jurisdictions impose taxes on the same income. Additionally, transfer pricing can help manage operational risks associated with currency fluctuations, and by adjusting transfer prices to account for exchange rate movements companies can stabilise their financial results, providing greater predictability in earnings and cash flows. This stability is crucial for long-term strategic planning and investment decisions.

Another important merit of transfer pricing is its contribution to promoting fair competition. By adhering to the arm’s-length principles, companies are incentivised to price their goods and services fairly. That practice helps prevent anti-competitive behaviour for local businesses which otherwise could be undercut by aggressive tax planning.

Overall, this is all useful in trying to make sure that we keep up to date in having that level playing field around the world. In June 2019, G20 Finance Ministers agreed to update the OECD proposals, known as BEPS 2, with two main interlocking pillars. Pillar 1 re-allocates part of the profits of the largest and most profitable multinationals from where they earn income to where they sell products and services; pillar 2 would impose a 15% minimum tax on global corporate profits based on the residence of the corporation. I understand that the 15% minimum tax has been controversial, as it removes one of the levers of agile, growing economies. I am also aware that the new US Administration have expressed concerns. However, this is a useful mechanism to make sure that there is fairness around the world.

For what it is worth, I think our time would be better focused on making the most of our investment zones and freeports, as well as stabilising tax legislation to give businesses certainty and confidence to invest here and help boost our economy. We should continue to welcome the many corporations that are based here and be mindful of the reasons why some companies are moving their corporate headquarters elsewhere.

Companies and communities need each other. Together, companies and communities can and must profit from each other—something on which I hope all noble Lords would agree.

The UK has implemented several legislative measures to address profit shifting by multinational companies and has adopted BEPS measures recommended by the OECD, including the hybrid mismatching rules. These rules prevent tax advantages from differences in tax treatment of entities or instruments between countries. For example, a payment can be treated as a tax-deductible expense in one country and the receipt considered a tax-exempt dividend in another.

Then there is the UK corporate interest restriction, which limits the amount of tax relief that companies can claim on their net interest expenses to the higher of £2 million or 30% of EBITDA. It is a very powerful method of preventing private equity avoiding tax. Then there is the diverted profit tax, which was introduced in 2015. This targets profits artificially diverted from the UK, as it imposes a 25% tax on profits deemed to be diverted through schemes.

When I first qualified as a chartered tax accountant—which was much to everyone’s surprise, particularly my father’s, at the time—it was the controlled foreign companies rules which were the hot new area. They came in in 1984—I qualified in 1985—and were significantly reformed later, in 2012. These rules aim to prevent UK companies shifting profits to low-tax jurisdictions by taxing the income of foreign subsidiaries of UK resident companies. There has of course always been the transfer pricing rules, which ensure that transactions between related parties are genuinely conducted at arm’s length, and HMRC has issued guidance on that as recently as September 2024.

With all this going on, why are we having this debate? It is because of the OECD’s pillars 1 and 2. The UK has one of the most robust anti-BEPS regimes in the world, largely due to measures taken by the previous Conservative Government, but also subsequent actions by the Labour Government. The OECD has led moves to eliminate BEPS since 2012. From the BEPS report in 2015, the UK has implemented pretty much all the material recommendations and closed a number of loopholes. The UK has implemented the first phase of pillar 2 and is implementing the second phase. The UK was one of the group of nations implementing at the very earliest date, along with Australia, Canada, New Zealand and all of the EU countries.

But now, as the noble Lord, Lord Sikka, has indicated, somewhat shockingly perhaps, the US has pulled out of both pillars, and this leaves our Government in a quandary. Do we want to avoid retaliation or do we stick to our guns? We have discussed pillar 1 and pillar 2 at length in this House. A number of us were keen on the digital services tax, or DST, and we tried to persuade the Government that it was time to tighten it up. The argument given to us against this was the John Lewis argument: that if you are not careful, you attack shopkeepers trying to sell their products online, as opposed to marketplace providers which simply facilitate a sale.

At the time, I worked very hard with a very able tax adviser, Glyn Fullelove, who drafted the legislation— which would have worked—but there was no political impetus to implement it, mainly because we all thought that DST would be a temporary tax while pillar 1 and pillar 2 were properly implemented. This does not look like it is going to happen. Will the Minister look at the DST rules afresh? In his opinion, are they still fit for purpose? Hard choices need to be made on DST—I believe it raised only £380 million last year and might raise about £800 million this year. Given that the Minister wants to help companies grow and raise more revenue, perhaps he might have another look at DST and see whether or not it should be enhanced.

On a practical matter, will a consequence of pillar 2 having no force or effect in the US be that US multinationals will no longer share information with non-US subsidiaries? If they do not share this information, it makes pillar 2 compliance and in particular the understated profits rule tax—UPRT—almost impossible. Has the Minister asked the US multinationals with a presence here whether they will have this information from their head office? I appreciate that the UPRT, which yields some £2.8 billion, will be harder to give up—indeed, it should not be given up—but it would be helpful to hear the Government’s plans for it, given that the information collation may be extremely difficult.

Another related area that I also believe can be of assistance to HMG in raising revenue is the undertaxation of profits in the UK by VAT evasion of offshore online retailers, which is a form of profit shifting. I am very grateful to Richard Allen, the heroic figure of RAVAS, for all his hard work in this area. As we know, bad actors are selling goods online under £135 to evade VAT and to gain a competitive advantage over law-abiding businesses both abroad and in the UK. Distortions of competition caused by the evasion of VAT cause significant harm to domestic retail, both on the high street and online. This harm in turn damages the UK economy through reduced tax revenue, subsequent employment and so on.

Despite recent legislation, which a number of us worked on, there are still obvious flaws in the ID verification system operated by Companies House, and HMRC has essentially enabled bad actors to easily obtain UK company registrations and thus VAT numbers. We have all read about thousands of letters arriving at a flat in Swansea as a result of overseas actors trying to create artificial UK companies. They are pursuing negative and fraudulent behaviour that is essentially the evasion of VAT, and thus shifting profits overseas.

Currently, HMRC has no effective mechanism for enforcing VAT on imports below £135 in value. Import VAT is no longer due on business-to-consumer non-excise goods sent in consignments valued at £135 or less. It is assumed that overseas businesses have complied with the UK legislation that obliges them to register for UK VAT, but that assumption is entirely unenforceable and a coach and horses are driven through it.

Some constructive ideas—such as a passport scheme where you simply put a sticker on every good that can be scanned as it comes in—are around but have not been enforced. It is true that some measures have been introduced, but there remains a significant and immediate problem. Can the Minister look at this urgent issue afresh and perhaps accept a meeting with Richard Allen of RAVAS, so that we can generate the appropriate and correct revenue for HM Treasury and continue the fight against evasion of VAT?

The professor, my noble friend Lord Sikka, has highlighted some severe abuses arising within multinational corporations that can affect their subsidiary companies and the nations in which they reside. The profits of a firm can be used by the parent company to sustain other, less profitable parts of the enterprise, when they might have been used for the firm’s own investments. He has pointed to the ways in which multinational corporations can conduct internal trade at fictitious and exorbitant prices to enable them to evade taxes on a massive scale. They can assign the costs of their enterprise to subsidiaries in countries where there are high taxes, and they can assign their profits to subsidiaries in countries in which there are low taxes. By appearing to make losses in the high-tax domains, they can avoid being taxed, and by declaring them elsewhere, they can retain a large part of their profits. To overcome these abuses can require considerable resources and strong co-ordination between the affected nations, which may have vastly different tax regimes.

The UK has a financial services industry of a disproportionate size when measured against the size of its gross domestic product. It is inevitable that it should be in the forefront of advising and facilitating the stratagems of tax avoidance. A dramatic case of tax avoidance that has recently come to light concerns the Russian oligarch Roman Abramovich. He has been residing and trading within the UK. However, his trades and hedge fund operations have been attributed to the British Virgin Islands, a so-called tax haven. In a defence against the charges of tax evasion, the oligarch’s lawyers have declared that he has

“always obtained independent expert professional”

opinion and legal advice, and has

“acted in accordance with that advice”.

This brief assertion reveals two things. The first is that there are plenty of people at hand in the City of London to advise on how to evade the British laws of taxation. The second is that those laws are weak and easily exploited. Our financial sector has mediated many of the acquisitions and takeovers that have created large multinational corporations. In the process, we have lost the ownership of many of our premier enterprises. Our national interests have become subservient to the interests of the multinational corporations to an extent that is probably unprecedented in the developed world.

The UK has lost ownership and control of its major public utilities and of its strategic industries. Utilities in which foreign ownership dominates include electricity generation, water, seaports, airports, railways, rolling stock and much more. The majority of motor manufacturers in the UK are under foreign ownership, a large part of our aviation industry has been sold to foreign owners, we are no longer the owners of our steel industry and most of our cement manufacturing is in foreign ownership—the list could be continued almost indefinitely.

The British financial sector and British banks differ markedly in their behaviour from those in adjacent countries. They have had a long history, and they were originally involved in trade and financial intermediation. Formerly, continental banks were involved principally in agricultural credit, and then they began investing in manufacturing. This may partly explain our nation’s comparative failure to invest in manufacturing, despite the fact that we were the original industrial nation.

Our banks and financial sector invest preponderantly in property and financial assets. The profits are derived from the commissions earned in mediating mergers and takeovers among firms. A major source of income has come from selling our industrial assets to overseas owners. The sale of our assets to foreign owners has enabled us to maintain a large deficit on our current account; the value of the goods that we import far exceeds the value of those that we export. The sale of our assets has also sustained a demand for the pound in international currency markets. This has inhibited our exports by raising their prices for foreign purchasers, which has also been a factor in our industrial decline.

A nostrum to alleviate those problems, propounded by the previous Government, has been to encourage foreign direct investment, which was the theme of the Harrington report that was commissioned by the Conservatives. Such a strategy will invite multinational corporations to enter the British economy. It will add to a deadweight loss, which is the remittance overseas of dividends and interest payments. Those are an incalculable drain on our national income. The noble Lord, Lord Harrington, observes that, when the Government invest, the private sector follows, and that £1 of government investment can unlock between £7 and £10 of private sector investment. He recommends that the Government should become an active investor. The present Government are also pursuing foreign direct investment. However, they seem to be unwilling to become an investor; they would prefer to rely almost completely on foreign capital.

Although multinationals in a number of sectors use profit shifting—the noble Viscount, Lord Hanworth, talked about the motor industry—the sector of most concern, by far, is the technology sector, which has so many tools to use in profit shifting. Frankly, here we are primarily talking about US-based corporations. I looked at the actions that the UK has taken. As the noble Lord, Lord Leigh, said, in 2015 there was the diverted profits tax; it did not raise a lot of money, but it led to some changes in behaviour. I join the noble Lord, Lord Sikka, in asking: why has country-by-country reporting ended up getting dropped? Perhaps the Minister can help us with that.

In 2020, the UK implemented a digital service tax of 2%, reflecting its concern that foreign—again, primarily US—technology multinationals were profit shifting to reduce their UK tax bill. The DST raised £678 million for the Treasury last year, predominantly from Google, Amazon and Apple. The tax also provides a more level playing field for UK-based technology firms. As the noble Lord, Lord Leigh, said, it is described as a temporary measure until pillar 1 is completed, which, I think, is why attention has not been paid to it. I join him in suggesting that it is time that the Government looked at the DST, to see if it could be enhanced in ways that would better represent both the loss of gross revenue and the unevenness of the playing field.

To enact pillar 2, the UK introduced in 2024 a multinational top-up tax—MTT—and a domestic top-up tax, DTT. The Finance Bill, which is now making its way through Parliament and which we will receive although we will be unable to amend it, is intended to complete the UK legislation for pillar 2 by introducing the undertaxed profits rule, UTPR. This is the bit with teeth. As the noble Lord, Lord Leigh, said, it is estimated to bring in about £2.8 billion a year.

There is a real question, as far as I understand, about when this will be implemented, once the legislation is passed. Can the Minister give us some clarifications on the date? There are growing concerns that, potentially, it could be kicked into the long grass. The problem is, as we can all anticipate, the arrival of President Trump. He very clearly said that the OECD agreement on BEPS has

“no force … in the United States”.

It has withdrawn from all the relevant treaties, but this is a far stronger statement.

In November, the FT printed an article entitled

“Trump win puts global corporate tax deal ‘in peril’”.

It suggested that countries would be too scared to apply UTPR to US-based companies for fear of punitive tariffs. Indeed, the big tech companies, which have the US President’s ear, as we all know, have said very clearly through their lobby groups that they plan to use trade negotiations to push back strongly against even the UK’s existing 2% digital services tax.

To add another complication to all this, in a rapidly changing world, we have cryptocurrency. I regard cryptocurrency basically as pyramid schemes masquerading as technology, but they can certainly provide a mechanism for bad actors who want to carry out any kind of tax avoidance, including profit shifting. I am interested to know how this changes the thinking of the Government and HMRC in trying to keep a grip on the profit-shifting strategies that are increasingly employed.

One thing I would suggest is that it is time to make sure that we link up with potential allies who are also willing to stand firm against base erosion and profit shifting. We know it is the EU; I suspect it is also Canada and Japan, and there should be others. My party has called for the Government to seize the opportunity of a pan-Europe customs scheme as a mechanism which would perhaps help us pull together our relationship with the EU but then also engage with other allies around this issue. I ask the Minister: are we in discussion with others who share our worldview on how we keep alive the strategy to end base erosion and profit shifting in this new Trump era? This really has to be done collectively, because it is one of those areas where we either hang together or, frankly, we hang separately.

The previous Government made significant progress in tackling the transfer of businesses’ profits to low-tax and no-tax locations. We constantly stressed our commitment to combating tax avoidance and pledged to raise an additional £6 billion annually. In 2018, we announced a digital services tax to ensure that digital businesses paid tax that reflected the value they derived from UK users, as an interim measure, pending an international agreement to reform the corporate tax framework. I supported it in this House, drawing on my own experience in the retail sector, where the tech giants held an unfair advantage because they did not pay much VAT and had much lower business rates. That reality has not changed. The noble Baroness, Lady Kramer, said that it was the sector of most concern to her.

Then, in 2022, as we have already heard, we confirmed that we would implement the OECD pillar 2 rules for a global minimum corporate tax rate, for accounting periods beginning after 2023. Pillar 2 applies a “global minimum tax” of 15% to the profits of multinational groups whose revenue exceeds €750 million per year. Provision to this effect was included in the Finance Act 2023 and further provisions were included in the Finance Bill 2023-24. As a result, the OBR estimated that the implementation of these reforms could raise £2.8 billion in 2028-29.

Due largely to measures taken by the previous Government, as my noble friend Lord Leigh of Hurley said, the UK has one of the most robust anti-base erosion and profit shifting regimes in the world.

That was the position until very recently. But the US has always been unenthusiastic about this whole process and this attitude is most marked in the Republican Party. The US has very recently withdrawn from the OECD deal in full. This is explosive stuff. US firms are some of the most prominent among those whose activities have caused the problems to which I have referred. The US announcement upends all plans and expectations. There are strong hints that UK interests might be adversely affected as a consequence. For example, our digital services tax and the undertaxed profits rule might be in the present Administration’s sights. The Minister may be able to confirm the sums involved. As I understand it, DST was forecast by the NAO in 2022 to raise £862 million by 2024-25. UTPR is only just beginning to take effect but is due to raise £550 million by 2029-30, according to the HMRC policy paper of last October on multinational top-up tax.

In short, the path along which we were proceeding now looks to be full of problems. An alternative to sticking to these taxes is the risk of costly tariffs if an accommodation cannot be found with the Trump Administration; in other words, the world has changed and we need to reflect how best to respond to this change. What is the Government’s assessment of all this—including my noble friend Lord Leigh’s question about the impact of the future lack of information sharing? How will they respond and, most importantly, how will they protect UK interests? I look forward to hearing the Minister’s thoughts on this extremely important issue.

The disadvantages of corporations shifting profits to low-tax or non-tax jurisdictions are well known; there is no need for me to go on about them, except to say that they represent a serious problem for UK economic interests. These disadvantages apply whatever the US Administration might do, but we now need a fundamental rethink about how we can best deal with these disadvantages in the world as it now is and tackle the problems that we jointly see.

My noble friend Lord Leigh of Hurley has come forward with various alternative proposals on VAT and its enforcement. In 2021, the Conservative Government introduced changes to limit profit shifting, from which the OBR then scored substantial revenue. If there is good reason to believe that these have not been as effective as they should have been, as my noble friend suggested, I would encourage Ministers to look at them again. I believe that his points merit serious consideration.

I had intended to end by outlining how the Government’s recent actions have damaged the economy. It remains true that, by talking the economy down, making large increases in employment taxes and crushing companies under new employment regulations, the Government are making fundamentally wrong and anti-growth choices. The consequence is a flat economy killed stone dead by the Budget—even Tesco followed Sainsbury’s with job cuts this week—and a potentially chilling effect on investment from overseas.

Yet these actions—foolish as they were—are only marginally relevant to today’s subject. It is well-run businesses in a thriving public sector that create jobs and wealth. They rely on the Government of the day to deal with the complexities of international tax and negotiate arrangements that are effective and fair to UK plc. The Trump challenge on tax is serious and I look forward to hearing how the Government plan to address it.