Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I beg to move amendment No. 25, in page 150, line 7 [Vol 1], leave out from ‘arrangements' to end of line 9.

Joe Benton (Bootle, Labour)

With this it will be convenient to discuss amendment No. 28, in page 150, line 11 [Vol 1], leave out from ‘secure' to end of line 12 and insert

‘that the amount in question was not eligible for qualifying relief within the meaning of Schedule 18A paragraphs 6, 7, or 8.'.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

The amendments concern the specific way in which the Government have chosen to implement the ECJ judgment, and I want to talk about something that the Financial Secretary highlighted in the clause stand part debate. He referred to a statement made by his right hon. Friend the Paymaster General in February, about the Government trying to close down any attempts made by UK companies to use the Marks & Spencer judgment to claim group relief and to enter into what was described as relevant arrangements to enable group relief to be claimed.

I should like to probe the arguments of the Financial Secretary about the clauses that concern those arrangements. It is fair to say that if someone were setting up a UK-based group of companies, they would seek to ensure that the shareholdings were such that they were able to claim group relief if losses were incurred in trading operations. They would check that they could offset the losses in one company against the profits in another for tax purposes. I would argue that that is a legitimate form of tax planning from the outset. Following the Marks & Spencer case, my belief would be that a UK parent company setting up subsidiaries overseas would, when starting up a new operation or new business, seek to structure the shareholdings so that they qualified for group relief. It may be that rather than encouraging an overseas investor to buy 30 per cent. of a subsidiary, they might ask that investor to buy just 24 per cent., so that they could qualify for group relief, and set up such arrangements from the outset. That is a perfectly reasonable form of tax planning.

However, there may be circumstances in which other arrangements are put in place, which would enable businesses to claim group relief on losses incurred by overseas subsidiaries. I should like to run through a few examples, to try to tease out from the Minister where he thinks the boundary lies between what he thinks is a sensible arrangement as part of the normal structure of a group and arrangements that might, in his view and that of the Treasury, be deemed to be tax avoidance. When companies are looking at structuring their businesses overseas, they need some certainties and some clarity.

Stephen Hesford (PPS (Rt Hon Baroness Amos, President of the Council), Privy Council Office; Wirral West, Labour)

With respect to the hon. Gentleman, it seems that he wants to have his cake and eat it. If he accepts that the Marks & Spencer judgment has to be made clear in the Bill, how can he argue on one hand that we have to implement it—that is, in favour of Marks & Spencer and the wider regime for tax relief for groups of companies throughout the European Union, which I understand is the essence of the judgment—and also argue that it is wrong of the UK Government to narrow the proposal as far as possible so that Marks & Spencer does not take over-advantage of that situation? Is the hon. Gentleman in favour of Marks & Spencer getting away with it or is he in favour of narrowing down to the bare minimum? Which is it?

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I am in favour of proper implementation of the ECJ judgment in the Marks & Spencer case. I will come to two issues that are connected with that matter in the next group of amendments. The schedule refers to relevant arrangements to enable companies to claim group relief. Anyone setting up a group structure from scratch and determining its structure would think about how to ensure that if losses do arise—no company sets out to make losses—they can flow through to UK tax computation and be offset against UK tax and profits. That is legitimate planning.

However, I am concerned about where the line is drawn between legitimate planning and the actions that people might take in order to make losses eligible for UK tax relief at a later date. There might be some tax structuring at the start of a new business opportunity, but people may find that the arrangements they make further on in the process, especially their choices about changes to group structures, for example, could make some losses eligible for relief in the UK, depending on their actions.

To help the hon. Gentleman, I give the example of a minority shareholder in an overseas company in which the UK parent owns 60 per cent. and a minority shareholder owns 40 per cent. If the minority shareholder exercises a put option, and requires the UK parent to buy those shares, which puts it over the 75 per cent. threshold for claiming group relief, the arrangements have not actually been made at the behest of the UK parent. If that happened as a consequence of actions by the minority shareholder, those actions will act as a trigger and enable the UK parent to claim group relief on the losses, assuming that there is no other way of obtaining relief in the country where the overseas subsidiary is  located. However, because it is not their action or at the parent’s direction, they have not entered into the relevant arrangements for the purposes of securing group relief.

We have heard of cases in which the parent company may deliberately buy out the minority shareholding and decide to close down the operation, and in doing so goes over the 75 per cent. threshold, which in principle would render those overseas losses eligible for group relief in the UK. If that is the case and the parent actively seeks to acquire that minority interest, does that fall within the remit of the anti-avoidance provisions in the schedule?

We are trying to understand what actions a company can legitimately take that will trigger group relief which will not be picked up by the anti-avoidance claims. Is structuring from the outset okay? Will transactions later on fall inside or outside the anti-avoidance regulations? That is not clear, as the wording in the schedule is quite broad. People have a legitimate interest in understanding where the Government and HMRC will draw the line when considering what is permissible and what is not in relation to the structures of group companies.

John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)

It is intended that the amendments should, as the hon. Member for Fareham said, alter certain detailed rules which would otherwise—as the clause and schedule are drafted—prohibit relief under the schedule in some circumstances. They would remove some of the protections in the legislation that prevent groups of companies from entering arrangements with a view to obtaining tax relief in the UK for foreign losses.

I should like to deal with some of the hon. Gentleman’s questions about the scope of our proposals. The European Court of Justice only expects cross-border loss relief in narrow circumstances, therefore it is important that we ensure in legislation that that is given effect and cannot be manipulated. The judgment in the Marks & Spencer case also makes it clear that Governments can adopt measures to prevent companies from seeking to achieve a tax benefit in one jurisdiction rather than another—in other words, choosing in which jurisdiction they will obtain relief for the losses. Just to be clear, the legislation does not prevent the movement of business activities. Section 403G only prevents loss relief from being obtained in the UK where a main purpose of the arrangements is to obtain group relief in the UK. That is the central provision, which, in some senses, answers the hon. Gentleman’s specific questions. I cannot give him a judgment on hypothetical or individual taxpayers’ cases. The purpose is to consider the motive in each particular case and instances would have to be examined on a case-by-case basis. HMRC has established procedures, with advisers and business, for doing just that.

In summary, I am concerned because the amendments would remove some of the important protections in the legislation. I am surprised that the Opposition have tabled such amendments. I should be interested to hear the hon. Gentleman say whether these are probing amendments, because he is trying to be much more generous with UK tax. It is not possible to be precise about the costs of the amendments, but  without the protection that they seek to remove, the potential for abuse, which is our main concern, runs into hundreds of millions of pounds a year.

I hope that the hon. Gentleman will not press the amendment to a Division, but if he does, I shall ask my hon. Friends to oppose it.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I am slightly disappointed with the Financial Secretary’s response to the amendments, because people are looking for a greater degree of clarity about what the fairly broad paragraphs in the schedule are seeking to achieve. He referred to assessing the motive in each case and the procedures that the Revenue and Customs have to assess the purpose of transactions. I can see a range of corporate transactions that people could enter into.

Stephen Hesford (PPS (Rt Hon Baroness Amos, President of the Council), Privy Council Office; Wirral West, Labour)

Will the hon. Gentleman give way?

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I shall just finish this point.

Some of those transactions are currently regarded as legitimate and acceptable and others would unlock the losses for relief in the UK after a loss had arisen and some group structuring had taken place. The Financial Secretary is trying to capture such transactions in this anti-avoidance provision in respect of groups that undertake restructuring to unlock those losses for use in the UK, perhaps where there is an overseas subsidiary with an external shareholder with more than 25 per cent. of the shares in the company and some transactions have been entered into that change the direction or benefit of the taxpayers. We ought really to have some greater clarity on that.

Stephen Hesford (PPS (Rt Hon Baroness Amos, President of the Council), Privy Council Office; Wirral West, Labour)

Is it not simply this? We have a judgment which we did not want and we are seeking to narrow that judgment down to protect the Rvenue in this country. Does he not agree?

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I referred to that point in my earlier remarks. We want to see the judgment properly implemented. In doing so, we also need to give some clarity to taxpayers on the implication of that, particularly where actions are taken to minimise the scope for abuse and where we are looking for greater direction and clarity from the Government. I regret to say that I do not think that the Financial Secretary offered that clarity in this matter.

As I said at the outset, these are probing amendments. I will not push them to a vote but I hope that the Financial Secretary will reflect on ways in which further guidance can be given to taxpayers on the breadth of these anti-avoidance techniques. Would they inhibit or catch groups that were set up as perfectly legal and sensible business arrangements, but to which the Revenue might impute the motive of being set up to enable group losses to be relieved at some time in the future if a business is loss-making? Unless the Financial Secretary has further clarification to offer, I beg to ask leave to withdraw the amendment.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I beg to move amendment No. 5, inpage 153, line 35 [Vol 1], leave out from ‘liability' to end of line 36.

Joe Benton (Bootle, Labour)

With this it will be convenient to discuss the following amendments: No. 6, in page 153, line 38 [Vol 1], after ‘every' insert ‘reasonable'.

No. 7, in page 154, line 19 [Vol 1], leave out from ‘liability' to end of line 20.

No. 8, in page 154, line 23 [Vol 1], leave out

‘immediately after the end of the current period'

and insert

‘when the claim for group relief was made'.

No. 9, in page 155, line 5 [Vol 1], leave out from ‘liability' to end of line 6.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

These amendments deal with two different areas within the judgment of the European Court and particularly refer back to the judgment of Mr. Justice Park on 10 April 2006, where he tackled a couple of the issues that were perhaps ambiguous in the ECJ’s original judgment. I should like to deal first with amendments Nos. 5, 6, 7 and 9. One of the issues that was left outstanding in the minds of Marks & Spencer and their advisers, and on which they sought clarification from Mr. Justice Park, was the use in the ECJ judgment of the word “possibility”.

Mr. Justice Park’s judgment states at paragraph 33 that in his view when the ECJ refers to possibilities available, it means recognised possibilities, legally available, given the objective facts of the company’s situation at the relevant time. Some of the sub-paragraphs of the schedule refer to every possibility, rather than trying to be more specific about the nature of those possibilities.

Two issues emerge from Mr. Justice Park’s ruling. First, there are the legally recognised possibilities and whether those are available, given the objective facts at relevant times. Mr. Justice Park states that while there may be legal possibilities for group relief, the fact that they are available does not necessarily preclude losses in other EEA countries offsetting UK tax or profits. He goes on to discuss what is meant by objective facts at the relevant time and uses two examples to illustrate that. The first is where the overseas business is loss-making and still trading. He said that although the parent company might argue that the overseas subsidiary will not return to profit, the fact that it could—thereby offsetting its losses against future profits—would mean that those losses could not be used to offset UK taxes.

His other example was of a loss-making overseas company that had been closed. The losses had been fully utilised in that country, and a balance of unrelieved losses remained that could be offset against UK taxable profits. He said that the objective facts in that case proved that the losses could be relieved in no other way than against UK taxable profits.

Paragraph 6(4) of schedule 1 refers to “every step”, but what does that mean? Will HMRC examine what a UK parent company has done to turn around a subsidiary prior to closing it, in order to ensure that every step has been taken? What is the objective measure of any step? In the case of Marks & Spencer, the French subsidiary was sold to Galeries Lafayette, which then used the losses. If M&S had not tried to sell  the business to Galeries Lafayette, would it still have satisfied the “every step” criterion? If it had not been able or had not tried to sell the business, would Revenue and Customs have said that the UK parent had not tried every step?

With the idea of every step, the Government are asking UK parent companies to know what purchasers have done with their losses. In the M&S case, it was known that Galeries Lafayette had used those losses to reduce its taxable profits, but most groups retain a degree of confidentiality about their tax affairs. There is no legal basis on which a parent that disposes of companies can find out what the acquirer has done with the losses.

My concern is that phrases such as “every step” and “by any other means” are poorly defined. In the effort to give better guidance to taxpayers, perhaps they should be either changed or qualified. That is why amendment No. 6 would insert the word “reasonable”. Amendments Nos. 5, 6, 7 and 9 seek to clarify what actions a claimant might take to meet the conditions for losses to qualify for offset against UK tax by defining more tightly the issue of possibility left hanging by the ECJ judgment.

The second issue that I shall tackle is that of timing, which is dealt with by amendment No. 8. The Government say in paragraph 7 of schedule 1 that a group relief claim should be made at the end of the current period. It is important for the Committee to know that UK companies claiming UK tax losses are allowed two years after the end of the current period to make a group relief claim. In defining so clearly the timing of the group relief payment for overseas losses, the Government are opening up a mismatch between the treatment of UK losses and the treatment of losses arising elsewhere in the European economic area.

In his judgment, Mr. Justice Park sought to elaborate on the ECJ judgment, which I understand was silent on the issue of when the group reliefclaim should be made. He identified three points at which the claim could be made. The first, in line with the Government’s new clause, is at the end of the accounting period when the loss was made. The second is at the time or times when the group relief claim is made by the parent—effectively a later date. The third is when the matter is dealt with by the special commissioners. I shall deal with the first two options.

Schedule 1 as it is drafted reflects the first option, yet it and the third option were ruled out by the High Court. In paragraph 44 of his judgment, Mr. Justice Park said that

“option 1 is too soon, and would be likely to rule out virtually every case.”

He went on to say:

“At the end of an accounting period in which M&SG and M&SB made a loss, and therefore was still likely to be carrying on its trade it is hard to imagine any case in which German or Belgian law would not provide for any possibility of relief for losses.”

So there could be a situation in which a business continues to trade at the end of a period. Say the financial year ends at 31 December and the business is still trading in Germany or Belgium, under schedule 1 any claim for group relief on those losses should be made. Given that the business is still trading at that point, and is likely to trade on into the next year, there is still the possibility in  German or Belgian law—assuming that they allow for such possibilities—for those losses to be relieved against future profits. The only way in which a claim for group relief could be made in those circumstances would be if the business had closed during the current accounting period, so that it was known that there would be no future trade against which the losses could be offset, if they were unable to be offset in that year or in previous accounting periods.

The ECJ judgment is that, where possible, losses should be relieved in that country first, before being made available to offset in the UK company. If the decision had to be made at the end of the financial year, the company would know that there had been losses, but not whether there would be profit in future years against which that year’s losses could be offset. Because the possibility still existed to offset those losses against future trading profits, they could not be offset against UK taxable profits. In a way, the timing in schedule 1 makes it virtually impossible for a business to make a valid claim, because unless it is closed down in the course of the year, it will still be trading, so there will still be the possibility at the end of that financial year to make a claim.

Mr. Justice Park decided that the decision to make a claim for the use of losses should be made at the time at which the group submitted its claim for group relief. Such claims can be made up to two years after the end of the accounting period in which the losses were made. In those circumstances, a UK parent company could have much greater certainty about the possibility that the losses could not be relieved in the country in which the subsidiary was resident. For example, it could have closed a loss-making subsidiary, so it would know that there would be no tax on profits against which the tax losses could be offset.

If the Committee were to accept amendment No. 7, schedule 1 would reflect Mr. Justice Park’s judgment on the matter. My concern is not merely to achieve certainty for businesses and clarity on the timing, but—having seen Mr. Justice Park’s ruling, and the fact that he chose option 2—

“the time or times when the group relief claim was made by the parent”,

that some UK companies might seek to take the Government to court again to get them to comply with Mr. Justice Park’s original judgment.

The Government might say, “That is fine. We must go through that process and take it through the House of Lords and to the European Court.” However, asMr. Justice Park said in paragraph 41 of his judgment,

“A principle that runs through the whole of community law and has been enunciated by the ECJ in numerous cases is the principle of effectiveness: procedures in Member States must not render practically impossible or excessively difficult the exercise of rights conferred by Community Law”.

It appears to me that the drafting of schedule 1 ignores Mr. Justice Park’s judgment and the principle of effectiveness. It will leave the Government and taxpayers open to further challenge in the courts.

Stephen Hesford (PPS (Rt Hon Baroness Amos, President of the Council), Privy Council Office; Wirral West, Labour)

Is it the hon. Gentleman’s view that all that Mr. Justice Park said was necessary in that case, or was much of it not necessarily directly relevant to what we are now considering? It is an opinion, but it is  not necessarily one that the Government need to take as black-letter law at this time.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

The hon. Gentleman opens up a can of worms in questioning the legal status of Mr. Justice Park’s judgment. To an extent, that goes back to the stand part debate, and the remarks of my hon. Friend the Member for South-West Hertfordshire about the primacy of Community law. If Mr. Justice Park’s judgment were seen as fleshing out the ECJ’s original judgment, should it be part of Community law? If it is part of Community law, will it have primacy over this legislation? I suspect that some people will go back to the ECJ about that. There is an important legal issue here about the status of Mr. Justice Park’s judgment in elaborating on the ECJ judgment. If we go down his route, we are saying that the Finance Bill overrides that judgment. However, as my hon. Friend has said, we know that parliamentary sovereignty is subservient to Community law. If Mr. Justice Park’s judgment is seen as elaborating on Community law, that may well prove ultimately to have primacy over the Bill.

Stephen Hesford (PPS (Rt Hon Baroness Amos, President of the Council), Privy Council Office; Wirral West, Labour)

It was potentially an interesting, wider question that the hon. Member for South-West Hertfordshire asked. However, I am asking a very narrow question. Did Mr. Justice Park need to say, when he made the judgment in that case, what he said, or did he just go on, because he felt like going on to elaborate on areas that he did not need to elaborate on for the purposes of the case? If the latter, his comments were obiter, and therefore unnecessary as part of the letter of the law.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

The hon. Gentleman, who was a barrister, would find it valuable to look at the judgment.

Stephen Hesford (PPS (Rt Hon Baroness Amos, President of the Council), Privy Council Office; Wirral West, Labour)

You have got it.

Joe Benton (Bootle, Labour)

Order. Remarks must be made through the Chair.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

My understanding is that Marks & Spencer went back to Mr. Justice Park for a ruling on the issues, and that he was specifically asked to clarify those points. In the detail of the judgment, he refers to representations made on the issues by counsel for both Marks & Spencer and HMRC. What he was saying on the matter was therefore relevant, and not simply some asides that we should not take into account in dealing with this schedule.

John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)

Like you, Mr. Benton, I wanted to ensure that all members of the Committee had a chance to contribute if they so wished. These amendments would remove some protections in the legislation that ensure that relief is consistent with Government policy and the relevant European law, as expressed in the Marks & Spencer judgment. It is clear that the ECJ, in the Marks & Spencer case, intended relief to be given for foreign losses only in very limited circumstances, where all possibilities of relief had been exhausted elsewhere. The Court went out of its way to note that Governments are free to adopt measures to prevent artificial arrangements seeking to obtain a tax benefit.

I shall deal, as the hon. Member for Fareham did, with amendments Nos. 5, 7 and 9 together. They would undermine the purpose of the new schedule, which is to ensure that if losses have to be, or could be, relieved in future in another state, the UK is not obliged to give relief for them.

We still want to ensure that if a foreign company gets relief elsewhere, it cannot do so here. That is why a general description of other possibilities of obtaining relief is necessary in the legislation. The alternative would be an attempt to describe all the possible ways in which other countries provide relief for losses. Such a description would have to be updated each year. It would be burdensome for us to do and burdensome for business to follow, and it would carry the obvious risk that not all the possibilities of obtaining relief in the other EU member states had been identified.

As for the second issue raised by the hon. Gentleman, amendment No. 8 would change the date at which a determination must be made on whether a loss is potentially relievable for a future period in another state. He proposed an alternative approach and, in so doing, made reference to Justice Park’s recent High Court decision on Marks & Spencer. There is indeed a difference between the approach in Justice Park’s decision—members of the Committee might wish to know that that might not be the final word on the subject—and that in the Finance Bill as to the relevant time at which tests of unrelievability of foreign losses are to be applied.

The difference in position comes about because there are two different and distinguishable scenarios. The judgment of Justice Park applies only to the circumstances of Marks & Spencer. It applies in the context when the United Kingdom legislation does not contain provisions to allow relief on the losses of foreign subsidiaries. We are dealing under the schedule with legislation that, first, reflects the European Court’s decision in December last year and, secondly, translates that decision into UK legislation. In doing so, the Government have decided that the relevant time should be immediately after the end of the period in which the losses were incurred by the foreign subsidiary.

In setting out the legislation in such a way, we are relying on paragraph 55 of the European Court’s decision in the Marks & Spencer case. That paragraph sets out the conditions where, exceptionally, group relief should be extended to foreign losses. Our view is that those conditions are restrictive; that view was supported by the Advocate-General in another European case. When giving his opinion on class IV of the ACT group litigation case, he said:

“The court held that, in exceptional circumstances...a home State must extend domestic group relief”,

but that that extension

“should be applied extremely restrictively”.

The amendment would make the relief not restrictive, but more generous. However, it would not make it more equitable. In short, these amendments would remove important protections under the Bill, so I hope that, having said that they are probing, the hon. Gentleman will not press them.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I am grateful to the Financial Secretary for his response. I shall begin by dealing with the first aspect of the amendments. I understand his point about the requirement to specify in great detail the particular circumstances that would preclude losses being utilised, and indeed being offset. He made a valid and important point about that, which I accept.

On amendment No. 8, the Financial Secretary distinguished between the specific circumstances in the Marks & Spencer case and the decision of Mr. Justice Park, and the general position that is reflected in the schedule. I understand the Financial Secretary’s argument about restricting the availability of the losses and setting out a theme that runs through the proposals to which we have just referred.

I wonder whether, in practice, the Financial Secretary has taken restriction to a point at which it renders the possibility of claiming group relief almost impossible. He is asking businesses, at the end of the financial year, to make a decision about submitting a group relief claim for overseas losses. Before a business has had chance to work through the accounts, think about what the scale of the losses might be, implement some judgments made in drawing up a set of accounts and determine the loss, he is expecting it to decide whether it should submit a claim for group relief for overseas losses. He is asking businesses to do something impractical.

A business might be continuing to trade, but it could be thinking about closing down. The Financial Secretary is asking such a business to make decisions at the end of the financial year—without proper reflection, without the opportunity to draw up proper financial statements and without knowing the quantum of losses—and before it is able to determine whether the losses it has incurred in that year can be relieved against past profits or profits that have emerged during that year. For example, if a series of overseas subsidiaries are operating the same territory, how will the UK parent business know that their profits are greater than the loss incurred by that business that year? The losses can be offset against the profits of overseas subsidiaries in the same accounting period.

The Financial Secretary is asking businesses to know far more than they are capable of knowing and is applying the provision in such a restrictive fashion that it is impossible for those businesses to make a claim for group losses. This is an area on which the Government should reflect further. He is being restrictive in asking businesses to make decisions that they are not in a position to make at the end of a financial year. While I do not wish to press the amendment nor amendments Nos. 5, 6, 7 and 9 to a Division, I shall reflect on the issue. I beg to ask leave to withdraw the amendment.

Joe Benton (Bootle, Labour)

With this it will be convenient to discuss Government amendment No. 23.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I would be grateful if the Minister discussed the amendments. I have his letter to the shadow Chief Secretary about them, and while I appreciate the need for the Committee to move on at pace, it would be appropriate to explain their purpose. What does the Financial Secretary want to achieve by changing the definition of losses to be relieved and the comparison between UK measures of the EEA losses and other measures?

John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)

The amendments will make minor technical changes to ensure that the amount of EEA losses that can be surrendered as group relief to UK companies is in line with the policy objective of preventing double relief for those losses. The previous version could have been read in two ways. That was not drawn to our attention by external sources, but it was something we spotted and decided to clarify with the amendments. I could go into detail, but I hope that the hon. Gentleman accepts that that is the reason for tabling amendments and how they have arisen. They will simply clarify technical changes. I hope that they are acceptable to the Committee.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I do not want to appear to be an anorak or pedantic about the changes, but the Government have sought to amend the Bill here. Is the Financial Secretary confident that, when EEA losses are restated using UK accounting rules and if those losses exceed original EEA losses, the higher value will not be offset against UK taxable profits?

John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)

Yes.