I apologise for returning late, Sir Nicholas, I was waiting for another vote. I am sorry to have inconvenienced you and the Committee.
It is appropriate to raise the relevant issue of stamp duty on fund mergers. The industry has discussed that with Government but has so far had no response. There is a general view that there are too many funds, and the Heinemann report highlights the removal of barriers to mergers as a key ingredient of cutting costs for consumers in the industry. The Treasury has endorsed that idea in the context of Heinemann, so I ask the Economic Secretary whether the Government are proposing to address that issue as part of their
programme to open markets and make the industry more competitive.
The clause makes it easier for foreign investors to receive their interest distributions from UK-authorised unit trusts and open-ended investment companies without reduction of tax. Like clause 183, it applies from 16 October 2002 and will allow UK funds to compete more effectively with their overseas counterparts. Entitlement to gross payment currently depends on the completion of non-residence declarations by foreign unit holders. That is often an onerous and off-putting process. The clause extends entitlement to pay gross, first, in cases where the interest is paid through a reputable intermediary and the fund manager has reasonable grounds for believing that the unit holder is entitled to gross payment; and, secondly, where the investor is a company or the trustees of a unit trust scheme.
The short and simple answer to the question asked by the hon. Member for Arundel and South Downs is that we keep policies, including those relating to fund mergers, under close review. The provision allows UK fund managers to compete on an equal footing with their overseas counterparts in other jurisdictions. Taken together with clause 183, it gives UK fund managers a valuable boost in competing overseas. I commend it to the Committee.
Question put and agreed to.
Clause 200 ordered to stand part of the Bill.
Clauses 185 to 190 ordered to stand part of the Bill.