The hon. Gentleman, I think with a degree of hesitation and embarrassment, said that he was asking about a small, pedantic point, but if he cannot do so in a Public Bill Committee considering a Finance Bill, when can he? There is no reason why he should be in any way apologetic for raising such a useful point.

The Amendment tabled by the hon. Gentleman and his colleagues would replace the phrase “enter into contracts” with the words “do business” in reference to the agent acting for the permanent establishment. While the amendment would follow the normal UK definition of “permanent establishment” more closely, the definition is not meant to be the same as the normal UK one.

To put it bluntly, the normal UK definition is about allocating taxing rights, so a wide definition makes some sense. However, the version being used for the VC schemes is about determining what companies may benefit from financing that is subsidised by the UK taxpayer. Consequently, because the existing rule, which requires most of the trade to take place in the UK, is being removed, it is right that we put in its place something whereby the company raising the funds must have a substantial UK presence to ensure value for money for the UK taxpayer. Of course, in doing so, we must ensure that we comply with EU state aid rules, but that is the balance that we are trying to strike.

This is not a fundamental matter of principle. The draft legislation, which is substantially as proposed by the previous Government, aims to secure the future of the schemes by making them compliant with state aid rules, while retaining some benefit for the UK. We think that the balance as set out in the schedule is correct. Consequently, I urge the hon. Member for Nottingham East to withdraw his amendment. He makes a fair point, but I hope that my explanation helps him. If we were to move in the direction set out in his amendment, we could make it rather too easy for businesses with only a slight UK connection to benefit from the reliefs, which I do not think is the intention of any member of the Committee.

As I said, the draft was put out for consultation and changes have been made in response. We have got the right wording here, so I urge the hon. Gentleman to withdraw his probing amendment. I hope that I have provided sufficient clarification of the thinking behind the wording used in this context.