Question (this day) again proposed, That the clause stand part of the Bill.

It is a great pleasure to serve under your chairmanship once again, Mr Howarth. Welcome to what may prove to be a briefer sitting than you were anticipating. I hope that that does not upset your plans too much.

The hon. Member for Wolverhampton South West raised a concern that the clause might permit aggressive tax planning or tax avoidance by multinational companies, and that a consequence could be lost revenue to the Exchequer. Let me reassure him. We believe that the clause will have a negligible impact on the Exchequer, but it will simplify the UK tax system. To some extent, if the existing rules were designed to deal with tax avoidance, they were not going to be able to do that effectively anyway because companies could put in a European economic area or UK-linked company.

We do not think the clause opens up a particular vulnerability in any event, but the hon. Gentleman made an important point about ensuring that our tax system is fit for purpose in a world in which multinational companies have choices and can structure themselves in particular ways. That is why the UK was keen to encourage the OECD to look at the international tax system as part of the base erosion and profit shifting project. That project reported recently; it was debated by G20 Finance Ministers at Lima last week and recommendations have been taken on board. As my right hon. Friend the Chancellor of the Exchequer has made clear, the UK will implement the BEPS recommendations.

There is an important point, but I do not believe that it is relevant to the clause. The Government remain determined that the international tax system should ensure a closer alignment between economic activity and taxing rights. That is the key to the BEPS reforms, which is an agenda we are keen to push forward.

There is a difference between something that affects those currently trading in a particular way and the actions that a group of companies might take in the light of a changed tax regime. Is the Minister confident that a change of behaviour through company restructuring following the changes in the clause is unlikely because there will not be much of a loss of revenue from linked companies and so on, and there will not be a change in behaviour that will lead to such a loss in the future?

We do not believe that there will be a change of behaviour that will lead to a loss of revenue as a consequence of the clause. I hope that that provides reassurance to the hon. Gentleman and to the Committee.

Question put and agreed to.

Clause 34 accordingly ordered to stand part of the Bill.