Business-Government Forum on Tax and Globalisation Minutes of 1 June 2009 Meeting
Attendees Rt. Hon Stephen Timms MP, Financial Secretary to the Treasury; Douglas Flint (HSBC); Julian Heslop (GSK); Andrew Shilston (Rolls-Royce); Byron Grote (BP); Richard Lambert (CBI); Duncan Tatton-Brown; Nicolas Moreau (Axa UK); Mark Elborne (GE); Adam Lent (TUC); Parthasarathi Shome (HMRC); Michael Devereux (Oxford Centre for Business Taxation); Melanie Dawes (HMRC); and Edward Troup (HM Treasury). Apologies James Lawrence (Unilever); Hanif Lalani (BT); and Andrew McLaughlin (RBS). Notes The presentations given at this meeting under Items 2 and 4 can be found at: http://www.hm-treasury.gov.uk/tax_governmenttaxforum_index.htm Item 1 – Welcome Rt Hon Stephen Timms MP welcomed members to the fourth meeting of the forum and introduced new member Mark Elborne, GE’s President and CEO for UK and Ireland. Item 2 – UK Economy: Analysis and Trends Officials from HM Treasury and the Department for Business, Enterprise and Regulatory Reform gave short presentations on a) expected trends for the UK economy and b) the Government document “New Industry, New Jobs”, which was published on 20 April 2009. The forum discussed the presentations and agreed that the Government is focusing on the right issues and that now was a good time to reflect on where we wanted to be in the next 10 to 20 years, however it identified some key issues the Government needed to consider if it were to successfully deliver this policy framework. These included: • • The need for fiscal consolidation would require the Government to be innovative in how it steered this agenda and this would require a cultural change. The New Industry, New Jobs objectives were laudable but current budget imbalances would undoubtedly have to take priority and therefore timescales and ambitions should be set realistically. One of the key challenges would be to ensure that the UK has enough highly skilled people to attract the desired business investment. The Government will therefore need to consider further the role of schools and higher education in developing the future UK workforce. There was a case for analysing why companies choose to form companies in particular countries and consider in the light of this analysis how the Government could create an attractive business environment.
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Item 3 – Budget 2009 The Financial Secretary and Edward Troup explained the Government’s thinking that underpinned the Budget 2009 package. The forum discussion identified the challenges the Government faces in returning the public finances back to balance without reducing the attractiveness of the UK as a place to invest and work. The forum members also urged Government to consult wherever possible to ensure new measures did not have unintended administrative burdens for businesses. On specific matters forum members highlighted firstly general concerns regarding the consequences of the taxation of employer contributions to pension schemes on employees, particularly in relation to mobile ‘knowledge economy’ talent and secondly forum members offered assistance to make the proposed new responsibility sign-off of Senior Accounting Officers more workable. Item 4 – Taxation of the Knowledge Economy As agreed at the 16 February 2009 forum meeting, Treasury officials gave a short presentation on the role of tax and innovation, setting out the issues the Government is considering in examining the way the tax system encourages innovative activity. The forum discussed the presentation and welcomed the direction of this work and the Government’s willingness to engage. Forum members highlighted that in its review, the Government should: • • • examine what other countries are doing to encourage innovative activity; identify what methods of Government support have the greatest impact in terms of encouraging innovation; and consider how its policy on innovation fitted into the wider policy environment.
Forum members welcomed the Treasury's commitment to engage with them and the wider business community as work progresses over the coming months. The Financial Secretary confirmed that the Government would set out its assessment and proposed approach in advance of the 2009 Pre-Budget Report. Next Meeting The next forum meeting is currently scheduled for 27 October 2009.
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