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House of Commons Hansard
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General Committees
18 June 2018

Delegated Legislation Committee

Draft Double Taxation Relief (Mauritius) Order 2018 Draft Doubt Taxation Relief and International Tax Enforcement (Cyprus) Order 2018

The Committee consisted of the following Members:

Chair: Mr Laurence Robertson

† Aldous, Peter (Waveney) (Con)

Coffey, Ann (Stockport) (Lab)

† Dodds, Anneliese (Oxford East) (Lab/Co-op)

† Ford, Vicky (Chelmsford) (Con)

† Fysh, Mr Marcus (Yeovil) (Con)

† Grant, Peter (Glenrothes) (SNP)

Lammy, Mr David (Tottenham) (Lab)

† Lopresti, Jack (Filton and Bradley Stoke) (Con)

† McKinnell, Catherine (Newcastle upon Tyne North) (Lab)

† Mann, Scott (North Cornwall) (Con)

† Metcalfe, Stephen (South Basildon and East Thurrock) (Con)

† Percy, Andrew (Brigg and Goole) (Con)

† Smith, Jeff (Manchester, Withington) (Lab)

† Stride, Mel (Financial Secretary to the Treasury)

Umunna, Chuka (Streatham) (Lab)

† Walker, Thelma (Colne Valley) (Lab)

† Whittaker, Craig (Lord Commissioner of Her Majesty’s Treasury)

Kenneth Fox, Committee Clerk

† attended the Committee

The following also attended (Standing Order No. 118(2)):

Francois, Mr Mark (Rayleigh and Wickford) (Con)

Stewart, Bob (Beckenham) (Con)

First Delegated Legislation Committee

Monday 18 June 2018

[Mr Laurence Robertson in the Chair]

Draft Double Taxation Relief (Mauritius) Order 2018

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I beg to move,

That the Committee has considered the draft Double Taxation Relief (Mauritius) Order 2018.

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With this it will be convenient to consider the draft Double Taxation Relief and International Tax Enforcement (Cyprus) Order 2018.

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It is a particular pleasure to serve under your chairmanship, Mr Robertson. The orders before the Committee give effect to a new replacement double taxation agreement, or DTA, with Cyprus and a protocol amending our existing agreement with Mauritius. DTAs remove barriers to international trade and investment and provide a clear and fair framework for taxing businesses that trade across borders. By doing that, they benefit both business and the economies of the countries signed up to them.

I will say a few words about each agreement. Our current DTA with Cyprus was signed in 1974 and last amended in 1980. This new treaty therefore provides a comprehensive update that reflects the current OECD standards, including the BEPS—base erosion and profit shifting—minimum standards on treaty abuse and improving dispute resolution. The new treaty protects the UK’s taxing rights over gains from the disposal of land and buildings in the United Kingdom. That is particularly important, because it prevents non-residents from developing and disposing of UK land without paying tax in the United Kingdom.

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I am only here today to represent the concerns of servicemen, civil servants, policemen and firemen who have retired to Cyprus. They went there on the understanding that the tax rate would be 5%. That way, they eke out their pension pretty well. This change will hit them extremely hard. I very much want the House to realise that suddenly they will go from paying 5% up to paying at least 20%, and that is a big jump.

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I thank my hon. Friend for his intervention. The fact that he has chosen to attend this Committee, despite having not been selected to serve on it, is testimony to how strongly he feels about the issue. What I would say to him is this. First, the actual impact of the changes—the move from 5% up to 20%, as he termed it—on individual public service pension recipients will depend largely on their own personal tax affairs. As my hon. Friend may well know, there is a different personal allowance level in operation in the United Kingdom from that pertaining to Cyprus, so there is an interplay between those two reliefs as well. It is therefore not immediately obvious that all of those affected by this measure, or indeed the majority, will be adversely affected. The other point to make is the importance of a level playing field. In the case of all the other countries where we have a similar situation and with which we have agreements in place—countries such as Germany and Belgium—it is the UK tax authorities that actually levy the tax on those who are in receipt of UK public service pensions, albeit that they reside in those territories.

This treaty provides for exemptions for source state taxation, including eliminating withholding taxes on dividends, interest and royalties arising in Cyprus, but we have ensured that we retain the right to apply a withholding tax of 15% on distributions from real estate investment trusts, or REITs. The agreement also contains the most up-to-date provisions to guard against treaty abuse, the latest OECD exchange of information article, and a provision for mutual assistance in the collection of tax debts. Those features strengthen both countries’ defences against tax avoidance and evasion.

The protocol with Mauritius amends our existing 1981 DTA to update the dividend article in order to close a loophole in the original agreement. That was being abused to avoid tax on dividends from REITs. Dividends from UK REITs are usually subject to a withholding tax when paid to investors, because the profits themselves are not taxed in the hands of the REIT. However, the Mauritius DTA predates the creation of REITs and prevents application of that withholding tax. We recently became aware that third-country investors had established a company in Mauritius to use that feature of the DTA to avoid UK tax on dividends from a REIT.

We approached the Mauritian Government proposing a change to the dividend article to prevent the avoidance, and they were happy to co-operate. The amended article allows the UK to withhold tax at 15% on dividends from REITs to residents of Mauritius, bringing it into line with many of the UK’s other DTAs. The changes made by the protocol will, once it is ratified, be effective from the date of signature—28 February 2018—so there will be no delay in shutting down the avoidance and protecting the UK Exchequer with immediate effect.

The UK, and Cyprus and Mauritius, can be happy with the agreements. They protect UK revenue and provide a stable framework in which trade and investment between the UK and Cyprus and Mauritius can continue to flourish. I therefore commend the orders to the Committee.

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It is a pleasure to serve with you in the Chair, Mr Robertson, and to hear again from the Minister, with his explanation of the two double taxation agreements. It is of course not so long ago that we were talking about other agreements, particularly those covering Belarus and Ukraine. I am grateful to the Minister for writing to me on 13 June, after that exchange, to cover some issues that are relevant to these treaties as well. With your permission, Mr Robertson, I might delve into some of those briefly.

I am pleased to hear that Her Majesty’s Revenue and Customs is considering the case for further reviews of the treaty network. That would be very helpful because we, as parliamentarians, currently do not have a clear idea of which treaties are being negotiated with which countries, when, with which actors and according to which principles. It would be enormously useful to have that timetable in front of us. Surely it is also necessary to conduct a review, given that we recently debated and agreed in this place that the UK will follow the OECD’s multilateral instrument for the reform of double taxation agreements. It seems to be a useful time to review the agreements.

I was grateful to the Minister for stating in his letter that it would be helpful to know what kinds of additional information it would be useful for Committee members to have before debating such treaties. The first kind—this was revealed a bit in the exchange that we just had—is a clear indication of why new treaties or agreements might shift away from previous ones. Currently, the way that we parliamentarians normally notice that is through the explanatory note that comes with the agreement, which sometimes flags up particular issues. For example, it usefully flagged up the treatment of property investment vehicles for Cyprus. However, explanatory notes do not go through systematically and say, “Here’s every difference compared with the existing agreement.” We have to do that ourselves and look at them in parallel to work out what the differences are. Of course, some of them might not be important, but we cannot really judge that, so it is quite time consuming.

Secondly, we do not have an indication of why certain choices have been made. The potential impact of the new regime on British servicemen and women, and others who might be living in Cyprus, was a useful example. It would be helpful to know whether there had been consultation with people who might be affected by the new agreement. Above all, it would be useful to know why both the UK Government and the Governments of the countries with which we are negotiating treaties have taken certain decisions to move away from an existing regime. The OECD’s approach—I know the Minister is very much on top of the detail of this—gives us many choices about how we can contract with other countries through such agreements. It does not often specify an exact way forward. In fact, one particularly contentious matter, which I think we have debated in this room before, is the use of different forms of arbitration. Countries might have very different views on that, and very different interests.

Finally, the other area where it would be helpful for us, as parliamentarians, to have information about such treaties, when we are talking about developing countries or countries in the global south—a category that Mauritius would probably fall into—is whether any formal assessment, or even informal discussion, had been undertaken by the Government about whether the agreements cohere with the principle of policy coherence for development.

We would all support the tightening-up of the regime, which the Minister mentioned, although it is not something that will particularly benefit Mauritius financially. Such schemes do not tend to have much of a trickle-down impact—quite the opposite—and often create problems for the countries in which they are based, so when we are talking about developing countries, it would be helpful to have a systematic analysis of whether policy coherence for development has been considered in decision making.

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I am grateful for the opportunity to make a brief contribution to the debate. I have spoken previously in similar Delegated Legislation Committees to assert my view that the purpose of all these agreements should be to ensure that people pay tax where they should pay tax, morally and on principle, so I support any agreement that provides an incentive for people to do the decent thing and that closes down as fast as possible any loophole or incentive that encourages people to create an imaginary existence somewhere simply to get a preferential rate of tax.

Therefore, what assurances can the Minister give that nothing in the legislation will unintentionally create incentives or opportunities for further tax dodges that HMRC will then have to legislate to try to close down? Can he give concrete examples of the kinds of practices he mentioned in his opening remarks that have developed against the interests of UK taxpayers? Can he give us an indication of how much money is involved in them? Are they a major problem, or is he simply trying to prevent the problem getting any bigger?

I was concerned by the comments of the hon. Member for Beckenham about the potential impact on people who have given a lot of years of valued and dedicated service to the United Kingdom—military or other service—and who may now feel that their retirement plans are being adversely affected because of decisions taken back home in the UK. Can the Minister give us an indication of how big the effect is likely to be on individuals? How many UK citizens are likely to be directly affected, and how badly? Who will be affected? Will it be people who can just about get by on the pension they have accumulated, or people who could buy and sell most hon. Members here and who some of us may not be too sympathetic towards if they were asked to pay a fair share of taxes?

If the Committee and the House approve this legislation, how will the tax status of those UK citizens living abroad compare with the tax affairs of their colleagues who have chosen to stay and live in the United Kingdom in their retirement? I understand that if someone has organised their entire retirement on one set of assumptions and those assumptions change, it is frustrating and upsetting, but I would not want the Government accidentally to create a position in which people who are retiring are given an incentive to go and live, and spend their retirement money, in somebody else’s economy rather than here. We should be looking for people who receive a pension that is funded by the UK taxpayer to pay the same tax on that, regardless of where they choose to live. We would certainly not want to give people an incentive to move overseas and spend their pension promoting somebody else’s economy. I hope the Minister will give us some assurance about that.

The explanatory memorandum for the order relating to Mauritius said that, in general, the draft legislation complies with the OECD framework. I am interested in why it says “in general”. Does that mean that it does not comply in some specific details, or was the person who wrote it just being careful and reluctant to give a 100% guarantee of compliance to anything? Is there anything in either instrument that does not comply with the recommended frameworks from organisations such as the OECD?

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May I, too, say what a pleasure it is to serve under your chairmanship this afternoon, Mr Robertson?

Like my hon. Friend the Member for Beckenham, I am making a special guest appearance here today in order to raise the issue of service veterans. I managed to give at least brief private notice to the Financial Secretary of my intention to do so.

It is a fact that many veterans and, indeed, other former public sector workers living in Cyprus have been taxed for many years at a rate of 5%. It is important to bear in mind that these people have served their country, and many of them subsequently married local girls and settled down in Cyprus, in some cases to raise a family. Not unreasonably, they have made their financial plans on the basis that they would continue to pay the local tax rate of 5%, to which they have become fully accustomed. For those people suddenly to have to adjust to a tax rate of 20% or perhaps in some cases a marginal rate at 40%—so, eight times higher—will be quite a considerable adjustment.

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You will forgive me, Mr Robertson, for intervening on my right hon. Friend, but the fact of the matter is that I have an interest and I declare it. A very good friend of mine was at the Joint Service Defence College with me. He was a Royal Navy officer and he has contacted me to say that because of this change, he has no option but to return to my constituency. I welcome him back, but the fact is that that is a very big change in his life as a consequence of this change in the tax regime, if it comes about.

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I am sure that my hon. Friend is always trying to look after his constituents, both old and new. Nevertheless, that is a valuable example of the change that this measure could mean. If someone has been living in Cyprus for some period of time and has to return to the United Kingdom for tax reasons because of this change, that shows that it is not a merely immaterial alteration.

We should bear in mind the very practical point that recent movements in the exchange rate between the pound and the euro have only compounded the challenge for people who are paid their pensions originally at the sterling rate and have to convert that into euros.

I will ask the Minister some specific questions and then ask for a favour. My first specific question is, assuming that the tax treaty comes into force fairly shortly, in what tax year would the new arrangements arise? In other words, would these veterans be charged at the new rate of 20% or more in the current tax year—2018-19—or would it only cut in, as it were, in a full tax year, in 2019-20? For anybody who is looking to plan, that is an important piece of information that, understandably, they want to know.

Secondly, given the scale of this change, has the Department considered any transitional arrangements, perhaps phasing it in, in some way, over several years to give people time to adjust? As I am sure the Minister can appreciate, what some of these veterans would like is for the Government to reconsider this whole decision, and I can well understand why they would make that case. I can make that plea on their behalf but, knowing a bit about how government works, I suspect that the Minister is not going to give them great joy on that point. What I am seeking to do, therefore, as I am sure the Minister, who is a reasonable man, can understand, is to say that if the Government are determined to go ahead with this change, which I suspect they are, could they at least try to ameliorate it in some way, to give people who have planned for a number of years on one basis—perfectly reasonably—a little more time to adjust to having to plan for themselves and their families on an alternative basis?

Bearing in mind that these are people who have served their country loyally, will the Government in return, as my hon. Friend the Member for Beckenham and I very much wish—as, I suspect, do other members of the Committee—give a little bit of acknowledgment of the good service of those people in the past? I look forward enthusiastically to the Minister coming up with at least something out of his back pocket.

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I thank everybody who has participated in this debate. To pick up on some of the questions that the hon. Member for Oxford East raised, we are constantly reviewing existing treaties. HMRC is considering the best way to approach looking at the different treaties and perhaps bring forward rationales for why we might approach them in a particular way. The hon. Lady will know that the OECD model is the starting point for our negotiations in this respect; it is available in the public domain and we can all view it. She asked what information could be provided in advance to Committees, particularly about shifts away from previous positions in existing agreements where they are being renegotiated. I would be happy to have a further discussion with her outside the Committee about the detail of that.

The hon. Lady also asked why certain choices were made. We have an explanatory memorandum and it is the case with most treaties that there is some time between the treaty being signed and it coming before this House. For example, the signed DTA that we are looking at was published on the Government website, and a ministerial statement was made to that effect, on 27 March 2018. MPs and their constituents have been able to make representations to me since then. The Government do not consult more generally on the contents of DTAs because they are the product of bilateral negotiations with other states, which deal with a vast range of complex issues that are not suitable for open negotiation.

The hon. Lady asked whether there were formal assessments of whether these arrangements are coherent with our development goals and approaches in developing countries. I assure her, as we have discussed in previous Committees, that the Department for International Development is well aware of and comfortable with our approach. Where it has concerns that it wishes to raise, my colleagues and I at the Treasury will be very happy to hear them. As with any agreement of this nature, it is only by mutual agreement between ourselves and those whom we negotiate with that we come to an agreement at all. Nobody is forcing any particular country into an agreement with us.

The hon. Member for Glenrothes asked me for an assurance that the instruments would not provide further opportunities for tax avoidance. I give him that assurance; I have no crystal ball, but I believe they are intended solely to make the tax system internationally fairer and operate better. As we have discussed in the case of the REITs and Mauritius, they tighten up the tax treatment there to make sure that we are able to levy appropriate tax on those particular structures.

The hon. Gentleman asked me how much money was involved in this kind of clampdown; in the specific case of Mauritius, there was one particular case of treaty shopping where a company was set up in Mauritius with a REIT in the UK, but the transaction was really coming back to another country. I believe the amount involved in that particular case was about half a million pounds. They are not sums up in the hundreds of millions, but they are significant sums none the less. There is an important principle at stake as well.

The hon. Gentleman also raised the issue of our personnel based in Cyprus who are in receipt of public service pensions. He asked how many people might be affected. There are about 65,000 UK residents residing in Cyprus, of whom something in the low thousands—I do not have a precise figure—might be on Government service pensions. A subset of that group would be on armed forces pensions—I shall come on to the contribution of my right hon. Friend the Member for Rayleigh and Wickford in a moment. The hon. Member for Glenrothes sought an assurance that under the new arrangements, those individuals would not be disadvantaged in any way relative to those receiving UK pensions who reside within the United Kingdom. The answer to that is they would not be; they are all basically on the same basis.

The hon. Gentleman also made an interesting point about the language in the explanatory memorandum, asking about the statement that the draft instrument complies generally with the OECD model. He is right. Almost invariably in such treaties, there are variations from that model, and one in the case of Mauritius is the principal purpose test, which does not feature in this particular agreement. That is an important tax avoidance measure, but we have assurances from Mauritius that that is something that will be included in the multilateral instrument. When the Mauritian Government ratify that, they will not have it as a reserved matter.

Coming to the very important points made by my right hon. Friend the Member for Rayleigh and Wickford, and indeed my hon. Friend the Member for Beckenham, as I said earlier, the critical thing in the Cyprus order is that we seek to place the arrangements that pertain to the UK public service pensions of those who happen to be resident in Cyprus on the same basic footing as those that we have with just about every other country with which we have such arrangements. The impact will be determined by a complicated interaction of different allowances—of course the personal allowance in the UK is different from that in Cyprus—and the 5% lower rate tax is a lower rate tax, but an individual who is being taxed in Cyprus can elect to pay the higher rate tax, so it is tricky to work out the exact impact in individual circumstances. We believe, however, that for the less well-off in particular, the likelihood—on average, on balance—is that the impact will be lower rather than greater.

My right hon. Friend asked in which tax year the measures would kick in, and the answer is in 2019-20 at the earliest. I may not meet his invitation to impress him and come up with something out of my pocket, or a rabbit out of a hat perhaps, but I shall go as far as to say that I will, of course, be pleased to meet him to discuss this matter or, indeed, any other tax measure that he may wish to raise with me. However, if we were to look at any form of transitional arrangements, that would require an agreement with Cyprus, and the likelihood of that—or of us pursuing that path, I have to say, as he rather suggested in his contribution—is very low.

On that note, I hope that we can agree the draft orders before the Committee.

Question put and agreed to.

Draft Double Taxation Relief and International Tax Enforcement (Cyprus) Order 2018

Resolved,

That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Cyprus) Order 2018.—(Mel Stride.)

Committee rose.

Draft Police and Criminal Evidence Act 1984 (Codes of Practice) (Revision of Codes C, E, F, and H) Order 2018

The Committee consisted of the following Members:

Chair: Ian Austin

† Atkins, Victoria (Parliamentary Under-Secretary of State for the Home Department)

† Badenoch, Mrs Kemi (Saffron Walden) (Con)

† Dakin, Nic (Scunthorpe) (Lab)

† Davies, Chris (Brecon and Radnorshire) (Con)

† Davies, Glyn (Montgomeryshire) (Con)

† Flint, Caroline (Don Valley) (Lab)

† Kendall, Liz (Leicester West) (Lab)

† Lee, Karen (Lincoln) (Lab)

Mahmood, Shabana (Birmingham, Ladywood) (Lab)

† Maynard, Paul (Lord Commissioner of Her Majesty's Treasury)

† Mills, Nigel (Amber Valley) (Con)

† Morris, David (Morecambe and Lunesdale) (Con)

† Penrose, John (Weston-super-Mare) (Con)

Smith, Eleanor (Wolverhampton South West) (Lab)

† Spelman, Dame Caroline (Second Church Estates Commissioner)

† Thomas, Gareth (Harrow West) (Lab/Co-op)

† Yasin, Mohammad (Bedford) (Lab)

Yohanna Sallberg, Committee Clerk

† attended the Committee

Second Delegated Legislation Committee

Monday 18 June 2018

[Ian Austin in the Chair]

Draft Police and Criminal Evidence Act 1984 (Codes of Practice) (Revision of Codes C, E, F, and H) Order 2018

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Before I call the Minister to move the motion, I just want to say that Members should feel free to take their jackets off if they would like to. [Interruption.] Apparently, I have to say that you are allowed to.

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I beg to move,

That the Committee has considered the draft Police and Criminal Evidence Act 1984 (Codes of Practice) (Revision of Codes C, E, F, and H) Order 2018.

It is a pleasure to serve under your chairmanship, Mr Austin. The order was laid in draft on 21 May and will bring into effect four revised codes of practice that were issued under the Police and Criminal Evidence Act 1984. Code C concerns the detention, treatment and questioning of persons detained under PACE. Code E concerns the audio recording of interviews with individuals suspected of committing offences. Code F concerns the visual recording, with sound, of interviews with individuals suspected of committing offences. Code H concerns the detention, treatment and questioning of people detained under terrorism provisions.

For England and Wales, PACE sets out the core powers of the police to prevent, detect and investigate crime. The exercise of those powers is, however, subject to codes of practice. The codes do not create powers, but they do put in place, among other things, important procedural safeguards for the public when the police exercise their powers.

The four codes were published in draft for public consultation at the end of last year, in accordance with the Act. A total of 32 substantive responses were received, primarily from organisations that are involved in law enforcement and the criminal justice system. That number is deemed normal for this type of consultation. There were other responses from people who simply adopted the response of their representative organisation verbatim.

The main revisions to code C concern safeguards for vulnerable suspects; voluntary interviews, which are interviews with suspects who are not under arrest; and the use of live-link technology, which was introduced by the Policing and Crime Act 2017, to interview detained suspects and to authorise extended detention before charge.

The revised safeguards for vulnerable suspects introduce a new definition of vulnerable, which will apply to any person for whom an appropriate adult must be called. That replaces references to persons being mentally vulnerable or having a mental disorder, as those descriptions are unhelpful in identifying vulnerability. Instead, the revisions describe a range of functional factors for assessing an individual’s ability to understand their position and to exercise their rights and entitlements. If there is any reason to suspect that any of those factors applies, the police must secure an appropriate adult for that person.

The revisions require the police to take proactive steps to identify and record any functional factors that indicate that a person of any age may require help and support from an appropriate adult, and to make that record available for police officers and others to take into account when they need to communicate with that person. The requirement extends to juveniles to ensure that specific relevant factors are not overlooked simply because, by virtue of their age alone, an appropriate adult must always be called.

Other changes update the role description of the appropriate adult and of, and who may or may not act in that capacity. That approach reflects what is, essentially, established good practice and takes into account the work of the Home Office-chaired working group on vulnerable people and the responses to the statutory consultation. Those changes are mirrored in code H.

For voluntary suspect interviews, the rights, entitlements and safeguards that apply, and the procedure to be followed when arranging for a voluntary interview to take place, are strengthened and extended. Those changes take account of concerns that a suspect might not realise that a voluntary interview is just as serious and important as being interviewed after arrest, which may be particularly applicable when the interview takes place in a person’s own home, rather than at a police station. The approach mirrors that which applies to detained suspects on arrival at the police station, with the interviewer standing in for the custody officer.

The new code provisions reflect the amendments made to the 1984 Act by the Policing and Crime Act 2017. They allow a live link to be used when detention without charge is extended by a superintendent for up to 36 hours and by magistrates courts for up to 96 hours. The live link provisions also allow a detained suspect to be interviewed by an officer who is not present at the police station where the suspect is detained. The provisions will enable the police to take advantage of technological developments in cases where the live link does not adversely affect a suspect’s ability to communicate effectively and exercise their rights.

Other amendments that reflect changes introduced by the 2017 Act ensure that 17-year-olds are treated as juveniles for all purposes under PACE. Revisions to code E, which are mirrored, as appropriate, in code F, introduce substantial changes to the audio and visual recording of suspect interviews. The new and revised provisions cover all interviews, for all types of offence and for all suspects, whether or not they have been arrested, and irrespective of the outcome. The provisions specify the types of device that, if authorised by the chief officer, are to be used to audio-record suspect interviews and mean that whenever an authorised recording device is available and can be used, it must be used. A written interview record may be made only if such a device is not available or cannot be used and the interview cannot be delayed until an authorised device can be used. Again, the provisions will enable the police to take advantage of technological developments while safeguarding suspects’ rights.

Under code F, the device specification also extends the range of devices that may be used for recording suspect interviews, to include body-worn video devices, which are increasingly being deployed across forces. That change will be particularly welcomed by the police.

Finally, minor typographical and grammatical corrections have also been made, and out-of-date references have been updated.

The revisions strike the right balance between the need to safeguard the rights of suspects and supporting the operational flexibility of the police to investigate crime. The revised codes provide invaluable guidance to the police and the public on how the police should use their powers fairly, efficiently and effectively.

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It is a pleasure to serve under your chairmanship, Mr Austin. We on the Opposition Benches support the measures in principle. As times and technology change, codes of practice should reflect that. The use of video recording is vital to investigations. We must use every means at our disposal to investigate, solve and prevent crimes and terrorist offences. However, the Opposition strongly believe that such things must be conducted with complete respect for our civil liberties. That has been and must continue to be the British way. We see no reason to think that the powers outlined today would affect that.

The consultation rightly raised the issue of safeguards for juvenile and vulnerable people. Following that, greater attention has been paid to defining those who are vulnerable in the codes of practice. That is important in ensuring fair treatment and support for those who need them during questioning. However, we continue to question the resources available to execute the new powers. Police officer numbers have been slashed by 21,000 since 2010, and our cash-strapped police forces are under increasing strain.

Increased safeguards often require more resources. Can the Minister offer reassurances that there are sufficient resources to ensure the enforcement of the new powers? That is important to us. We cannot protect the public on the cheap, and that includes the protection of their fundamental rights. We appreciate that the change will be monitored and reviewed to ensure success. I would be interested to hear from the Minister how monitoring might take place and when we might expect a review to be published.

Were any measures that individuals recommended in the consultation not included by the Government in the updated codes of practice? We note that no specific measures are included for what happens to the video recordings of people deemed to be innocent. We do not want to fall into a similar situation as we have done with fingerprints and DNA.

As I said at the beginning, we are not opposed to the measures, and I look forward to hearing back from the Minister on some of the points of concern I have raised.

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I rise to ask a specific question of the Minister and to make a general point. As I understand it from the Minister’s opening submission and from a briefing I have received, one of the revisions to Police and Criminal Evidence Act code C amends previous provisions to ensure that 17-year- olds are treated as children for all purposes under the Act.

Does the amended provision specifically cover reporting by various media organisations on individuals who are involved in or the victim of a crime? I ask that in the context of a 17-year-old in my constituency who was stabbed recently. It was very serious; he had to be taken to the hospital. His parents, having to deal with that particular trauma, also saw him named in the media, because he was older than 16. Children up to the age of 16 are covered and cannot, when they are the victims, be named in media reports, but there is a bit of a legal loophole once someone hits the age of 17, so he could be named.

Section 9 of the Independent Press Standards Organisation’s editors’ code states:

“Particular regard should be paid to the potentially vulnerable position of children under the age of 18 who witness, or are victims of, crime. This should not restrict the right to report legal proceedings.”

No legal proceeding has yet begun. If a particular media outlet has signed up to IPSO, it presumably would not or should not have reported my constituent’s name. I suspect that those media organisations that named him have not signed up to IPSO.

I take this opportunity to raise that specific concern with the Minister because of the distress that my constituent and his parents have undergone. Journalists from the particular news outlets were at the front door of the victim’s home. Other family members were contacted in an effort to find out the young man’s name. I hope that the order we are discussing will cover that particular situation. If not, would the Minister be willing to investigate the issue and write to me?

The more general point I wanted to raise was similar to a point that my hon. Friend the Member for Lincoln raised from the Front Bench. To make the best and most effective use of the new codes of practice, one clearly needs to make the resources available to the police. In my constituency, we have lost more than 373 uniformed police officers since 2010. By the end of this year, fewer than 100 uniformed police officers will be stationed in my borough. That is a source of considerable concern to my constituents at a time when violent crime is increasing significantly in London as a whole and in Harrow in particular.

In Harrow, the custody suite where CID officers would expect to be based—they would presumably be the main people taking advantage of the new codes of practice—has been closed. Instead, anyone interviewed in relation to crime in Harrow will now be interviewed in Colindale or Wembley police stations. The tri-borough merger that has been forced on the Mayor of London by the shortage of resources for the Metropolitan police is of huge concern to my constituents. We are, or were until recently, the safest of the three boroughs of Barnet, Brent and Harrow. My constituents are genuinely concerned that our police officers will be squeezed out of Harrow to serve the constituents of Barnet and Brent, which also have significant crime problems, particularly with burglary and gang-related crime. I continue to seek assurances from Ministers, as well as from local police representatives and the Mayor, that the interests of Harrow will not be forgotten.

I wonder aloud whether the time we are taking today, and the time taken by civil servants and others who have contributed to the process that has led up to this Committee’s deliberations, might have been better spent lobbying the Treasury and the Home Secretary to release more money for the Metropolitan police in London, so that my constituents could be reassured by having more uniformed police officers on the beat. Those extra officers might have been able to stop the recent stabbing that I specifically referred to and other incidents of violent crime that are worrying my constituents.

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May I thank the Opposition for their agreement in principle to the operational codes? These codes have been in place since 1984 to ensure that the powers the police exercise are used fairly, equitably and effectively, meeting the public’s expectations for law enforcement, while ensuring that the rights of suspects are observed.

The hon. Member for Lincoln asked a question about resources that was echoed by the hon. Member for Harrow West. I know that the order is not focused on police resources, but with your consent, Mr Austin, I want to talk about the fact that we have protected police funding since 2015. This year, after the Policing Minister spoke to every local police force in the country, we have secured up to £460 million more, with the help of police and crime commissioners, to help the police. The Home Secretary has announced his intention to look at police resources as part of the comprehensive spending review.

The hon. Member for Harrow West mentioned the plans that the Met Police Commissioner and the Mayor of London have in relation to consolidating units within London and forming the tri-borough unit. That is an operational decision for the commissioner and the Mayor of London; it is not a matter for the Home Office. If the hon. Gentleman has concerns about that decision, I hope he will speak to the commissioner and the Mayor of London. The whole reason we have devolved power to the Mayor, as PCC for London, is precisely because he has the local knowledge to enable that process to happen.

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I thank the Minister for giving way; she is comprehensively responding to the debate. Could she bear in mind that police resources have been significantly reduced since 2010, and that is part of the context that my hon. Friends are alluding to?

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I know that the public are concerned about policing in the here and now. As I have said to the hon. Member for Sheffield, Heeley (Louise Haigh)—she is sadly missed today—when we talk about resources, we have to put things into context historically. We had to make very tough decisions after 2010 as to how we spend public money, because of the financial mess we found ourselves in. I do not want to hark on about that; I want to talk about the future. The point is that we are trying to rebalance things with £460 million more of funding this year.

The hon. Member for Lincoln asked whether the new features of the codes will be monitored. The codes are operational, so the Government do not monitor them as such. That is the role of Her Majesty’s inspectorate of constabulary and fire and rescue services, which does a very good job of trying to address that.

The hon. Lady asked what happens to the interviews if the person interviewed is not charged, nothing happens to them and they are an innocent person in the eyes of the law. The evidence obtained, as with other evidence obtained in such circumstances, is kept in accordance with the 1984 Act. When there is an ongoing investigation, the evidence will be kept for as long as that investigation continues, but it has to be returned where a person is not charged in accordance with the 1984 Act.

Finally, the hon. Member for Harrow West described a terrible situation where a constituent of his—a young man of 17—has been the victim of a stabbing. Our sympathies of course go to him and his family. Sadly, part of my role in the Home Office is having to try to help families who find themselves in that terrible position. If the hon. Gentleman feels it would be of benefit to his constituent or their family to meet me at some stage to talk through their experience, I would be honoured to do that.

The hon. Gentlemwan made a point about media reporting on the case. Sadly, this order is not the right area for that question. I do not say that in a critical way, but the order is about how the police conduct their investigations, and reporting restrictions are a separate piece of law. If I may, I will take that matter away to see what more can be done, and I will write to the hon. Gentleman.

With that, I thank the Committee for its consideration of the important issues before us today.

Question put and agreed to.

Committee rose.

Draft Double Taxation Relief (Mauritius) Order 2018 Draft Double Taxation Relief and International Tax Enforcement (Cyprus) Order 2018

The Committee consisted of the following Members:

Chair: Mr Laurence Robertson

† Aldous, Peter (Waveney) (Con)

Coffey, Ann (Stockport) (Lab)

† Dodds, Anneliese (Oxford East) (Lab/Co-op)

† Ford, Vicky (Chelmsford) (Con)

† Fysh, Mr Marcus (Yeovil) (Con)

† Grant, Peter (Glenrothes) (SNP)

Lammy, Mr David (Tottenham) (Lab)

† Lopresti, Jack (Filton and Bradley Stoke) (Con)

† McKinnell, Catherine (Newcastle upon Tyne North) (Lab)

† Mann, Scott (North Cornwall) (Con)

† Metcalfe, Stephen (South Basildon and East Thurrock) (Con)

† Percy, Andrew (Brigg and Goole) (Con)

† Smith, Jeff (Manchester, Withington) (Lab)

† Stride, Mel (Financial Secretary to the Treasury)

Umunna, Chuka (Streatham) (Lab)

† Walker, Thelma (Colne Valley) (Lab)

† Whittaker, Craig (Lord Commissioner of Her Majesty’s Treasury)

Kenneth Fox, Committee Clerk

† attended the Committee

The following also attended (Standing Order No. 118(2)):

Francois, Mr Mark (Rayleigh and Wickford) (Con)

Stewart, Bob (Beckenham) (Con)

First Delegated Legislation Committee

Monday 18 June 2018

[Mr Laurence Robertson in the Chair]

Draft Double Taxation Relief (Mauritius) Order 2018

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I beg to move,

That the Committee has considered the draft Double Taxation Relief (Mauritius) Order 2018.

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With this it will be convenient to consider the draft Double Taxation Relief and International Tax Enforcement (Cyprus) Order 2018.

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It is a particular pleasure to serve under your chairmanship, Mr Robertson. The orders before the Committee give effect to a new replacement double taxation agreement, or DTA, with Cyprus and a protocol amending our existing agreement with Mauritius. DTAs remove barriers to international trade and investment and provide a clear and fair framework for taxing businesses that trade across borders. By doing that, they benefit both business and the economies of the countries signed up to them.

I will say a few words about each agreement. Our current DTA with Cyprus was signed in 1974 and last amended in 1980. This new treaty therefore provides a comprehensive update that reflects the current OECD standards, including the BEPS—base erosion and profit shifting—minimum standards on treaty abuse and improving dispute resolution. The new treaty protects the UK’s taxing rights over gains from the disposal of land and buildings in the United Kingdom. That is particularly important, because it prevents non-residents from developing and disposing of UK land without paying tax in the United Kingdom.

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I am only here today to represent the concerns of servicemen, civil servants, policemen and firemen who have retired to Cyprus. They went there on the understanding that the tax rate would be 5%. That way, they eke out their pension pretty well. This change will hit them extremely hard. I very much want the House to realise that suddenly they will go from paying 5% up to paying at least 20%, and that is a big jump.

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I thank my hon. Friend for his intervention. The fact that he has chosen to attend this Committee, despite having not been selected to serve on it, is testimony to how strongly he feels about the issue. What I would say to him is this. First, the actual impact of the changes—the move from 5% up to 20%, as he termed it—on individual public service pension recipients will depend largely on their own personal tax affairs. As my hon. Friend may well know, there is a different personal allowance level in operation in the United Kingdom from that pertaining to Cyprus, so there is an interplay between those two reliefs as well. It is therefore not immediately obvious that all of those affected by this measure, or indeed the majority, will be adversely affected. The other point to make is the importance of a level playing field. In the case of all the other countries where we have a similar situation and with which we have agreements in place—countries such as Germany and Belgium—it is the UK tax authorities that actually levy the tax on those who are in receipt of UK public service pensions, albeit that they reside in those territories.

This treaty provides for exemptions for source state taxation, including eliminating withholding taxes on dividends, interest and royalties arising in Cyprus, but we have ensured that we retain the right to apply a withholding tax of 15% on distributions from real estate investment trusts, or REITs. The agreement also contains the most up-to-date provisions to guard against treaty abuse, the latest OECD exchange of information article, and a provision for mutual assistance in the collection of tax debts. Those features strengthen both countries’ defences against tax avoidance and evasion.

The protocol with Mauritius amends our existing 1981 DTA to update the dividend article in order to close a loophole in the original agreement. That was being abused to avoid tax on dividends from REITs. Dividends from UK REITs are usually subject to a withholding tax when paid to investors, because the profits themselves are not taxed in the hands of the REIT. However, the Mauritius DTA predates the creation of REITs and prevents application of that withholding tax. We recently became aware that third-country investors had established a company in Mauritius to use that feature of the DTA to avoid UK tax on dividends from a REIT.

We approached the Mauritian Government proposing a change to the dividend article to prevent the avoidance, and they were happy to co-operate. The amended article allows the UK to withhold tax at 15% on dividends from REITs to residents of Mauritius, bringing it into line with many of the UK’s other DTAs. The changes made by the protocol will, once it is ratified, be effective from the date of signature—28 February 2018—so there will be no delay in shutting down the avoidance and protecting the UK Exchequer with immediate effect.

The UK, and Cyprus and Mauritius, can be happy with the agreements. They protect UK revenue and provide a stable framework in which trade and investment between the UK and Cyprus and Mauritius can continue to flourish. I therefore commend the orders to the Committee.

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It is a pleasure to serve with you in the Chair, Mr Robertson, and to hear again from the Minister, with his explanation of the two double taxation agreements. It is of course not so long ago that we were talking about other agreements, particularly those covering Belarus and Ukraine. I am grateful to the Minister for writing to me on 13 June, after that exchange, to cover some issues that are relevant to these treaties as well. With your permission, Mr Robertson, I might delve into some of those briefly.

I am pleased to hear that Her Majesty’s Revenue and Customs is considering the case for further reviews of the treaty network. That would be very helpful because we, as parliamentarians, currently do not have a clear idea of which treaties are being negotiated with which countries, when, with which actors and according to which principles. It would be enormously useful to have that timetable in front of us. Surely it is also necessary to conduct a review, given that we recently debated and agreed in this place that the UK will follow the OECD’s multilateral instrument for the reform of double taxation agreements. It seems to be a useful time to review the agreements.

I was grateful to the Minister for stating in his letter that it would be helpful to know what kinds of additional information it would be useful for Committee members to have before debating such treaties. The first kind—this was revealed a bit in the exchange that we just had—is a clear indication of why new treaties or agreements might shift away from previous ones. Currently, the way that we parliamentarians normally notice that is through the explanatory note that comes with the agreement, which sometimes flags up particular issues. For example, it usefully flagged up the treatment of property investment vehicles for Cyprus. However, explanatory notes do not go through systematically and say, “Here’s every difference compared with the existing agreement.” We have to do that ourselves and look at them in parallel to work out what the differences are. Of course, some of them might not be important, but we cannot really judge that, so it is quite time consuming.

Secondly, we do not have an indication of why certain choices have been made. The potential impact of the new regime on British servicemen and women, and others who might be living in Cyprus, was a useful example. It would be helpful to know whether there had been consultation with people who might be affected by the new agreement. Above all, it would be useful to know why both the UK Government and the Governments of the countries with which we are negotiating treaties have taken certain decisions to move away from an existing regime. The OECD’s approach—I know the Minister is very much on top of the detail of this—gives us many choices about how we can contract with other countries through such agreements. It does not often specify an exact way forward. In fact, one particularly contentious matter, which I think we have debated in this room before, is the use of different forms of arbitration. Countries might have very different views on that, and very different interests.

Finally, the other area where it would be helpful for us, as parliamentarians, to have information about such treaties, when we are talking about developing countries or countries in the global south—a category that Mauritius would probably fall into—is whether any formal assessment, or even informal discussion, had been undertaken by the Government about whether the agreements cohere with the principle of policy coherence for development.

We would all support the tightening-up of the regime, which the Minister mentioned, although it is not something that will particularly benefit Mauritius financially. Such schemes do not tend to have much of a trickle-down impact—quite the opposite—and often create problems for the countries in which they are based, so when we are talking about developing countries, it would be helpful to have a systematic analysis of whether policy coherence for development has been considered in decision making.

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I am grateful for the opportunity to make a brief contribution to the debate. I have spoken previously in similar Delegated Legislation Committees to assert my view that the purpose of all these agreements should be to ensure that people pay tax where they should pay tax, morally and on principle, so I support any agreement that provides an incentive for people to do the decent thing and that closes down as fast as possible any loophole or incentive that encourages people to create an imaginary existence somewhere simply to get a preferential rate of tax.

Therefore, what assurances can the Minister give that nothing in the legislation will unintentionally create incentives or opportunities for further tax dodges that HMRC will then have to legislate to try to close down? Can he give concrete examples of the kinds of practices he mentioned in his opening remarks that have developed against the interests of UK taxpayers? Can he give us an indication of how much money is involved in them? Are they a major problem, or is he simply trying to prevent the problem getting any bigger?

I was concerned by the comments of the hon. Member for Beckenham about the potential impact on people who have given a lot of years of valued and dedicated service to the United Kingdom—military or other service—and who may now feel that their retirement plans are being adversely affected because of decisions taken back home in the UK. Can the Minister give us an indication of how big the effect is likely to be on individuals? How many UK citizens are likely to be directly affected, and how badly? Who will be affected? Will it be people who can just about get by on the pension they have accumulated, or people who could buy and sell most hon. Members here and who some of us may not be too sympathetic towards if they were asked to pay a fair share of taxes?

If the Committee and the House approve this legislation, how will the tax status of those UK citizens living abroad compare with the tax affairs of their colleagues who have chosen to stay and live in the United Kingdom in their retirement? I understand that if someone has organised their entire retirement on one set of assumptions and those assumptions change, it is frustrating and upsetting, but I would not want the Government accidentally to create a position in which people who are retiring are given an incentive to go and live, and spend their retirement money, in somebody else’s economy rather than here. We should be looking for people who receive a pension that is funded by the UK taxpayer to pay the same tax on that, regardless of where they choose to live. We would certainly not want to give people an incentive to move overseas and spend their pension promoting somebody else’s economy. I hope the Minister will give us some assurance about that.

The explanatory memorandum for the order relating to Mauritius said that, in general, the draft legislation complies with the OECD framework. I am interested in why it says “in general”. Does that mean that it does not comply in some specific details, or was the person who wrote it just being careful and reluctant to give a 100% guarantee of compliance to anything? Is there anything in either instrument that does not comply with the recommended frameworks from organisations such as the OECD?

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May I, too, say what a pleasure it is to serve under your chairmanship this afternoon, Mr Robertson?

Like my hon. Friend the Member for Beckenham, I am making a special guest appearance here today in order to raise the issue of service veterans. I managed to give at least brief private notice to the Financial Secretary of my intention to do so.

It is a fact that many veterans and, indeed, other former public sector workers living in Cyprus have been taxed for many years at a rate of 5%. It is important to bear in mind that these people have served their country, and many of them subsequently married local girls and settled down in Cyprus, in some cases to raise a family. Not unreasonably, they have made their financial plans on the basis that they would continue to pay the local tax rate of 5%, to which they have become fully accustomed. For those people suddenly to have to adjust to a tax rate of 20% or perhaps in some cases a marginal rate at 40%—so, eight times higher—will be quite a considerable adjustment.

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You will forgive me, Mr Robertson, for intervening on my right hon. Friend, but the fact of the matter is that I have an interest and I declare it. A very good friend of mine was at the Joint Service Defence College with me. He was a Royal Navy officer and he has contacted me to say that because of this change, he has no option but to return to my constituency. I welcome him back, but the fact is that that is a very big change in his life as a consequence of this change in the tax regime, if it comes about.

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I am sure that my hon. Friend is always trying to look after his constituents, both old and new. Nevertheless, that is a valuable example of the change that this measure could mean. If someone has been living in Cyprus for some period of time and has to return to the United Kingdom for tax reasons because of this change, that shows that it is not a merely immaterial alteration.

We should bear in mind the very practical point that recent movements in the exchange rate between the pound and the euro have only compounded the challenge for people who are paid their pensions originally at the sterling rate and have to convert that into euros.

I will ask the Minister some specific questions and then ask for a favour. My first specific question is, assuming that the tax treaty comes into force fairly shortly, in what tax year would the new arrangements arise? In other words, would these veterans be charged at the new rate of 20% or more in the current tax year—2018-19—or would it only cut in, as it were, in a full tax year, in 2019-20? For anybody who is looking to plan, that is an important piece of information that, understandably, they want to know.

Secondly, given the scale of this change, has the Department considered any transitional arrangements, perhaps phasing it in, in some way, over several years to give people time to adjust? As I am sure the Minister can appreciate, what some of these veterans would like is for the Government to reconsider this whole decision, and I can well understand why they would make that case. I can make that plea on their behalf but, knowing a bit about how government works, I suspect that the Minister is not going to give them great joy on that point. What I am seeking to do, therefore, as I am sure the Minister, who is a reasonable man, can understand, is to say that if the Government are determined to go ahead with this change, which I suspect they are, could they at least try to ameliorate it in some way, to give people who have planned for a number of years on one basis—perfectly reasonably—a little more time to adjust to having to plan for themselves and their families on an alternative basis?

Bearing in mind that these are people who have served their country loyally, will the Government in return, as my hon. Friend the Member for Beckenham and I very much wish—as, I suspect, do other members of the Committee—give a little bit of acknowledgment of the good service of those people in the past? I look forward enthusiastically to the Minister coming up with at least something out of his back pocket.

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I thank everybody who has participated in this debate. To pick up on some of the questions that the hon. Member for Oxford East raised, we are constantly reviewing existing treaties. HMRC is considering the best way to approach looking at the different treaties and perhaps bring forward rationales for why we might approach them in a particular way. The hon. Lady will know that the OECD model is the starting point for our negotiations in this respect; it is available in the public domain and we can all view it. She asked what information could be provided in advance to Committees, particularly about shifts away from previous positions in existing agreements where they are being renegotiated. I would be happy to have a further discussion with her outside the Committee about the detail of that.

The hon. Lady also asked why certain choices were made. We have an explanatory memorandum and it is the case with most treaties that there is some time between the treaty being signed and it coming before this House. For example, the signed DTA that we are looking at was published on the Government website, and a ministerial statement was made to that effect, on 27 March 2018. MPs and their constituents have been able to make representations to me since then. The Government do not consult more generally on the contents of DTAs because they are the product of bilateral negotiations with other states, which deal with a vast range of complex issues that are not suitable for open negotiation.

The hon. Lady asked whether there were formal assessments of whether these arrangements are coherent with our development goals and approaches in developing countries. I assure her, as we have discussed in previous Committees, that the Department for International Development is well aware of and comfortable with our approach. Where it has concerns that it wishes to raise, my colleagues and I at the Treasury will be very happy to hear them. As with any agreement of this nature, it is only by mutual agreement between ourselves and those whom we negotiate with that we come to an agreement at all. Nobody is forcing any particular country into an agreement with us.

The hon. Member for Glenrothes asked me for an assurance that the instruments would not provide further opportunities for tax avoidance. I give him that assurance; I have no crystal ball, but I believe they are intended solely to make the tax system internationally fairer and operate better. As we have discussed in the case of the REITs and Mauritius, they tighten up the tax treatment there to make sure that we are able to levy appropriate tax on those particular structures.

The hon. Gentleman asked me how much money was involved in this kind of clampdown; in the specific case of Mauritius, there was one particular case of treaty shopping where a company was set up in Mauritius with a REIT in the UK, but the transaction was really coming back to another country. I believe the amount involved in that particular case was about half a million pounds. They are not sums up in the hundreds of millions, but they are significant sums none the less. There is an important principle at stake as well.

The hon. Gentleman also raised the issue of our personnel based in Cyprus who are in receipt of public service pensions. He asked how many people might be affected. There are about 65,000 UK residents residing in Cyprus, of whom something in the low thousands—I do not have a precise figure—might be on Government service pensions. A subset of that group would be on armed forces pensions—I shall come on to the contribution of my right hon. Friend the Member for Rayleigh and Wickford in a moment. The hon. Member for Glenrothes sought an assurance that under the new arrangements, those individuals would not be disadvantaged in any way relative to those receiving UK pensions who reside within the United Kingdom. The answer to that is they would not be; they are all basically on the same basis.

The hon. Gentleman also made an interesting point about the language in the explanatory memorandum, asking about the statement that the draft instrument complies generally with the OECD model. He is right. Almost invariably in such treaties, there are variations from that model, and one in the case of Mauritius is the principal purpose test, which does not feature in this particular agreement. That is an important tax avoidance measure, but we have assurances from Mauritius that that is something that will be included in the multilateral instrument. When the Mauritian Government ratify that, they will not have it as a reserved matter.

Coming to the very important points made by my right hon. Friend the Member for Rayleigh and Wickford, and indeed my hon. Friend the Member for Beckenham, as I said earlier, the critical thing in the Cyprus order is that we seek to place the arrangements that pertain to the UK public service pensions of those who happen to be resident in Cyprus on the same basic footing as those that we have with just about every other country with which we have such arrangements. The impact will be determined by a complicated interaction of different allowances—of course the personal allowance in the UK is different from that in Cyprus—and the 5% lower rate tax is a lower rate tax, but an individual who is being taxed in Cyprus can elect to pay the higher rate tax, so it is tricky to work out the exact impact in individual circumstances. We believe, however, that for the less well-off in particular, the likelihood—on average, on balance—is that the impact will be lower rather than greater.

My right hon. Friend asked in which tax year the measures would kick in, and the answer is in 2019-20 at the earliest.[Official Report, 17 July 2018, Vol. 645, c. 4MC.] I may not meet his invitation to impress him and come up with something out of my pocket, or a rabbit out of a hat perhaps, but I shall go as far as to say that I will, of course, be pleased to meet him to discuss this matter or, indeed, any other tax measure that he may wish to raise with me. However, if we were to look at any form of transitional arrangements, that would require an agreement with Cyprus, and the likelihood of that—or of us pursuing that path, I have to say, as he rather suggested in his contribution—is very low.

On that note, I hope that we can agree the draft orders before the Committee.

Question put and agreed to.

Draft Double Taxation Relief and International Tax Enforcement (Cyprus) Order 2018

Resolved,

That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Cyprus) Order 2018.—(Mel Stride.)

Committee rose.