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Although the effects of Brexit are likely to take many years to become fully apparent, one clear consequence of Brexit has been the establishment of an independent UK trade policy.
In a Policy Paper published alongside the Budget, the government announced an intention to give the Secretary of State a power to ’call-in’ transition reviews or reconsideration of transition reviews in suspected cases of dumping or subsidised imports or unforeseen import surges with a view to mitigating any injury to UK industry.
The need for the new power is justified on the grounds that it ’has become clear in some instances’ that ’greater ministerial involvement is required, in particular where there may be wider factors the Trade Remedies Authority (TRA) is not mandated to take account of’.
It will be interesting, when the secondary legislation is introduced, to see whether this is part of any broader reform of the TRA’s role. For example, if ministers are concerned that transition reviews need to be called-in, what about future cases that are not related to the transition to an independent trade policy? And, if the ministers are focused upon those ’wider factors’, will this lead to greater transparency as to how such factors are assessed on public interest grounds? The government, of course, does not have an entirely free hand, because the EU/UK Trade and Co-operation Agreement requires that the TRA be ’independent’. Ultimately, if the Secretary of State can only accept or reject the TRA’s recommendations, how will calling-in a review by references to factors that the TRA is not mandated to consider, lead to what are perceived to be more satisfactory outcomes?
It is only a subjective impression, but in all the pre-Budget chatter, references to the UK becoming a ‘Singapore on the Thames’ seemed rather more muted than they were in March 2021. However, a consultation on introducing the ability for a company to redomicile in the UK indicates, that in one respect at least, the project still has momentum.
Indeed, Singapore, seems very much the model being followed because, although the consultation document contains a paean to England’s ‘green and pleasant land’ (or, more precisely, the UK being a ’leading destination for investment…with world-class regulatory and legal system…transparent and robust corporate law and governance…a competitive tax system’), it also shows rather more enthusiasm for permitting ‘inward’ redomiciliation. The paper notes that when Singapore introduced a redomiciliation regime in 2017 it did not permit ‘outward’ redomiciliation. Bearing in mind, for example, the whittling away in recent years of the advantages of holding UK property in offshore companies, and the commercial and practical advantages that can arise from UK property being held onshore, it will be interesting to see if there is an appetite for redomiciling property groups.
More generally, permitting redomiciliation would represent something of a mini-revolution in company law terms. It will be fascinating to see quite how committed and courageous the government turns out to be to ‘strengthening the UK’s position as…an open, competitive, free market economy’.
The introduction of a power to allow relief from stamp duty and stamp duty reserve tax when loan assets are transferred to a securitisation vehicle is welcome—if that power is used. What is curious about the measure is that reference is made to the government’s desire to ‘increase the flexibility of the government in responding to the changing nature of the securitisation and [insurance linked securities] markets’. However, no commitment is made to actually introduce the relief. Indeed, the policy paper states that taking this power ‘does not represent an intention to make any particular changes in relation to the March 2021, or any future, consultation’. A summary of responses to the March 2021 consultation will be published, we are assured, in ‘due course’.
As expected, the government is moving forward with the welcome introduction of an asset holding company regime. We shall have to await publication of the Finance Bill to see to what extent changes have been made since draft legislation was published over the summer.
Regrettably, no further concrete information was provided as to how the government intends to take forward its wider-ranging review of the funds regime, except for the reassurance the government ‘remains’ committed to the exercise. However, we were told that the government will also publish its response to the call for input on the broader elements of the UK funds regime review, as well as a consultation on options to simplify the VAT treatment of fund management fees ’in the coming months’.
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