Q91 Helen Goodman: Are you saying that you did not take the decision because you thought that the public sector would get its share of the returns through taxation? Are you going back on what you have obviously agreed with the NAO in writing this Report?
Mr Kingman: Could you point me to the relevant paragraph?
Helen Goodman: Sorry, it is page 30, paragraph 3.6.
Mr Kingman: The Report quite rightly names a range of reasons. The reason that I am trying to describe is probably the first bullet point on that list. The tax issue is the third bullet point.
Q92 Helen Goodman: It was highlighted, so I thought that it was a major consideration.
Mr Kingman: I certainly would not describe it as the principal reason.
Q93 Helen Goodman: Would you be concerned at all if things were sold on the equity markets or vehicles were set up overseas that were not subject to UK taxation?
Mr Kingman: There are principles around transactions involving offshore tax havens, for example. I know that they have come up before the Committee in relation to the Mapeley transaction. In general, the Treasury always likes to get a share of tax out of anything that we can, but we are not in the business of requiring any form of UK public sector procurement to be done solely through UK-based vehicles, because that would be illegal under EU law.
Q94 Helen Goodman: I can understand that, but it seems that you are opening up a massive loophole. Mr Williams pointed out that whereas you had a share in debt refinancing, you do not have the same level of control here. The situation is even worse if things are sold on to overseas vehicles.
Mr Kingman: As I said, legally, it simply would not be possible for the British Government to restrict any form of procurement to UK-based bodies.
Q95 Helen Goodman: Do you have any estimate of how many equity holdings are in the hands of companies registered overseas?
Mr Kingman: No, I do not. As you know, the Treasury is very restricted in what information it has access to in relation to the affairs of individual taxpayers or taxpaying companies.
Q96 Helen Goodman: So at the moment, we do not know the potential loss or gain?
Mr Kingman: Correct.
Q97 Mr Khan: Mr Kingman, isn't the PAC being a bit unfair to you by moving the goalposts? The reason behind PFIs, as I understand it, is to harness private sector management expertise in the delivery of public services and not to have a detrimental impact on public borrowing. PFIs are doing so successfully. You would say that one could use two criteria to assess how wonderfully successful both the PFI projects and refinancing have been: first, projects are finishing well on time-I think that you used a figure of 90%-and secondly, most are under budget.
Mr Kingman: I would agree that that is the principal way that we judge the success of the policy, but I think that the work done with the NAO and the PAC over time has been-
Q98 Mr Khan: You have already sucked up to me. That is fine-the PAC is wonderful-but we are being slightly unfair. We are moving the goalposts.
Mr Kingman: I do not think that it is for me to make that comment.
Q99 Mr Khan: Some would argue-it is not quite a third fiscal rule-that we have a third PAC rule. As you said, the first two rules are to be on time and under budget. The third rule that we have imposed on you is to share the proceeds of refinancing with the taxpayer.
Mr Kingman: I think that it is right when refinancing has taken place that we should seek to secure a good deal for the taxpayer from it.
Q100 Mr Khan: Right. You accept the moving of the goalposts, so that we now require you to share the proceeds of refinancing with the taxpayer. Do you accept that that is a noble and right thing to do?
Mr Kingman: I do not know that I myself would describe it as moving the goalposts, but-