§ Sir Michael Grylls
To ask the Chancellor of the Exchequer what response he has received from United States Treasury Secretary Bentsen to his representations about unitary taxation.
§ Mr. Lamont
United States Secretary Bentsen has explained the United States Adminstration's position. He and his colleagues recognise the importance the British Government attach to this issue, the strength of feeling in the United Kingdom and the risk of retaliatory action by the United Kingdom if a satisfactory solution is not forthcoming. He has assured me that the Administration are very keen to find a solution to this problem that is acceptable. I have said that the Government are ready to discuss how an acceptable solution could best be achieved. But I have informed him that the Government will have to take retaliatory measures in relation to United States based companies if there is not a satisfactory resolution of the problem of the internationally opposed unitary tax on foreign-owned companies in California by the end of this year. Meanwhile, I have instructed the Inland Revenue to obtain information from California-based companies in the United Kingdom on the probable impact of such retaliatory measures.