Business Editor: The fair and the foul and the £4bn tax avoidance bill

Why UK plc has reason to fear this damp squib with a sting in its tail

Something weird started to happen late last week. My email queue started filling up with missives from the Chancellor. Not directly from him, mind. I hardly see Gordon Brown sitting down and saying: "Och, I have a few spare minutes. I'm gonna fire an email or two at that awkward bugger Nissé." No, it was officials at the Treasury announcing all sorts of grand things, from grants for stem-cell research to Mr Brown's vision for reforming the Common Agricultural Policy and a review of rules on intellectual property. It was a pre-pre-Budget report, if you will.

What, I wondered, was Gordon up to? He has one of his two big set-piece presentations tomorrow at 3pm. Yet here he is, stealing his own thunder. One can only presume these were minor distractions, because the PBR will be so full of thrilling stuff that these announcements would be lost in the roar of policy.

However, I fear the PBR will be a damp squib, with a sting in its tail. There will be lots of interesting announcements - such as a new tax system for films (what, another?), a property development tax and the long-awaited unveiling of real estate investment trusts. But the dangerous stuff will come when Gordon mumbles a bit about anti-avoidance measures.

According to analysis by Bill Dodwell at Deloitte, the Chancellor will need to raise about £4bn a year from closing so-called loopholes. Mr Brown says his tax take from corporations will be £44bn this year, up £10bn. Of this, about £5bn will come from improved corporate profits, £1bn from bringing forward taxes on oil revenues and the rest, well, from making companies pay tax they didn't think they had to pay.

It has been a theme of the last couple of Budgets that corporations have to pay their "fair share". But what is "fair"? Getting rid of convoluted tax dodges is all well and good, but experts say that the taxman is now disallowing tax treatments relied upon for two decades.

Denis Healey, Labour Chancellor in the 1970s, once said he'd squeeze the rich until "their pips squeak". But New Labour found that high tax rates were counterproductive - they encouraged talent to move abroad and tax avoidance to flourish. Gordon Brown would not be so foolish as to admit it, but he is making multinationals' pips squeak, and this will hurt UK plc.

At the moment this tax clampdown is merely putting off companies that might have invested or located in Britain. Sometime soon a big corporation will up sticks and move abroad, blaming these anti-avoidance measures as it goes.

I look forward to the Chancellor's email after this happens.

Share and share alike

I sell you something for £5. A few years later you only value it at £1. So I offer you £1.50 to buy it back. Are you getting a good deal or a bad deal?

If you are an Egg shareholder it is a good deal; if you are a Computacenter one, it's bad. Or so it seems.

The Prudential is offering 118p in shares to buy back the 22 per cent of Egg, its online bank, that it floated at 160p in 2001. Investors are expected to snap its hand off.

The founding shareholders of Computacenter are offering 255p a share for the 56 per cent of the group they sold to the market at 670p in 1998. Not enough, say the group's independent directors. And, with Computacenter shares having been as high as 320p earlier this year, you can see their point.

But the founders have the other shareholders over a barrel. No one can buy the group if they don't, and the company needs a restructuring that will plunge it into losses. The City, which rarely understands long- term investment, would surely mark down the shares if the group goes into the red.

The founders are expected to put a little more on the table - but no more than 5p a share. If I were an investor, I'd swallow my pride and take the money.

j.nisse@independent.co.uk