MP forces a vote on Osborne's plans to relax tax dodging rules

A Liberal Democrat MP will attempt this week to force another U-turn out of George Osborne's battered budget. The Chancellor is proposing to relax the rules on tax avoidance by British- based multinational companies, which opponents say will deprive developing economies of up to £4bn a year in tax.

The Treasury's Controlled Foreign Company rules are designed to prevent multinationals from avoiding tax by artificially channelling their profits through tax havens. But Mr Osborne has how decided the rules have gone beyond their original purpose. He intends to rewrite them to cover only "the highest risk of artificial diversion of UK profits".

But an amendment by Liberal Democrat MP Stephen Williams, to be voted in the Commons this week, would require him to consult the International Develop- ment department first, to see what effect his planned changes will have on the poorest nations. Melanie Ward at charity ActionAid said of Mr Osborne's plans: "The hypocrisy's staggering."