The committee set up by Alastair Darling to consider the future of corporation tax, and in particular the taxation of foreign profits, meets for the first time on Monday 9 June even though the consultation paper that gave rise to the furore that caused its establishment has now been withdrawn.

I admit that this means that if I was on the committee I would now be proposing one thing, which is that the committee should also be put on hold whilst it is reconstituted to include a rather broader representation of interested parties, including the professions, small business and civil society, all of which are excluded right now. But I can't see that happening and in that case it's worth thinking about what this committee should be addressing, and doing.

The first point to make is the glaringly obvious one that in the real economy the UK does not compete on tax. Companies don't leave the UK as such when they go for what they claim are tax reasons. The evidence is that they are moving HQs and related finance and intellectual property functions out of the UK and into the unreal economies of those tax havens called Jersey and Ireland. But they stay firmly in the real UK economy with regard to selling, manufacturing, having people on the ground, doing R & D and so on. They do remain present, therefore.

In that case the foreign taxes debate is an artificial one: the fact is that the existing arrangements for taxing foreign profits raise little for the UK and we know it. The argument is not therefore how to tax foreign profits. What is more, in truth, we should have no claim to foreign profits. We would, I think, prefer that tax was paid on those to the government to whom they are due. That seems fair and appropriate. We should not be purloining what is not ours.

Instead the terms of this debate should actually be about how to make sure that tax is paid in the UK on what companies earn in the UK, and that what is earned in the UK is not taken out of the UK. This will remain an issue whatever arrangement arises on foreign profit, and whether or not the likes of Shire and UBM have Irish tax residence or not. Unless this is appreciated all else that is discussed is irrelevant.

The key issues for debate then relate to why the UK does not collect what it expects is due to it, as is too obviously the case. There are a range of issues here where policy initiatives would radically help the UK protect its tax base in the interest of all its residents (and that seems to me to be the basic duty of the UK government). These are

1) The overly generous UK tax treatment of interest paid where interest is tax relieved in the UK even if used in a foreign enterprise owned by a group has to go. This is simply using the UK tax system to subsidise foreign operations, and that is absurd.We should only give tax relief for funds used to finance UK activity. Of course there are problems of definition that result from this e.g. is buying an overseas subsidiary a UK activity or a foreign activity? I accept that. But it's universally agreed that our system is more generous than most in the world and we clearly need to review this and develop an unambiguous and robust strategy for changing this rule in the near future.

2) We need to commit to cooperation on bolstering the tax base. So we must work with the EU on the CCCTB and on moving towards methods of unitary apportionment of profits. We must fully commit to methods of stopping tax abuse: for example we should support measures to ensure that companies are brought within the scope of the EU Savings Tax Directive to ensure that information is automatically exchanged on financial earnings of companies earning funds in locations in which they are not resident. At HMRC level I think there is good cooperation on tax: at Treasury level there is resistance. This has to end.

3) We need to know where companies are, and what they are doing in each location in which they operate. This is vital. The UK must back a call for Country-by- Country accounting which can provide enormous benefits by showing just what global companies are doing, and so make them accountable. This accountability of corporations to countries is absent now, and some are claiming it does not exist. That is not true. This is a way of reclaiming it. And it will help show who is, and who is not, paying their taxes, and where. Philosophically this is vital to this process. The argument that capital can roam unfettered and feckless around the world has to be challenged.

4) We need a general anti-avoidance provision in UK law to provide the flexibility to kill the more esoteric forms of tax planning as they happen, and not retrospectively. TJN has proposed this and a change to the way we interpret tax law to use an equitable basis of interpretation so that the will of parliament is respected (as it should be). We're not alone though. So has Prof Judith Freedman at Oxford University.

5) We need to strengthen transfer pricing provisions on payments to offshore if it cannot be demonstrated that the IPR located there was generated in the place to which payment is made. This is key: IPR is not created offshore, it is relocated there. If IPR cannot be shown to have arisen to the place in which payment is to be made then as a matter of course the UK should not allow tax relief on the payment being made.

6) We need research to be done on the use of formulaic apportionment as either the basis for UK corporation tax, or as the basis for an alternative minimum tax to stop excessive tax avoidance. Mike Devereux at Oxford has shown that the UK will be 8% better off as a result of using formulaic apportionment. This must stimulate more work.

This is just an opening agenda of necessary tax and other ideas that should be pursued. But I stress in suggesting them: we're not fighting to artificially keep companies here. We win real jobs, real opportunity and real profit by having great infrastructure and well educated people, largely paid for by tax. Our job is to make sure that corporate profits earned here are taxed here and we should leave these corporate profits really earned elsewhere to be taxed in those places. The loss of jobs from HQ relocation will be tiny when purely tax driven, as UBM and Shire have shown. The issue is therefore about UK tax and not artificial relocations.

One final vote winner though: corporation tax should be reformed so that small companies have a quite different, separate tax altogether. These small companies would be those not owned by PLCs or entities registered outside the UK or qualifying as 'large' companies as defined in company law. That's probably 97% of all UK companies and they need their burdens reduced to encourage real economic activity. At present they are being hindered by the rules created for the tiny majority in the small number of large companies who are creating most of our corporate tax problems. By splitting these groups into a quite different types of legal entity we can provide UK companies with separate tax and regulatory solutions that reduce the burden on the growth of those entities that make real contribution to the UK, so making their taxes fairer and more transparent whilst leaving the rules for corporations that are really separate from their owners quite distinct, and appropriate to their needs. I've already suggested how this could be done.

Do this lot and there's not just a vote winning strategy in here: there's a real tax strategy for the UK and those who really engage with it.