HL Deb 29 July 1953 vol 183 cc1018-23

2.54 p.m.

THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING) rose to move, That an humble Address be presented to Her Majesty praying that the International Organisations (Immunities and Privileges of the International Wheat Council) Order, 1953, reported from the Special Orders Committee on Thursday last, be made in the form of the draft laid before Parliament. The noble Marquess said: My Lords, I am sorry to have to interpose this piece of business before the debate on Foreign Affairs, but there is an element of urgency about it which will become apparent in a moment. The purpose of this proposed Order in Council is to make it possible for Her Majesty's Government to fulfil their obligation under Article XVII, Paragraph 7, of the International Wheat Agreement of 1949. Her Majesty's Government has been a party to that Agreement, and thus a member of the International Wheat Council established by it, since it came into force on July 1, 1949.

Paragraph 7 of Article XVII provides that the Government of the country where the seat of the Council is situated shall grant exemption from taxation on the salaries paid by the Council to its employees, but at the same time it permits an exception to be made in the case of the nationals of that particular country. Now, the seat of the Council has been in London since the commencement of the Agreement in 1949;and therefore the obligation to which I have referred, of granting exemption from taxation to its employees, falls on Her Majesty's Government. The draft Order is to be made under the International Organisations (Immunities and Privileges) Act of 1950, which your Lordships will remember. Under that Act the Government are empowered by paragraph 2 (c) of Section 1 to: confer upon…such other classes of officers and servants of the organisation as may be specified in the Order, to such extent as may be so specified, the immunities and privileges set out in Part III of the Schedule to this Act. And the Schedule, to which reference is made in its turn, lists among these immunities and privileges which can be or must be granted Exemption from income tax in respect of emoluments received as an officer or servant of the organisation.

My Lords, I want to be very short on this, but there are one or two points on which I think I must give a brief explanation. In the first place, some of your Lordships may wonder why the Order comes to be presented now, in view of the fact that Her Majesty's Government will actually cease to be a member of the International Wheat Council at the end of this week, when the Wheat Agreement of 1949 expires. You may also wish to know why the making of this Order has been somewhat substantially delayed. The reason why it is necessary to make the Order at this time is that the International Organisations (Immunities and Privileges) Act of 1950 provides in Section 1, paragraph 1 that an Order in Council may be made only in respect of an international organisation of which Her Majesty's Government is actually a member. As Her Majesty's Government will cease to be a member of this Council after July 31 it will not be possible to make the Order after that date. If the Order is not made, the result will be that Her Majesty's Government will be in breach of its obligation under the Wheat Agreement, because the employees who will be affected by it will be liable to United Kingdom income tax. I should make it clear that it is not the Order which expires at the end of this week; it is the power to make the Order, because the power to make the Order exists only so long as Her Majesty's Government is a member of the Organisation.

As regards the delay, I have, of course, no responsibility for the delay before the events of October. 1951, a period of two years but perhaps neither Her Majesty's present Government nor the late Government are entirely blameless in this matter. Since October, 1951, we have been reviewing the whole question of this extension of privileges and immunities to international organisations. As a result, we have had under consideration the presentation to Parliament of a number of Orders under the Act which will fall to be made and in order to save Parliamentary time, we had intended to present them in a body, so that the principle governing them all can be discussed at one and the same time and not re-discussed in a whole series of individual Orders. Some Orders, however, are not yet ready. This particular Order in regard to the Wheat Council had been delayed in order to give an opportunity of bringing in all the Orders in a body; but for the reason which I have given—urgency—it is now necessary to bring forward this Order as a separate entity.

Another matter which may cause your Lordships concern is the specific exclusion from the exemption given by the Order of citizens of the United Kingdom The exemption extends only to those employees who are not citizens of the United Kingdom and the Colonies. The reason for that is as follows. Section 1, paragraph (2), of the International Organisations (Immunities and Privileges) Act contains a proviso which precludes the making of an Order in Council which confers on any person any immunities or privileges greater in extent than those which, at the time of the making of the Order, are required ("required" is in that context the operative word) to be conferred on that person in order to give effect to an international agreement. Under the Wheat Agreement, Her Majesty's Government are required to grant exemption from taxation on lie salaries paid by the Council to its employees, but by the terms of the Agreement are only permitted—"permitted," not "required"—to extend that exemption to cover the case of citizens of the United Kingdom and the Colonies. Therefore, under the terms of the Agreement, coupled with the section of the Act, we have no power to extend the exemption to citizens of the United Kingdom or of the Colonies.

Article 2 of the proposed Order makes the exemption effective in respect of emoluments retroactively as from July 12, 1950. That is the date on which the International Organisations (Immunities and Privileges) Act came into operation. Unless the Order were thus made retroactive, it would not apply to immunities received previous to the date of the actual making of this proposed Order; therefore, we have to date it back in that way. The practical significance of the Order is, perhaps fortunately, small—in terms of revenue, amounting to only a few hundred pounds. The staff is small: there are only some seventeen members, of whom I think only two, or possibly three, are affected by this particular Order. But, if this Order is not passed, and we cease to be members of the Organisation, as we do to-morrow, without having made arrangements to safeguard those few persons, they will, in fact, be deprived of the exemption which Her Majesty's Governments, both present and past, have agreed that they ought to receive. I am sorry to have been so long but the matter is slightly intricate. I hope that, with these explanations, your Lordships will approve the Order. I beg to move that the Order be approved.

Moved, That an Humble Address be presented to Her Majesty praying that the International Organisations (Immunities and Privileges of the International Wheat Council) Order, 1953, reported from the Special Orders Committee on Thursday last, be made in the form of the draft laid before Parliament.—(The Marquess of Reading.)

3.3 p.m.

EARL JOWITT

My Lords, I rise as a guilty party—far more guilty than the noble Marquess who has just spoken, but, at the same time, I want to say this. There were, in the past, and have been since the war ended., many cases where these immunities have been granted. A grant of immunity to one person, referred to as a "privilege," is, in fact, a deprivation of rights to others. Therefore, this is, to my mind, a tendency that needs to be carefully watched. This instance is not nearly so bad as some—as, for instance, in the case of the Post Office, who, when they came, over here for a Conference, used to ask for immunity for anybody who ran down anybody in a car, or anything of that sort. I hope that this House is going to watch this sort of thing very carefully indeed. I did the best I could in my humble position in the Government. I hope that the noble Marquess, supported by the Leader of this House, will do the best he can to prevent this sort of thing from being done almost as a matter of course.

It is obvious that we must pass this Order, for we have made a bargain that we would; our good faith is at stake, and we cannot do anything about it now. But I hope that we are not going to pass these Orders—and I trust that here I speak for all sections of the House—as a matter of course in the future. I hope that the Government will be very chary of bringing them in. As it is, I do not know whether the fault is mine or that of the noble Marquess, but I do not like this scheme whereby, at the very last moment, a measure is introduced which has the effect of granting these people immunity from income tax as from July 12, 1950—which is more than three years ago—during which time, I suppose, income tax was exigible and perhaps should have been paid. But, having made my protest and having admitted quite frankly that I did the same thing in the past, I only hope that noble Lords will be warned by my frightful example and will try to see that they do not do this thing in future. I have nothing further to add except to say that we shall not oppose this Order.

On Question, Motion agreed to. The said Address to be presented to Her Majesty by the Lords with White Staves.