HC Deb 27 March 1935 vol 299 cc2027-32
The ATTORNEY-GENERAL

I beg to move, in page 68, line 30, to leave out "against Burman subjects of His Majesty domiciled in," and to insert: Burma or companies incorporated, whether before or after the passing of this Act, by or under the laws of the United Kingdom or. There is also on the Order Paper another Amendment in page 68, line 33, at the end to add: (2) Without prejudice to the generality of the foregoing provisions, a law shall be deemed to be such as to discriminate against such persons or companies as aforesaid if it would result in any of them being liable to greater taxation than that to which they would be liable if domiciled in British India or incorporated by or under the laws of British India, as the case may be. (3) For the purpose of this section a company incorporated before the commencement of Part III of this Act under any existing Indian law and registered thereunder in Burma shall be deemed to be a company incorporated by or under the laws of Burma. If I may I will deal with these Amendments at the same time. They are intended to bring within the range of this legislation against discrimination not merely individual subjects domiciled in the United Kingdom or Burma, but also companies incorporated in the United Kingdom or Burma. I should think that once any Member of the Committee is of opinion that there should be legislation against discrimination, he will agree with the Government in thinking that the provisions against discrimination should apply not merely to individuals but to companies. If that is so, it is not necessary for me to say anything further about these provisions. If there is any question about the form in which they are drafted, I will deal with the drafting points.

9.28 p.m.

Mr. ATTLEE

I should like to ask whether, in these Amendments, any alteration is made in the present position, or whether it will continue to be the case that the term British subjects domiciled in the United Kingdom will include, as I understand it now does, Burman subjects of His Majesty? I should like to ask also whether this phrase includes either the rulers or the subjects of the Federated Shan States? I have had recently in another connection a case which I have brought to the notice of the Secretary of State of what I consider to be a very bad piece of discrimination against the Shan States by certain interests in India. I want to be certain that the protection here extends to the Shan States. The difficulty has arisen that in India certain interests have declared for one purpose to the Shan States, "You are not included at all because you are in British India." But when the Shan States have replied to that, they have been told that they are in British India. There seems to be some doubt what is the exact position, and I should like to be assured that the position of the Shan States, and of subjects whom we should be careful to see are not damnified in any way, is covered.

9.31 p.m.

Mr. MOLSON

My right hon. and learned Friend will be aware that this very important Amendment was put on the Order Paper only last Friday, and that there has been extremely little time for my friends and myself to examine, in consultation with others, exactly what the effects of this Amendment would be. At first sight it seems clear that there are some minor omissions in drafting, and also that it does not cover everything for which we feel bound to ask. It is apparently the purpose of this Clause to safeguard Europeans who are trading, or have been trading, in India against any kind of discriminatory taxation, just as in a previous Clause it was intended to protect them against other kinds of discrimination. Of the Europeans that this Clause contemplates, there are those who are ordinarily resident in India, and those who are not. So far as those residents in India are concerned, there is only one ground of discrimination, which is ruled out by the second paragraph of this Clause, that is, discrimination based on the ground of domicile. As my right hon. and learned Friend pointed out in the case of Clause 111, the draftsman of the Bill enumerated as exhaustively as he could all the possible grounds of discrimination. There will be nothing in this Clause, even as amended, to prevent discriminatory taxation being levied in India, provided it is based on some other ground than domicile.

I would suggest to my right hon. and learned Friend that if a special and discriminatory tax were levied on those born in the United Kingdom, that would not be prohibited by this Clause because, although 99 out of 100 of those born in the United Kingdom would be domiciled there, it would not be taking domicile as the ground of discrimination. That is perhaps, a matter of draftsmanship, and I hope that before the Report stage I shall be able to have some Amendments drafted, and I feel confident it would be the intention of the Government to accept any Amendment which would prevent discrimination by taxation. But coming now to my second point, I cannot think it is entirely a drafting error that there is no provision in this Clause to prevent the penal taxation of non-residents. I am fully aware that in one or two of the Dominions there have been what have been called absentee taxes.

The CHAIRMAN

That may arise on the Question that the Clause stand part of the Bill, but not on this Amendment.

Mr. MOLSON

Very well. That is an important point, and it is something which has been omitted from the Amendment. However, having dealt with what I think is an unintentional omission I will, if I may, deal further with the matter of the intentional omission on the Question: "That the Clause stand part."

9.36 p.m.

The ATTORNEY-GENERAL

The answer to the hon. Member opposite about the Shan States is that they are included. With regard to the other question as to the substitution of the expression set forth in the Amendment for the expression "Burman subjects," I am not sure whether he was here earlier in the evening when I explained that the term "Burman subjects" is not a very satisfactory one from the point of view of draftsmanship, because it is very difficult to know what degree of racial descent will make a person a Burman subject or an Indian subject. Therefore, the course that we propose to adopt is to use the expression "a British subject domiciled in India" or "a British subject domiciled in Burma" as the case may be. The phrase "Burman subjects" disappears.

9.37 p.m.

Sir J. WARDLAW-MILNE

May I ask how the Attorney-General proposes to deal with the matter as it stands? Is he going to answer the questions that have been raised by my hon. Friend the Member for Doncaster (Mr. Molson) on the Question "That the Clause stand part"?

The ATTORNEY-GENERAL

I understood that the hon. Member was going to make some observations on the Question "That the Clause stand part." I will hear what he has to say and then say something in reply.

Sir J. WARDLAW-MILNE

I do not wish to interfere with that arrangement, except to say that we are going to pass the Amendment as it stands, and if the Amendment, as he suggests is not complete then we ought to know the Attorney-General's views at this stage before we pass the Amendment. Surely it is better to deal with it now whilst we have the Amendment before us than to deal with it on the Question: "That the Clause stand part."

9.38 p.m.

The ATTORNEY-GENERAL

The Committee are in this difficulty, and so are we, that I understand my hon. Friend accepts the Amendment as far as it goes. He says that an Amendment of this sort or of some sort ought to deal with the specific question as to the right to discriminate, for instance, by taxation against non-resident British subjects, and that he would like to see the Clause amended to that effect. I understood him to say that he would take the opportunity between now and the Report stage to draft words in order to improve the Amendment that I have moved. If that be so, I think it would be better to reserve my observations until those specific Amendments to the present Amendment are proposed.

Mr. MOLSON

It is very important that we should know on the Committee stage what is the intention of the Government. It is very important that we should know as a matter of policy whether it is or is not their intention to make it impossible for an Indian legislature to impose penal and discriminatory taxation upon non-residents. Obviously, the line upon which our drafting will go will depend upon the intentions of the Government.

The ATTORNEY-GENERAL

I can only say at this stage that I see very great difficulties in framing a Clause which is going to secure my hon. Friends object. As he pointed out, some of our Dominions at the present time, for instance, Australia, enjoy the right, and use the right, to pass what may be called discriminatory legislation against nonresidents. It is a form of taxation for which there is something to be said from the point of view of the Dominion or the Government imposing such taxation. If it is to be said that in relation to India this matter is to be viewed in a different light, then I am bound to say that I should like to see precisely the nature of the Amendment that is proposed. Certain attention has been given to this question, but I see a difficulty in framing words which would effect the object desired and yet at the same time would not go beyond what is desired and would not interfere with what I suppose every one will agree ought to be the rights of the Indian Legislatures.

That is why I am in a little difficulty in making any final or full observations upon the matter. I do not want to close my mind or to shut the door to any proposal, but on the other hand I do not want to say anything that would imply a promise to accept the Amendment that my hon. Friend may put down. All that I can say is that the matter has engaged the attention of the Government and that I very much doubt whether it is possible to frame satisfactory words. It may be that my hon. Friend, with the assistance that he has, will be able to frame satisfactory words which will not create mischief which the Government would like to avoid. If the position arises on the Report stage, perhaps we shall be able to deal with it on behalf of the Government.

9.42 p.m.

Sir J. WARDLAW-MILNE

I am very grateful to the Attorney-General for what he has said. Probably he is sympathetic to the idea which underlies the remarks of my hon. Friend the Member for Don-caster (Mr. Molson) and it may be possible with his assistance to get some words which will effect what is wanted. The mere fact that the Government are sympathetic to the object that my hon. Friend has in view is all that we can hope to get to-night. It is extremely difficult to get at the exact words required. I am satisfied to leave the matter as it is provided that we get Government assistance in drafting the necessary Amendments.

Amendment agreed to.

Further Amendment made: In page 68, line 33, at the end, add: (2) Without prejudice to the generality of the foregoing provisions, a law shall be deemed to be such as to discriminate against such persons or companies as aforesaid if it would result in any of them being liable to greater taxation than that to which they would be liable if domiciled in British India or incorporated by or under the laws of British India, as the case may be. (3) For the purposes of this section a company incorporated before the commencement of Part III of this Act under any existing Indian law and registered there-under in Burma shall be deemed to be a company incorporated by or under the laws of Burma."—[Sir S. Hoare.]

Clause, as amended, ordered to stand part of the Bill.