§ 42 Mr. McEnteeasked the Chancellor of the Exchequer (1) whether the investigation in Case T.1193/6/38, Inland Revenue, is still proceeding; whether the persons whose names were supplied as being willing to give oral evidence, and to produce documentary evidence of fraud against the persons concerned in the inquiry have yet been called on to give such evidence; and, if not, when it is proposed to call for this evidence;
(2) why a person appointed or recommended by the Westminster Bank, Limited, has been appointed to conduct the inquiry into Case T.1193/6/38, Inland Revenue; and whether, as the person concerned in the inquiry and against whom charges of fraud on the revenue are made has several accounts totalling large sums of money at this bank, he will reconsider this appointment;
(3) whether he will cause an independent inquiry to be made in Case T.1193/6/38, Inland Revenue, at which evidence can be taken on oath, and witnesses subpoenaed; will he see that oral evidence is taken from those willing to give it, and that documentary evidence is examined from those willing to produce it; will he make such evidence available to Members of this House; and will he see that the person against whom the charges of fraud are made is suspended from holding the office of financial adviser to one of the control boards until the inquiry is completed?
§ Sir K. WoodThe issue in this case is whether the income of a certain charitable trust has been wholly expended for charitable purposes. The trustee has appointed a chartered accountant of experience to investigate the trust accounts and this investigation is very near completion. It appears from the accountant's report that certain payments, while in the main of a generally benevolent character, 799 are not in the strict legal sense charitable. It has been accepted in principle that the sums erroneously paid away will be replaced in the hands of the trustee by the donor of the trust income and these sums will be applied by the trustee in accordance with the provisions of the trust deed. The amount to be replaced has not been finally ascertained, but it is expected that agreement on the figure which will receive the approval of the Inland Revenue will be reached shortly. When the adjustment has been made, there will remain no ground for objection on the part of the Inland Revenue, which is, of course, bound to repay to a charitable trustee Income Tax on income wholly expended for charitable purposes. In these circumstances I am satisfied that so far as Revenue interests are affected, they are being fully safeguarded. I see no ground for any further inquiry or for the course suggested in the last part of the hon. Members' third Question.
§ Mr. McEnteeIn view of the fact that statements have been made that this is a persistent fraud over a number of years, and that the sums involved are very considerable, does not the Chancellor consider it strange that the evidence offered has not been accepted, either orally or in writing, and does the right hon. Gentleman propose to ask for the evidence, if it is not asked for by the person who is charged with the inquiry, and who, by the way, is appointed by the bank, which is the trustee and which holds very large accounts for the person against whom the charges are made? Is the Chancellor willing himself to see the evidence that has been offered to the Inland Revenue authorities?
§ Sir K. WoodAs the hon. Member is aware, this is really a question of the administration of a trust deed for charitable purposes, and, of course, the Inland Revenue are concerned only to the extent mentioned in my answer. I have yet to receive the final report, but I will gladly look into the matter further myself—I have already examined it, in view of the hon. Member's Question—and I should be very glad to consult with him on any point to which he thinks my attention ought specially to be drawn; but except for the interests of the Inland Revenue, it is a matter of interpretation 800 and judgment as to whether a certain trust deed has been duly complied with or not.
§ Mr. McEnteeIs not the Chancellor aware that loaning money to friends cannot be considered under any circumstances a charity, when those friends repay every penny of the money that was loaned, and then 13s. 9d. is received back from the Treasury because it was loaned out of a charitable trust? Is not that obviously a fraud?
§ Sir K. WoodI would hesitate to pronounce on that statement, but in any event a matter of that kind, if there was any ground for investigation, would have to be investigated by the courts. I am concerned in this matter only from the point of view of the Inland Revenue, and the hon. Member can rest assured that I will see that the public interests are fully safeguarded.
§ Mr. McEnteeWill the right hen. Gentleman see me about this matter?
§ Mr. ThurtleIf there has been a misuse of charitable funds, is it the Chancellor's function or the function of any Minister of the Crown to direct the attention of the Public Prosecutor to the papers concerned?
§ Sir K. WoodCertainly, if any case of that kind arose and I thought a fraud had been committed, it would be my duty and the duty of anybody else to bring it to the attention of the appropriate authorities.