§ Immunities and privileges of other officers and servants.
- 1. Immunity from suit and legal process in respect of things done or omitted to be done in the course of the performance of official duties.
- 2. The following exemption or relief from taxes and rates:
- (a) in any case of a British subject who is a national or citizen of, or belongs to, any part of His Majesty's dominions outside the United Kingdom and would, if he were not a British subject, be qualified to receive the immunities and privileges set out in Part II of this Schedule, the like exemption or relief from taxes and rates as is accorded to an envoy of a foreign sovereign Power accredited to His Majesty;
- (b) in any other case exemption from Income Tax in respect of emoluments received as an officer or servant of the organisation." —[Mr. Law.]
§ Brought up, and read the First time.
§ Mr. LawI beg to move, "That the Schedule be read a Second time."
It is, in fact, consequential upon other Amendments which the Committee have accepted, and accordingly I will, with the permission of the Committee, move it formally.
§ Mr. Bowles (Nuneaton)May I ask one question which I raised on the Second Reading? We were told that members of U.N.R.R.A. and other organisations here would be able to insure, in fact, would be forced to insure, against motor accidents. I put a question, but my right hon. and learned Friend did not refer to it when he replied, as to what happened about other torts, such as defamatory statements, committed by members of such organisations. Are they to be completely immune from any legal process in the courts? Large numbers of people in the course of business or social life are liable, in moments of excitement or in the course of furthering their business interests, to utter defamatory statements concerning either firms or persons. I would like an assurance from my right hon. Friend, if he can give it, as to what 129 provision is made for them to be liable to the process of the courts.
§ Mr. PetherickI think the Government have largely met the objections of a great many of us in the Amendments they have put down, but I would like to point out a small matter to which I have drawn attention privately in regard to this Schedule. Amongst the other exemptions which U.N.R.R.A., or one of these similar organisations, would get is exemption from taxes on goods
directly imported by the organisation for its official use in the United Kingdom or for exportation.It seems to me that those words "for its official use" may be open to a certain amount of misconception. I understand that the Government views on that phrase mean that U.N.R.R.A., for example, can import typewriters from America to be used wherever its offices may be. It can import canned pilchards to be sent to some unfortunate starving country in Europe, and to those classes of goods I should have no objection whatever. However, I am inclined to think, subject to correction, that the words "official use" may go rather wider than the Government intend. They might have two meanings: one, for the official use of the organisation, and the other for the use of the officers of the organisation. Suppose U.N.R.R.A., owing to the generosity of the Foreign Office, takes over the Foreign Office building and establishes its office there; it might run a canteen in the dungeons below the Foreign Office and import wine free of duty for use in that canteen by its officers. Would that be for official use or not? I should be inclined to maintain that it might very well he claimed that those words might cover wine and cigars and everything else that can be imported, so that a good time is had by all the officers of the Association. If there is the slightest degree of doubt, I would suggest the insertion of suitable words. I was wondering whether the Government would consider the insertion of "in the performance of its official duties" in Part III of the Schedule which relates to the junior officers of these organisations. Thus, Sub-section 4 of Part I would read as follows:Exemption from taxes on the importation of goods directly imported by the organisation for its official use in the performance of its official duties…130 I believe that would make that part of the Schedule incontrovertibly correct, and would carry out what I believe to be the intention of the Government.
§ Sir I. AlberyI understand that all three parts of the Schedule are now under discussion and I wish to make a few remarks about the Third Schedule. Before we part with it, I want to make quite sure that we correctly understand the effect of it. As I understand the Third Schedule in its relation to the junior officers of these organisations, it appears to mean this, that any official of foreign nationality, or any official from one of the British Dominions, would be free of Income Tax and, as I read it, free of rates. However, any person of English nationality domiciled in England employed by one of these organisations would be subject to rates and subject to full Income Tax. If that assumption is incorrect I would be gladly interrupted, because I do not want to pursue the matter in the sense in which I now intend to pursue it if I have wrongly understood it.
§ The Attorney-GeneralI think I know what the point is. It is a little complicated but, as my hon. Friend and the Committee will remember, British subjects are primarily excluded from what we call the top rank immunities under the Bill. 2(a) of Part III makes a limited exception to that. It says that if we have here someone who comes from the Dominions someone who, though a British subject, belongs to what is sometimes called an overseas part of the Empire, if he comes here as a high official of U.N.R.R.A.—that is, in the top grade —he does not get immunity from suit but he does get immunity from rates and taxes because he is a top man. Under the Schedule dealing with the lower officials the only exemption they get in respect of tax is exemption from Income Tax on their official emoluments. They do not get exemption from rates. I hope I have made myself clear.
§ Sir I. AlberyI find my right hon. and learned Friend's explanation is a little difficult to reconcile with the reading of Part III, which states:
In any other case exemption from Income Tax in respect of emoluments received…Just before this it states:The following exemption or relief from taxes and rates…
§ The Attorney-GeneralParagraph 2 (a) of Part III covers rates in the case of the high official who comes from an overseas part of the Empire. That is why the word "rates" comes in paragraphs (a) but not in (b).
§ Sir I. AlberyDo I understand that a junior official, an English citizen, will have to pay full Income Tax, but that a foreigner, or someone from British Dominions, will be free from Income Tax?
§ The Attorney-GeneralYes, if he is a British subject ordinarily resident here.
§ Sir I. AlberyI want to draw attention to that and have it put on record, because I think it is a most important matter. We are approaching the time when we shall need every facility for export trade, and for getting back old markets, with new ones, all over the world. One of the most important things in this connection is that there should be a large number of people in this country who have a knowledge of foreign languages and customs, and who can help us to get back our lost trade. By Part III of the Schedule we are practically setting up organisations which will be encouraged in every way to employ foreigners, and strangers who have knowledge of foreign languages, to the exclusion of British subjects. They will probably need to employ foreign correspondents and a good deal of clerical staff with some knowledge of foreign languages and it appears to me that if a junior official gets £700 or £800 a year he will, if he is a foreigner, receive that amount free of tax, while if he is an Englishman he will get only £500 or £600 a year. In those circumstances it will not be possible to attract to this kind of employment the same class of British subject as foreign subjects. I am one of those who wish to encourage the employment of a certain number of foreigners in this country in peace-time, because it is helpful to our international relationships in trade and commerce. At the same time it is vitally important to our own people that they should have employment and be encouraged to make themselves efficient. I know it is hoped that a considerable number of these organisations will be located in London, and it is a matter for serious consideration whether our people should suffer a hindrance of that kind in taking up employment of this nature.
§ 4.45 p.m.
§ Mr. BowlesWill the Attorney-General tell us whether "taxes and rates" cover Customs Duties? Last night an aircraft came back from Paris with British and American officers aboard. The British were subject to a Customs examination and payment of duty on the goods they had imported. The American officers were allowed to go through, which caused a certain amount of concern on the part of the British representatives. We passed an Act in 1942 which has not worked quite so well as the House thought it would. Can we have an assurance that "taxes and rates" do not apply to Customs Duties, because this is an important matter and concerns people who find they are discriminated against in such cases as the one I have just quoted?
§ Viscount HinchingbrookeI want to follow the point made by the hon. Member for Nuneaton (Mr. Bowles) about Customs Duties. In Part I of the Schedule a distinction is made between taxes and rates in paragraph (3) and taxes an the importation of goods in paragraph (4). When we get to Parts II and III there is no distinction made, and we talk of taxes and rates in each case. I am especially concerned with the position of the junior official in one of these organisations, who is not British and is, therefore, given immunity from taxes. I would like to ask the Attorney - General whether "taxes" in that sense include Customs Duty—in other words, whether these junior officials will be able to import for their own use merchandise from foreign countries free of Customs Duty?
§ The Attorney-GeneralMay I deal with the Noble Lord's point first, which is a simple one? Although I quite agree that the word "taxes" may be used in two senses, all a junior official gets is laid down in Part III, paragraph (2) (b), which expressly refers to Income Tax. Income Tax does not include taxes on imported goods. The only immunity he gets is in respect of Income Tax.
§ Viscount HinchingbrookeDoes he not get exemption from taxes and rates under paragraph 2 (a) if he is not a British subject?
§ The Attorney-GeneralNo, paragraph 2 (a) merely applies to British subjects who are high officials, and 133 who would get the full exemption accorded to high officials but for the fact that they are British subjects. Paragraph (a) provides that though we do not give them immunity from suit, they do get immunity from taxes and rates. My hon. Friend the Member for Nuneaton (Mr. Bowles) raised a question about other torts. I gather that he was talking about the lower grade people.
§ Mr. BowlesYes.
§ The Attorney-GeneralIn the course of official duties protection applies. For instance, there are many consuls who have similar protection if they make reports to their countries on trade matters. Such is the nature of the world that sometimes they have to report that a trader is not wholly satisfactory, in terms which may give a prima facie cause for defamation. But if the report is made in the course of official action he is protected. Of course, there may be cases which lead to injustice or hardship. But these are cases in which immunity may be waived or which the Foreign Office must take up. It is, however, necessary to grant the immunity in order that the work can be done in a proper way unimpeded. Some countries are more disturbed than this and these immunities may be more necessary there than here. The way in which these things are approached is important. If it is found that this immunity in respect of official acts covers something unnecessary —someone suggested it might cover a defective lift, when the lift was endeavouring to take people from one floor to another —in such a case it might be waived.
§ Mr. BowlesThe immunity is either in the head of the organisation or in the individual. The British Ministry cannot say, "You must waive immunity." The right hon. and learned Gentleman referred to other countries which have not so much law and order as we have and said a person might commit assault and battery.
§ The Attorney-GeneralI did not say that.
§ Mr. BowlesNo, I am saying that. Is that another tort to be exempted or not? An exaggerated report on the financial insufficiency of a firm can be understood, but one can imagine positions in which an excited consul or other representative might go further than the right hon. and learned Gentleman has suggested.
§ The Attorney-GeneralI made it clear earlier that we cannot insist on immunity being waived but we can make representations. We have the advantage that we ourselves are a member of this organisation and therefore have influence both from within and from without. Although these immunities have existed in respect of foreign Governments for a long time—and in the last decade or so the League of Nations and the have also been protected—the one instance of resulting injustice brought forward was in 1933. This immunity in respect of officials acts has been enjoyed by consuls. Some time ago I went into that and, although many consuls hold temporary appointments, I could find practically no case where anyone could claim that immunity was being abused. I think the answer to the hon. Member is that there may be torts in the course of official acts. I cannot imagine that a body like this would regard assault and battery as something done in accordance with official duties. I think we may rest assured that there will not be abuse.
As to the point raised by my hon. Friend the Member for Penryn and Falmouth (Mr. Petherick) we read "official use" as meaning "use by the office." If it meant use by the "officers," it might cover almost anything. We certainly do not intend that it should be used to cover drinks for consumption at home or in a canteen. I am not sure whether it would really add much to say "in the course of their official duties," because I think "official" could be used as possibly covering a canteen. I do not wish to seem to be unreasonable, but the matter is entirely in our own control. My hon. Friend may be right but I am not too sure about it. It might be said it is part of the duty to-day of a body which has a big office to make canteen arrangements, and the same argument be raised about official duties.
§ Mr. PetherickIs it not necessary, therefore, to put in words to make it plain that that particular exemption does not refer to a canteen? Running down His Majesty's lieges may happen in the performance of official duty, but I do not see how guzzling in a canteen in their own office can be a performance of their official duties.
§ The Attorney-GeneralMy hon. Friend points his argument by using the word "guzzling." I do not want to have an 135 argument about it. I hope my hon. Friend and the Committee will accept this statement. We construe "official" as meaning "for the office." On that basis liquor for the canteen would not be entitled to tax exemption. I think it will be better than trying to get a form of words which might give rise to difficulties. I hope that statement will satisfy my hon. Friend. I am grateful to him for raising the point as it is desirable that it should be made clear. My hon. Friend the Member for Gravesend (Sir I. Albery) raised a point about British subjects. We did not feel inclined to give taxation immunities, which we extend to those who come here from overseas, to British subjects ordinarily resident here. We thought the Committee might object to that. My hon. Friend points out that to some extent that may act adversely from the point of view of their employment. It is possible but, after all, people do not in fact go about seeking for a country where no Income Tax is levied. People who settle here come under our heavy taxation. On the whole we have survived it, and though I appreciate my hon. Friend's point, I do not at the moment feel a way round it.
5.0 p.m.
I think there would be objections to exempting anyone ordinarily resident here from taxation on his emoluments, wherever they come from. It is one of those anomalies which are inevitable when you get two principles clashing, one, the principle that our taxation is levied on people who reside here on their emoluments, wherever they come from, and the other, the concession we make to foreigners and which our own people get when they go abroad.
§ Question put, and agreed to.
§ Schedule read a Second time and added to the Bill.
§ Bill reported, with Amendments.
§ As amended, considered.