HC Deb 28 November 1945 vol 416 cc1464-8

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Captain Crookshank

I think the Chancellor of the Exchequer is right when he says that the advisory panel is the key to the whole problem. Therefore it seems to me that it would be just as well if the Chancellor could tell us a little more about his ideas on the advisory panel, because all that the Bill says is the opening words in Clause 40 (IA). There is no Schedule or anything indicating the kind of persons to be appointed. It only says there will be an advisory panel of such persons as the Treasury think fit. It is the Chancellor's own selection —that is what is meant by "a person the Treasury think fit" —and a referee. We should be obliged if the Chancellor would expand a little and tell us what kind of person he has in mind, and also tell us about the referee. This is going to be a rather strange and unusual panel. They have not only this function over the general field about which so little is known, but if one looks at Subsection (3) of the. Clause, one finds they have a duty laid upon them "in such cases and at such times as they think fit" to make certain inquiries. It is entirely up to them, therefore, to inquire what happens to this money. They cannot be compelled by anybody to investigate unless they wish to, and, on the other hand, no sum which has been mis-applied can be recoverable unless the advisory panel has so reported. It is probably the right sort of function for the advisory panel. I suppose they would get some indication something had gone wrong in a particular set of circumstances, and they themselves would investigate it.

That function seems to me to be much in contrast with another function which they have. They have to act in an enormous number of cases, probably without any option at all, where the whole or any part of the refund is not paid to the person who originally carried on the business, or is not to be used for the purpose of the original trade or there has been any change in the persons by whom the trade is carried on. Even the death of one person can affect it. It seems to me the panel will have much to do, with the many changes, and the vast number of persons and undertakings which have been concerned with E.P.T. during all these years. The death of one partner has to be investigated and reported on, without the panel having any possibility of doing otherwise, because all this is laid in the statute Is that really the intention? If so the panel will have to be something enormous, if it is to deal with this possibly great mass of problems, coming up within a very short time. I hope the right hon. Gentleman will let us know something about that, and is it really necessary that this sort of thing has to be approved in every case by the advisory panel? They cannot approve the undertakings unless they are satisfied with regard to certain things in the second part of the Clause. That I do not think is so difficult. It is the change in the persons in the first part that worries me, when I reflect how wide is the field covered by the Excess Profits Tax over this long period of years.

As I read it the second function cast upon them is purely at their own volition, and not in the least mandatory. I think that is probably the right way, but I am not sure it is the only way with which you can deal with this problem. So long as you get a panel of experienced persons in whom all concerned can have confidence and a referee to whom there lies an appeal under Subsection (4) of the Clause, then I do not think this Committee will be doing anything very wrong in passing the Clause. But I should like the right hon. Gentleman to explain how he thinks the panel of any reasonable size is going to deal with all these varied persons; so that, if we think fit, we could put in words at the next stage to indicate more clearly the kind of person who ought to be on it.

10.45 p.m.

Mr. Dalton

I am very glad to respond to the request of the right hon. and gallant Gentleman. We have to feel our way. Nobody can make a cut and dried scheme. It can develop and as experience accumulates improvement can be suggested. The intention is that this panel shall consist of persons of business experience. It should not be difficult to find people who are broadly acceptable in the light of their experience, including, in particular, some commercial accountants and people with experience of that sort, on account of the relationship which an accountant bears to a business concern. These are the kind of people we have in mind. The experience of such people and the application of common sense, rather than rigid, tightly drawn rules, will see us through most of the difficulties.

There may be a vast number of cases —we cannot tell. We have to test the thing by experience. I hope that a lot of them will be susceptible to precedent after a time. One or two broad rules would be laid down, and these would be made known and firms who might be in difficulties about knowing whether this or that was legitimate would be able to say, "In such and such a case the panel thought that this was all right." There will doubtless be Questions in the House, and it will gradually become clear that some things are all right and some are not all right. Therefore, I hope that although a number of individual firms will have problems that will not mean the same number of references to the panel. I hope that the various problems will fall conveniently into groups and that one case will govern others.

As to referees, there are people who have had experience in appeals arising out of tax legislation. That is the sort of person of whom I am thinking, but I have not a fixed mind on this. I am open to suggestions from any hon. Member in any part of the Committee who has experience and ideas upon the subject. Broadly, I would say that the referee should be a man who has had experience in regard to appeals in matters relating to tax legislation generally. A lot of these cases will never, in fact, go to the panel at all. Very often the thing will be cleared up between the Inland Revenue and the firm concerned. On the other hand, if there is a case in which it is felt that the panel could serve a useful purpose, in which there is some particular, exceptional aspect or one of special and wide importance to a lot of firms, I would hope that the panel would have a look at it. My mind is quite flexible on all this. Clearly, We must have some special body to do this work, and we will compose it to the best of our ability, so as to command general confidence —the confidence of the Government and of business. In that way we hope to get along in dealing with this awkward problem. It is not a case for strict predetermined rules. We must see how we go. I am anxious to get something that will work with the maximum of acceptance, and with the minimum of bureaucracy.

Captain Crookshank

I am much obliged. The right hon. Gentleman has been most forthcoming. I agree that there might not be many cases to go to the panel but I ask the Chancellor to look at Subsection (2), under which it is mandatory that no refund shall be paid, unless the panel approves. That means that every single case has to go to the panel automatically.

Mr. Dalton

Yes, but it might be purely formal. It might be nothing more than a rubber stamp. We will look at the point, but I am not going to jump into any inelastic commitments about the matter, nor I am sure would anybody wish me to do so. We will look at it. It might well be that the panel would be clearly of opinion, or the Inland Revenue might advise the panel, that certain things fell into broad categories and that it was not necessary to have a special session of the panel, as those things could be handled on broad lines in the light of precedent.

Captain Crookshank

I am sorry to come back to the point, but there could not be any parallel case where it is a matter of the personnel concerned.

Mr. Dalton

I will look into it.

Mr. Nicholson

Surely these questions could be the subject of commonsense discussions. I think the right hon. Gentleman will defeat his own ends if he makes a point of having somebody of legal experience as referee. My experience is that the legal profession will not want to act in this capacity and that he should choose people like accountants, of wide commercial experience.

Question put, and agreed to.

Clause ordered to stand part of the Bill.