§ 2. Mr. A. R. W. Lowasked the Secretary of State for Commonwealth Relations what progress has been made in his discussions with the Government of India concerning the deduction of Indian income tax from pensions payable to ex-members of the Secretary of State's services in India and the Indian Army, who are now resident in the Channel Isles. Eire or the Colonies.
§ 8. Brigadier Medlicottasked the Secretary of State for Commonwealth Relations if he will make a statement on the position of the discussions with the Government of India regarding the deduction of income tax from pensions payable to former members of the Indian Army now residing in the Colonies or in the Channel Islands.
§ Mr. Gordon-WalkerAs a result of discussions with Indian officials, administrative arrangements are being made, subject to confirmation by the Government of India, under which that Government will levy tax on pensioners in the places named in broadly the same manner as they levy tax on pensioners resident in the United Kingdom. Thus, for instance, under the proposed arrangements, the Government of India would for the next few months provisionally tax the pension of a person resident abroad as if he had no income other than his pension. Details of the arrangements will be sent shortly to all persons who draw their pensions through the Commonwealth Relations Office or the High Commissioner for India.
§ Mr. LowWould not the right hon. Gentleman agree that this arrangement and any other arrangement that involves the payment of Indian income tax before the pension is received by the pensioner must impose hardship upon the pensioner? Is not the right hon. Gentleman under an obligation, which was assumed by the late Chancellor of the Exchequer 1195 in a statement to the House on 15th July, 1948, to see, in conjunction with the Indian Government, that he does everything possible to avoid inconvenience or hardship to the pensioners? What is he doing about that?
§ Mr. Gordon-WalkerI am doing everything possible to avoid inconvenience to the pensioners. The new arrangements which I have just mentioned are the result of representations that I made to the Government of India. I hope that that answers the hon. Gentleman.
§ Brigadier MedlicottIs the right hon. Gentleman satisfied that these arrangements completely fulfil the pledge given at the time the services of these men were dispensed with?
§ Mr. Gordon-WalkerI think that they satisfy the pledge and that we are doing everything we possibly can. We shall continue to do so.
7. Mr. Wakefieldasked the Secretary of State for Commonwealth Relations if he will make representations to the Government of India to rectify the anomaly whereby certain former servants of the Crown in undivided India receiving pensions through the High Commissioner for India are less favourably treated than others who, with similar service records, receive pensions through the High Commissioner for Pakistan.
§ Mr. Gordon-WalkerI take it that the hon. Member is referring to the decision recently taken by the Government of India (but not by the Government of Pakistan) to tax the pensions of certain former servants of the Crown. I do not think that I have grounds for making representations against this decision. It is within the legal competence of the Government of India; moreover many governments, including our own, follow the practice of taxing pensions paid from their revenues wherever the pensioner resides. I understand that, in the majority of cases, by the operation of relief granted by the United Kingdom Government, no increased burden of tax will fall on the pensioner.
Mr. WakefieldDoes the Minister consider it fair that people who rendered equal service to the Crown in undivided 1196 India should now receive unequal pensions merely because of the accident that some of them receive their pensions from the High Commissioner of Pakistan while others, less fortunate, receive their pensions from the High Commissioner of India?
§ Mr. Gordon-WalkerI do not know that I am called on to express my view as to whether it is fair or not. But what I would say is that it is directly within the legal competence of the Indian Government to do this.
§ Mr. R. S. HudsonWhatever may be the legal competence of the Government of India, the right hon. Gentleman told us at the beginning of Questions that he hoped to save from death by starvation millions of Indians. Does he think it fair that they should reply to that by inflicting hardship on these ex-servants?
§ Mr. Gordon-WalkerI think it would be quite shocking to bargain in that way.
Mr. WakefieldMay I ask the Minister if he will refresh his memory in regard to the assurance given by the Prime Minister in this House on 10th July, 1947, in these words:
… those concerned have the assurance of His Majesty's Government that they will receive the pensions to which they are entitled."—[OFFICIAL REPORT, 10th July, 1947; Vol. 439, c. 2458.]
§ Mr. Gordon-WalkerI have no need to refresh my memory on this point, since I looked it up when the hon. Gentleman put down the Question. The reply of the Prime Minister was carefully framed at the time to cover an interim period pending the settlement with India of an agreement which was then concluded between us and the Indian Government.
§ Brigadier RaynerWill the right hon. Gentleman revise his views on bargaining and remember that on the one hand, although lives have been in question, on the other hand the livelihoods of people who have won a gallant and honest pension in doing their job is under consideration?
§ Mr. Gordon-WalkerI quite agree that various views can be held on pensions. I am prepared to continue representations and to do all I can to protect the interests of these pensioners, but I would not agree that I can deal with this in relationship to the question of help to India over their food shortage.