Clause 4.—(ANNUAL DUTIES (CONTINUATION).) (Hansard, 24 July 1952)

§ Mr. I. Mikardo (Reading, South)
I beg to move, in page 4, line 23, to leave out "August," and to insert "November."
I think I can deal very shortly with this Amendment, because I rather fancy that this was the one to which the Financial Secretary referred when, in an excellent speech, he was winding up the debate on Clause 2 stand part. He put forward certain arguments which led me to believe that he is so much in favour of this Amendment that he will either accept it or will give such undertakings as will permit me to ask to withdraw it.
946 What this Amendment seeks to do is to extract the Government next year from the dilemma in which they are this year. According to the account given by the Financial Secretary, this problem is tied up with the relative dates of the Bill and the presentation of the accounts. The Financial Secretary, defending the form of one of the earlier Clauses of the Bill, which appeared to have retro-active effect, said that this is, in effect, a Finance Bill following a Budget statement, and there must, therefore, be reference back to the Budget statement just as there is when we are discussing our own Finance Bill. But the great defect about that is that we are here discussing a Finance Bill, without having heard the Budget statement, and the difficulty that we are in is that we are asked to vote changes on duties without knowing what the changes are.
When the Chancellor of the Exchequer presents his Budget statement to the Committee, he not merely says, "I propose to increase the petrol tax by so much," but he immediately adds, "That will bring me in an additional revenue of so many million pounds." When he proposes to increase the allowances on Income Tax, he adds that that will cost the Treasury so much per annum. Because he says things like that we are the better able to consider whether we agree or disagree with what he is recommending.
Here we cannot do that, and it is becoming increasingly apparent that we are in somewhat of a difficulty over this matter. I am sure that the Financial Secretary recognises it, because he said on Clause 2 stand part—and I took it down, though I must confess I had to write very fast to get it down, but not as fast as I would have had to do had it been said by my hon. Friend the Member for Oldham, West (Mr. Hale)—"I do not propose to argue that the timing of this Bill and the accounts is satisfactory, but so far as this Bill is concerned there is nothing we can do about it this year. We have no option in the matter." It seemed to us on this side of the Committee that if we put down this Amendment it would make it possible for us to deal with the matter more sensibly next year.
The accounts, because of the change made last year at the suggestion of one 947 hon. Member opposite, are due to be presented not later than 31st December. We cannot hope that they might be laid somewhat earlier than that, and we propose in this Amendment that this date should be extended for four or five months longer until November, and by then the accounts will have come along. Therefore, in next year's Bill the Financial Secretary will be able to refer to the consequences of the Bill by reference to the Budget statement.
Some people may say we ought not to worry about the Budget statement and the accounts. It has been said several times that this is an independent body and can do what it likes. I am not a constitutional lawyer, and I hesitate to talk about these matters in the presence of the Attorney-General and other learned Members, but it seems to me that we ought to come down on one side of the fence or the other. If we have jurisdiction in these matters, then we ought not to pass legislation without knowing something about the effect of it; or we have no jurisdiction, in which case why have we got this Bill? This Bill is now before us, and we ought to know something about the effects of it.
I will say one last thing. It may very well be that the Financial Secretary may have one or two reservations about the Amendment. First, he may think that November is not the best month for the purpose which my hon. Friend the Member for Oldham, West and I have in mind, and also for the purpose which he has in mind.
The other reservation which he may have is that he would prefer not to commit himself firmly in this matter until the conclusion of the discussions which he tells us are in operation. Although, if he takes that view, it would have to be two years instead of one; but, if the Financial Secretary takes either view, I shall be happy to accept it. If, in other words, he says that he wants the same end as we are trying to get, but prefers a slightly different way, we shall not press the Amendment in its present form. But, in order to obtain his views, I beg to move the Amendment.

§ Mr. Foot
I support the Amendment and, in so doing, would say that my hon. Friend has presented some very technical and general arguments for it. But, what 948 I particularly desire to say is that I believe there is a great convenience offered to the House when it debates the Bill next year because of this proposal. The more we discuss this Bill, the more it would appear that the whole relationship between this country and the Isle of Man is most anomalous. Indeed, I would say that if one examined the relationships of different countries all over the world, one would hardly be likely to find parallel legislation going through two legislatures, each being able to offset the other without knowing the result if they did it.
That is not a very satisfactory state of things, and the Financial Secretary has accepted the fact that there are these anomalies, and that they form one of the purposes of the discussions going on at present. The result of this must not only involve a change in some of the financial relationships between the two countries, but also a change in the form of the Bill, with a clearer definition of the relationship between the two countries. It will be a great advantage if, next year, we do not have to stop half way along and say, "Well, we have to put the Bill through because it must pass before August." If we substitute November, or some later month which is perhaps more convenient, it would no doubt be acceptable; but if three or four months are allowed after we discuss the Bill next year, it would give opportunity for a fuller examination than otherwise would be possible.
When one looks down the list in this table which would be affected by the Amendment being moved, one will notice some of the questions kept open by such a postponement; and if one looks back to the debates on this Bill in previous years, one will see the kind of questions which are likely to arise. In 1932 on this subject, there was an extensive debate—

§ Mr. Mikardo
What time did the debate begin?

§ Mr. Foot
It started about six o'clock in the evening, but the fact that there was such discussion, dealing with one of the first items in the Schedule, shows what a curious statement it was which was made yesterday by the Leader of the House (Mr. Crookshank) when he said that this was formal legislation. It is a curious type of formal legislation, and we would like to know what informal legislation is. At that time there were some discussions on the subject of ale and 949 beer and the question of the duties borne by them in the Isle of Man. My right hon. Friend who was at that time the Member for West Houghton, had some questions on this subject. He said: "I think I am entitled to ask whether there are any breweries in the Isle of Man, or, if not, what is the source of the beer that comes into the Isle of Man."

§ The Chairman (Sir Charles MacAndrew)
I think the hon. Gentleman should keep that speech for the Motion that the Clause stand part, instead of on this Amendment.

§ Mr. Foot
It would be more appropriate at that stage. But I agree that it is certainly desirable that the Government should adopt this Amendment in some form, so that when we debate the Bill next year we may be able to put the financial arrangements between this country and the Isle of Man on the kind of clearer footing that the Financial Secretary indicated earlier.

§ Mr. Bing
The Financial Secretary made a rather gracious reference to myself that I misunderstood and I gave him a rather dusty answer. Let me make amends and thank him for the courtesy with which he dealt with the matter and for the politeness I failed to appreciate and did not respond to.
With regard to the Amendment, 31st December, is the date when the accounts go to be audited by the Comptroller and Auditor General, but it might be possible to have some arrangement whereby the House could have the unaudited accounts. The Tynwald must have some accounts, and if they were available to us it might be possible to debate the Bill in the period September-December.
I do not want to go back on history, but the Leader of the House thought at one time that we ought not to discuss this Bill. After examining one or two aspects of it, we see it is our duty to explore the Measure. It would be more convenient to explore it when the time-table is not so crowded. The Amendment would allow a day or so to be given to the matter at the beginning of the Session when, as everybody knows, Ministers are always looking round for Bills. One of the troubles is that, having looked around and got the Second Reading for Bills 950 when the House has nothing to do, they have to get them through the remaining stages when the House has a great deal to do.
How convenient, then, if there were a little Bill like this. It would provide an answer to people who say, "Here is the Gracious Speech—why have you not introduced any legislation?" Might I therefore commend this Amendment? It might be found the year after next—if the present Administration are still in office—a useful excuse and alibi, as well as a fruitful occupation for Parliament at that time of the year. It is a practical Amendment. My hon. Friends, I understand, do not wish to press it, but it is down for an exploratory purpose, and I hope the Financial Secretary will respond to the invitation.

Mr. Glenvil Hall
I hope that my hon. and learned Friend the Member for Hornchurch (Mr. Bing) will not mind if I express the hope that the Financial Secretary will not give in to the blandishments of my hon. Friends and accept this Amendment. I know that ordinarily any Amendments to which they put their names are well worthy of consideration. I do not doubt that this suggestion should be considered, but I wanted to say, in case the Financial Secretary was overcome by their persuasiveness, that I think that he should not accept the Amendment.
We have in office a Conservative Government. It is obvious from what has happened up to now that we are in for a further considerable amount of muddle, waste and mismanagement. It may well be that when the next Budget is opened, and the Finance Bill is printed, there will have to be increases in taxation, especially in the field of Customs. If that is so, and this date is altered to November, the Isle of Man might be put in a specially favoured position. [Interruption.] As my hon. Friend the Member for Oldham, West (Mr. Hale) reminds me, they are now so favoured.
They are entitled to all the amenities which citizens of this country receive. We help to defend them, and the amount spent on defence is enormous. It would be unfair if we altered this Bill and gave them possibly a rebate for a period of the year. Perhaps the Financial Secretary will correct me if I am wrong when 951 I say that if we did alter the date they would not pay, in this direction, the same rate of tax as ourselves.

§ Mr. Hale
Unless and until the new agreement is ratified by the Tynwald it will not make one penny difference. This Amendment would have the great advantage that we should have the accounts for the year before the Bill is considered again.

Mr. Glenvil Hall
True. I realise what my hon. Friends wish to do, but there are dangers. The Isle of Man is now in a specially favoured position. Some people from my hon. Friend's constituency who previously used to come to live in mine are now retiring I understand to the Isle of Man because Income Tax there is lower than it is here.
If the Financial Secretary accepts this Amendment it will be doing a disservice to the country and taking a step about which the Committee ought to hesitate long.

§ Mr. Boyd-Carpenter
I have to direct my argument in two directions—to those who support the Amendment and to the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall). As the hon. Member for Reading, South (Mr. Mikardo) said, I made a passing reference to this Amendment in my speech on a previous Clause. I have a good deal of sympathy with its obvious purpose, which is to try to get the timing of the accounts and the Bill more convenient for the Committee. There is great force in that.
Indeed, that is one of the aspects of the matter which we intend to look into in the course of the negotiations which I have mentioned. But the real objection to this proposal as it stands is that Tynwald by its resolution has asked for the Clause 4 dates to be continued until 1st August, 1953. I do not want to go over the ground again. It is ultimately within the authority of the House of Commons to disregard that, but I cannot imagine a more inconvenient and tactless moment at which to override the wishes of Tynwald, and impose the dates for a longer period than is asked for, than the time when we are entering into negotiations to discuss these very matters which, as all hon. Members who have spoken have 952 said, are in a far from satisfactory position. It would be a most inappropriate atmosphere for the negotiations to be carried on.

§ Mr. Bing
Supposing that in June the Tynwald passed their financial resolutions if we put November into the Bill, then next June, if they so desire, the Tynwald can alter the resolution to vary the tax.

§ Mr. Boyd-Carpenter
I think that constitutionally they may be able to do so, but it would create a most unfortunate tangle if we forced them to do it. The negotiations are an attempt to get not co-operation in working a difficult system, but a system which will work much more easily. It is our desire to get the timing of the accounts and the Bill much closer together, and it may well be that the timing of the accounts might be adjusted, but until I have examined it I cannot say and do not want to be dogmatic. I cannot accept the Amendment for this year, but I give the assurance that the question of timing will be dealt with. It may well be that that will be a feature of the discussions. But, so far as we are concerned, it is our wish that everything should be made as convenient as possible. The hon. Member for Reading, South has indicated that that argument might have some force, and I hone he not feel it necessary to press the Amendment.

§ Mr. Mikardo
The Financial Secretary has managed with one blow to deal with both opponents, because his arguments answered the points made by myself and my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall), and I am very happy to accede to his invitation and ask leave to withdraw the Amendment.

§ Mr. Hale
I hope that the right hon. Gentleman is not going to intervene. We are quite near the end, and I think I can deal with a matter of some substance in a few sentences. The Financial Secretary has been very accommodating, and we are anxious not to embarrass him; what I have to say on this Clause 953 will be a complete answer to the intervention by the right hon. Gentleman the other night. The history of the collection of this tax is that up to the war of 1914–18 it was found by a number of people who studied this matter in the Library that the Isle of Man paid to the Exchequer £10,000 a year. That was when the National Debt was about £8,000 million. As a result of that, negotiations were commenced and the Isle of Man made itself voluntarily responsible for the repayment of £250,000 of War Debt. That was not a small but substantial contribution.
Later, when the matter was again raised by negotiation they made themselves responsible for the further repayment of £500,000. As a result of the labours of a few people in the Library looking into this fiscal system the National Exchequer gained by £700,000. We have had another war, and the National Debt now totals about £25,000 million, a fantastic sum, yet the annual sum payable by the Isle of Man is still £10,000.
Negotiations are now going on, and it is suggested that they should pay 5 per cent. of the common pool. But they have been going on for three years, and we hope they soon come to a conclusion. These are not small matters. We maintain the cost of collection of the taxes, the cost of the defence of the island, and that ought to be conveyed to the Tynwald very forcibly. These are substantial services as a result of which they are able to give the inhabitants of that island specialised advantages—Income Tax of from 2s. 6d. to 3s. in the £ until 1948, when it was contemplated to raise it to 4s.
These are exceptionally important matters which it is our duty to raise. It is our duty to raise them. The time has come when the attention of the islanders should be called to the fact that we do bear a very heavy burden in relation to the defence of the island. Of course, their population has not increased greatly and they may have special representations to make. But we do feel that this is an opportunity of calling the attention of the island to the need for a reconsideration of the fiscal arrangements of the island.

§ Mr. E. Fletcher
There are other reasons beyond those mentioned by my hon. Friend the Member for Oldham, West (Mr. Hale) why we should just give a moment or two to Clause 4. I am sorry that the last of the four Amendments on the Order Paper for amending the Clause was not called, but I can quite understand that that was at the exercise of your discretion, Sir Charles.
I want to draw attention to the very curious effect of the second half of the Clause, because as it stands this is the effect of continuing in force certain powers which are given by the Acts set out in the table to the Governor. As I understand it, under the Customs legislation of the Isle of Man some of these Acts give the Governor power to make orders varying or repealing Customs Duties and also give him power to impose new duties on goods.
It is an entirely novel conception for us that Parliament should give the executive power to impose new duties, and the effect of continuing the operation of subsection (2) is that in all the Acts which confer these powers on the Governor this executive power can be continued for another year. I hope when the Financial Secretary comes to reply he will he able to tell us that one of the matters which will be engaging the attention of himself and the representatives of the Isle of Man in connection with these financial arrangements is whether it is reasonable, whether it is desired in the Isle of Man—I am quite sure it is not desired here—that there should be this quite anomalous power given to a non-elected Governor to impose completely new Customs duties. It is true that they are limited in operation to a year.
I hope the Financial Secretary will agree with me that in the new arrangements which are being worked out with the Isle of Man it will be realised by their representatives that in these days it is quite anomalous, quite contrary to all democratic conceptions, that the Governor of the Isle of Man should have the sole and uncontrolled right to impose new Customs duties. When I read this it struck me with surprise that the right existed, but it strikes me with even greater surprise that the Government should ask the House to continue in 955 operation a very curious and undemocratic regulation of this kind.
This seems to me to be another of the quite out of date and obsolete regulations which, I suppose, have been inherited for several decades, and I feel that in this debate, which the Lord Privy Seal thought was inopportune and so contrary to all precedent, this is another, and by no means the least important, of the matters which could quite fruitfully be amended and put on a modern basis in the new arrangements that are being worked out.

§ Mr. Crookshank
I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
We have made considerable progress this evening, and I said the other night that I did not intend, as far as I was concerned, to ask the Committee to sit unreasonably late. Now, as the time is getting on, and it is ten minutes to one o'clock, and hon. Members keep rising, I thought it would be as well if we could break off the discussion, and put this Bill down as the first Order for tomorrow.

§ Mr. Foot
I want to say a few words in support of this Motion. I only hope that, having moved to report Progress, and if he is supported by my hon. Friends, it is not going to be followed up by the Leader of the House coming to the House tomorrow and making a declaration that hon. Members kept the Committee sitting late in a manner in which they had no right to act. I hope he will not follow the Motion to report Progress which he has made tonight with the kind of statement which he made following the previous occasion. Perhaps the Leader of the House has shown a different temper on the matter this evening, and perhaps it is because he has had the opportunity of discovering that what he told the House yesterday, when he made his statement after Questions, was not the case. He said this was—

§ The Chairman
On the Motion to report Progress, we can only discuss reporting Progress, and cannot enter into a discussion of what happened yesterday or may happen tomorrow.

§ Mr. Foot
Speaking for myself, I am prepared to support the proposal made by the right hon. Gentleman on the condition that he will not follow it up by 956 the kind of action he took on the previous occasion.

§ Mr. E. Fletcher
I should like to support the Motion which the Leader of the House has made, and I do so not entirely for the reasons which he gave, but because I think the Committee will realise that this is a far more important Bill than the Leader of the House was prepared to agree on Tuesday night. The further we go into our examination of it, the more it appears to be worthy of the consideration of hon. Members and of the Government.
There is one point I should like to put to the Leader of the House. I understand that he has suggested that we should report Progress, and that this Bill should be the first Order for tomorrow. I am wondering whether that is a really convenient course to adopt.

§ Mr. Bing
Yes, it is.

§ Mr. Fletcher
My hon. and learned Friend the Member for Hornchurch (Mr. Bing) will be able to give his own reasons why he thinks it is, but I am wondering whether it will be convenient to all those hon. Members who were told by the Leader of the House today what tomorrow's business will be. While it may be convenient to my hon. and learned Friend and to those taking part in the discussion tonight, I wonder whether we have not a duty to have some regard to the interests of other hon. Members.
Surely it will be very difficult for hon. Members who have not been here tonight and who attend at 11 o'clock tomorrow, when they find that the business announced by the Leader of the House has been changed, and that for an hour or two, or may be two or three hours, we may be engaged in our discussions on this Bill? I hope, therefore, that if the Leader of the House intends to persevere with his intention of resuming the Bill as first Order tomorrow, he will take the appropriate steps to see that all hon. Members are informed of that intention.

Mr. Glenvil Hall
I think the right hon. Gentleman has done a wise and reasonable thing in moving this Motion. I hope he will not feel aggrieved that we have carried this debate on tonight. For obviously very good reasons he was not able to be in his place, but the Financial Secretary will tell him that we have had 957 a very useful debate and have covered matters which should be covered. The mere fact that this Bill frequently goes through more or less formally is all the more reason we should look at it in greater detail now and again, and for the reasons given by my hon. Friends, all have gone to show that it was time we really examined this Bill in more detail. Therefore, I make no apology.
I know it is close to the end of the Session, and the right hon. Gentleman has had perhaps a very gruelling time, but he has brought some of it on himself. As I said earlier on Clause 2, we had only been discussing it about 20 minutes, and had had only one speaker from this side followed by the Financial Secretary when the Lord Privy Seal moved that we report Progress. I ask him to remember his own days in Opposition and how he personally, as well as his friends, would have reacted if someone had treated them in that scurvy fashion.
Tonight we have had a more reasonable debate and have been accorded what we ought to have had from the beginning, that is a more reasonable time in which to discuss these important matters which ought to be looked at from time to time, if not necessarily every year. The bulk of my hon. Friends are delighted that the right hon. Gentleman has moved this Motion, and we shall accept it. If any of his hon. Friends object and would like to go on speaking I can assure him of our support in the Lobby.

§ Mr. Bing
Those of us on this side who have taken part in the discussion on this Bill appreciate the attitude of the Financial Secretary and the right hon. Gentleman, and I hope my hon. Friends will not cavil at whatever particular time the right hon. Gentleman arranges further discussion of this Bill. It is, after all, the right hon. Gentleman's responsibility, and I am sure that we will all be there to deal with it. I thank both him and the Financial Secretary for the very courteous way they have treated the Committee tonight.

§ Mr. George Wigg (Dudley)
I should like to support what has been said. It is a very wise step the Leader of the House has taken. Perhaps during the weeks that lie ahead he will pay more attention to his job as Leader of the House, because it is his duty to be here 958 when the Committee or House is sitting. He does not set us a very good example.

§ The Chairman
I do not think that that arises on this Motion.

§ Mr. Wigg
I am addressing myself to the point that if the Leader of the House had agreed we could have disposed of the Bill in another ten minutes, and for reasons which I do not understand, but of which I approve, we shall continue our deliberations tomorrow.
It may well be that on this Motion I will not be going too wide if I say that if the right hon. Gentleman finds himself in difficulty and has to make inroads into tomorrow's business it is surely due to the way he has led the House. The way to get Government business through is to treat the House and Committee with respect. If the Leader of the House had been in for our debates he would have had an example in the Financial Secretary. He treated the Committee with great courtesy and patience and, may I add, with great wisdom. If the Leader of the House had only stayed away another ten minutes we would have had only the ordinary Orders for tomorrow, but that is his affair; he has chosen another course.
I hope that during the 14 weeks' Recess he will study the example of other Leaders of the House and realise that his job is to lead, and certainly to be in the House when the House is sitting. If he did that he would begin to get the feel of the House of Commons, which he clearly has not got at the moment.

§ Sir Robert Grimston (Westbury)
Is the hon. Gentleman speaking as an Opposition Whip when he informs us that this business can be concluded in ten minutes, and will that be the case tomorrow morning?

§ Mr. Hale
I only want to make one comment. I do not think it is fair to the Leader of the House to say that the business could have been concluded in ten minutes. There is an exceedingly important Amendment to be called which will be the subject of some discussion, and I think that the Leader of the House took the right course.
I should first like to express my gratitude to the Parliamentary Secretary for the courteous and informative manner 959 in which he treated the Committee tonight, which fully justified the debate. Secondly, I wish to express my thanks to the Leader of the House for his somewhat tardy recognition that this should be the first Order of the Day. I am very grateful, and in the circumstances am prepared to let bygones be bygones.