HC Deb 19 May 1952 vol 501 cc173-5

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

Mr. E. Fletcher

This Clause is so important that even at this late hour we ought to devote a moment or two to it before we pass on. In terms, it follows precisely the recommendations in paragraph 241 of the Millard Tucker Report, but I think it is a great pity that the Chancellor of the Exchequer could not find it possible to go further than the precise terms of the recommendations of that report, because it is obvious from what the Committee said that they would liked to have gone further.

This Clause is an attempt to deal with a real problem, namely the problem which confronts mining concerns abroad in making contributions to the public services of the countries in which their activities are engaged. I think it is relevant to remind the Committee of what the Millard Tucker Committee said about this. They said: It was represented to us that companies operating abroad in undeveloped countries are often called upon to make large contributions towards the establishment or development of local public services, and that tax relief ought to be given in respect of such expenditure. We have much sympathy with this view; I am sure the Committee has great sympathy with that view as well, and I hope the Chancellor will have. They go on to say: … there is, however, the danger that any general provision drafted to give relief would be far wider than was intended and might apply where the contribution was made from munificence rather than for business reasons. But is "munificence" the right word? Is that an appropriate word to use in the case of trading companies, mining companies, oil companies and others operating in backward undeveloped countries, who, as hon. Members know, from time to time are not merely invited but are expected and required to make contributions of all kinds to the public services in those backward undeveloped countries? It might be a contribution towards a water supply or drainage. It might be the provision of hospital or educational facilities; frequently it is a contribution for relief of famine and so forth. Those contributions are not made for reasons of munificence.

Hon. Members opposite have referred to the loss of Abadan. Have we not something to learn from recent experiences in Abadan about the duties of companies which are operating in backward undeveloped places? Ought not the Chancellor to see that it is made possible for companies to have appropriate taxation relief where contributions of that kind are made?

This Clause as it stands is limited to contributions to works and services or facilities wholly or mainly for the welfare of persons employed"— with the company— or their dependants;". Those words are very limiting and, I should have thought, very unsatisfactory. Although no Amendment is down on the Order Paper—there may be one on the Report stage—I earnestly hope that in view of the wide social implications of the subject the Chancellor will consider this matter between this stage and a later stage of the Bill.

The Solicitor-General

The objects of the Clause are again in line with the recommendations of the Millard Tucker Committee, but in two respects there has been a departure from those recommendations and it might be convenient to mention those briefly. The Tucker Committee recommended that in relation to expenditure of this character, there should be relief by way of widening Section 66 (3) of the 1945 Act, whereas the Bill provides that allowances on the basis of a 10-year spread will be allowed.

That will be much simpler and more favourable to the taxpayer in that 10 per cent. can be written off each year instead of normally 2 per cent. on which the allowances are made in respect of industrial buildings. That is one respect in which the Clause is more favourable than the Millard Tucker Report. The other respect in which it is more favourable is that it extends to contributions made in respect of houses built by other persons for persons employed at or in connection with the working. In those respects it goes beyond the Millard Tucker Report and in other respects it follows the recommendations.

10.30 p.m.

Mr. E. Fletcher

Will the hon. and learned Gentleman agree that there is nothing in the Report which proposes to limit contributions to service wholly or mainly to buildings occupied or to be occupied by persons so employed;"?

Clause ordered to stand part of the Bill.

Clause 20 ordered to stand part of the Bill.