HC Deb 10 November 1952 vol 507 cc726-36

Motion made, and Question proposed. That this House do now adjourn."—[Mr. Kaberry.]

10.1 p.m.

Mr. Cyril W. Black (Wimbledon)

I desire to raise with the Financial Secretary to the Treasury the question of the claim to exemption from Entertainments Duty by a company called People's Concerts, Ltd., and I ought at once to declare a personal interest in this company as a director and shareholder.

The purpose for which People's Concerts, Ltd., was formed was to provide classical concerts for educational purposes on a non-profit-earning basis and without recourse to public funds. I think at any rate that particular feature and object of the company ought to make its appeal to the Treasury, which, after all, is called upon to provide so much money through the Arts Council, and in other ways, in order to subsidise classical concerts, so that it certainly ought to look with favour upon any organisation existing for the same purpose where no recourse to public funds is involved.

Exemption from Entertainments Duty in the case of such a company is governed by Section 8 of the Finance Act, 1946, which lays down that exemption shall be granted where the Commissioners are satisfied that the entertainment is provided by a society, institution or committee which is not conducted or established for profit and that the aims, objects and activities of the society, institution or committee are partly educational. Parliament has laid down those two conditions under which exemption from Entertainments Duty is to be granted; firstly, that the concerts must not be conducted for profit, and secondly, that the aims of the organisation must be partly educational.

People's Concerts, Ltd., applied under this Section for exemption from Entertainments Duty, and the claim for exemption was the subject of a very long correspondence between the company and the Commissioners of Customs and Excise, and at a later stage between myself and my hon. Friend the Financial Secretary. But the Commissioners were unwilling to grant exemption for a reason clearly stated in a letter written by them in which they say: They"— the Commissioners— cannot be satisfied that a body controlled by one person, or by two persons who are husband and wife, is acceptable for the purposes of Section 8 of the Finance Act, 1946. It is, I think, abundantly clear, and is not likely to be in dispute, that the Commissioners of Customs and Excise were laying down, and had ever since the Finance Act, 1946, continued to lay down, a rule of their own devising for which there was no statutory or Parliamentary authority at all—an absolute rule that exemption would not be granted in the case of what the Commissioners regarded as a one-man company.

This matter was the subject of long correspondence and finally ended in an absolute refusal to grant exemption from Entertainments Duty. The company, therefore, took the matter to the divisional court, presided over by the Lord Chief Justice, and asked for a mandamus, and, after a very full hearing by the divisional court, a mandamus was granted to the company with full costs against the Commissioners of Customs and Excise.

I would point out that, owing to the entirely illegal conduct of the Commissioners in this matter, which made necessary an application to the divisional court for a mandamus, the public purse has been involved in several hundred pounds' worth of legal costs which never need have been incurred, and which never ought to have been incurred. As the result of the decision of the divisional court, the Commissioners finally granted the exemption asked for. This is yet another case in which the High Court of Justice proved itself to be the upholder and defender of the people's rights against the unauthorised and illegal actions of the bureaucracy.

There are three matters which arise from this case and which still require to be dealt with, and I will mention them briefly now. Firstly, it is perfectly clear from the whole course of the correspondence and the whole course of the case that, from 1946 to 1952, the Commissioners of Customs and Excise had been maintaining a wholly illegal rule, and as a result many applicants for exemption from Entertainments Duty who were entitled to exemption under the rules laid down by Parliament have been denied exemption because of this additional, illegal and unauthorised rule which the Commissioners themselves have been imposing.

The question therefore arises as to what steps will be taken to inform all such applicants of the illegal manner in, which their applications have been dealt with, and to make redress to them so far as possible for the wrong which they have suffered.

The second matter which calls for attention surely is this: that the actions of the Commissioners in this matter have been of such a character and their attitude in the matter has been accompanied throughout by such obstinacy and such unwillingness to yield to the obvious facts of the case, until they were compelled to do so by the divisional court, that it is quite clear that they have been acting under a completely mistaken view as to the limited nature of their own legal rights.

The question therefore arises as to whether a review should not take place of the general operations of the Commissioners of Customs and Excise so that forthwith any other injurious and illegal actions which they may be committing may be brought to an end; and it should be brought home to them that they can act only within the bounds which Parliament itself has imposed upon them.

Thirdly—and perhaps this is from some points of view the most distasteful matter to which I have to refer—there is the false affidavit which was sworn by one of the Commissioners of Customs and Excise and laid before the divisional court. I must refer briefly to the affidavit and to the comments of the Lord Chief Justice upon it. This is the relevant part of the affidavit: I, Arthur Wood Taylor, of 2, Keswick Road, Orpington, in the county of Kent, one of the Commissioners of Customs and Excise … make oath and say as follows: I was one of the Commissioners who considered the application by the Applicant herein under Section 8 (1) of the Finance Act, 1946. The said application was duly considered by them on its merits as a result of which they were not satisfied that the Applicant fulfilled the requirements of the subsection. In considering applications made on behalf of limited companies wherein management and controls are vested in a husband and wife the Commissioners have determined that as a general rule and unless exceptional circumstances are shown to exist the application should not be granted. Nevertheless each application is considered on its merits and it is not correct to say that the Commissioners are seeking to impose conditions on the Applicant herein, nor did they in the present case apply a rule without considering all the relevant facts and exercising their discretion thereon. In face of that affidavit, it is interesting to see what the Lord Chief Justice said. The following is from the judgment that he delivered in the case. The Lord Chief Justice said: Lest I should say anything that I should perhaps regret afterwards, I will say no more than that I think that affidavit is entirely contrary to what Mr. Boyd-Carpenter has set out in his letters. Applications are not considered on their merits. His letters show that there is an absolute rule that if the directorate is what has been described in this case the application will be refused. The Lord Chief Justice continued: In my opinion the Commissioners have no right to insist on that as a general rule. It is abundantly clear in this case that the Commissioners were satisfied of the bona fides of this company, using the expression 'bona fides' as meaning that they were qualified within Section 8 of the Finance Act, 1948.… The swearing of a false affidavit by anybody at any time is a very serious matter indeed, but in this case there can be no excuse offered on the ground that the person swearing the affidavit was acting in ignorance or in inexperience. Here we have a responsible public servant, understanding fully the nature of the act in which he was engaging, making an affidavit which was described by the Lord Chief Justice in the terms which I have indicated.

The swearing of this false affidavit can only be attributed to one of two circumstances: first, that it was sworn carelessly and recklessly and without regard to whether the contents of the affidavit were true or untrue; or, second, that the Commissioner concerned found himself faced with a resolute opponent, realised that when the matter came into court he was likely to meet with a rebuff at the hands of the court, and, in a last desperate effort to secure his objective, descended to the depth of swearing an affidavit which he knew was not in accordance with the facts of the case. Whichever of those explanations is the true one, it is a most serious matter, as I am certain every hon. Member of the House will agree, for a false affidavit to be sworn in this way.

I am not a lawyer and I am not qualified to say whether the swearing of this affidavit amounts to perjury in the legal sense or not, but I will say that it is certainly morally indefensible. We in this country are rightly proud of the Civil Service, and we believe, and rightly believe, it to be the best in the world, and it is because of that that it is all the more important that action should be taken by the Executive where, as in this case, conduct falls far short of the standards expected. This is a case to which it is only right that public attention should be drawn because, after all, this House is perhaps the most important safeguard of the rights of the citizen against a bureaucracy which is ever increasing in authority and in power.

10.15 p.m.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)

I am bound to say that, when my hon. Friend the Member for Wimbledon (Mr. Black) indicated to me what subject he had decided upon when he had the good fortune to secure the Adjournment, I was a little surprised at his choice of topic. As he has told the House, he has succeeded in establishing in the courts that his construction of the law was right and that adopted by the Customs and Excise was wrong. He has had a forensic victory and has succeeded in establishing that the organisation with which he is concerned is freed from the burdens of Entertainments Duty.

That is perhaps not quite as exceptional a happening as my hon. Friend may think. Time and again the courts have played a very useful part in finding that the views of the law adopted by Government Departments are wrong, and that those adopted by the citizen are right. In that way they perform a most useful function in maintaining the rights of citizens, and I hope in that connection that I do not need to tell the House that, in view of the ruling on the law given by the learned Lord Chief Justice in this case, instructions have been given that what is now known to be the law must govern the exercise of the discretion vested by Statute in the Commissioners of Customs and Excise.

As time is extremely limited, I will deal very quickly with the two general points made by my hon. Friend before proceeding to deal with the allegations that he has seen fit to make against a very distinguished officer in the public service. His two general points were these. First of all, he asked what restitution had been made to citizens who had suffered as a result of the wrong view of the law adopted by the Departments concerned. I think my hon. Friend has been in the House long enough to know that it is the ordinary practice that where the law is found to be other than had been thought, nobody jobs back to reopen transactions concluded bona fide by both parties under the mistaken view of the law. If we were to do that, my right hon. Friend's attempts to reduce the size of the Civil Service would go the other way, and a large increase would be necessary.

It has always been understood that where a Department of State is involved and the decision goes against it, previous transactions effected under the old view of the law remain in effect. My hon. Friend has had a certain degree of publicity on this matter, and it has not diminished tonight All I can do is to say that if anybody thinks they have been aggrieved by the view taken of the law, it has been and still is open to him to submit a new application. In point of fact, to date no such application has been received.

Secondly, my hon. Friend referred to the question of a general investigation into the administration of the Customs and Excise. Perhaps justifiably gratified with his forensic victory, he wrote me a letter on 30th June making some rather vague and generally expressed charges. I replied on 16th July asking for particulars of them and undertaking to investigate any he sent to me. I repeated the request on 31st July, but so far my hon. Friend has not seen fit to supply me with any particulars.

Let me come to a further point. I was a little surprised when my hon. Friend passed on from the general matters with which all hon. Members are, of course, concerned, to a matter which concerns hon. Members far more. That is a direct charge of what my hon. Friend described as a false affidavit which he made against a very distinguished public servant. Before going into the details of this matter, I wish to say that both my right hon. Friend and I are satisfied that there is not the faintest scrap of justification for any such attack. In the normal way, the responsibility for what is done or is not done by Departments of State rests on Ministers. My hon. Friend seems to have sought to bypass that salutary doctrine by seeking to suggest that the Commissioner of Customs was guilty of making a willful misstatement in the affidavit. That establishes a serious charge, and it is my duty, as, indeed, it is my intention, in the time available to me to deal with it.

The matter arose in this way. The affidavit which was filed in the case which my hon. Friend's organisation brought against the Customs was settled in the first place by counsel, who had seen all the relevant correspondence, and then sworn by the Commissioner concerned, who of course in so swearing accepted responsibility for the truth of the document. It is perfectly clear, as I shall, I think, demonstrate to the House, that those contents—however we may argue about the precise construction of phrases in other correspondence—those contents of that document were true in intention and in substance. The complication which arose in the case arose wholly from the use by my hon. Friend of letters written by me to him on this subject.

I may comment in passing that when my hon. Friend and I had this correspondence no intimation was given to me that our perfectly friendly correspondence was to be the basis of court proceedings. As hon. Members know, a great deal of correspondence passes between hon. Members and Ministers. It is not in the ordinary sense personal, although in this case some of my hon. Friend's letters to me were so marked. I believe that in many constituency cases hon. Members adopt the practice of forwarding Ministers' letters with such comments as they care to make as to the wisdom or unwisdom of them. Certainly such letters as I generally wrote to my hon. Friend, are unless differently marked, written with that possibility in view. That is not quite the case here, because my hon. Friend was not writing in the case of a constituent but on a matter affecting an organisation with which he is concerned; and he did not find the occasion to intimate to me that he intended to use this correspondence in court proceedings.

Mr. Black

I did not know that I was going to.

Mr. Boyd-Carpenter

Even my hon. Friend must have had some intention to institute proceedings before he instituted them. I make no complaint about that, but it clearly affects the style and language used in those letters. They were not in any sense solicitor's letters—those kind of letters before an action, a series of which begins, "Dear Sir, We are instructed" and ends with one beginning, "Dear Sir, Unless." They were ordinary letters exchanged between Parliamentary colleagues and were not drafted, or intended to be drafted, in order to give a precise statement of the law.

When the letters were so used by my hon. Friend annexed to his affidavit, the learned Lord Chief Justice, very properly, if I may say so with very proper respect, construed those letters as one would construe letters written between parties to an action. I would not dream—it would be most disrespectful to the learned Lord Chief Justice and wholly unjustified so to do—of making any suggestion that in using those letters in that context and in that atmosphere he was not perfectly entitled to construe them as having a meaning in some degree different from the sense of what is set out in the affidavit filed by the Commissioner of Customs.

The point I would bring to the attention of the House is that if we are to look upon not only Mr. Taylor's affidavit, but on my letters, as documents produced for the purpose of legal proceedings—which the one was and the others certainly were not—the letters being letters in less legal language than the affidavit there was a difference which could be read between them: the affidavit was a wholly accurate statement of the practice adopted by the Board of Customs and Excise. This could not very easily be put in colloquial and friendly letters, such as those between Parliamentary colleagues on a matter which was the concern of both of them.

The material words in a letter of mine to which, in a passage quoted by my hon. Friend the learned Lord Chief Justice referred, was that as a "general rule" certificates of exemption were not granted where the directors were husband and wife. It is not for me to seek to give a ruling on the legal effect of the expression "general rule." I can only say that as I then used it, as I have done in the House and in scores of letters, I used it as meaning "general practice" and not as meaning a rule having statutory force.

That is exactly what, in that sense, the Commissioner of Customs concerned said in his affidavit, paragraph 4: In considering applications … the Commissioners have determined that as a general rule and unless exceptional circumstances are shown to exist the application should not be granted. I am bound to say to the House that when a proper allowance is made, as it has been in this case, for the difference between the colloquial language of correspondence and the necessary precision of a sworn affidavit these two ideas are really very much the same.

I can quite see that for the purposes of an action at law, "general rule" can be construed as meaning something in the nature of a statutory rule, and that being so considered would of course distinguish it from the true version as set out in the affidavit. The whole of this matter seems to boil down to this: any conflict there may be arises in that way. It is perfectly clear, therefore, that that conflict arises from the terms of the expression which I used in my correspondence with my hon. Friend and not in the perfectly accurate, fair and painstaking statement which the Commissioner of Customs made in his affidavit.

Therefore, I must tell the House that if anybody is at fault it is myself. It is a charge to which I very willingly plead guilty. I have never, and I do not intend even now to start having my letters to hon. Members vetted by the legal department to see if they would stand up as accurate statements of the legal position if used in court proceedings. Were I to do so, I should have to come down to the House and ask for a very large increase in the Treasury Solicitor's department. Whether I am right or wrong, that is the practice I have adopted and intend to adopt.

From the point of view that my hon. Friend seeks to inflate this incident to being one in which a senior public official so departed from the standards rightly expected and universally found in our public service as to swear an affidavit false in any particular, I think the House will be satisfied from what I have said that there is not the slightest justification for that, nor did the Lord Chief Justice so say. He said that it differed from the letters I have written. That, in the circumstances which I have explained to the House is, made in that context, perfectly true. But, as I have said, and I will if I may once again repeat—it is important in fairness to the individual concerned to make this absolutely plain—such inaccuracy as from a legal point of view arose was in my letters, while the affidavit was wholly correct.

As these charges have been made, I am entitled to add that I am authorised by my right hon. Friend the Chancellor to say that the official concerned is one who holds his highest confidence. I am perhaps also entitled to add on my own behalf, having had the honour of working with him, that I fully share my right hon. Friend's feelings about the very distinguished public official concerned. I can only express my regret, in the light of the circumstances which it has been so easy to explain, that my hon. Friend did not see fit to continue our correspondence and have this matter explained to him in correspondence instead of taking the course which, though perfectly within his rights, he has seen fit to take in this House tonight.

Question put, and agreed to.

Adjourned accordingly at Half-past Ten o'Clock.