HC Deb 23 June 1953 vol 516 cc1681-97

The Income Tax Act, 1952, shall be amended by the insertion after section four hundred and forty-eight of the following section: 448A. Exemption shall be granted from tax chargeable under Schedule D in respect of the profits of a trade carried on by a local community with voluntary unpaid labour solely for the provision of local amenities.

Brought up, and read the First time.

3.31 p.m.

Sir David Robertson (Caithness and Sutherland)

I beg to move, "That the Clause be read a Second time."

I am compelled to put down this new Clause because of the action of the Inland Revenue Department in making Income Tax demands on the Thurso Town Improvements Committee, the Golspie Village Amenities Committee and the Clyne Amenities Association Brora. The town of Thurso and these two villages are in my constituency and the brief facts of the case are as follows. I shall deal with Thurso first.

When the war came to an end returning soldiers, sailors and airmen came back to the lovely old town of Thurso, which was beautifully laid out a century and a half ago, but some parts of which are now in a state of disrepair owing to the poverty of the burgh and to the fact that it has no industry. The annual collection of rates from owners and occupiers in Thurso, for each of the last five or six years, is about £15,000. That will give hon. Members from more populous parts of Britain some impression of the lack of funds in that area.

These returning ex-Service men, and other citizens of all kinds of income groups, set about raising money by their own efforts to bring about improvements which, in a more prosperous area, would be borne on the rates. There the rates are high, and they weigh heavily on both owner and occupier. These public-spirited men and women felt it would be harsh to add to them in any way and that the poorer people would be the worse hit. They also felt it would be wrong to ask the Exchequer for any further sums of money. So they set about holding a gala week which is a source of great pleasure to many visitors from other parts of the country and from overseas.

They ran sales of work and other wholesome enterprises of that kind. They applied the money to the building of a children's playground near the beach. I have visited it many times, particularly in summer when this flower garden is a place of beauty. There are swings, roundabouts and see-saws in a lovely setting of lawns, shrubs and flowers, so different to the places where children in the bigger cities have to play, with asphalt and bricks all round them.

They also applied the money to building a pram-way to assist mothers to get down to the beach and that is a great asset to the mothers of young children. They re-built 12 bathing boxes which were falling to bits. They gave money to improve playing fields and a public tennis club. I know that in the great place like Brighton and Bournemouth and Rothesay and Dunoon things like that would be a charge on the rates. But we cannot afford it in Thurso. The annual income of £15,000 does not run that far and has to be spent on things which are regarded as prior essentials.

As a further means of raising money the committee ran a dance or two. We are great people for dancing in Caithness. We are very good at amusing ourselves, because no one else does it for us. Both citizens and visitors were glad to go to these dances. Nothing amuses a Sassenach more than to go to a Highland dance to watch or to take part in the reels, and so on. They were able to rent the little town hall on a fortnightly basis and this has become a target for the Inland Revenue.

For these people who have been for six years doing all this very proper work have been delivered a bolt from the blue, a demand for £700. I did all I could to prevent the assessment being made. I thought that would be the best way of avoiding what I am compelled to do today. I have taken every possible step to avoid coming to this Committee and moving this new Clause. The answer I received from the Inland Revenue and from the Financial Secretary, who was so courteous in receiving me and corresponding with me, is that it is the law to tax people like the members of this committee, the men and women who gave their services on a voluntary, unpaid basis.

I have been in this House for 14 years under various Governments. I do not think that that is the law. At any rate, I am certain that it was never the intention of Members of Parliament that this should be the law. If it is, why was it not enforced when this committee came into being? Nothing was hidden. Public meetings were held every year, when the townspeople were invited to be present and elect a new committee. They published their accounts, showing exactly how the money they got was raised and how it was spent. The Income Tax surveyor lives among us. He is not a stranger in a remote place. Every fortnight the local paper carried advertisements of the dances, so that if that is the law I think I am entitled to ask the Chancellor why it was not enforced for six years.

Why were these people allowed to go on year after year contributing in this way without an assessment being made? There must have been a dereliction of duty on one, two, three, four, five and six years. Or is it possible there was no dereliction of duty; that a smart official thought it was a good thing to tax a little Highland community trying to help itself in the most praiseworthy manner? So much for Thurso.

In Golspie, in the neighbouring county of Sutherland, we have no cinema. We have no race track and no dog track and I do not think we particularly want them. At the end of the war, just as happened in Thurso, the people formed an amenities committee. They realised that our young people were continuing to leave the area and that a cinema is a very desirable thing anywhere, particularly in a place where there is no other entertainment. It might be the means of stopping the flow of young people to the South and overseas. That is our greatest affliction in the Highlands, the loss of generation after generation of the best of our people.

This committee came together. They got someone to loan or give them a projector and they rented the village hall on Friday and Saturday nights and ran a cinema show. They rented the films and took it in turns to be on duty at the box office and as ushers and doorkeepers. The only person they have ever paid was the projectionist. Their object was to build a community hall with any profits they might make.

It will be recalled that at the end of the war, legislation was passed to provide money for community halls. I remember having correspondence on that subject with reference to my old constituency of Streatham. All the machinery was on the Statute Book to enable money to be found for this purpose. But in Golspie we were prepared to find the money ourselves from the profits on these cinema shows.

After six years the blow fell and a demand came in for £3,300. There was no assessment for six years, and then this demand was made. The population of the parish of Clyne, the parish involved, is only 1,000, and hon. Members will understand why the commercial cinema has never been attracted to Brora or Golspie, which have similar populations.

This matter affects every one of us in this Committee. I have been told by an eminent member of the legal profession, an Opposition Member of this House, that if this act of the Inland Revenue is correct in assessing Thurso, Golspie and Brora they would be equally correct in taxing any golf, tennis or football club, or any other kind of club that holds a dance and makes a profit.

The attitude of the Inland Revenue to the three communities that I have mentioned is that they are not charities within the meaning of the law. I am also told that the law in relation to charities throughout Great Britain is in a chaotic state. These public-spirited men and women did not have a lawyer sitting beside them when they drew up their laws and regulations. They drew up a constitution which would be regarded as wholesome and proper anywhere, but their activities are not brought within the definition of a charity, although the money which they raised is all for such wholesome purposes.

The Inland Revenue say, "Even if you were a charity you would be liable to tax because you are carrying on a trade by running a dance fortnightly "- or even once, I suppose. The Inland Revenue say that by showing a cinema film on Friday and Saturday nights these people are carrying on a trade and, therefore, are subject to tax.

The effect of all this in Thurso is to bring the dances to an end. They were the main source of revenue with which to provide these fine works of which I have spoken. I do not know what will happen to the cinema in Golspie and Brora, but I think that if they are relieved of £3,000 there will not be much heart left in anyone to continue.

I appeal to hon. Members on both sides of the Committee because hon. Members in all parties have put their names to this proposed new Clause. I am not going to divide the Committee against my own Government. I make no apology to anyone for saying that. I could not remain a Member on this side of the House and do that in present circumstances, but I wish that I were free to do otherwise. I hope it will not be necessary. I hope that my right hon. Friend the Chancellor, who has such a distinguished record, will appreciate the justice of this case. The whole thing is so lamentable.

3.45 p.m.

My colleagues on both sides of the Committee who represent the Highlands are all struggling to arrest depopulation. It is a great affliction, and it is something which Britain cannot afford. If we help ourselves and refrain from going to the Exchequer for help, why are we not allowed to continue to do it without a shock of this sort coming along and stopping dancing stone dead in Thurso and making people feel that it is not worth while going to sales of work? They feel that the Government will grab whatever funds are available.

Is it not absurd that we have legislation on the Statute Book to provide money for the building of community halls where all can meet in a democratic fashion and enjoy themselves, or at political meetings or in courses of instruction and so on, and that when the money is provided by voluntary effort of the kind that I have described-efforts by men and women who have borne their share of the crushing taxation which we all have to pay-a burden like this should be put on them.

There would be no profits to tax if these people charged expenses and wages, but they have been glad to give of their best free, and the Inland Revenue, supported, unfortunately, by my right hon. Friend, say that it is the law that this money should be taxed. It is up to hon. Members on both sides of the Committee to say whether, in their opinion, this is the kind of law which should be made, and if not, they should make perfectly plain that they support this Clause.

Mr. Niall Macpherson (Dumfries)

My hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson) has put this case very clearly and cogently and there is not much that I need add. The question, basically, is a very simple one. We have a number of well-disposed people getting together generally to achieve a specific object for various purposes. They are willing to give their effort and their time for nothing. They build up funds with the object of achieving these purposes, and when the funds are built up the Treasury tax those funds.

It may be that those well-disposed persons are in a small burgh or a small community which has no constitutional recognition at all as such. It may be that in the burgh in which they are working the representative institution itself considers that the objectives are in themselves desirable, but that they are not objectives that the burgh itself should pursue and gives full support to the work of these people. Surely, in those circumstances, there should be some means of ensuring that it is possible for that community to have the amenities which these people have banded themselves together to provide. It seems to me that that is the simple issue, and I trust that my right hon. Friend will be able to meet it in some way.

I do not suppose that anybody will imagine that the words in this proposed new Clause are absolutely watertight. I do not know whether the term "local community," for example, is a correct legal definition, but, clearly, the intention is there. There are obvious difficulties in the present system of the law as it is applied at present. If these funds are to be built up, and if they are then to be taxed, obviously, any committee which sets itself up for this purpose will be under a very great temptation, instead of using the money for achieving its objective, to "blue" it at the end of the year, to prevent the Treasury getting their hands on it.

It seems to me that the main difficulty arises simply because of the necessity to carry forward a sum of money from one year to another in the process of building up the fund which is to provide the amenity. Surely there ought to be some means of getting over that difficulty. I trust very much that my right hon. Friend will not give encouragement to that type of committee which sets itself up merely to provide parties of one kind or another, but will give every possible encouragement to the sort of voluntary organisation which sets itself up to provide services and amenities for the people of the community to which it belongs.

Mr. G. R. Mitchison (Kettering)

I am in favour of this new Clause, though not quite sure that it goes, at all points, far enough. It seems to me, first of all, that the whole question of what is and what is not a charity badly needs to be reviewed. Obviously, that cannot be done on this new Clause, but I hope it will not be overlooked.

These charity organisations provide just as good an instance as we could have. They very often give themselves a number of charitable objects, and add, at the end, a rather wide phrase of a kind which I can only describe as a loophole, by reference to the doctrine of not leaving any loophole, because through that loophole the whole bath water may go out. Then they discover that, although the generality of their objectives and their personal intentions are charitable, they are not charitable institutions, because they might spend sums of money on non-charitable objects.

A similar point arises in connection with church activities, where some of the lines of demarcation between one church function and another are really very artificial and very unreasonable. One can even get into subtle distinctions which depend on the way in which the clergy- man is referred to and described. That is the first point.

The next point concerns this business of trade. I quite appreciate the difficulty, and it is a real one, but, on the substance of the matter, what villages are doing all over the country-not only in Scotland, but also in England-is to embark on various activities for the purpose of raising money for a village hall or something of that sort. They ought not to have to depend on the niceties of definition any more than is strictly necessary, and what I hope the Chancellor may feel able to do is not, perhaps, to accept the Clause as drafted, but to say that he will look at the matter and see whether something can be introduced, I hope on Report stage, but, if not, at the earliest possible date.

Let me take the sort of thing that presents difficulties. The new Clause says that what is intended are activities with voluntary and unpaid labour. The hon. Member for Caithness and Sutherland (Sir D. Robertson) happened to mention that, in the case he quoted, they paid the man who operated the cinema. That illustrates the sort of difficulty into which these bodies can get. It is not unlike the question which we were discussing lately concerning amateur theatricals and amateur opera performances, and, if only for that reason, I believe that the drafting of the new Clause should be reconsidered. On the other hand, I feel quite clear that this kind of activity ought not to be discouraging by taxation, and discouraged, as I am sure the hon. Member was quite right in saying, in many cases, to the point of complete extinction.

If I may turn for a moment to what may sound rather like a party line, we are in this country abolishing the kind of village community that depended almost exclusively on the squire, with the parson's occasional assistance, and it seems to me that it is our responsibility to see that we have in its place an effective village democracy-effective not mainly for political purposes, but for the whole social life of the small community. We ought not to deprive them of the opportunities they are given in that respect by activities of the sort that we have heard about today.

This is a matter of very great importance, not only in Scotland, but in all parts of the United Kingdom, and I would add that I happen to live in Scotland. We have a cinema in a small fishing village, very much the same as they have in the hon. Gentleman's constituency, except that, being more enterprising people, we work the cinema ourselves; but that is a small distinction. The point is that this activity ought to be encouraged, and it is a proper ground for tax remission.

I want to make a third and last point. I think that assessments in arrear for a number of years are very regrettable. I quite recognise that they have to be made from time to time, and I see the sort of circumstances in which they have to be made, but I have seen, even within the limited experience of my own constituency, several cases in which they have really caused hardship. Sometimes, the hardship is increased by the local tax official being a trifle over-zealous, and forgetting, at any rate for the purpose of correspondence, that there is a six-years' limitation to what he can properly claim.

I knew a case in which a man carried on a very small business as a sweep, but finding sweeping, as a matter of free competition and private enterprise, rather unprofitable he took a job as a sweep, whereupon the local Income Tax officer, quite properly-and I am not saying that he did anything wrong-descended upon him and assessed him on the assumed profits of his sweeping when acting independently for the previous six years.

Now, sweeps are not very good at keeping accounts, and inspectors of taxes are not particularly good at assessing a sweep's profits. This kind of thing ought to be avoided if it is possible, and I hope that, in matters of that sort, the Chancellor will do his best to temper the strict letter of the law, having regard to his responsibilities concerning the public purse, and see to it that his officials do so whenever there is a question of recovering back taxation.

I hope that the hon. Gentleman who moved this new Clause, and who made such a convincing and forceful case for it, will not necessarily leave us to judge the depth of his conviction from the sonority of his voice, but will take the matter to a Division; or, if he feels unable to do that, will let somebody else do it for him, and will then express his convictions in the most forcible way

4.0 p.m.

Mr. J. Grimond (Orkney and Shetland)

I should like to add a word or two in support of the proposed new Clause. I do not think it is necessary to say more than a word or two, because the arguments and the difficulties must be very well known to the Treasury. I can hardly feel that the Treasury want to tax the kind of association referred to and I imagine that they would like to avoid doing so if they can.

The arguments for encouraging these associations have already been presented, and they particularly apply in the North of Scotland where it is important to provide amenities if people are to be kept there at all. It is necessary to encourage people to provide their own amenities, and there is still a great tradition of self-help not only in finding amusement but building their own houses and reclaiming their own ground. I am sure that the Government have no wish to discourage that, and would like to avoid a situation in which one of these associations finds itself deprived of funds. There should be no difficulty in drafting a suitable Clause to carry out this object.

There are several salient points about these associations. The first is that they cannot possibly be said to make any profit. Most of them are voluntary and if they were charged with payment the so-called profit would completely disappear. I know there is some difficulty about the disposal of the funds, so to speak, but so long as they are put back for a community purpose for which the association was formed, there must be some way known to the experts of the Treasury to draft a suitable Amendment to the Income Tax Act to enable these associations not to be taxed.

I would say in passing that we would not like to encourage associations of the wrong kind, to which reference has been made, because it would only be the honest associations who would bear the brunt of the tax on their activities. We cannot attach blame for efficiency to Income Tax officials. Any blame must rest fairly and squarely upon us. We pass the Measures and it is for the officials to apply them, but it should be possible to make some exception to cover association activities. In the case of the local associations which exist in my constituency, in Caithness and Sutherland and other parts of the Highlands, the amounts at stake are extremely small and are hardly worth collecting.

There can be no argument of loss of revenue. It is for the ingenuity of the Treasury to find a way to exclude associations which exist for local purposes. I would ask the Chancellor of the Exchequer to look at this matter with great sympathy, and, if he cannot accept the proposed new Clause, to try to draft something himself to carry out its objects.

The Economic Secretary to the Treasury (Mr. R. Maudling)

This is a matter of considerable importance, particularly to the communities mentioned by my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson) and to many other communities, particularly in the rural areas. My right hon. Friend the Chancellor of the Exchequer has given very careful consideration to the whole problem.

We do not wish to stultify the efforts of these local organisations which-and there is no argument about it-are very worthy and excellent bodies, devoting their activities to purposes which promote the general amenities of the people living in their districts. No one wants to obstruct their activities. Income Tax officials have in this matter only been doing the duty which is laid upon them by statute to collect a certain amount of tax. They cannot let the taxpayer off, as many of them would like to do. Neither can the Minister nor Members of the Government depart from the law laid down by the House of Commons.

As to the delay in collection, mentioned by the hon. and learned Member for Kettering (Mr. Mitchison), I agree that as a general rule back assessments ought to be avoided, but it is not possible for the Inland Revenue always to know everything that is going on. Some people think that the Inland Revenue try to know too much about what people are doing. It is incumbent upon anyone who engages in a trade to make a return to the Revenue, but I particularly appreciate how inconvenient it is when taxpayers are presented with a demand for tax which is legally due in respect of activities in which they had been engaged and on which they believed they were not liable to taxation. All trading activities are liable to tax under Schedule D, the only exemption being in the case of charities.

"Charities," for this purpose, are very narrowly defined. When a trade is carried on by a charity the profits must be applied solely to the purposes of the charity, and either the trade must be exercised in the course of the actual carrying out of a primary purpose of the charity, or the work in connection with the trade must be mainly carried on by the beneficiaries; for example, a shop for the sale of goods made by the blind. Those are the only exceptions which exist at the moment.

The definition of "charity" has been drawn by the House of Commons very tightly and there is always difficulty in the way of extending the definition by exemptions of this kind too rapidly or too easily. It is of interest that the Nathan Committee on the Law and Practice relating to Charitable Trusts, which recently reported, said that in their opinion there was no case for any alteration of the content of the legal meaning of "charity." That Report is being studied at the moment by the Government. I admit that the Committee were not concerned with the specific point of taxation.

The new Clause proposes a very wide extension of charitable exemption, and there are practical difficulties. I am advised that neither the phrase "local community" nor the phrase "local amenities" is readily definable in law. There is also the difficulty to which the hon. and learned Member for Kettering referred, that the employment even of one professional projectionist would mean that the community or association would not get the benefit of tax exemption.

Considerable matters of principle are involved. To some extent what is now proposed is an extension of the exemption from charity to self-help. There is a great difference between charity, when people set out to help others, and self-help, when they set out to help themselves and to provide amenities for their own enjoyment. There is quite an extension there. It is the distinction between the kind of laudable activity or trade engaged in by a person to help his son and, on the other hand, charitable activity as a result of which a person makes a payment for a benefit of widows or orphans. It is a substantial extension, and it is difficult at first to be certain that any group of people, who band themselves together and engage in trade in order, not to profit themselves, but to provide the community with benefits in kind, should have exemption from Income Tax such as is at present given to charitable organisations.

However, my right hon. Friend recognises the great importance of this matter to local communities, particularly in the rural areas. What he has decided to do, and has done, is to refer the question specifically to the Royal Commission on Taxation to consider and give him the benefit of their expert advice on the whole principle involved and on the practical possibility of meeting my hon. Friend's point. It so happens that the Commission are about to embark upon a general survey of the problem of charitable institutions in relation to Income Tax and it would be very convenient if they were, at the same time, to study this proposal, which has arisen as the result of the initiative of my hon. Friend.

My right hon. Friend feels that there really are difficulties about this Clause. In view of the very involved nature of the legislation on these matters and the possible repercussions from the complexity of some of the questions of principle involved, he also feels that he cannot undertake any legislation on the matter this year. But he has already referred it to the Royal Commission and has asked them for their opinion upon it as soon as they can conveniently give it after their deliberations. When they have provided their advice he will study what they have to say most carefully. Beyond that he cannot go at present, but he hopes that in view of this assurance and of the action he has taken in referring the matter to the Royal Commission my hon. Friend will be willing to consider withdrawing his Clause.

Mr. Mitchison

We do not know when the full report on this very complicated question is likely to appear. Obviously, it may take a very considerable time. Would it be possible to put this matter, which has a degree of urgency, to the Royal Commission and ask them for an early report on this aspect?

Mr. Glenvil Hall (Colne Valley)

I know that we have a very large number of new Clauses to consider today and I am sure that some hon. Members will think some of them much more important than this one. Nevertheless, in view of what the Economic Secretary to the Treasury has said, I think it is only right that someone else from this side of the Committee should speak before we proceed to a Division or pass on to the next Clause.

I believe that there will be some disappointment in all parts of the Committee that the Economic Secretary has not gone further than he did this afternoon. None of us objects when someone stands at the Treasury Box and says that the Inland Revenue authorities must do their duty and collect taxes if, under the law, such taxes should be collected, but, if I understood him rightly, the hon. Member for Caithness and Sutherland (Sir D. Robertson), although he strongly objected to the assessment itself, still more strongly objected to the fact that seven years went by before the assessment was made, in spite of the fact that the Inland Revenue officials were living there in the midst of the activities which had gone on since 1945 or 1946. It is one thing to assess an organisation of this kind year by year right from the beginning, when everyone knows where he is, and quite another to jump on people at the end of seven years and make a tax demand of something like £700.

I was surprised to hear that the amount had been met. Normally, in cases of this kind and with charities of this sort, the money is very properly spent year by year as it is raised. I gather that in the case of another of these communities—Golspie—an even larger sum was demanded, running to over £3,000. We all object to the Inland Revenue authorities waiting for a number of years and suddenly pouncing in the name of the law. We on this side of the Committee must protest against that kind of thing happening.

The hon. and learned Member for Kettering (Mr. Mitchison), as usual, put his finger on the core of this matter, which is that the law relating to charities is in something of a mess. I was delighted to hear the Economic Secretary say that the Chancellor of the Exchequer was asking the Commission to consider it. I hope that before we pass on to the next Clause the Economic Secretary will be able to answer the question put by my hon. and learned Friend the Member for Kettering and will tell us that an early report on this matter will be made and that even if something cannot be done, as I imagine it cannot now be done, before we pass this Bill, that certainly it will be done in the next Finance Bill.

4.15 p.m.

This matter not only affects two or three small village communities in the far North of Scotland. I gather that it affects almost every town and village in the country, and, for that matter, every political party, because all of us at one time or another have run dances. The assessment was made here because the dances were run for profit. Apparently the fact that dances were run to make a profit for a good cause made no difference under the law.

All of us, from time to time, are engaged in helping our local parties or associations to run dances for profit and the profit is devoted to political purposes. It is time that something was done about this matter and that we all knew where we were. I hope that the Economic Secretary will let us know whether we shall have proposals from the Chancellor in the next Finance Bill -that is, if the Chancellor is then in office and the Government now on the other side of the Committee are in power.

Mr. Maudling

My right hon. Friend has asked the Royal Commission to report as soon as they conveniently can on this problem, though, of course, they cannot take this specific and narrow problem apart from the general problem of charitable organisations; and, obviously, they cannot deal with it before the Report stage of the Bill.

Mr. Joseph Reeves (Greenwich)

What happens if the community has spent the money year by year?

Mr. Glenvil Hall

These are very praiseworthy objects and we can all remember what happened a few years ago when pressure was brought on the then Chancellor to extend the exemptions allowed to theatrical performances undertaken by amateurs. At first, like the present Chancellor of the Exchequer, the then Chancellor was inclined to shy away from the proposition on the ground that it might open the gates too widely, but, in the end, he agreed to alter the law. I am sure that everybody has found that change an exceedingly good one. I am sure that all of us have discovered that throughout the country advantage has been taken of it without harm to the Exchequer or anyone else.

I hope, therefore, that between now and next year the Chancellor will consider this matter and will find himself able to accede to the request now being made from all quarters of the Committee. The proposal is just and reasonable and cannot possibly do anybody any harm.

Mr. Douglas Houghton (Sowerby)

I rise to say a few words in defence of Inland Revenue officials. The Committee really cannot expect me to sit here and listen to the kind of criticisms which have been made on both sides of the Committee.

I thought that the speech of the hon. Member for Caithness and Sutherland (Sir D. Robertson) was marred by the venom which seemed to creep into his remarks about Inland Revenue officials. He said that there was a dereliction of duty if an assessment was made retrospectively over a number of years, or that perhaps it was not dereliction of duty but, as he pictured it, officials took a fiendish glee in pouncing on their victims. I object to the word "pounce" in this context from whatever side of the Committee it comes. Inland Revenue officials do not pounce. All they do is to write a kindly and sympathetic letter, asking how long a person has been drawing the money and, if he says he has been doing so for six years or 10 years, it is quite natural that they should say, "We must raise assessments for those past years."

I know it is very inconvenient-and it may be absolutely disastrous, financially -for these retrospective assessments to be made, but it is not true to say that the Inland Revenue officials are living in the communities where these activities are going on. They do not go to these dances. In the North of Scotland there is Wick, Inverness and Peterhead. The hon. Member for Caithness and Sutherland (Sir D. Robertson) knows better than I do the area which must be covered by the Inland Revenue offices from those towns.

There is no inspector of taxes in the constituency of the hon. Member for Orkney and Shetland (Mr. Grimond). His constituency is taken care of from Wick, and he knows, as I do, that dances can go on for years without the Inland Revenue authorities knowing anything about them. Quite seriously, a duty rests upon those who may be liable to tax to let the authorities know of their activities or, alternatively, to take proper advice and so save themselves from being involved in this difficult situation. There is no secret service at the disposal of the Inland Revenue. Local assessors no longer exist. There are no local informers to tell the authorities about the activities which are going on.

I hope the Committee will understand the difficulties under which Inland Revenue officers work when information regarding past activities comes to their notice, into which they are bound to inquire. The debates in the House and in Committee are, happily, singularly free from criticisms of public servants who, were I not here, would have nobody to raise a voice in their defence. I am quite adequate for the task of defending public servants on all occasions, and I happen to know a little about the Inland Revenue. They are doing a difficult job and working under tremendously difficult conditions caused by those who seek to avoid taxation. We should be grateful to the Inland Revenue for the efficiency with which they are doing their job, even though at times they do things which, on the surface, appear to be difficult to defend.

Mr. Archer Baldwin (Leominster)

The Committee may think that the hon. Member for Sowerby (Mr. Houghton) is biased. I want to support what he said because it cannot be said that I am biased in favour of the Inland Revenue authorities.

The Chairman

We cannot discuss the Inland Revenue officials.

Question put, and negatived.