HC Deb 15 July 1958 vol 591 cc1162-7
Mr. E. Fletcher

I beg to move, in page 9, line 40, to leave out from "persons" to "whose".

This Amendment has been put down to enable us to hear the result of the Chancellor's consideration of the discussion which took place in Committee. I do not think that the Chancellor was present during the Committee stage when this matter was discussed, but the Financial Secretary was present and, as a result of representations made to him from both sides of the Committee, he undertook to bring those representations to the attention of the Chancellor. I hope that as a result we shall hear that the Chancellor is prepared to accept this Amendment.

In view of the lateness of the hour, I do not want to deploy all the reasons which we adduced in Committee. I shall summarise the matter shortly by saying that Clause 16 is designed to enable fees and subscriptions paid by Schedule E taxpayers to professional bodies and learned societies to be able to make such payments free of tax. The Clause is hedged around with a variety of safeguards to the Revenue. For example, every payment to any such professional body or learned society has to be to a body approved by the Commissioners of Inland Revenue. Various other conditions have to be observed and the provision ensures that the payments have either to be made as a condition of the individual's employment, or are in some way relevant to his office or employment.

The object of the Amendment is to ensure that learned societies which would become eligible for this benefit shall not be debarred by being mainly of a local character. Many professional bodies and learned societies whose continued existence is in the national desiderata are, as was pointed out from both sides of the Committee, essentially of a local character. We felt that their claims to the benefit of this concession should be considered by the Commissioners of Inland Revenue together with those which were national in character. Their claims are just as meritorious. The only argument of the Financial Secretary was that it would be administratively inconvenient, which we did not think a very cogent or satisfactory answer. I hope that the Chancellor will now be able to tell us he will accept the Amendment.

Mr. Cronin

I beg to second the Amendment.

10.45 p.m.

Mr. Simon

This matter has been reviewed since Committee stage. As I indicated in Committee, in theory the local society has the same case for consideration as the national society. The great difference between them is that in the case of the local society the administrative difficulties would be very great, so great at present as to jeopardise the chances of dealing expeditiously with the national societies. That is the first difference. The second is that the reliefs that would be enjoyed by the local societies are likely to be very small indeed.

If I may summarise the difficulties with regard to local societies, there will be the extreme difficulty, in many cases, of deciding their true nature. I will not repeat the sort of examples that I gave at considerable length to the Committee. The second is that only a very small number of members will be employed in occupations that will entitle them to claim relief, and only for small amounts. I mentioned to the Committee the local museum curator or his assistant; the local photographer in the case of the local photographic society. The other members are largely brought together in admirable societies but, for them, it is really for the enjoyment of a hobby; a thoroughly enjoyable hobby but, nevertheless, not one that will rank for relief under the Clause.

The third point is that, in many cases, owing to the smallness of the subscription, the relief will be lost in the rounding-up of the P.A.Y.E. system. I did not go into that with the Committee, but it has come to my notice in the review of this matter.

Fourthly, there is the large number of societies that might possibly claim approval, and the impossibility, at the present stage, of delegating examination of their claims to the local districts. We desire, if possible, to deal with the national societies before October, so that, in the case of their members, the exemption can pass into their next year's code. It would be quite impossible to do that if we now had to deal with the local societies.

The hon. Member for Islington, East (Mr. E. Fletcher) made the valuable suggestion in Committee that it might be possible to delegate the work to the districts. I have looked into that. We do not feel that it would be possible this year, or until a code has been built up nationally on which the districts could work.

It really comes to this. To deal with the local societies this year, however good a case they have in logic, which I recognise, is not possible administratively except at the cost of the national scheme, which I do not think the House would want. What I ask is that the hon. Gentleman should withdraw the Amendment, and we will look at it again next year. I do not enter into any commitment to deal with it, but we will look at it again by then. It may be that by the time a body of central doctrine has been built up it will be possible to delegate, in a year or so, power to the districts to deal with the work.

Mr. Cronin

The Financial Secretary's remarks are disappointing. I was rather surprised that he did not accept the Amendment, so ably moved by my hon. Friend the Member for Islington, East (Mr. E. Fletcher), as I feel that some of his arguments lack serious validity. He said that the relief involved is small, but when it is a question of doing justice, which is eminently the case here, I do not think that the sum involved is very important. We in this House are concerned that everybody should get a fair deal.

The hon. and learned Gentleman said that the true nature of a society is often difficult to elicit, but surely that is the whole purpose of having district inspectors of taxes. They are familiar with local conditions, and would, naturally, know the societies in their districts. He also pointed out that a very small number of members in any society would be entitled to the relief, but I feel that that is to argue in favour of the Amendment.

Again, the hon. and learned Gentleman pointed out that some of these societies are recreational in their nature, but that aspect of the Amendment is dealt with by subsection (3), which gives the Commissioners full powers to see that the recreational side is not taken into consideration. Lastly, he pointed out the very large number of societies. There may well be several thousand and, at first glance, the Financial Secretary's argument does appear to be valid. I think that during the Committee stage he suggested that there should be a "breakdown" of these societies. I would ask him to recollect that there are 650 district inspectors of taxes and that, if one divides them among several thousand societies, it means that each inspector merely has to deal with just a few.

Therefore, that cannot be a valid point of view for him to adopt and I do ask him to see whether he cannot meet us in some way.

Mr. Douglas Jay (Battersea, North)

May I ask the Financial Secretary to relieve us of some anxiety which is felt on this side of the House? He says that it is really only practicable, administratively, to deal in the initial year with the national societies; and that he could then go on and deal with the local societies. That is the logic, but is not a matter of equity involved as well? If he proceeds in this fashion, does it not mean that in the initial period one type of taxpayer will gain the relief while the other type does not, merely for reasons of administrative convenience and not on grounds of equity at all?

Does not the hon. and learned Gentleman think that there are some objections to that? Cannot he assure us that it is the intention of the Government to overcome that difficulty at the earliest possible moment?

Mr. Simon

If I may speak again by leave of the House, I should like to answer that question. When I say that the case has been made out in logic for extending the relief to the eligible members of the local societies, that, of itself, does imply that, if the extension is not made, the eligible members have a complaint. What I emphasise is that the relief to them is likely to be very much smaller than in the case of the national societies. I do not say that for that reason they must be disregarded entirely; but this must be considered in the light of the amount of work involved this year which might prevent us from dealing expeditiously with the national societies. But I have in mind what has been said, and I undertake to keep this matter under review.

Mr. E. Fletcher

I must say that the Financial Secretary has gone a long way towards meeting us. He has conceded the merits of this claim, he has conceded the justice of it, and has pointed out that there are administrative difficulties in dealing this year with both the national and the local societies. He has indicated that the administrative difficulties, which he foresaw during the Committee stage of the Bill, can be overcome next year by hearing from delegations of local societies, and that a year's experience will enable a body of case law to be built up.

Mr. Simon

I did not specifically commit myself to next year, but otherwise, what the hon. and learned Gentleman is saying fairly summarises my remarks.

Mr. Fletcher

We are not binding the hon. and learned Gentleman to anything for next year, but he has gone a long way towards saying that the case will be almost irrefutable at an early date and, in those circumstances, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.