HC Deb 20 May 1958 vol 588 cc1074-5
4. Mr. Frank Allaun

asked the Chancellor of the Exchequer what instructions he has given to the Commissioners of Inland Revenue regarding claims for deduction from taxable expenses of money spent on advertisements consisting of company chairmen's statements at annual meetings largely devoted to political propaganda.

Mr. Amory

None, Sir. Claims of this nature, like claims for a deduction in respect of other business expenditure, fall to be considered in the light of the rule laid down by law that outlay is deductible if, not being of a capital nature, it is incurred wholly and exclusively for the purposes of the trade.

Mr. Allaun

But is the Minister aware that in the first fortnight of this year the six big steel combines spent tens of thousands of pounds on newspaper advertisements of this kind? Have these advertisements been allowed as trading expenses? Secondly, has other expenditure on this campaign been claimed and allowed?

Mr. Amory

The criterion which is adopted is the criterion that I have explained. Of course, it is not for me to interpret the law. That is for the Commissioners and, on appeal, for the courts.

Mr. H. Wilson

While it is not the Chancellor's function to interpret the law, is not it his function to propose appropriate changes in the law which, for example, private Members cannot propose, as they would impose a charge? Apart from the cases referred to by my hon. Friend the Member for Salford, East (Mr. Frank Allaun), has the Chancellor seen a statement by a company chairman showing that his company spent—largely financed by the Chancellor—£83 million on advertising last year, and then he spends more money to advertise that statement, to send it round the country, to M.P.s and others, and to print it in newspapers? The Chancellor is being asked to pay the greater proportion of the cost of propagating that chairman's views.

Mr. Amory

I agree with the first point that the right hon. Gentleman made; it is certainly for me to propose a change in the law if I find that one ought to be made, but in this case I have no proposal to make to change the law at present. It does not seem to me that one can object to advertisement expenditure merely because of the cost of it. It certainly ought not to be for the Revenue to lay down what should be the appropriate total expenditure of any particular firm on advertising. That is surely a matter of judgment for the firm concerned.