HC Deb 21 June 1966 vol 730 cc523-5
Mr. MacDermot

I beg to move Amendment No. 240, in page 34, line 39, after "order" to insert: contained in a statutory instrument". This is exactly the same point about publication of an order by Statutory Instrument.

Amendment agreed to.

Question proposed, That the Clause, as amended, stand part of the Bill.

Mr. Patrick Jenkin

Subsection (2) is a slightly odd provision. The Clause is intended to relieve from tax chargeable under Schedule F certain interest and royalties which fall within the definition of Schedule 11 of the 1965 Act. It seems that this must imply that, because certain interest and royalties are included as distributions in Schedule 11, the nonresident treaty relief from United Kingdom companies with such interest and royalties is somehow circumvented.

If this proposition is valid—it is a supposition rather than a proposition— all the other interest which has to be treated as a distribution under Schedule F will be denied treaty relief—for instance, bonus and convertible securities and other such securities. Subsection (2) is concerned only with treaty relief. In all the relevant treaties interest and royalty are generally defined, so that it is not a question of having regard to the national law as to whether this will qualify for relief.

It seems doubtful whether it is right that a country should seek to withdraw or imply the withdrawal of relief on certain forms of income passing between the two countries if the Convention expressly says that there should be relief. If the supposition is correct, people will place rather less faith in the Conventions than presumably is the intention of the Treasury when drawing them up. The whole point is based on a supposition or an implication which is to be drawn from the subsection. It may not be justified. If it is not, the whole point falls. If it is justified, it has some implications which it would be right for the Financial Secretary to explain.

Mr. MacDermot

I am assured that the hon. Gentleman's point is based on a misunderstanding, but I do not pretend that I have an understanding of the misunderstanding. I can seek to explain to the hon. Gentleman what the purport of the Clause is if that is what he wants, but I think he appreciates the general purport. Perhaps the hon. Gentleman will allow me to write to him, giving him a full explanation.

Mr. Peyton

Originally, I had no intention of intervening in this debate. I do not do so out of any desire to prolong the proceedings unnecessarily. I am not sure that when we are debating complicated matters it is right that such explanations as are available should be made by letter passing between a member of the Government and an Opposition Front Bench spokesman. This seems to me to be a complete denial of what the proceedings of this Committee are for.

I do not wish to be unreasonable. I have every sympathy with the Financial Secretary in his difficulty in understanding exactly what is at issue between us. I ask him not to regard my intervention —my second tonight—as frivolous. But it would be much more satisfactory if he amended his undertaking and promised to give a clear exposition of what is involved when we reach the Report stage. Merely to say that the matter can be resolved by letter is wholly inadequate.

Mr. Patrick Jenkin

I am sure that my hon. Friend the Member for Yeovil (Mr. Peyton) is right on this, as he was in his previous intervention. It was only my desire not to submit the Committee to the exposition which I am sure the Financial Secretary would have given us on Schedule 6, dealing with the three-year surplus, that I was prepared to accede to the hon. and learned Gentleman's suggestion in that instance.

In this case, it seems quite possible to put down an Amendment on Report to allow the matter to be raised then. Clearly, I have raised a point to which the hon. and learned Gentleman does not immediately have the answer. I do not blame him, for these are complex matters. But my hon. Friend the Member for Yeovil is right. The point can well be explained to the House on Report. I suggest that, whatever may happen between the hon. and learned Gentleman and myself, that would be the right thing to do constitutionally.

Mr. MacDermot

I agree with what has been said. There is no question of trying to conceal any matter from the Committee or of failing to give a public answer where it is required and would be helpful. But on Finance Bills it is common practice, in these technical matters, for the Government to make available an answer to an hon. Member who has raised a point. If it is a matter which he wants on record publicly, then, obviously, we can make suitable arrangements by putting down an Amendment from one side or the other in order to air it on Report if that is the right and necessary course.

Question put and agreed to.

Clause, as amended, ordered to stand part of the Bill.