HC Deb 06 July 1971 vol 820 cc1110-3
12. Mr. Ashton

asked the Chancellor of the Exchequer whether advertisements by business firms advocating membership of the European Economic Community are treated by the Inland Revenue as eligible for tax relief, or if they have to be declared as contributions to political activities.

Mr. Patrick Jenkin

Such expenditure is allowable as a deduction in computing profits for tax purposes only if it is shown to have been incurred wholly and exclusively for the purposes of the company's trade. The second part of the Question is a matter for my right hon. Friend the Secretary of State for Trade and Industry.

Mr. Ashton

Can the hon. Gentleman tell us specifically whether the advertisement paid for by Lord Stokes will be eligible for tax relief? Is it the Government's policy to encourage big firms to go in for political advertising and then to subsidise it, to try to change public opinion on the Common Market?

Mr. Jenkin

I will not be drawn into discussing the tax affairs of individual businesses. We warmly welcome those industrialists who are prepared to stand up and be counted if it is in their interests to join the Common Market.

15. Mr. Deakins

asked the Chancellor of the Exchequer what estimate he has now made of the effect of the United Kingdom's revised contribution to the European Economic Community Budget on the balance of payments position at the end of any transitional period.

Mr. Barber

As my right hon. Friend the Chancellor of the Duchy of Lancaster said in the House on 24th June, the net United Kingdom contribution in the last year of the transitional period is estimated at about £200 million.

Mr. Deakins

If it is not possible for the Government to forecast the growth of the economy five years ahead, unlike the Common Market countries we have just heard about, will they be able to state in the forthcoming White Paper on British entry that we shall have sufficient balance of payments surplus in 1978 to finance both faster growth and the cost of entry?

Mr. Barber

I believe that we shall. The hon. Gentleman had better await the publication of the White Paper, however, to see its terms.

Mr. Gardner

Does my right hon. Friend agree that our contribution to the E.E.C. budget promises to be one of the best and most profitable investments that this country has ever made?

Mr. Barber

I agree entirely. I believe, and have always believed, that membership will offer major benefits to our economy and that we shall become more competitive in world markets as a whole. There will be beneficial effects upon our trade balances, and these will offset the costs of our contribution to the budget.

22. Dr. Gilbert

asked the Chancellor of the Exchequer how the Inland Revenue determines whether the cost of advertisements by companies advocating entry to the Common Market has been incurred wholly and exclusively for the purposes of the company's trade.

Mr. Patrick Jenkin

By considering the facts of each case in the light of the case law on the interpretation of the statutory rule quoted in the Question.

Dr. Gilbert

Is the hon. Gentleman aware, with respect to these notorious advertisements by British Leyland, that I have had correspondence with Lord Stokes, who assures me that entry into the E.E.C. is not essential to his company but that a genuine free trade area in industrial goods would certainly meet his company's requirements? May we take it that the hon. Gentleman's encomium for Lord Stokes, expressing the views of 12 directors, will be echoed by his approval of the elected representatives of the workers of British Leyland, about 200,000 of them, who are unanimously opposed to entering the Common Market?

Mr. Jenkin

The hon. Member is making a pretty large assumption about that. I have no doubt that when the Government's White Paper is published tomorrow and we have the debates in this House and the country, even those of Lord Stokes' employees who at present have some doubts about this will recognise that their long-term interests in pay, employment and welfare depend upon our joining the Community.

Mr. Thorpe

Would the hon. Gentleman not agree that the supplementary question was a little unfair to one of Britain's leading industrialists? Would it not be better to reserve the position of those who are both for and against the Common Market at the same time for politicians and not industrialists?

Mr. Jenkin

I suppose that some can sit on the fence until the iron enters into their soul.