ISLE OF MAN BILL (Hansard, 15 November 1979)

HC Deb 15 November 1979 vol 973 cc1599-616 1599

§ Order for Second Reading read.

7.54 pm

§ The Minister of State, Home Office (Mr. Leon Brittan)
I beg to move, That the Bill be now read a Second time.
This short Bill marks a further significant development in the long history of co-operation between the Governments of the United Kingdom and the Isle of Man in customs and excise matters. I am particularly glad to be associated with it.
The Bill offers a rare opportunity for the House to have regard to the special position of the island and the aspirations of its people and to appreciate the importance of the long-standing and close association between the United Kingdom and the island, and the benefits to both our territories of continuing our close co-operation on matters of common interest.
The present development in customs and excise matters is the second event of some moment in the history of the Isle of Man this year. During 1979 the island has celebrated the millennium of the Tynwald, the island legislature. My right hon. Friend the Home Secretary had the duty of accompanying the Queen when she visited the island on Tynwald Day, 5 July. Subsequently, on 15 October, my right hon. Friend signed on behalf of the United Kingdom Government the new agreement between our two Governments on customs and excise and associated matters.
The agreement, which has been laid before the House, sets out the conditions agreed between the United Kingdom Government and the Isle of Man Government on which the island's wish to run its own customs and excise service has been met.
The British Government well understand the desire of the people of the Isle of Man to run their own customs and excise service. We feel that the negotiations to this end that have taken place over recent months between the two Administrations have resulted in an agreement that can justifiably be regarded as satisfactory to both parties.
The agreement commits both Governments to introduce any necessary legislation 1600 so that the island's customs and excise service may operate from 1 April 1980. The Bill before us contains the enactments that the United Kingdom Government consider to be necessary in the United Kingdom as a result of the island assuming responsibility for its own customs and excise administration.
The measure will bring to an end more than 200 years' presence of the United Kingdom customs officers on the island. The presence began in 1765 in very different circumstances, largely as a result of the need to counter the growth of smuggling between the two territories.
The essential features of the customs and excise arrangements that have developed over the intervening years, and exist today, largely date back to the nineteenth century and were formalised in 1957 in an agreement between the two Governments, which was followed by the passing of the Isle of Man Act 1958.
The present Bill seeks, as far as possible, not to disturb those arrangements and proposes to maintain the essential features of the 1958 Act and, in particular, to retain the advantages to both Governments of a customs union between our two territories and the arrangements for the sharing of customs and excise revenue.
There will, broadly, continue to be common customs and excise duties, common VAT and car tax rates and common import and export prohibitions and restrictions on, for example, drugs. Under the proposed arrangements, there will continue to be no need for a customs barrier between the United Kingdom and the Isle of Man and there will continue to be free movement of goods and travellers between the two territories.
The Bill provides for the introduction of new financial and accounting arrangements consistent with the agreement and for measures safeguarding United Kingdom revenue after the new arrangements come into operation, when the customs and excise service of the Isle of Man, instead of that of the United Kingdom, will collect customs and excise duties and taxes on the island. Accordingly, the Bill also provides for the recovery from the United Kingdom of customs and excise duties and taxes chargeable on the island and for the enforcement of Isle of Man judgments relating to duties. It 1601 supplements existing procedures for serving summonses and warrants in revenue proceedings.
In order to implement the handover, the Bill enables the functions of the Commissioners of Her Majesty's Customs and Excise on the island to be transferred to officials of the island Government.
The opportunity has also been taken in clause 11 of the Bill to enable the transfer to the Manx, by Order in Council, of functions conferred on the Lieutenant Governor under United Kingdom legislation. The present century has seen successive transfers of powers of the Lieutenant Governor to the hands of democratically elected representatives of the Manx people.
The provision in the Bill would enable the Isle of Man to continue this programme of transferring, with the agreement of Her Majesty's Government, certain of the remaining functions of the Lieutenant Governor to appropriate bodies of the island Government. The primary purpose of the Bill is to prepare the way for the changes that I have mentioned in the administration of customs and excise measurements. These changes call for the enactment of parallel Isle of Man legislation which, I understand, is already under way and will, I feel sure, be implemented in the same atmosphere of good will, and with the same spirit of co-operation, as has been evident during the past months of negotiations on the subject between our two Administrations.
I commend the Bill to the House as a measure introducing a change in the relationship between our two communities which merits the support of the people of the United Kingdom and will, I am confident, be equally welcome to the people of the Isle of Man.

§ 8.2 pm

§ Mr. George Cunningham (Islington, South and Finsbury)
We, the Opposition, join the Minister of State in recollecting the congratulations which we have extended before to the Isle of Man on its millennium year.
As the Minister said, it is not often that the House has occasion to debate the affairs of the Isle of Man and the relationship—the rather curious constitutional relationship—which subsists between the Isle of Man and the United Kingdom. 1602 Certainly, it is an odd relationship, full of anomalies, but it is one which in modern times has been acceptable to the peoples of the island and of the mainland and one which has caused remarkably little friction over the years. When we are considering any change in the relationship, and to some extent this Bill represents change, we must be careful to avoid doing anything which might create sources of friction in the future.
The purpose of the Bill, as the Minister said, is to permit the Isle of Man—or to reflect its decision—to maintain its customs service and to make the necessary changes in United Kingdom legislation. The Bill, if passed, will give effect to an agreement reached between the Governments of the Isle of Man and the United Kingdom on 15 October and published on Tuesday of last week.
The Opposition have already expressed disapproval of the delay in getting the text of that agreement into the hands of Members. Three weeks or so between the conclusion of an agreement and the publication of the text is not abnormal and is not worthy of criticism in the normal way of things. What is, however, both abnormal and unacceptable, and I hope that the Minister will take this on board, is that the House should be asked to consider a Bill to implement an agreement on a Thursday when the text of the agreement has been made available only on the previous Tuesday. By accident, because last Thursday's business was postponed to Monday of this week and to today, that interval has become nine days instead of two, but it was intended that we should debate the Bill two days after the agreement had been made available to Members. That is not good enough, and I hope that nothing like that will happen again.
I hope that the Minister will give me his attention. Where it is not possible for such an agreement to be printed and published as a Command Paper—and there can be delays in that process—it must be recollected that typewriters were invented a long time ago, and there is an obligation on the Government and the Home Office to make sure that the text in one form or another gets to Members as quickly as possible when a Bill is due in which the first paragraph of the explanatory memorandum refers to the agreement. I wish the Minister to take on board our 1603 view of the negligence of the Home Office in getting that text to Members, and I hope that that never happens again.
Before coming to the substance of the proposals in the agreement and the Bill, I wish to register a small concern about the language of the agreement in certain places. Paragraph 14—to take just one example—says: The governments also agree to the following particular arrangement (including any necessary legislation)". Similar wording is used in some other paragraphs.
The Government of the United Kingdom are, of course, free to give undertakings that they will propose or introduce legislation to Parliament. But the wording of agreements should never remotely imply that the passage of that legislation by Parliament can be taken for granted. No undertakings about the passage of legislation have any validity, and I hope that a different form of words will be adopted in future to make that clear. It is noticeable that the language of the October 1979 agreement in this regard is different from the sort of language used in the previous agreement a decade or more ago.
The Isle of Man already has the right to determine its own customs charges and duties, just as it is free to determine the level of income tax rates on the island. When we say that, however, it is as well to add for the avoidance of doubt in anyone's mind that the exercise of this right is subject to the approval of Ministers in tendering advice on the assent and to the overriding and paramount right of this Parliament to do all things necessary both for the purpose of adhering to international agreements entered into on behalf of the Isle of Man, with or without its consent, and, more generally, for ensuring the good government of the island. 'The habit is—and it is a good habit which we should stick to as far as possible—that this Parliament does not in fact legislate for the Isle of Man except on a restricted kind of matter. But, in law, that habit is not binding, and we should make that clear.
The Crowther Commission on the constitution did us all a service by going into this matter in some detail and it is worth quoting the passage in which the Commission set out the situation. The Commission said: 1604 Parliament has a paramount power to legislate for the islands—the Isle of Man and the Channel Islands—in any circumstances … if exceptionally circumstances should demand the application to the islands without their consent of measures of a kind hitherto regarded as domestic then Parliament would in our view have the power to enact the necessary legislation. While that fact should not be forgotten, surely it is right that relations between the Isle of Man and ourselves should proceed according to the conventions, the principles of give and take and mutual trust and support which are the basis of the friendly relations that have up to now existed. It is in that context that we come to the proposal before us.
As I understand the situation, there is nothing in either the agreement or the Bill which in any way alters the rights of the two Governments and the two legislatures concerning the fixing of customs and other duties and charges. Nor is there anything here which changes the conformity which in practice exists between the rates of duty actually currently being charged. There can be a divergence in roles applied—and in a few cases such as beer there are divergences now—but the Bill makes no change in the legal right to create such divergences. I hope the Minister can confirm that that is the case.
The Bill does two things. First, it makes the necessary changes in United Kingdom legislation to take account of the setting up of a separate Isle of Man customs service as agreed by both Governments in the agreement. The principal legislation about that service will, I assume, be in an Act of Tynwald—an Act which will, of course, require the assent of United Kingdom Ministers.
Secondly, the formula for dividing the proceeds of customs duties—and here I would like some clarification from the Minister when he replies to the debate—between the United Kingdom and the Isle of Man as set out in section 2 of the 1958 Act is altered in clause 2 of the Bill. I should be interested to know whether there will be any alteration in the financial distribution of funds as a result of that. When we come to Committee and we reach clause 2, I hope that we can consider the point that I have raised.
That brings me to the business of the dangers to good government and so to the relations between the two territories if the Isle of Man should ever become 1605 more of a tax haven than it is now. This is an important matter which cannot be shirked. If things go wrong, this issue could poison relations between the island authorities and the United Kingdom. It would not be acceptable to us for the Isle of Man to become a means of avoiding tax and other obligations which are, in commonsense terms, properly due.
If there is any body of opinion in the island that would like to see things go that way, we should make it clear now that the overriding powers of this Parliament would have to be employed to prevent it. Of course, to some extent the Isle of Man is a tax haven now. Taxation is, by custom, regarded as a matter for Tynwald, not this House, to decide. It is not present practice, but any significant expansion of the opportunity for abuse there would be unacceptable. As the Crowther report said in addressing itself exactly to this point, Implicit in the situation is the opportunity for abuse; but the United Kingdom taxation authorities have ample statutory powers to deal with that abuse I simply question whether, in the light of some of the evidence presented to the Tynwald Select Committee—which I shall come to in a moment—that optimistic, confident and definite statement by Crowther way back in 1973 is still unchallengeable. We must make sure that it is clearly understood by the few people whose minds might turn in that direction that we would not tolerate a Cayman Islands in the Irish Sea.
The agreement reached on 15 October does not seem to open up that prospect at all—quite the reverse. Assurances about conformity of rates and about consultation on rates are set out in the agreement. The agreement seems to reflect that give and take which has to characterise relations if they are to continue amicably.
Anyone reading only the Bill and the one document that the Government have chosen to present to the House in connection with it might think that there was no cloud in the future relationship between the island and the United Kingdom. In fact, there is much more background to the proposals before the House than the Government have chosen to publish and, I must add, more than the Minister has chosen to refer to in his opening speech.
1606 The essential documents are the review of the Common Purse Agreement, conducted at the invitation of the Isle of Man Government by PA Management Consultants Limited, and the proceedings of the Select Committee of Tynwald in pursuance of that review. The fact is that there are financial interests operating in the Isle of Man, or which have their eyes on the Isle of Man, which would like to see the island become a tax haven, an offshore bolthole, where they can be free of normal surveillance. This is a far more serious matter than the possibility that tourists to the island will get their whisky and cigarettes a bit cheaper.
The PA report held out a prospect of the island gaining considerably in its financial sector from an abrogation of the Common Purse Agreement with the United Kingdom. It candidly admitted that there would be compensating losses in some other ways. I find the most revealing passage in the PA report that on page 23, where it says that no financial centre can in the longer term afford to have any financial records of its banking and insurance institutions supervised by agents of a foreign Government". That is the language of a private consultancy, not of the Isle of Man authorities, but it should be said at once that, if the authorities and people of the Isle of Man were to start thinking of the relationship between them and the United Kingdom on that basis, it could not be a one-way business. The relationship has to be based on give and take, and not just on take. If the Isle of Man authorities decide to further their own interests without regard to those of their fellow countrymen on the mainland, there will be a resentment and reaction on the mainland that will be likely to render the equations set out in the PA report invalid.
There is little coverage of Isle of Man affairs in British newspapers and, of course, the Isle of Man is hardly mentioned in this Parliament because it is not represented here. I hope that the new Select Committee of the House on Home Office affairs will direct its attention sometimes to Isle of Man matters. The absence of coverage in the press and in this House means that hon. Members are not aware of the intense debate that has been going on on the island about its future as a financial centre. It is necessary to correct that, and the best way of 1607 doing it is to quote some of the submissions made to the Tynwald Select Committee by financial interests and those connected with them on the island. It is a pity that the report of the Select Committee has not been printed and published, for some of the ideas canvassed before the Committee will surprise those who assume that the future of our relationship with the Isle of Man will be free of problems.
For that purpose I should like to quote some of the submissions that were made to the Tynwald Committee. One submission said: Our particular aim is to build up an international business in providing investment advisory services etc. to those resident outside the United Kingdom and the Isle of Man. Clients who come to us for such advice have the alternative of choosing banks in other areas such as Switzerland Luxembourg Monaco and certain West Indian islands. … They specifically object to a situation in which not only do VAT returns have to be made to the United Kingdom but the Customs and Excise officials employed by the United Kingdom could make complete inquiries into the affairs of any business operating in the Islands". I am sure that in winding up the debate the Minister will take the opportunity to rebut that assertion, but for the moment I am merely quoting some submissions to give the flavour of the discussion that has taken place.
Another submission said: There is a continuing worldwide demand for sterling. … Much of this sterling is in foreign ownership and foreigners are at the present time unwilling as a generality to hold sterling in the United Kingdom itself. As a consequence a great deal of these funds go to the offshore islands and in particular to Jersey. In practice it will probably be politic to get rid of the Common Purse in stages and it is suggested that the first step would be to rechristen it with the title 'Customs Union' or something similar and opt out of VAT. … Without the Common Purse the Island would be seen to be independent and thus able to look to North America and the EEC countries as well as the United Kingdom as a suitable home for subsidiary enterprises of all kinds. Another submission said: It is in my view vital that every possible step shall be taken to ensure that foreigners do in fact believe that full confidentiality exists in the Isle of Man as they believe it to do in the Channel Islands and that all thoughts of surveillance by a 'big brother' in the United Kingdom are eliminated. … From the angle of the financial sector the ideal would undoubtedly be complete fiscal autonomy from the United Kingdom. … On balance it would 1608 seem to me to be too great a risk to go the whole hog' at once. Another submission said: The power of another nation —another nation!— to control wholly or partly the rates of one or more taxes levied is seen abroad as evidence of a degree of dependence on that other nation whether or not such power arises by agreement. The submission added: A matter causing concern is the right of the United Kingdom Customs and Excise officers to examine the books of the Bank in regard to the collection of VAT". This submission was put forward by a bank. If this tax is to continue we would like to see the Island having its own Customs service. … Ideally we feel no fiscal information in regard to Manx businesses should leave the Island but we do realise that this is practically impossible to arrange while the agreement is in force". One wonders what Singer and Friedlander (Isle of Man) Limited, which wrote that passage for the benefit of Tynwald, feels that it has to hide. We must bear that kind of comment in mind in assuming the continuing truth today of the comment in the Crowther report to which I referred earlier, which said: Implicit in the situation is the opportunity for abuse; but the United Kingdom taxation authorities have ample statutory powers to deal with that abuse". This is another example of the kind of submission made to the Tynwald Select Committee: I am aware that certain banking services, already available, would be utilised by companies outside the sterling area if they were assured that there was no requirement to make returns of any nature to United Kingdom tax authorities". Mr. Gilbey made the following comment: The Island should be in a position to decide on and impose its own rates of indirect taxation without regard to those in, or the interests of, the United Kingdom or any other country … Tynwald should negotiate to end the Common Purse Agreement. Such negotiations will require a very high degree of statesmanship and also good political timing, perhaps when a Conservative Government is in power in the United Kingdom. I have quoted those submissions to give something of the background, which we would not have gathered from any of the documents presented by the Minister to the House or from his opening speech. There is more to this than meets the eye. 1609 I say that not in criticism of the Isle of Man authorities but in criticism, perhaps, of those who are using—and see the prospect of using—the Isle of Man for their personal profit. So much for the views of those speaking for the financial sector in the Isle of Man.
One can contrast warnings given by people on the other side. One submission stated: We are dealing with a minority, however, who would use abrogation of the Common Purse as a first step in an effort to break away from our reciprocal agreements with national health and pension schemes. Beware of the financier bearing gifts. Another said: Those engaged in this sector"— that is, finances— are seeking further economic protection in the first instance for personal gain … and at the same time seeking an advantage not available to those engaged in the other sectors of the economy. … Under the present agreement the stability of the Island's Government is apparent. It might not always remain that way if it were felt by some that all the financial advantages of independence were accruing in the main to one sector only of the economy. Another said: The levying and collection of customs by Isle of Man authorities presented problems which led to the first Common Purse Arrangement. Would history repeat itself is a question which must come to the fore, and accordingly I hope that in their approach to the renegotiation of the Common Purse Arrangement too much reliance is not placed on the conclusions of the PA Management Committee Report. The Isle of Man Trades Council said: We feel the whole report of the PA Consultants which recommended abrogation of the agreements is slanted towards benefit for the banking and financial sector to the detriment of the majority of the population, especially the lower and fixed income groups". I found the most moving submission was that by a Manxman who had considerable experience in the United Kingdom and islands customs service. He wrote: I regard myself as a patriotic Manxman seeking only to serve the best interests of the Island. I sympathise with and support the desire of Tynwald to have greater control over insular affairs. History, geography and culture all make the Manx case for devolution greater than the cases now being argued for devolution for Scotland and Wales. But surely the key to responsible self-government is not to be found in alcohol and tobacco. Though I like a drink and a smoke I feel very strongly that the image of an Island which seeks to 1610 promote itself on gambling, drinking and smoking is false. The Island is worth more than that. In any case, haven't we been here before, in the years before 1765? It is equally unworthy to base the prosperity of the island on attracting banks and finance companies trying to evade legitimate surveillance and taxation to which they are, and should be, subject in the large countries where otherwise they are based.
The Opposition are content to see the Bill receive its Second Reading and go through its other stages tonight. Nothing in the Bill or in the agreement gives the financial interests reflected in some of those quotations the substance of what they want.
But we have to sound a warning. It is in the end the responsibility of this Parliament to look to the well-being of the entirety of the United Kingdom and the islands. We cannot abdicate that responsibility. We should say to the people of the Isle of Man, as was said in one of those submissions "Beware of the financiers bearing gifts". Their interests are not in the well-being of the island but the health of their balance sheets and escape from the taxman. If a tiny island like the Isle of Man lets the financiers get a grip, it will soon discover that it is the banks that are running the Isle of Man, not Tynwald.
Maybe it is time for parliamentarians in this Parliament and parliamentarians in Tynwald to have some means of meeting informally. There is at the moment no means whereby parliamentarians of these two so much interrelated and interdependent legislatures can find a way of coming together. If that notion found favour with Tynwald, I am sure that both sides of this House would like to see some means established whereby we could have better contact between parliamentarians of the two legislatures than perhaps we have had in the past.

8.26 pm

§ Mr. Tam Dalyell (West Lothian)
We all owe a considerable debt to my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham).
This story started for some of us, Mr. Deputy Speaker, precisely during the debate on devolution. My hon. Friend may well remember that from time to time it was said that devolution would 1611 provide some of the advantages enjoyed by the Isle of Man. Only this morning, on BBC radio, there was an account of some financial negotiations in New York undertaken by a certain Mr. Robert Sangster, an Isle of Man financier. One begins to wonder why Isle of Man financiers should start negotiating in the United States. It must be for some purpose.
I suggest that this may be the tip of an iceberg and that there are very serious issues involved. I do not wish to regurgitate what my hon. Friend has said so splendidly, but let no one be under any misunderstanding. This is a subject of considerable interest.

8.27 pm

§ The Minister of State, Treasury (Mr. Peter Rees)
We have had a short but none the less interesting debate, as one would expect when my hon. and learned Friend the Minister of State, Home Office, the hon. Member for Islington, South and Finsbury (Mr. Cunningham) and the hon. Member for West Lothian (Mr. Dalyell) have made contributions. Indeed, there has been a certain nostalgia attaching to some of the comments, particularly those from the Opposition Benches. One recalls battles long ago, which turned out—at least from the point of view of hon. Members present here tonight—in the way that we all wanted on that occasion.
I hope that the House will forgive me if I do not go over-deeply into the constitutional implications, because we are not here being asked to legislate to change the constitutional framework within which the United Kingdom's relations and this House's relations with the Isle of Man are conducted.
If I may say so, I admired the thorough way in which the hon. Member for Islington, South and Finsbury analysed and set out the details of the constitutional relationship. I hope that he will allow me to add just one gloss, for the benefit of those in the House who have not perhaps applied themselves to the issue with quite his thoroughness. The Isle of Man is a Crown dependency. Long ago, the particular framework within which we operate was set up legislatively by this House. It has long been a convention that we do not legislate in the internal affairs of the Isle of Man. There may be 1612 occasions—I hope there never will be—when we shall have to consider such a fundamental question, but I should like to think that we have established a stable and pleasant relationship that will, as far as we can see, meet all the changing circumstances that we are likely to encounter.

§ Mr. Dalyell
That stable and pleasant relationship, as the Minister calls it, will not remain stable and pleasant if certain people in the Isle of Man, to borrow the phrase used by my hon. Friend the Member for Islington South and Finsbury (Mr. Cunningham), decide to turn it into some kind of Cayman Islands. The question that we are entitled to ask is surely this. Are there certain people on the Isle of Man who are altering this relationship, which hitherto has been pleasant and stable enough and of no great consequence? If the Isle of Man is to become some kind of sheltered banking area, we have a new ball game, and it becomes a matter for discussion in this House.

§ Mr. Rees
This was a point touched on by the hon. Member for Islington, South and Finsbury. I emphasise to the House that nothing that could be construed in or out of this measure would open the door to that kind of future. I reassure the House on that. This measure is concerned purely with indirect taxation. All that this measure does, as my hon. and learned Friend emphasised, is to permit the Isle of Man to set up its own customs service to operate with the United Kingdom's Customs and Excise service. It is—and I hope this is not too emotive—a customs union. I might go so far as to say it is a common market.
Naturally, one suspects the motives that have led some finance houses, and individuals, to set up their headquarters and conduct their operations from the Isle of Man. However, I am not sure that I would be in order if I discussed that dimension of the problem, because it does not arise in the Bill.
The hon. Member for Islington, South and Finsbury raised a point to which I should like to respond. In clause 6 of the—not precisely but broadly and in principle—a clause in an earlier agreement in 1958. In doing so it has bound itself to harmonising its rates of indirect taxation, with the exception of some small 1613 areas. Beer duty has always been lower on the Isle of Man. I understand that the island has two domestic breweries, and the rate of duty may be concerned with that. But I do not think that the House will worry unduly about it. Nor do I believe that we are concerned about the Isle of Man's gaming duties, which do not spill over on to this side of the Irish Sea. The island operates its own casinos, and so on, and there is no need to harmonise that aspect.
The Isle of Man has agreed to maintain the same rates and coverage of VAT, excise duties and customs duties as we do. It goes no further than that. What will be new as a result of this agreement—if the House passes the Bill, as I hope it will, and if a parallel Bill is passed by the Tynwald—is that there will now be a small independent customs and excise force on the Isle of Man.
I understand that to a large extent the staff will be recruited from members of the present Customs and Excise service on the Isle of Man and that they will work closely with our own Customs and Excise. Indeed, I hope they will look to us for consultation, advice and training. But constitutionally they will have their own separate Customs and Excise force.
The hon. Members for Islington, South and Finsbury and for West Lothian were both a little concerned about whether the Isle of Man would move on and make itself a tax haven—a Luxembourg or Lichtenstein in the Irish Sea. Tonight, we are not concerned with that. There is nothing in the Bill, as it stands, that should lead anyone to conclude that there will be greater scope to avoid direct taxation. The Bill is entirely concerned with the administration of indirect taxes in the "common market" formed by the Isle of Man and the United Kingdom.

§ Mr. Dalyell
If it is not suitable to discuss these questions tonight, when will it be suitable? There is great difficulty in discussing this kind of issue when one has—dare I say it?—some kind of a devolved government. Did we not find all these difficulties before the recent events in Ulster and when we were discussing Northern Ireland? It seems to me that the House of Commons has a problem.

1614

§ Mr. Rees
Of course I am sensitive to the anxieties expressed by the hon. Member. I have had occasion to admire his contributions to our constitutional debates over many years. However, I respectfully suggest that if he feels it appropriate to debate the whole of our constitutional relationship with the Isle of Man, he should find other opportunities to put down some kind of substantive motion. That kind of issue does not really arise on this Bill.
I would like to reassure the hon. Gentleman, but it does not lie within my narrow field of responsibility to deal with this point—

§ Mr. George Cunningham
I quite agree that this Bill does nothing to bring about a Cayman Islands situation or anything like it. However, I hope that the Minister will not ignore the facts. Reading through the PA Management Consultants' report and the Select Committee report on proceedings in the Tynwald, I find that many people see this change as a first cautious step in the direction mentioned by my hon. Friend the Member for West Lothian (Mr. Dalyell). The authorities on the Isle of Man are infinitely more cautious and sensible, but let us not brush aside the dangers.

§ Mr. Rees
I took very careful note of the comments of the hon. Member for Islington, South and Finsbury. I am sure that they will be noted, read and commented upon outside this House, and perhaps even on the Isle of Man. He drew attention to the management consultants report which I have read—although I cannot match the hon. Member's assiduity in studying it—and I did not feel that it was appropriate for us to lay it in the Library of the House of Commons. I regard it as extraneous matter, and it is open to hon. Members to study it at their leisure if they so wish.
I have also studied the contributions to the debates in the Tynwald, but it is not appropriate for me to involve myself in internal debates on the Isle of Man. It would be inappropriate for any Minister, however humble, of a United Kingdom Government to comment in detail on interventions made in the legislature of a friendly State. I know that the Isle of Man is a Crown dependency and at the end of the day we have ultimate legislative responsibility for it, but we do not 1615 want to conduct our debates on this narrow issue in that way.
I am quite happy to debate this further on an appropriate occasion but it would be quite inappropriate for me to go further now.

§ Mr. Dalyell
I make it plain as one who has been to conferences at Douglas and who has visited the Isle of Man frequently that I have nothing against the good-hearted Manx people. Also, I agree that it would be an abuse of this occasion to pursue this matter too closely. However, I warn that my interest has been alerted and aroused by events over the past few weeks and that some of us may wish to pursue this matter in all the available ways. We would like to ascertain why Mr. Robert Sangster and others like him should go to the United States and emphasise that they are Isle of Man-based financiers. They would not do this unless there was some serious advantage in doing so. That advantage may be a disadvantage to the British community and the rest of the islands. There are balances to be considered. What is one man's advantage in this context is surely another man's disadvantage. The disadvantage is to the citizens of the rest of the United Kingdom. We come up against the problem of having subordinate Parliaments in only parts of the United Kingdom.

§ Mr. Deputy Speaker
Order. I am sure that the hon. Member for West Lothian (Mr. Dalyell) knows that the topic that he seeks to introduce is not covered by this debate. It would be interesting to hear the Minister's answer, but the hon, and learned Gentleman would be out of order in trying to answer the question.

§ Mr. Dalyell
My final contribution is that our interest is now thoroughly aroused in the subject and we shall pursue it in every way possible.

§ Mr. Rees
I take note of the hon. Gentleman's interest. I must defer to the Chair, as I hope I always do, and not pursue interesting byways. There may be another opportunity when the hon. Gentleman will be able to pursue the interesting matters that he seeks to introduce.
1616 I do not claim that the Bill is a simple measure. Some of its provisions are rather abstruse. It is the successor to the Isle of Man Act 1958. It is designed to allow a joint administration of the indirect taxes of this common market, this customs union, and to enable it to function effectively and properly with two bodies of Customs and Excise officers.
The Bill has no deeper, no wider and no further purpose than that. We could have a fascinating debate on many other matters were we within the rules of order. I am tempted to take up the remarks of the hon. Member for Islington, South and Finsbury, who read a letter summing up the views of one perceptive observer. I know exactly who the letter was from. It happened to be written by one of my constituents, Mr. Douglas Crellin, who lived on the Isle of Man, served with the Customs and Excise and died a few years ago. I, too, spotted that letter. I thought how perceptively it was written.
We need not debate the constitutional relationship of the House of Commons to the Tynwald. There is involved the status of Crown dependency. It is not incumbent upon me to speculate on Mr. Sangster's motives or what could or could not be done by way of direct taxation there or here. I am sure that the hon. Member for West Lothian, with his well-known parliamentary skills, will be able to create an opportunity for such a debate within the rules of order.
The Bill is a practical measure that is designed to implement an agreement that has been worked out with good will and care between the two authorities of this country and the Isle of Man. I commend it to the House. I hope that it will find favour on both sides of the House and will pass through the House without more ado.

§ Question put and agreed to.

§ Bill accordingly read a Second time.

§ Bill committed to a Committee of the whole House.—[Mr. MacGregor.]

§ Bill immediately considered in Committee.

§ [Mr. RICHARD CRAWSHAW in the Chair]

§ Clause 1 ordered to stand part of the Bill.