Lords Sitting of 11 June 1931

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
The Duke of Somerset—Sat first in Parliament after the death of his father.

MINISTRY OF HEALTH PROVISIONAL ORDER (CITY OF WORCESTER) BILL.
House in Committee (according to Order): Bill reported without amendment.
MINISTRY OF HEALTH PRO VISIONAL ORDERS (MANCHESTER AND SOUTH STAFFORDSHIRE) BILL.
House in Committee (according to Order): Bill reported without amendment.
SCOTTISH UNITED INVESTORS LIMITED ORDER CONFIRMATION BILL.
Read 3a (according to Order), and passed.
CUMBERLAND MARKET (ST. PANCRAS) BILL.
Read 3a (according to Order), and passed.

NORTH KILLINGHOLME (ADMIRALTY PIER) BILL.
Order of the Day read for the consideration of the Commons Message of Tuesday last, namely: "That it is expedient that the Bill be committed to a Joint Committee of Lords and Commons."
Moved, That the Commons Message be now considered.—(Lord Amulree.)
On Question, Motion agreed to.
THE SECRETARY OF STATE FOR AIR (LORD AMULREE): My Lords, this is a Bill introduced by the Admiralty in another place, the effect of which is

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to recondition a pier at Killingholme in the County of Lincoln. At one time it was considered to be a desirable course that a Joint Committee of the two Houses should consider this matter. Since then circumstances have arisen which render it in my opinion unnecessary that that course should be taken, and if your Lordships are agreeable, it might be convenient that the Motion which I submit should be negatived. I beg to move.
Moved, That this House do concur in the following Resolution communicated by the Commons, namely: "That it is expedient that the Bill be committed to a Joint Committee of Lords and Commons."—(Lord Amulree.)
On Question, Motion disagreed to.
Ordered, That a Message be sent to the Commons to acquaint them therewith.

WIDOWS', ORPHANS' AND OLD AGE CONTRIBUTORY PENSIONS BILL.
Read 3a (according to Order), and passed.

HOUSING (RURAL WORKERS) AMENDMENT BILL.
House in Committee (according to Order): Bill reported without amendment.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION.
The following Bills received the Royal Assent:—

Ancient Monuments,

Local Authorities (Publicity),

Workmen's Compensation,

Widows', Orphans' and Old Age Contributory Pensions,

Post Office and Telegraph (Money),

Palestine and East Africa Loans (Amendment),

Cumberland Market (St. Pancras),

Public Works Facilities Scheme (West Surrey Water) Confirmation,

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Public Works Facilities Scheme (Acton Swing Bridge) Confirmation,

Ministry of Health Provisional Order (East Elloe Joint Water Supply District),

Alexander Scott's Hospital Order Confirmation,

Scottish United Investors Limited Order Confirmation,

Lowestoft Water and Gas,

Guildford Gas and Cranleigh Electricity,

Northampton Extension,

Mid Southern District Utility,

Liverpool University,

Middlesex County Council,

London Electric, Metropolitan District, and City and South London Railway Companies.

House adjourned during pleasure.
House resumed.

INCIDENCE OF INCOME TAX.
VISCOUNT ELIBANK VISCOUNT ELIBANK had the following Notice on the Paper:
To draw the attention of His Majesty's Government to the Income Tax Acts and regulations as affecting—

1. British Colonial officials and other persons of British origin not ordinarily resident here, who are entirely earning their livelihood overseas, and who temporarily visit this country on leave of absence, or for other purposes;

2. Foreigners who make temporary visits to this country and whose income is derived entirely from foreign sources.

Secondly, to point out that as a result of the existing Income Tax laws and regulations many of those in category (1) are now visiting foreign countries instead of this country and that the visits to this country of those in category (2) are becoming less frequent, with the consequence that apart from other important considerations, money that would be spent in this country is being spent in European countries; and
Thirdly, to ask whether in these circumstances His Majesty's Government will take early steps to review the whole

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incidence of Income Tax as affecting both these classes of individuals with a view to amending the existing laws and regulations in such a manner as will induce them to come to this country instead of driving them away.
And to move for Papers.
The noble Viscount said: My Lords, I have ventured to place on the Paper the Motion which stands in my name because I think it is a matter which your Lordships will agree calls for serious consideration. I should like, however, to preface the remarks I have to make on the subject by pointing out that I do not blame the present Government for the existing position. On the contrary, the methods of the application of the Finance Acts and regulations to the classes of individuals I have mentioned in the Notice have grown up over a number of years under Governments of various political creeds. My object, therefore, in bringing this Motion before your Lordships' House is not to attack the Government, but to try to induce them to reconsider the whole incidence of taxation as affecting these two classes of individuals, with a view to bringing legislation into line with practical and reasonable conditions and considerations, and to eliminating the largely theoretical basis upon which the present taxes are levied—which, in my opinion, does far more harm than good.
I do not wish to weary the House by discussing at length the sections of legislative enactments and regulations by which the Treasury are empowered to levy Income Tax upon those individuals; nor do I wish to examine the details of the various Income Tax schedules which apply to their cases. I hope, indeed, that the Government, as a result of this debate, will see their way at a later date to review that legislation and those schedules. All I am concerned with today is to put before your Lordships the broad effect of the law and how it affects these individuals, and the disadvantages which accrue not only to the individuals themselves but to the country at large.
Let me take the first case mentioned in my Notice, that of the British Colonial officials and other persons of British origin not ordinarily resident here, who are entirely earning their livelihood overseas, and who wish to visit this country temporarily for purposes of
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pleasure, or on leave of absence, or whatever it may be. If a place of abode is not maintained here Income Tax is payable by those persons on remittance of overseas income for any year in which they are in this country for six months or upwards or for periods equal in the whole to six months in the Income Tax year beginning on April 6. I think your Lordships will agree, with Income Tax at its present high rate of 4s. 6d. in the £, that this becomes a very serious matter to all those concerned. They are usually individuals who are just contriving to make both ends meet and have very little to spare for triennial or even six-yearly visits to the old country. It is so serious that probably all of those persons arrange to-day to spend in Europe such part of their leave or holiday as will avoid the payment of Income Tax in this country, the heavy incidence of which would just weigh down the scale and prevent them from coming here at all or, if they wished to spend the whole of their holiday in this country, would considerably curtail the extent of the holiday they could so spend.
I would like to sum up very shortly what this country loses by the present laws so far as those individuals are concerned. The principal disadvantages, so far as I see them, are, first of all, that the money expended by these people, is spent in France, Italy or elsewhere instead of in Great Britain. Secondly, these British people—I emphasise the word "British"—and this applies especially to officials, should be regaining their touch with, and knowledge of, home conditions and political conditions. Instead of that they are frittering—I use the word advisedly—their time away in foreign watering places. Thirdly, those engaged in commerce are probably forming new foreign trade connections instead of new British trade connections. I am not blind to the fact that at some stage Income Tax must reasonably become payable by these people. It is the shortness of the period to which I take exception and which, I venture to believe, requires reconsideration.
Quite recently an example came to my own cognisance of a British official home on leave for a somewhat long period from one of the Colonies. Instead of spending all his leave in this country, as he wished to do, he left this country two or three

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weeks ago, to my own knowledge, in order to go to Italy to spend two or three months there. It was much against his will, but he could not afford on the income he receives from his Colony to spend that leave in this country for fear of the Income Tax which would be levied upon him if he did so. I venture, therefore, to suggest to His Majesty's Government that the period of six months is too short, and should be, in the case of these officials and other Britishers who come from overseas, extended to at least nine months. I put that suggestion to His Majesty's Government as one worthy of consideration.
There is another anomaly to which have not referred in my Notice, but which I feel should be brought up to-day, and that is the hardship imposed upon oversea officials and other Britishers living overseas who wish or have to maintain their wives and their families in this country for educational or for health reasons, whilst they themselves are earning their livelihood overseas. In another place, I know that an honourable friend of mine, Sir John Sandeman Allen, a Member for one of the Liverpool Divisions, has an Amendment down to the Finance Bill in which he brings up this point, and is seeing what he can do to have it remedied. At the same time, I think it is not out of place that I should refer to it on this occasion and support in this House what my hon. friend is doing in another place in the next few days.
There is yet another anomaly in relation to the same category of individuals to which I wish to draw your Lordships' attention. This again is not mentioned in my Motion, but it is part of the comprehensive subject to which I am referring. At present, if any of these officials or commercial men come here from overseas on duty leave, or for consultations, and not on holiday leave, they are liable to be charged Income Tax immediately they set foot in this country—I mean on their income remitted to this country. This is especially a handicap to British business firms who have in the past not infrequently arranged, when matters of difficulty have arisen, for their managers or other representatives to come to this country in order to consult with them. Your Lordships will agree that with this Income Tax liability attaching to such a temporary visit, this work,
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which is very useful and very helpful to business firms and sometimes to Government Departments, will be hampered and the practice must largely cease, much to the detriment of British overseas business. If it does not cease, then, if that tax is continued, I am afraid that subterfuges will be resorted to with the object of putting a different complexion on the visit and so avoiding the payment of Income Tax. In other ways we have often heard that the Income Tax as applied to-day in its inquisitorial manner is creating unwilling criminals of many classes.
I should now like to turn to the second category of persons named in my Motion. I refer to the foreigners who make temporary visits to this country, and whose income is derived entirely from foreign sources. I think the best way of putting the subject before the House is to quote from a recent circular which was issued by the Board of Inland Revenue. This is what it said:
"A visitor"—
that is a foreign visitor—
"who maintains no place of abode in the United Kingdom and whose visits are not habitual but occasional only is not regarded as resident in the United Kingdom unless he has been in the United Kingdom for a period or periods equal in the whole to six months in the Income Tax year (beginning 6th April).
Moreover, even though he does not maintain a place of abode in the United Kingdom available for his use, and does not stay for six months in any one year, he is regarded as becoming resident if he visits the United Kingdom year after year (so that his visits become in effect part of his habit of life) and the annual visits are for a substantial period or periods of time. The question of residence in any particular case can only be determined by reference to the facts of the case, but it can he said that the Board of Inland Revenue would normally regard an average annual period or periods amounting to three months"—
I ask your Lordships to notice that period specially—
"as 'substantial' and the visits as having been 'habitual' after four years. And, where the visitor's arrangements indicated from the start that regular visits for substantial periods were to be made, he would be regarded as resident in and from the the first year."
The circular goes on:
"A visitor who thus becomes chargeable as a resident is liable not on the whole of

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his income arising abroad but only on so much of that income as is received in or remitted to the United Kingdom."
To begin with, I want to emphasise that the foreigner here concerned earns no part of his income in this country, but only comes here to spend it, or to spend a part of it, after he has already paid Income Tax in his own country. These regulations which I have just read out, on the other hand, are going a long way towards stopping foreigners coming to this country regularly, or for any length of time, and consequently are having the effect of keeping them away altogether. This applies, I believe, to foreigners who have hitherto been regular visitors to this country. The regulation which refers to a foreigner being liable to Income Tax by qualifying as a resident by visits which have become in effect part of his habit of life, and which constitutes three months as a substantial period for an annual visit and characterises the visits as habitual after four years, has to my own knowledge driven one American lady away from this country—a lady who used to come here regularly and expend anything in a period of five to six months of £5,000 to £10,000 during her visit. She, under these regulations, would be mulcted in 4s. 6d. in the £ on that amount if she spent £10,000. That would be an additional £2,500 for the privilege of coming here. She cannot afford it, and so she stays away and visits France, Italy and other places.
Just before I came into the House I was given by a noble friend information regarding another very similar case. The case mentioned to me by my noble friend is this. His daughter is married to an Italian. She has British investments in this country, but, having married an Italian, she has assumed her husband's nationality and domicile. If she came to this country to spend a holiday she would be immediately mulcted in Income Tax on those investments, with the result that she and her husband at the present moment, with their servants, are spending several months in Austria instead of coming to this country.
Cases of that kind could be multiplied ever and over again. They are all within the knowledge of your Lordships' House, and therefore I will not weary the House by giving other cases because
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nearly all of your Lordships know of cases yourselves. I have had many conversations with foreign friends of mine, and especially Americans, and it is generally stated that fewer and fewer foreigners are coming to Great Britain to make Great Britain their temporary home because of this Income Tax question. On the other hand, it is well-known that many of them are visiting France, Germany and Italy, and that those countries welcome them. They welcome them for the money they spend, they welcome them for the business they bring, and they do not mulct them in heavy taxation in addition to the taxation of their own country as is done here.
I venture to assert that this country is very short-sighted in its policy in this connection because we require the presence of these foreigners just as much as other countries do. I cannot understand how, for instance, the present Government—and other Governments, I agree—support travelling associations of Great Britain in the face of this attitude. Only recently a Bill was introduced called the Local Authorities (Publicity) Bill to encourage travelling in Great Britain and it was supported—with a certain amount of enthusiasm I may say—by the noble Lord, Lord Marley, on behalf of the Government. We have the "Come to Britain" movement supported by the Government in public speeches and other ways on the one hand, and, on the other, the Inland Revenue doing all they can to keep these people out of the country. They may be doing this with their eyes shut because not sufficient publicity is brought to hear upon this subject. That is one of the reasons why I have ventured to-day to bring the matter before His Majesty's Government, in the hope that the Government will examine the. position very carefully indeed, that they will investigate it, and investigate it impartially, not only through the eyes of the Treasury but through the eyes of some persons who know something about the outside as well as the Treasury point of view.
I even venture to ask His Majesty's Government whether they will set up another Committee, a strong Committee, an impartial Committee, to investigate this subject. In view of the great partiality they have shown for setting up

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Committees on numerous subjects, I am sure they will feel it very difficult to resist such a request on my part for a Committee to investigate this very important subject of Income Tax as affecting the classes of individual I have named in my Resolution. Therefore I hope the Government will see their way to take this subject not as a mere subject of debate to-day but as one of serious import; that they will take it into consideration and do what they can to alleviate the position. I beg to move.
THE MARQUESS OF HUNTLY: My Lords, before the Minister replies, may I add one word in support of my noble friend He has alluded to many cases which I think deserve the consideration of the Government, but there is one point upon which he has not touched which peculiarly affects the country I come from. Your Lordships are aware that we rely in Scotland upon the rents that we receive from our shootings and fishings. I believe it is now held by the Board of Inland Revenue that if any foreigner takes a lease of a shooting or fishing in Scotland he renders the whole of his income in foreign countries liable to taxation. I believe that is very seriously affecting these lettings in the North. It is a matter which I think has been dealt with by successive Chancellors of the Exchequer in a very blind fashion. They have not seen that we are treating this Income Tax question differently from any other country in the world. France, for instance, taxes the foreigner through the hotels. She tells the person who receives a traveller in a hotel to add so much to the bill which goes for national taxation. She does not in any way charge the person who travels through the country on his income derived from abroad. That is perfectly right, but here we do not do that. A man can freely travel about if he uses hotels, but if he takes a house or gets an abode that instantly makes the whole of his property abroad liable for Income Tax. That is a short-sighted way of treating the matter. I do hope that my noble friend's request that careful consideration be given to this question will be agreed to by His Majesty's Government.
THE SECRETARY OF STATE FOR THE COLONIES (LORD PASSFIELD): My Lords, I make no complaint whatever of the noble Viscount, Lord Elibank, for
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bringing this question before your Lordships nor of the noble Marquess, Lord Huntly, for supporting him, because I agree that there is a certain discouragement of people coming to this country. But, as I shall attempt to show your Lordships, that discouragement in so far as it exists, is based really on a misapprehension as to the things which will he done to those people by this wicked Inland Revenue Department. It really is not quite so serious as has been represented, but there is a great deal of misapprehension and a certain amount, let us say, of fear. Therefore the more the matter can be ventilated, the more apprehension is dissipated and fear is removed, the better everybody will be pleased. This is an extremely difficult question, a difficult question for the Chancellor of the Exchequer and the Inland Revenue because naturally they have to be careful that they are not, by concessions, eating away at the Income Tax which for good or for ill has become the sheet anchor of the national finances.
The noble Viscount, Lord Elibank, was good enough to indicate that it is not a matter for which this Government has any responsibility. The law has grown up under a succession of Governments quite irrespective of their political views. I should like to point out that it is not a question of an inquisitorial, oppressive and bureaucratic Inland Revenue. The position as described, in so far as it is correctly described, by the noble Viscount, is a matter of law, and the inland Revenue is but carrying out the law as it has been determined. Of course the law can be altered, but I am anxious to make it clear that it is not the fault of the Inland Revenue. What is complained of is actually part of the law of the land either by express words of Statute or based on decided cases, because as a matter of fact these things become so intricate that it is not until the Judges get to work on them that you can really say in some cases what is the law. Viscount Elibank rather complained of the theoretical basis upon which these exactions took place, but I want to suggest to your Lordships that it was Viscount. Elibank himself who was rather giving theoretical cases.
VISCOUNT ELIBANK: If the noble Lord will allow me to interrupt, I should like to say that my cases were not theoretical. My cases were actually cases I know.
LORD PASSFIELD: If the noble Lord would have a moment of patience, that is exactly what I was going to explain—that it was the theory that he was explaining rather than the actual facts of the case, because all the cases which he described were not cases in which the person would have been subject to Income Tax at all; or at any rate in any case in which he might have been charged it would be to nothing like the extent which the noble Viscount suggested. That is simply bearing out my proposition. I said that there was a lot of misapprehension, which is in itself mischievous. I entirely agree, and we had better try and get it explained.
What is the law to-day for persons who come and live here for a time? Are they never to pay Income Tax? The noble Viscount suggested that at some point they must be liable for Income Tax and, in fact, the only question then is in what conditions, after what term of residence and in what circumstances they shall be roped in. The test for the liability to Income Tax, according to the law, is residence in this country. "Residence," in connection with this matter and others, is a difficult word to define. It is easy enough at first sight, but in actual practice extremely difficult, to decide whether a person is resident here or not. Judges and Statutes have laid it down that, if a person has a place of abode here and comes here, that person becomes a resident here—not a, permanent resident, but a resident in respect of the twelve months from April to April during which the Income Tax runs. That is not the case which the noble Viscount brought forward, or at any rate not the main case. He was referring to people who do not abide here, but who visit this country, either on leave of absence, as visitors or commercial people coming to consult, and so on. Those persons are not regarded as resident, and are therefore not liable for Income Tax in this country if the period of their visit does not exceed six months; but let me observe that it is six months in any one Income Tax year.
If, as I understand it, they come here for the five months ending on April 6, 1931, and if they stay on for another five months, it seems to me that they are not here for six months in any one Income Tax year, and consequently the shortness of the period can hardly be
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complained of, since a person who is here for six months or more can hardly be considered a transient visitor. If it is agreed that he should be liable for Income Tax at some point, then you must at some point consider him resident, and really I think six months in any one Income Tax year is a very fair period for a visit. I am sure we should be glad to have the company of these people even for a longer time than that, but at some point it is held that they must be liable for Income Tax. I want to go on to explain, as to the fear which the noble Viscount expressed of the effect of Income Tax on wealthy Americans and foreigners who come and stay for longer than six months, that, after all, the shooting season and the fishing season hardly last longer than six months. If they stay longer than six months, I think both the noble Viscount and the noble Marquess said that they become liable to pay Income Tax upon the whole of their income. I am advised that this is not so at all.
VISCOUNT ELIBANK: I think the noble Lord has misquoted me. I did not say that. What I said was that they were liable to pay upon such income as they remitted to this country.
LORD PASSFIELD: I did not wish to particularise the noble Viscount, Lord Elibank, but I think the noble Marquess, Lord Huntly, did actually say that they became liable to pay upon the whole of their income.
THE MARQUESS OF HUNTLY: What I understand is now held by the Court is that, if a foreigner takes a lease or has residence in Scotland, he is liable on the whole of his income for Income Tax in this country. I understand that is the rule.
LORD PASSFIELD: That is the difficulty of these special cases. Certainly if a person becomes resident in Scotland he does become liable to pay Income Tax as a resident here, but, as a matter of fact, if persons are resident for a certain period they incur liability in respect of such part of their income only as they receive in or as is remitted to the United Kingdom. As I understand it, the liability is therefore limited to Income Tax on the amount, practically, of their expenditure here, or of the income brought for that purpose. As Lord

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Elibank, I think, quoted, the rule with regard to any particular case depends on the facts of the case. I am only stating what the general effect of the law is. Accordingly, as I say, a visitor is not considered resident for the purpose of becoming liable to any Income Tax at all unless he resides for six months in any one Income Tax year. The only complaint that can be made about that is that six months is not a long enough time, but I should have thought that, as a matter of fact, six months would cover the case of practically all visitors to this country unless they really become resident; and if they become resident they have to pay Income Tax.
There is another case which personally I am a little bit more concerned about than these foreigners who come here on prolonged visits. The noble Viscount spoke of the lady who fled to Italy lest she should become liable to Income Tax here. I do not know if she had already resided just upon the six months within the Income Tax year. Since April 6 she could not have resided for six months, so that she need not have left at any rate until October, and could have stayed to enjoy the British summer before she went. It is that misapprehension as to becoming liable for Income Tax which, I think, is having a powerful effect, but I cannot think that six months is not a reasonable limit. Then there is the other case to which the noble Viscount, Lord Elibank, referred—that of the Colonial official.
VISCOUNT ELIBANK: I am so sorry to interrupt the noble Lord, but it is rather a difficult case. The noble Lord has not dealt with the case of those visitors who are regular visitors to this country and who are only allowed to remain for three months. That is the case I am referring to.
LORD PASSFIELD: If the noble Viscount would only allow me to go on. I cannot refer to more than one class of case at once. Let him have a little patience. There is a more serious class of case than that, to my mind, and that is the Colonial official, or the person engaged in commercial pursuits, who comes to this country under the head of those who come for a period of six months in the year and will become liable to Income Tax, though only to the extent
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of the income that they receive here or is remitted to this country. If such a person has an abode here—for instance, if his wife is living here or he keeps a house in which his children are living—then if he conies to this country at all during an Income Tax year he will become liable to Income Tax upon the amount of the income which is received here or which is remitted to him here.
That, I think, is a somewhat hard case. I am not Chancellor of the Exchequer, but I shall certainly take an opportunity of representing that case to the Chancellor of the Exchequer, because I have been brought into contact with it in the Colonial Office, and I think it is a little hard on the British official who has gone out to the tropics and comes home that he should be charged in that way. He is not, as I have said, charged if he has not an abode here, but if his wife is here, or if he has a house for his children, he becomes liable, even if he only comes for one day. That seems a little hard, and I should like to make a representation on the point. You will notice, however, that he is liable only for the income received or remitted.
Then there is the case of a man who does not come here for six months, but who does come for a substantial period, which I suggest is at least three months, in successive years, and actually makes a habit of coming for more than three months every year, at any rate for four years. Apparently, he may come for five months or five and a half months for three years in succession and not be dropped upon, but if he comes for four years his visits become a habit and the law will regard him as a resident. There again it is only a question of where you draw the line. If a man is going to come to live in England for a substantial period, year after year, it seems to me that he must be regarded as liable to Income Tax at some period. He is only liable for tax on the income which is remitted to this country, and the question is whether more than three months in each year for more than four years is too small a limit. I should be very glad to talk that over with the Chancellor of the Exchequer, but I am afraid that I cannot hold out any hope of being able to soften his heart, because it is the result of the experience of the Inland Revenue for a whole generation, and I am

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afraid they will have reasons which will be far more cogent with the Chancellor of the Exchequer than any which I can bring to bear upon him.
To sum up, the position is that you are not liable to tax on the whole of your income if you come to reside here for a short time. You must remain for six months, and for six months in any one Income Tax year. Consequently, two separate periods in two separate Income Tax years will not make you liable. Then you are only liable for tax on the income which is received here or remitted to this country. But if you have an abode here and you come back to this country then you may be liable for a much briefer period, but, again, only on the amount of income received here or remitted here. Or if you make a practice of coming here for more than three months yearly for more than four years, then you may be considered a. resident and again have to pay, but only for the amount of income which you receive here or is remitted here. The noble Viscount has not brought this forward, of course, because it is an ingenious and interesting point, but because of the apprehension that it is having an effect in preventing foreigners or British subjects living abroad from coming to this country. I agree with him that it is undesirable to prevent or discourage them from coming, but I am not sure that I should put it so greatly on the amount of money that they spend here. I am not sure whether Scotland benefited by these shooting or fishing rents. At any rate, Scottish lairds have intimated to me grave doubts whether Scotland is richer or better for them.
But we do not want to discourage foreigners from coming to this country. I want to encourage them, and I think it is a great advantage that we should travel in other countries. I think foreigners can learn something from us, and that we can learn something from them. When the noble Viscount said that fewer and fewer foreigners were corning here he said what is quite contrary to my information. Neither the Inland Revenue nor the Board of Trade are aware of any diminution in the number of foreigners coming to this country. On the contrary, they inform me that more and more foreigners are coming—that the number coming from the United
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States and from the Continent of Europe and the Far East is increasing year by year. That, of course, does not affect the question raised by the noble Viscount. We do not want to discourage them, whether they are coming or not coming. I beg the noble Viscount to take heart. I think England is becoming more and more attractive to foreigners—I do not say it is because we have a Labour Government—and especially to the number coming from France. That being so, I cannot believe that this complaint is of very serious import.
I think, however, the misapprehensions are serious, and I think that something should be done to prevent people fleeing from this country who have been here three months, because they are afraid of being made liable for Income Tax. They will not be and I think they should be made aware of it. As to the suggestion that the Government should appoint a Committee to enquire into the subject, I am afraid that I cannot hold out any hope that the Government will consent to that, although I will consult the Chancellor of the Exchequer as to whether it is possible. So far as my information goes, a Committee would not have a desirable result, but might, by advertisement, even magnify the evil. I repeat that I think something should be done to clear up the misapprehension difficulties. I am informed that no Papers exist which could he presented, except a bare statement of the law, and that would not really he a useful document. I beg the noble Viscount not to persist in his Motion for Papers, because I can assure him that we cannot find any Papers which would be useful to lay before the House. I will, however, see whether some steps cannot be taken to remove the misapprehensions which do exist, and which have an effect upon a small number of people coming to this country.
VISCOUNT ELIBANK: My Lords, I wish to thank the noble Lord for his sympathetic reply. At least he has given us some crumbs of comfort, for he has said that he will refer certain points to the Chancellor of the Exchequer and will also consult the Chancellor of the Exchequer as to whether a Committee should be set up. I wish to thank the noble Lord for those concessions. At the same time, I should like to add one or two words after the speech which he

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has made. It seems to me that whilst he has attributed certain misapprehensions to me, the noble Lord himself is under some misapprehension as to the real effect upon these visitors. I do not think he has grasped the fact that it is the regular visitors to this country who really bring most money here. It is not the visitors who come here occasionally and are mulcted in Income Tax after six months' residence, but the visitors who come here regularly and who are now told that a "substantial period" is three months after four years. They are not only mulcted in Income Tax in the fourth year, but also for the three previous years as well. That is not only very unreasonable, but very unfair. Those are the cases which I particularly wish to impress upon the noble Lord, and which I hope he will bring to the attention of the Chancellor of the Exchequer.
Then, again, the noble Lord told us that after all these regulations were the result of legislation which has been passed, and that they were actually embodied in the laws. I venture to oppose that statement, because so far as I know the word "substantial" was never interpreted in the law. The law says only that it shall be for a substantial period. It is the Inland Revenue officials who have interpreted that word "substantial," and said it shall be three months. I think, therefore, that the noble Lord himself was under a misapprehension when he told us that this was embodied in the law. That is a point which I consider should be brought to the notice of the Chancellor of the Exchequer—namely, as to whether that period of
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three months should not be considerably extended. The noble Lord in his reply did not, I think, deal with the question of British Colonial officials coming here on leave for six months. He did not say that he would represent their case to the Chancellor of the Exchequer. I hope I am not misrepresenting the noble Lord.
LORD PASSFIELD: I expressly said I thought their case was one which came home to me in particular, and I would do something about it. But, as a matter of fact, they can stay here for five and a half months; it is not any worse than that.
VISCOUNT ELIBANK: No. But I have already stated the reasons why I think the period ought to be longer than that. I did not know that the noble Lord was going to represent that case to the Chancellor of the Exchequer. If he is going to do so, of course I withdraw what I said. Those are the only points I wish to make. I hope that a Committee will be set up, and I am grateful to the Government for having given as much consideration to the Motion as they have. I beg leave to withdraw my Motion.
LORD PASSFIELD: My Lords, with the leave of the House, I should like to make clear that I am making no promises. I had to tell the noble Lord that I was afraid I should not be able to induce the Chancellor of the Exchequer to take my view, though I have undertaken to convey the view he takes. But that is not a promise.
Motion, by leave, withdrawn.
House adjourned at twenty-five minutes before six o'clock.