§ 2.36 p.m.
§ LORD BARNBYMy Lords, I beg to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask His Majesty's Government whether, in view of the need to encourage visitors from North America, and to reduce irritation caused by formalities at present required, they will consider simplification of procedure for purchase of apparel free of purchase tax.]
800THE MINISTER OF CIVIL AVIATION (LORD PAKENHAM)My Lords, of the facilities now open to North American visitors for making purchases free of tax, the two following are the most important. Under an experimental arrangement, visitors holding a United States or Canadian passport, when exchanging dollars into sterling at a bank, may obtain coupons to buy goods free of purchase tax for immediate delivery. Five coupons, each valid for tax-free purchase of £1 worth of goods are issued for every £15 worth of dollars exchanged, subject to a maximum of 180 coupons in any one year. The visitor must sign the coupons and, on making a purchase, show his passport and sign an undertaking that the goods will be used up or exported within three months. The alternative arrangement entitles him, on showing his passport, to have goods to a value of £5 or more delivered free of tax to the ship or aircraft in which he is leaving the country merely by signing a statement that he has paid the amount in question, and that he is a bona fide visitor. These arrangements have recently been improved and are continually reviewed, but the Government consider that the formalities involved are the minimum necessary to prevent abuse. That these arrangements are reasonable and adequately publicised is indicated by the increasing use which tourists are making of them.
§ LORD BARNBYMy Lords, arising out of that answer—and with the understanding of the House that by reason of the intricacy of the arrangement, the large amount of exchange necessary to obtain coupons and the many formalities which, according to the noble Lord's explanation, have to be observed, the arrangement stands self-condemned—may I ask if it would not be possible to arrange that the procedure for visitors from North-America should be limited to the formal presentation of passport and payment for the goods upon which it would be permissible for the goods to be taken away?
LORD PAKENHAMMy Lords, with great respect, I cannot agree with the noble Lord that an arrangement such as I have described, which is being used increasingly, stands self-condemned. At any rate, it is not condemned by the persons who are chiefly concerned. I concede to the noble Lord, who has been 801 good enough to give me notice of his supplementary question, that the suggestion which he makes would have the minimum of formality, but I consider that it would open the way to considerable and, indeed, serious abuse. Two difficulties might arise: first, the retailer would be reclaiming tax on little more than the strength of his own word that he had sold goods to an American visitor; and, secondly, there would exist the temptation to visitors to buy more than they required for their own purposes. As the noble Lord is aware, a passport by itself is no evidence that its owner is a visitor, or that he is bringing dollars into the country. For this reason, it would be difficult to prevent, as would be necessary, an American or Canadian resident here from buying goods free of purchase tax for himself or his friends.
§ LORD BARNBYMy Lords, while thanking the noble Lord for his reply, may I remark that it is not very convincing to suggest that the main objection to my suggestion would be that any visitor from North America might buy too much in this country? What we want is that people will bring money over here and spend it. I beg the noble Lord to take the matter up again with the Treasury, in view of the wide dissatisfaction which exists among visitors from North America in respect of this matter.
LORD PAKENHAMI will gladly take up with my right honourable friend any matter which the noble Lord raises. I think, however, that when he reads my reply in Hansard he will see that he has misunderstood the main point of my answer to his supplementary question.