§ 2.43 p.m.
§ LORD DARWENMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether their attention has been drawn to recent correspondence in the Press complaining of the harsh and unreasonable attitude of the Estate Duty Office in valuing the copyright of literary works of deceased persons for probate purposes.]
§ THE MINISTER WITHOUT PORT-FOLIO (THE EARL OF DUNDEE)My Lords, copyright in literary works, in common with other property, is valued for estate duty purposes, under Section 7 (5) of the Finance Act, 1894, on the basis of the price which, in the opinion of the Commissioners of Inland Revenue, and subject to right of appeal, the property would fetch if sold in the open market at the time of the death of the deceased. Your Lordships will appreciate that the Estate Duty Office have a duty to satisfy themselves as to the 529 values placed on property by representatives of the taxpayer. Your Lordships will also appreciate that the rule of confidentiality in tax matters prevents me from discussing the facts of the particular case which gave rise to the correspondence in the Press to which the noble Lord refers. My right honourable friend the Chancellor of the Exchequer is, however, satisfied that the aspersions against the Estate Duty Office are unwarranted.
§ LORD DARWENMy Lords, I thank the noble Earl for his Answer, but I would ask him whether he does not think that it is necessary for the Government to see not only that justice is done in these matters but also that it appears to be done. The general public have no knowledge of the matters known to the noble Earl, and to them this seems a very unjust state of affairs.
§ THE EARL OF DUNDEEMy Lords, we are all subject to very heavy, and some of us may think oppressive, taxation, and in order to prevent evasion the Finance Act imposes on the Inland Revenue officers statutory duties which they have to carry out. Because of the rule about confidentiality I cannot discuss the correspondence in this matter. I think that if the noble Lord were to read it again he would agree that the Inland Revenue have carried out their duties in a reasonable and considerate way according to law.
LORD SALTOUNMy Lords, will the noble Earl ask Her Majesty's Government to consider this suggestion: that when there is a difference of opinion between the Estate Duty Office and the heir or beneficiary in the estate as to the value of any asset, the beneficiary or the executor should be allowed to say to to the Estate Duty Office, "Well, if you value this article at this price, find me a market and I will sell it"? I ask that question because I know of occasions where that has been said and the suggestion has been entirely inoperative. As a matter of fact, I myself inherited a house which I——
§ THE EARL OF DUNDEEMy Lords, surely that is not a matter of criticism 530 against Inland Revenue officials but a criticism against the Finance Act. If the noble Lord wants personal reminiscences, I may say that I spent most of my last year at Oxford disputing with the Inland Revenue about the death duties on my father's estate, with the result that I did not obtain a very good degree.
LORD SALTOUNMy Lords, my actual question, which I was in perfect order in putting, is the one thing the noble Earl has not answered. I asked whether an arrangement could not be made whereby, if the Inland Revenue put upon an article a value which the executor or beneficiary disputes, the beneficiary or the executor can challenge them to sell it at that price.
§ THE EARL OF DUNDEEMy Lords, that is exactly what I was referring to when I said that this was a matter for criticising the Finance Act and not the officials of the Inland Revenue. They cannot make these decisions; it is a matter for Parliament in passing the Finance Act.
§ LORD SILKINMy Lords, is the noble Earl aware that the particular case to which he refers as being confidential was disclosed in the Press? And was it not a case where a literary work written ten years before the death was valued on the assumption that it had film rights and the value of those film rights was to be taken into account? Does that not appear, on the face of it, a very disturbing state of affairs, and ought not the House to be given rather more reassurance on the matter than the noble Earl has given?
§ THE EARL OF DUNDEEMy Lords, I am aware of the correspondence in the Press, which I read with great interest—including the prospect of seeing Mr. Compton Mackenzie's ghost. But I am afraid that the rule about confidentiality prevents me, despite the fact there has been this correspondence in the Press, from saying anything about the details of this case.
§ LORD CHORLEYMy Lords, does the Minister agree that the situation has changed so much, because of the question of film rights and other things of this kind, that the whole of this matter ought to be looked at again? It is not 531 a question of civil servants not doing their job to the best of their ability and very conscientiously, but that the method adopted, which no doubt in the nineteenth century was a perfectly good one, has now ceased to be appropriate. It is a difficult problem, but I would ask the Minister whether he does not think the Government might give some thought to this matter and possibly set up a Committee to go into this whole problem.
§ THE EARL OF DUNDEEMy Lords, very likely; but I think that is a matter to be considered by Parliament in passing the Finance Act, and it cannot arise as a matter of criticism against the conduct of the Inland Revenue officials in carrying out their duties under the law.
§ VISCOUNT STANSGATEDuring his studies at Oxford, did the noble Earl find any reputable dictionary containing this word "confidentiality"?
§ THE EARL OF DUNDEEI must confess that the first time I saw it was this morning.
§ LORD DARWENMy Lords, if the noble Earl assures me from his confidential information that there is a very good explanation in this particular case, I am prepared to accept that; but I still feel it necessary that, in some way or other, the public should be assured that the Estate Duty Office is not playing some sort of "hanky-panky" with these estates.
§ THE EARL OF DUNDEEI am most anxious not to discourage noble Lords opposite from mitigating the incidence of estate duty.