INTERNATIONAL COFFEE ORGANISATION (IMMUNITIES AND PRIVILEGES) ORDER, 1962 (Hansard, 3 December 1962)

§ THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE)
My Lords, I beg to move that an Humble Address be presented to Her Majesty praying that the International Coffee Organisation (Immunities and Privileges) Order 1962, be made in the form of the draft laid before this House on November 20 last. This Order is necessary in order to enable us to ratify the International Coffee Agreement which was signed in Now York apt the end of September. I think your Lordships know that the purpose of that Agreement is to try to get, by international' co-operation, a greater order into the marketing and price of this important primary commodity, with the general purpose of eventually correcting the disequilibrium between the price of primary commodities and the price of manufactured goods which within the last seven or eight years has operated so heavily to the disadvantage of the underdeveloped countries of the world and in other respects against the general stability of world trade.
This Order about immunities and privileges does not confer any juridical privileges or immunities on the personnel of the International Council under the Coffee Agreement which will be established in London. It only confers certain fiscal immunities which are exactly the same as those which we have already conferred on the Wheat Council, the Tin Council and the Sugar Council, all of 6 which also have their headquarters in London; that is to say, the Organisation itself is exempt from direct taxation, but not from customs duties, and it is exempt mostly from rates, although it pays a contribution in respect of fire and water rates from which the organisation may be held to derive benefits. That applies only to the actual premises of the organisation. The individual members—the staff—are not exempt from rates on the houses in which they may live. The delegates to the International Conference Which has agreed upon recommending this agreement, by a very large majority voted that the headquarters of the Council should be in London because of its importance as a financial and commercial centre of the world. I think that it is a good thing in every way that it should be in London, and I hope your Lordships will agree to approve the Address to provide for the coming into effect of this Order.

§ LORD SILKIN
My Lords, I rise, not for the purpose of opposing this Order, but for the purpose of once more drawing attention to what many of us feel rather apprehensive about: that is, the gnawing number of people who are exempt from taxation and who, in some cases, enjoy diplomatic immunity—although I am glad that that is not the case here—and the organisations which are exempt both from taxation and from the payment of rates. We are, of course, very glad that this Organisation will have its headquarters in London, and this could be to the advantage of this country, but since the Organisation will pay no tax and no rates, the advantages are to that extent very much reduced. I do not know where the offices of this organisation will be, but if, as I imagine, most of these organisations are in the boroughs of Westminster, or, possibly, Marylebone, it is rather hard upon those boroughs that they should have have premises occupied for which they get no rates.
7 I imagine that the answer is that if the headquarters had been in some other country, British employees would be exempt from the payment of income tax. I do not know whether that is the kind of thing, but one always feels somewhat apprehensive about the growing number of these cases. I should be grateful if the noble Earl could tell us how many people are now exempt from the payment of income tax in this way and how many organisations are exempt from the payment of tax and rates in respect of their premises. I imagine, from the list the noble Earl read out, that the number must be considerable. I do not propose that we should object to this Order, but I think we ought to keep a very careful watch on these matters and not accept these exemptions without the greatest possible scrutiny.

§ THE EARL OF DUNDEE
My Lords, I am grateful to the noble Lord for this support of the Address. I am aware, of course, of the feelings of apprehension about the growing number of persons who are exempt from tax. I cannot give the noble Lord the total number of persons, but it is estimated that the total amount of income tax which is lost to the Exchequer by these exemptions is only about £34,000 a year.

§ LORD SILKIN
In this case alone?

§ THE EARL OF DUNDEE
No, in this case it will be very much less—£2,000 or £3,000 perhaps. I was referring to the total number. I gave that figure only because the noble Lord asked for the total number of persons, which I cannot for the moment give him, but I can give him the total amount of money as it has been estimated. Perhaps to a very large extent that is a notional loss, because if they had to pay income tax the losses would be greater and the United Kingdom subscription would therefore have to be higher; so to some extent we gain on the swings what we lose on the roundabouts. The number of people—I am not sure if I mentioned it to your Lordships—on the Coffee Council who are probably going to be affected by this Order will be about 40.