HL Deb 27 January 1977 vol 379 cc623-5

3.5 p.m.

Lord ORR-EWING

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper. I draw attention to a typographical error. The date should read 15th December and not 13th December.

The Question as printed was as follows:

To ask Her Majesty's Government whether the Chancellor of the Exchequer approved the Consultative Paper issued by the Inland Revenue on 13th December, which, instead of improving the tax treatment of those working abroad, penalises them.

The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk)

My Lords, my right honourable friend the Chancellor of the Exchequer did approve the Consultative Paper and the Government would not accept that the proposals penalise the majority of those working overseas.

Lord ORR-EWING

My Lords, is the noble Baroness aware that the Chancellor said that he would try to improve the tax arrangements for United Kingdom based people who, in Britain's interest, are striving to increase our exports, and that the idea in this paper that they would have to spend 30 consecutive days abroad before getting any tax benefit is totally unrealistic and should be instantly withdrawn because it is a strong disincentive rather than an incentive to better and more productive effort?

Baroness BIRK

My Lords, as the noble Lord is no doubt aware, the changes in the 1974 Act were brought about because of the "unacceptable face of capitalism" occasioned by the Lonrho scandal. That is absolutely true; that is the fact. This happened similtaneously with the Chancellor's statement and it is a matter that has been repeatedly picked up in most of the hundreds of representations made to the Inland Revenue regarding this Consultative Paper and in discussions with the interested bodies. I am delighted that the noble Lord has added his voice to the representations. Clearly they must be taken into account in the Government's consideration of the form the proposed legislation should take. That is the point of a Consultative Paper.

Lord POLWARTH

My Lords, while declaring my interest as one who carries out duties of this kind, hopefully in the interests of the country as well as of my own businesses, may I ask whether the Government will listen to the opinion of those engaged in these operations, which is that the carrying out of half-a-dozen or so brief visits abroad, often over long distances, is frequently not only more productive in return to the country but definitely more arduous and disruptive of home life?

Baroness BIRK

My Lords, the Government are now totally aware of this. This matter has been underlined many times, and again this afternoon.

Lord BRUCE of DONINGTON

My Lords, is my noble friend aware that Section 189 of the Income Tax Act 1970 is extremely tightly drawn and, indeed, has been tightly drawn, including the Acts from which it was originally consolidated, for well over a quarter of a century. Is she aware that application in the strict sense of Section 189 of the Income Tax Act affects a far wider spectrum of employees than were incorporated in the original Question? Will my noble friend bring some pressure to bear on the Government to ensure that this matter is examined in depth?

Baroness BIRK

My Lords, that is a different question but I note what my noble friend says.

Lord ORR-EWING

My Lords, the noble Baroness's assurance that this matter will be re-examined is comforting. However, it is strange that the Government should issue a paper which is so totally out of touch with the reality of industrial life. I hope that in the re-examination they will take into consideration that the winning of exports is a difficult business, and that it is desperately important that our salesmen should come back and report to head office and get matters moving as a result of these measures and should not be encouraged to stay overseas for one hour longer than is necessary—apart from the fact that by staying abroad for extra time they are spending further foreign currency, which is undesirable.

Baroness BIRK

My Lords, I can say no more than repeat that the point has been made forcefully, clearly, succinctly and articulately from all quarters. The Government are very well aware of this and are bent on increasing our export trade; the noble Lord can be absolutely satisfied.

Baroness WARD of NORTH TYNE-SIDE

My Lords, will the noble Baroness send a copy of yesterday's debate to her Cabinet?

The LORD PRIVY SEAL (Lord Peart)

My Lords, yes.