§ Lord BOYD-CARPENTERMy 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 they are prepared to waive payment of the dollar premium in the case of United Kingdom employees of United States companies who are offered and desire to take up shareholdings in those companies.
§ The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey)No, my Lords, to do so would put such employees in a privileged position by comparison with other would-be investors in foreign currency securities and would be inequitable to those investors all of whom have to pay the premium.
§ Lord BOYD-CARPENTERMy Lords, would the noble and learned Lord not agree that it is the declared policy of the Government, as illustrated in this year's Finance Act, to encourage employee shareholdings? If the Government are encouraging these by tax concessions at home, as they are doing, why is there any objection in principle to giving employees this privileged position when they happen to be employed by an American company?
§ Lord McCLUSKEYMy Lords, as the noble Lord has said, it is the Government's policy to encourage in the way that he indicated, but the Question on the Order Paper is not, as I think the noble Lord will acknowledge, confined to employees who could take advantage of the provisions of the Finance Act 1978 relating to income tax relief for employees who participate in a profit-sharing scheme. Indeed, the effective date for that scheme coming into operation is April, 1979. 1400 So the answer I have given is quite general in relation to all would-be investors. But if I turn to consider the narrower question of the Finance Act 1978, the essential point is this: the investment currency premium is an integral or intrinsic part of the value of foreign currency securities to United Kingdom investors. If it were excluded from the value of shares that could be appropriated each year to an employee, some United Kingdom employees would receive foreign currency securities with a value well in excess of £500, and this would run counter to one of the main features of these schemes, which is that the upper limit should be £500 per year of assessment.
§ Lord BOYD-CARPENTERMy Lords, if the noble and learned Lord is putting any weight on that last objection, would it really surpass the skill of the Treasury to limit the amount of purchases with free dollars to an amount equivalent to the £500 sterling?
§ Lord McCLUSKEYMy Lords, it would not tax the ingenuity of the Treasury to do that, but that would run counter to the whole scheme, which has been in operation since 1939, which is designed to protect our foreign currency. We do not want to do that and give special privileges to this small category of potential investors.
§ Lord KINNAIRDMy Lords, can the Minister tell me why a Socialist Government are apparently always so keen to impose restrictions but never to grant any freedoms?
§ Lord McCLUSKEYMy Lords, with respect, that is a nonsense. The Government are not imposing any restriction at all. What the Government are doing is introducing profit-sharing by the present Finance Act with effect from April, 1979. It is that concession on the part of the Socialist Government which has caused people to want even more.