§ 7.11 p.m.
§ Lord TREFGARNE rose to move, That the draft order laid before the House on 17th June be approved. The noble Lord said: My Lords, I beg to move that the Eurocontrol (Immunities and Privileges) (Amendment) Order 1980 be approved. With your Lordships' permission I will speak at the same time to the International Organisations (Immunities and Privileges) Miscellaneous Provisions Order 1980. These draft orders, both made under the International Organisations Act 1968, were laid before the House on 17th June, 1980.945
§ The draft Eurocontrol Order is required because of a change which is to be introduced into the tax régime applied to staff members of the European Organisation for the Safety of Air Navigation—or Eurocontrol as it is generally known. The change will mean that from the date on which staff become liable for an internal tax, which will be applied for the benefit of the organisation, they will cease to pay United Kingdom tax on their salaries.
§ The order will have no effect on the operational working of Eurocontrol, which as your Lordships may recall, was established by convention in 1960. The original aim of the convention was that the agency it established would control both civil and military traffic in the upper air space of member states. However, by the time that the new agency started functioning in 1963, it had become evident that the original aim was incompatible with the integrated system, covering the whole air space and catering for both military and civil air traffic, which we and France were by then developing. Accordingly, the United Kingdom, France and the Republic of Ireland continued to provide their own air traffic control services in the upper air space. Despite this change, Eurocontrol has fulfilled an important role, and contributed to the development of navigational aids in all member states.
§ Your Lordships may know that a new agreement is being negotiated to provide the framework for a more positive cooperative venture for future safe and efficient air traffic control over Europe, in the future. In the meantime, member countries have been concerned about the practical effects of the present taxation system which permits members to tax staff salaries, but requires them to refund to the Eurocontrol budget the amount of tax which they collect.
§ We accepted this requirement because of the principle that the country in which an organisation is situated should not derive benefit from taxing the salaries of staff members stationed in its territory, since these salaries are, of course, provided by the funding of other member states. Although an arrangement to repay the tax which has been collected may appear to be a simple, self-cancelling, transaction, in practice it has proved to involve considerable administrative effort. It has also created financing difficulties for Euro- 946 control when delays have occurred in members making their reimbursements to the organisation. To overcome these drawbacks, members have agreed to adopt the method, commonly used by most international organisations, of applying an internal tax system to their staff, and using the proceeds for the organisation's benefit. The agreement to do this is contained in the protocol which was signed by member states in Brussels on 21st November 1978. Copies of that protocol were laid before the House in March last year.
§ The draft order before your Lordships is for the purpose of giving effect to that agreement. The making of the order will not, of course, result in any reduction in United Kingdom revenue receipts because, as I have said we currently repay to the organisation a sum equal to the amount of tax collected from their staff. This order, if approved, will lead to administrative savings to Her Majesty's Government and remove budget financing delays which have sometimes created difficulties for Eurocontrol. I have therefore no hesitation in commending it to your Lordships.
§ I turn now to the second of the draft orders, which is required to take account of changes in customs and excise law. These changes, which were introduced in the Finance (No. 2) Act 1975, made provision for a duty levied at importation to be denoted either a customs duty or an excise duty. Before the 1975 Act, which took effect on 1st January 1976, all duties charged at importation were termed duties of customs, and excise duties were charged on goods produced in the United Kingdom. Certain orders made under the 1968 International Organisations Act contain references to customs duties and excise duties in the sense in which these terms were used before the 1975 Act came into force.
§ The International Organisations Act itself was brought up-to-date by the Customs and Excise Management Act of 1979. It is now necessary to up-date those orders listed in the schedule which contain the now superseded, and inappropriate, terminology. The second draft order before your Lordships does no more than bring into line the provisions in the existing orders to which it refers. It does not add to their provisions in any way; 947 neither does it accord any additional privileges to the organisations or to persons connected with them. I hope therefore that your Lordships will approve this draft order, also. I beg to move the first Motion standing in my name on the Order Paper.
§ Moved, That the draft order laid before the House on 17th June be approved.—(Lord Trefgarne.)
Lord BRUCE of DONINGTON
My Lords, the House will be indebted to the noble Lord for having explained so clearly the purport of the two statutory instruments that we are now considering. The House will observe from the 24th Report of the Joint Committee on Statutory Instruments that these particular draft instruments were considered by the Joint Committee as not worthy of being drawn to the attention of both Houses. It therefore makes them strictly noncontroversial and we on this side of the House will wish to do everything to facilitate speedy passage. I observe with some interest the comments the noble Lord made about the Eurocontrol (Immunities and Privileges) (Amendment) Order 1980. He said that there had been a certain reorganisation of the arrangements that were originally intended for Eurocontrol.
Since he mentioned it, I must inform the noble Lord that I regard the arrangements amending the original concept of Eurocontrol as a retrograde step. It was my privilege while I was a Member of the European Parliament and the president of its Transport Committee to investigate in some detail the activities of Eurocontrol at both its centres. If there was one concept that seemed to me to bear some constructive and positive contribution to the unity of Europe, it was the concept of Eurocontrol. Indeed, by common consensus the duties it has performed in controlling the passage of aircraft over 20,000 feet have been impressive. Nobody who has visited their installations and observed their duplicated computer equipment and simulated displays for the benefit of air traffic controllers can be under any illusions as to their efficiency.
It therefore appears to be rather a pity that the Governments of the United 948 Kingdom and France were not able to swallow fully the original concept of Eurocontrol as originally formulated. One cannot speculate as to the reasons for this, but it appears that, in spite of the talk there has been about the need for a united Europe, certainly in the sphere of traffic control, the national interest, whether at West Drayton or whether in France, has certainly succeeded in minimising the original community impact that lay behind the establishment of Eurocontrol itself. These are more controversial matters on which the noble Lord touched by way of explanation and I do not want to make anything more of them.
So far as the orders themselves are concerned, there can be no doubt that the course decided upon by the Government in regard to the taxation of the officials and various others who are concerned with Eurocontrol is the most sensible course to adopt. I venture the prediction that the time is not far distant when they have to adopt the same principle in so far as the salaries of European Members of Parliament are concerned; this lies far beyond the existing order.
Regarding the International Organisations (Immunities and Privileges) Miscellaneous Provisions Order, we on this side entirely accept the various interpretations and drafting amendments that have had to be made in order to bring this up to date. One does not want to go through all of them. I have not ventured, in view of the report of the Joint Committee, to trace each amendment through to its original order. They are entirely noncontroversial. We compliment the noble Lord on his felicitous presentation, and hope that the orders will be passed by the House.
§ On Question, Motion agreed to.