§ Mr. Edelmanasked the Secretary of State for Foreign Affairs what has been the result of the discussions which have taken place between the British and French authorities on the French National Solidarity Tax.
Mr. McNeilWhile the French authorities have stated that they do not consider that Article 11 of the Anglo-French Commercial Convention of 1882 entitles British interests even to partial exemption from the National Solidarity tax, they have nevertheless agreed to make certain substantial concessions in the application of the tax to British interests. The extent of these concessions has been described in an announcement published by the Board of Trade in the Press on 31st October and in the communiqué issued on 5th November at the end of the meeting of British and French economic experts in London. Some further points of detail are still under discussion. I should like to take this opportunity of explaining the reasons which led His Majesty's Government in the United Kingdom to decide not to press any claim in defence of British interests based on the provisions contained in Article it of the Convention of 1882, a claim which on a purely legal reading of the Convention would appear to have some foundation.
301WHis Majesty's Government consider that persons resident in France or with interests in France should normally contribute to the French Exchequer. The main purpose of the National Solidarity tax is to assist the reconstruction and rehabilitation of the economy of France, which will benefit foreign interests in France as well as French citizens. The French Government have just agreed to grant British subjects national treatment in the matter of war damage. It would be illogical, to say the least, to request the French Government to exempt British subjects in general from liability to a tax which aims at assisting the work of reconstruction in France and to claim at the same time national treatment in respect of war damage. French nationals, in common with other aliens, have moreover been liable to payment of similar forms of extraordinary taxation in this country during the war and have not sought exemption by reference to the Commercial Convention of 1882.
I am sure that in the light of these considerations and of the recent French assurances it will be agreed that the decision of His Majesty's Government not to invoke the Convention was the right one; but I do not wish to be understood as prejudicing any right to partial exemption from the tax which British subjects or associations may be able to enforce in the French courts by appeal to Article 11 of the Convention.