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Relief From Double Taxation

Volume 415: debated on Wednesday 31 October 1945

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Ninth Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

I do not know whether this would be the appropriate occasion for the Chancellor to say something about other negotiations which may have taken place, apart from those with the United States, of which the House has had full information, and whether, if they have taken place, or are expected to take place, they will be on the same lines; or, again, whether the Chancellor anticipates that a different treatment will be adopted, as between other countries, from that followed in the case of the United States.

I am glad to respond to the right hon. and gallant Gentleman's question. There is not much I can say further than that we are now engaged in negotiations, notably with several of the Dominion Governments. These negotiations are being conducted with good will on both sides. They are complicated, and I would prefer the House to be informed of them when they reach conclusion. I do not think I could usefully say more than that at this stage, but we will keep the House fully informed, and I am sure that the more of these agreements we can conclude the better it will be for our trading prospects.

6.45 p.m.

This Resolution obviously has two great merits—the quality of mercy, in that it blesses him that gives and him that takes, and also the merit of continuity. We have heard this afternoon some of the rather more doubtful Resolutions. This admirable Resolution obviously springs from the right hon. Gentleman, and I have no doubt that the Chancellor will admit the fairness of it.

It is of very much greater importance than may be realised. It is perfectly clear that we are living in a closed economy, and that not for many years will the tariff walls be broken down as easily as is imagined. Looking at this Resolution, not only from the point of view of the relief to the shareholder, but from the more important one of the indication of assistance to themanufacturer and to our export trade. I think it will the realised that we should have as many of these Agreements as possible. They will assist our unfavourable export trade almost more than anything else. Imagination is the pilot of enterprise, and, with a little imagination, we can see the great effect on our exports. Our experience of these Agreements with America has shown us how reciprocally good they are.

There is, however, one point attaching to this blessing which I am now giving to this Resolution, and that concerns the need for great precision in making such Agreements and also of arriving, as far as possible, at a standardised form. We have heard a good deal today on the subject of motor cars and on the merits and demerits of producing as few models as possible. I know the difficulties which there will be in negotiations with other countries, but, if we can arrive at a standardised form, it will be of great assistance to industry. Where an industry is contemplating opening a subsidiary in any other part of the world, one of the first things it must do is to compute what the taxation will be, and, if we can get an assurance from the Chancellor that he will bear in mind the need for simplifying and standardising these Agreements with other countries, it will be of the greatest assistance.

I was disappointed that the Chancellor made no reference to the countries of Western Europe now in the sterling area. Some of us on this side of the House feel that we are not getting on very fast with any kind of comprehensive trading or financial agreements with them. We have one currency Agreement so far, and I think it would be a great satisfaction to the House if the Chancellor said that, in principle, the Government are in favour of applying these Agreements to those countries.

:May I ask the Chancellor whether the rules which I understand the Government are going to make about the way in which people can dispose of this relief, will come out in time for this financial year? It is already the end of October, and a company with a big branch business in the United States, whose financial year corresponds with the calendar year, will want to know how it can dispose of the relief which it is to get. I think the Chancellor will agree that disposal of Dominion relief to the shareholder is not very satisfactory. We want this relief to encourage enterprise, and it would be best if rules could be made so that the preference shareholders do not participate in it. Can the right hon. Gentleman give industry any assurance that these rules will come out before the end of this year?

The hon. Member for Bury (Mr. W. Fletcher) called attention to the urgent necessity for some kind of uniformity, and I can assure the House that one of the objects of the Resolution is to enable conditions to be inserted in the Bill which shall do something in the way of bringing about that uniformity, and I think that will also meet the point made by the last speaker with regard to the rules, so that industrialists shall know where they stand. At the moment the legislation in this country is rather of a piecemeal nature. One of the Sections deals with reciprocal relief so far as the Dominions are concerned, and includes India. There is also one provision which deals solely with shipping, another which deals solely with air transport, and another which regulates the position in the case of companies trading through agents and branches. The net result of it is that there is only a piecemeal attempt to introduce into the British legislative system anything in the nature of a comprehensive scheme for bringing about, or enabling the Government to put into operation, agreements in common form with countries throughout the world, and one of the primary objects of this Resolution is to enable the Bill to include something of that nature, so that, as and when agreements are negotiated, as far as possible, they will be in standard form, because the common object aimed at is to enable the Government to give effect to these agreements, as far as possible, on a uniform system.

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.

Tenth Resolution agreed to.