With this Motion it would be convenient to discuss at the same time the other Government Motion,
That the Interim Commission for the International Trade Organization (Immunities and Privileges) Order, 1972, a draft of which was laid before this House on 22nd March, be approved.
The first order will confer the legal capacities of a body corporate on the Institute. Her Majesty's Government will be required to do this by Article 4 of the Convention on the Establishment of the Institute, which was signed in Paris on 6th October, 1971. It will enable the Government to ratify the Convention.
The Institute, which will be situated in Milan, is an international organisation of a rather novel kind, in that its membership may include, in addition to Governments, private non-Governmental bodies. The Chairman is Sir John Chadwick, recently our ambassador to the OECD, and a number of persons well known to hon. Members, such as Mr. Peter Cussick, of the United States, have been actively associated with the foundation of the Institute.
This is a useful development in view of the clear interest of large industrial concerns in an Institute whose principal object is to provide
… advanced training of managers and teachers and facilities for associated research and the management of technological innovations.
The Institute is not, of course, in any sense a commercial organisation and is expressly debarred from making any pecuniary profit.
The second order, dealing with the Interim Commission for the International Trade Commission, will confer exemption from income tax upon officers of the Commission in respect of emoluments received by them as such. The Commission provides the Secretariat for the General Agreement on Tariffs and Trade, and although GATT is not a specialised agency of the United Nations its officials are accorded a similar status in Geneva. There are many precedents for confering this limited tax exemption from international officials. The effect of the order will be to exempt from our income tax the few officers who are resident here but work for the ICITO in Geneva. They are interpreters, translators and English-language secretaries.
There has been an anomaly in that these same people working also for the other United Nations agencies in Geneva, such as the World Health Organisation, the International Labour Office and others, pay no tax on their salaries which they earn from their exactly comparable employment with those agencies. We undertook in the United Nations to bring our practice into line with that of other countries, members of GATT, and the order enables us to do so.
In conclusion, I emphasise that despite their rather long titles the orders do not confer immunity from our courts. The orders will have an effect strictly limited to the purposes which I have described, but they and the agreements which they implement form part of our increasing co-operation with other countries in seeking international solutions to problems of common concern.
I rise briefly to welcome the order giving international recognition to the International Institute for the Management of Technology. It is a pleasant irony that the formation of the Institute was first dreamed of at a conference which was held at Deauville six or seven years ago at which the technological gap between America and Europe was discussed. The joint chairmen of that conference were an old friend of many hon. Members, Senator Portman of France and the Under-Secretary of State who has moved the Motion. I suppose the odds against the chairman of that founding conference standing at the Dispatch Box to propose the order giving international recognition to the institute would require to be worked out by one of the computers at the International Institute, but they must certainly be many million to one.
This is to be a specifically European project. The British Government have subscribed to it 140,000 European monetary agreement units, which is a long way of saying 140,000 dollars. The British firms that have contributed to it include Guest, Keen and Nettlefold, Tube Investment and Joseph Lucas. The German Government have contributed even more than we have, and so have the French. The Japanese Techno-Economic Society has subscribed 10,000 European monetary agreement units to the institute. As the Institute is sited in Milan, it is not surprising that the Italian Government have contributed heavily and that such leading Italian firms as E.N.I., Fiat, Pirelli and Olivetti have also subscribed heavily.
This is a specifically European institute, but it is probably right to say that it would never have got started had it not been for the drive and enthusiasm of an American, Mr. Peter Cussick. I was glad to hear the Under-Secretary of State pay tribute to him.
The Institute's courses and seminars will start this summer. The international staff are first-class, but I suspect that the main value of the courses will come from the mixing up of the students drawn from the ranks of middle management from many countries in Western Europe. I wish the Institute well and I welcome the introduction of the order.
I always take pleasure in dealing with orders such as these in the presence of the Under- Secretary of State, for I always feel that there is a complete meeting of minds on them. They are certainly a closed book to me. However, since the hon. Member for Beckenham (Mr. Goodhart) has now enlightened me considerably about one of them, I should like to add the Opposition's welcome to the first order which I understand will enable us to ratify the Convention.
The Minister has given some explanation about the other order which refers to the so-called Interim Commission for the International Trade Organisation, members of which are the permanent staff of the General Agreement on Tariffs and Trade. I believe that the Interim Commission was set up as long ago as 1948, so it has been interim for a very long time. I am informed that by virtue of their status as members of the Interim Commission of this non-existent United Nations Specialised Agency, the officials of GATT enjoy the privileges and immunities of an international organisation.
Now, some 24 years later, we are, as I understand it, taking steps to provide exemption for those who live in the United Kingdom and I assume that, apart from the few officers and employees who have been mentioned, this would also apply to pensioners who are resident in this country.
The way in which this is done is, I gather, by an exchange of notes, in the course of which our permanent representative wrote saying that he had the honour to inform the officer concerned
… that the Government of the United Kingdom are prepared to accord to officials of the Commission exemption from taxation on the salaries and emoluments paid to them by the Commission.
If the foregoing proposal is acceptable to the Commission, I have the honour to propose that this note, together with your reply, will be an agreement …".
Not surprisingly, it was found to be acceptable. I only wish I had received a similar document addressed to me by those responsible for my income tax.
Perhaps we could be told why this arrangement has lasted for some 24 years without this order becoming necessary on an earlier occasion. Does it apply to both employees and pensioners?
With the leave of the House, may I say this in regard to pensioners. I take it that this order does apply to them and, if I am wrong, I shall let the hon. and learned Gentleman know.
As he will know, the Interim Commission was established by a resolution of the United Nations on trade and employment—the Havana Charter organisation as it was called. The idea was that the International Trade Organisation should come into being, but owing to the then opposition in the United States that organisation never came into being, but the secretariat was kept in operation to service GATT. That is what it has been doing.
I understand that there has been no necessity to undertake the resolution of this order before because the number involved is very small and no representations were made, but certain matters have recently come to light—and we have had representations from GATT in Geneva—that a number of people have been put in a difficult position. Therefore, we have decided that it is necessary to do this. The amount of income tax the Chancellor of the Exchequer will have to forgo is about £1,000 a year, so I do not think it will be difficult for us to ride it.