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House of Lords

Monday, 24th June 1996.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Ripon.

The Lord Chancellor: Leave of Absence

The Lord Chancellor (Lord Mackay of Clashfern): My Lords, before the commencement of business, I take the opportunity to inform the House that I am to undertake a longstanding engagement formally to open the new regional offices of Industrial Tribunals in Newcastle Upon Tyne on Friday, 28th June 1996.

Accordingly, I trust that the House will agree to grant me leave of absence on Friday, 28th June 1996.

Burma: Support for Aung San Suu Kyi

2.37 p.m.

Lord Jenkins of Putney asked Her Majesty's Government:

    Whether they are taking all the action they can to assist Aung San Suu Kyi and a democratically elected government in Burma, and whether they will take no action to support the present military dictatorship in power.

Lord Chesham: My Lords, we remain deeply concerned about the situation in Burma. We issued a statement on 22nd May and our ambassador in Rangoon followed it up with a demarche to the State Law and Order Restoration Council on 7th June. We have consistently pressed the State Law and Order Restoration Council to work with Aung San Suu Kyi and Burma's other democratic groups to achieve national reconciliation and democratic reform. We make it clear to the SLORC that resumption of normal relations is conditional on progress on this issue and other key issues.

Lord Jenkins of Putney: My Lords, I am grateful to the Minister for that reply. Is he aware that, in connection with relations with Burma, Aung San Suu Kyi has requested that tourism is not facilitated now? Is he further aware that while some travel agents have responded and deleted Burma from their advertising, others have not? Does the Minister think it proper to advise the Government to make it clear that they would like to discourage travel to Burma, in agreement with Aung San Suu Kyi's view, until such time as the country ceases to be under a military dictatorship?

Lord Chesham: My Lords, I have already said that, while we deplore the situation in Burma, we have no policy to introduce a ban on UK tourists visiting Burma.

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That would be almost impossible to bring about, but we are making everyone aware of the situation and our dislike of it.

Lord Dubs: My Lords, will the Government consider discouraging commercial links with Burma, which sustains one of the vilest regimes in the world? A clear statement that the Government believe that British firms should not do business with Burma would surely be helpful. Will the Government consider it?

Lord Chesham: My Lords, while not encouraging firms to do business with Burma, we believe that if they wish to do so we cannot absolutely forbid them. We believe that, with the pressures being brought to bear, improvements will definitely be made if the economic situation improves in Burma. That cannot be achieved by banning all business and trade with it.

Lord Jenkins of Putney: My Lords, does the Minister agree that, at least for the time being, there will be no government-sponsored trade missions to Burma?

Lord Chesham: My Lords, there is no intention to have one. There was to be a BEAMA mission in July, which the Government are not financing in any way. We know of no further missions this year, but if there were to be further missions they would have to be considered on a case-by-case basis. We have no intention of funding further trade missions to Burma in the foreseeable future.

Baroness Seear: My Lords, the Minister said that the Government could not ban firms from doing business with Burma. However, he was asked whether the Government would discourage such business. Surely discouragement to show the widespread opposition and loathing of the present regime is the least that we can ask.

Lord Chesham: My Lords, the noble Baroness is right and that is what we have been saying. It was in our statement on 22nd May.

Viscount Waverley: My Lords, should we not encourage the ASEAN countries in general and Singapore and Japan in particular to place much greater conditionality on the large amounts of inward investment that they put into Burma? Are the Government considering that and, if so, what is being achieved?

Lord Chesham: My Lords, it is difficult for us to tell Singapore or any of the ASEAN countries how they should behave and what their investments should be. We have made clear our loathing of the situation and hope that everyone takes the same attitude.

Lord Monkswell: My Lords, presumably Hong Kong is a member of the ASEAN group of nations. I believe that the Governor of Hong Kong is answerable to the British Government in that regard and therefore he could have some input.

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Lord Chesham: My Lords, I am not certain about the situation with regard to Hong Kong. A large amount of the investment going into Burma goes through British dependent territories, but it is investment from non-UK companies.

Educational Trusts: Tax Relief

2.41 p.m.

Lord Boyd-Carpenter asked Her Majesty's Government:

    Whether they have given further consideration to the effect of the provision in the Finance Act 1996 for withdrawal of the tax concession in respect of future tax on money set aside to finance the education of children.

The Minister of State, Department for Education and Employment (Lord Henley): My Lords, the Finance Act 1996 does not withdraw tax relief here. The Charity Commission has concluded that a small number of educational trusts operating school fee plans are not truly charitable. If a trust loses charitable status it is no longer entitled to charitable tax reliefs. However, relief will not be withdrawn until 1st April 1997. In the meantime the Government are reviewing the implications for the trusts and their planholders.

Lord Boyd-Carpenter: My Lords, I thank my noble friend for that moderately reassuring reply. When a tax concession is withdrawn in a case where money is being held in reserve to finance the education of children, will it be only in a case where there is a clear lack of any charitable intention?

Lord Henley: My Lords, I confirm exactly that. I ought to make clear to my noble friend that under the 1993 Act the charity commissioners have a duty to remove charities that are no longer charitable. They have been conducting a review into that kind of trust for a number of years. They first gave notice to trusts as long ago as 1994 that things would not be all right. This year they made it clear that such trusts were to be withdrawn from the register. Discussions are now taking place with the Inland Revenue, the charity commissioners and the trusts in question with a view to restructuring them. That is why we have also made it clear that we shall not be withdrawing tax relief until April next year; nor will that withdrawal be retrospective. That gives time to those trusts to restructure.

Lord Eatwell: My Lords, is the Minister aware that I agree with him that the cost to the Treasury in this case is relatively small? However, does he agree that in respect of another aspect of the funding of private education the cost to the Treasury is very high? For example, as regards the assisted places scheme, in a situation where parents are separated or divorced, will the Minister confirm that the income of the father is not taken into account in determining the scale of an award

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and that therefore the Treasury gives large grants to children of wealthy parents? What is the basis for that profligacy with taxpayers' money?

Lord Henley: My Lords, I do not believe there is any profligacy with taxpayers' money. We are committed to the assisted places scheme. The noble Lord's reference goes somewhat beyond the Question on the Order Paper, but I know that the party opposite dislikes it. We are committed to both the maintained sector and the private sector. Our commitment to the assisted places scheme is a sign of that commitment. We shall continue with that commitment. As my right honourable friend the Prime Minister made quite clear, we look to seeing that provision double in the years to come.

Lord Eatwell: My Lords, as the noble Lord has indicated his willingness to discuss the assisted places scheme, will he refer to the question that I asked? Why in a case where parents are separated and divorced is the father's income, even when the father supports the child, not taken into account in determining the scale of an award?

Lord Henley: My Lords, the noble Lord dislikes the private sector. I suspect he also dislikes the charitable status given to private education. I remind him of exactly what happened to one of his friends on the Opposition Front Bench the last time his party questioned the charitable status of the private sector. He withdrew that remark pretty quickly when comments were made by others in his party.

Lord Monkswell: My Lords, will the Minister answer the question posed by my noble friend Lord Eatwell in terms of the effect on grants or loans paid to young people--whom I still consider children--at university? Surely the same kind of problem arises in that sphere.

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