HC Deb 02 July 1923 vol 166 cc187-94

Section fifty-two of Sub-section (2) of the Finance Act, 1920, shall be extended so as to exempt from Corporation Profits Tax companies formed for the purpose of operating and maintaining steam pilot cutters, and whose shareholders are working licensed pilots, when the earning of the pilots are limited by Statute.—[Mr. Gershom Stewart.]

Brought up, and read the First time.


I beg to move, "That the Clause be read a Second time."

This New Clause is brought forward in the interests of a very worthy body of men, and it will not cost the Treasury much money. It deals with the Corporation Profits Tax, which is half dead, and which we hope will be quite dead before long. These pilots, on whose behalf the Clause is introduced, are treated as though they were a public company making profits for their shareholders who get money without working for it. These men have their own cutters, and sail their own ships by day and in the dead of night, in all weathers, to bring in the big ships which carry our foreign trade. When a pilot dies or retires from business his shares in the company pass on to another pilot and not to any outsider. I appeal for sympathetic consideration on the ground that this is a real example of co-partnership. It is not a question of a large speculative company. We are appealing on behalf of deserving individual seamen, and I ask the Financial Secretary to give the Clause his favourable consideration.


I beg to second the Motion.

All my life has been spent among men who go down to the sea in ships and have their business in great waters, and of all these men the pilot is, perhaps, the one most to be admired. The Corporation Profits Tax is levied upon limited companies. For reasons of their own, the pilots have formed their pilot cutter service into a limited company. When the Finance Act levied Corporation Profits Tax it was never intended that it should fall on public utility companies therefore, railway companies, canals and docks were specifically exempted. If the Chancellor of the Exchequer of that time had thought of the pilots, he would have exempted them. Had the pilot cutters been under the docks companies they would have been exempt, because the docks companies have been exempted. I am sure that this matter only wants to be brought to the notice of the Financial Secretary to ensure that he will grant to the pilots this small concession, which will cost only a few hundred pounds.


I am afraid that I shall have to be hardhearted again. My hon. Friend who moved this Amendment must not call it a small matter. A question of principle is involved. Companies are exempt if they have a limited dividend. Under the Act of 1920 certain companies are exempt, but they must be such as gas, water, electricity, tramway, dock, and canal companies who, by virtue of their constitution, are limited in their dividends. The pilot cutter companies—I do not know whether there is more than one; there may be two or three—are composed of pilots whose shares are not limited in dividend, and if the business of a pilot company is satisfactory they can be paid as large dividends as they can earn. Consequently they are not exempt under the Act of 1920. I had the constitution of one of these companies looked up at Somerset House, and there was no limit to their dividend, but if they liked to alter their constitution, so as to limit their dividends, then they would come under the exemption of the Act of 1920. But so long as their dividend paying power is unlimited I am afraid that they must come under the general law and pay Corporation Profits Duty.


It is almost useless occupying time appealing to the Treasury Bench to grant any exemption, but this is an illustration of how a man can change his disposition when he becomes a Minister. We knew the right hon. Gentleman in former days as hail fellow well met and brimming over with kindness.


I am just the same now.


And now we find him hard-hearted when we make an appeal of this kind. If there are only one or two companies the collection of the amounts involved must cost more than the value of the amount collected. But this is the case of a small class of men whom few Members of this House have not had the opportunity of admiring for their persistent devotion to duty. These men should be singled out for special benevolence. In no single instance have any members of their families ever become a burden on the poor rate or in any way received any assistance. The fact that they have made such provision for their families and dependants out of their own earnings is something which speaks strongly in their favour. The incomes of the great majority of these men are very small, in many cases they are regulated by statute law, and only a small number of them would come under the category described in this Amendment. Where singular instances do occur, I hope the Minister will make an exemption.


I regret that the right hon. Gentleman has not seen his way to make this slight concession, which I would press upon him, in the unavoidable absence of my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy). I think it is important that the case should be fully heard. It is perfectly true that this pilotage company does not come strictly within the meaning of the Section, because there is no limitation upon the

dividends, but the right hon. Gentleman must admit that this is only a technical difference. The shares are all held by the pilots, and, as servants of the company, their salaries are limited. There is a definite limitation of their salaries, but the company in itself is merely a profit-sharing institution, in which the pilots themselves are the shareholders. It is quite different from a public company, wherein the shares are held by people outside, who benefit by any increase in dividend. In this case it merely represents a means of sharing the profits among the men themselves, and, in that sense, I do not think it is outside the spirit of the Section. If these pilots decided to raise their salaries, so that there would be no dividend, or only a fixed dividend payable, their case could be brought strictly within the limits of the Statute. This is only a technical variation of the principle included in the original Act, and the Treasury should consider the special circumstances of the case, and bring it within the purview of the exemption.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 144; Noes, 248.

Division No. 262.] AYES. [10.29 p.m.
Alexander, A. V. (Sheffield, Hillsbro') Falconer, J. Lansbury, George
Ammon, Charles George Foot, Isaac Lawson, John James
Attlee, C. R. Gosling, Harry Leach, W.
Barker, G. (Monmouth, Abertillery) Graham, D. M. (Lanark, Hamilton) Lee, F.
Barrie, Sir Charles Coupar (Banff) Greenall, T. Lees-Smith, H. B. (Keighley)
Batey, Joseph Greenwood, A. (Nelson and Colne) Linfield, F. C.
Benn, Captain Wedgwood (Leith) Grenfell, D. R. (Glamorgan) Lowth, T.
Bennett, A. J. (Mansfield) Griffiths, T. (Monmouth, Pontypool) Lunn, William
Berkeley, Captain Reginald Groves, T. MacDonald, J. R. (Aberavon)
Bonwick, A. Grundy, T. W. M'Entee, V. L.
Bowdler, W. A. Hall, F. (York, W. R., Normanton) McLaren, Andrew
Bowerman, Rt. Hon. Charles W. Hall, G. H. (Merthyr Tydvil) Macnamara, Rt. Hon. Dr. T. J.
Broad, F. A. Hamilton, Sir R. (Orkney & Shetland) March, S.
Brotherton, J. Hardie, George D. Marshall, Sir Arthur H.
Brown, James (Ayr and Bute) Harney, E. A. Martin, F. (Aberd'n & Kinc'dine, E.)
Buckie, J. Harris, Percy A. Middleton, G.
Burgess, S. Hastings, Patrick Morel, E. D.
Butler, J. R. M. (Cambridge Univ.) Hay, Captain J. P. (Cathcart) Morrison, R. C. (Tottenham, N.)
Buxton, Charles (Accrington) Hayday, Arthur Mosley, Oswald
Buxton, Noel (Norfolk, North) Hayes, John Henry (Edge Hill) Murnin, H.
Chadwick, Sir Robert Burton Henderson, Rt. Hon. A. (N'castle, E.) Murray, John (Leeds, West)
Chapple, W. A. Herriotts, J. O'Grady, Captain James
Charleton, H. C. Hill, A. Oliver, George Harold
Clarke, Sir E. C. Hillary, A. E. Paling, W.
Collins, Pat (Walsall) Hinds, John Parkinson, John Allen (Wigan)
Collison, Levi Hirst, G. H. Phillipps, Vivian
Cotts, Sir William Dingwall Mitchell Jenkins, W. (Glamorgan, Neath) Ponsonby, Arthur
Darbishire, C. W. Jenkins, W. A. (Brecon and Radnor) Potts, John S.
Davies, Evan (Ebbw Vale) John, William (Rhondda, West) Pringle, W. M. R.
Davies, Rhys John (Westhoughton) Johnston, Thomas (Stirling) Rae, Sir Henry N.
Davison, J. E. (Smethwick) Jones, Henry Haydn (Merioneth) Richardson, Sir Alex. (Gravesend)
Duffy, T. Gavan Jones, Morgan (Caerphilly) Riley, Ben
Dunnico, H. Jones, R. T. (Carnarvon) Ritson, J.
Ede, James Chuter Jones, T. I. Mardy (Pontypridd) Roberts, Frederick O. (W. Bromwich)
Edmonds, G. Jewitt, W. A. (The Hartlepools) Robertson, J. (Lanark, Bothwell)
Edwards, C. (Monmouth, Bedwellty) Kenyon, Barnet Royce, William Stapleton
Entwistle, Major C. F. Lambert, Rt. Hon. George Saklatvala, S.
Salter Dr. A. Sullivan, J. Whiteley, W.
Sexton, James Thomas, Sir Robert John (Anglesey) Williams, David (Swansea, E.)
Shaw, Thomas (Preston) Thomson, T. (Middlesbrough, West) Williams, Dr. J. H. (Llanelly)
Short, Alfred (Wednesbury) Thorne, W. (West Ham, Plaistow) Williams, T. (York, Don Valley)
Simpson, J. Hope Trevelyan, C. P. Wilson, C. H. (Sheffield, Attercliffe)
Sitch, Charles H. Turner, Ben Wintringham, Margaret
Snell, Harry Walsh, Stephen (Lancaster, Ince) Wood, Major M. M. (Aberdeen, C.)
Snowden, Phillip Watson, W. M. (Dunfermline) Wright, W.
Spencer, George A. (Broxtowe) Watts-Morgan, Lt.-Col. D. (Rhondda) Young, Robert (Lancaster, Newton)
Stephenson, Lieut.-Colonel H. K. Weir, L. M.
Stewart, J. (St. Rollox) Westwood, J. TELLERS FOR THE AYES.—
Strauss, Edward Anthony White, Charles F. (Derby, Western) Mr. Gershom Stewart and Major
Agg-Gardner, Sir James Tynte Ednam, Viscount Lamb, J. Q.
Alexander, E. E. (Leyton, East) Elliot, Capt. Walter E. (Lanark) Lane-Fox, Lieut.-Colonel G. R.
Alexander, Col. M. (Southwark) Ellis, R. G. Leigh, Sir John (Clapham)
Archer-Shee, Lieut.-Colonel Martin Erskine, James Malcolm Monteith Lloyd, Cyril E. (Dudley)
Ashley, Lt.-Col. Wilfrid W. Erskine, Lord (Weston-super-Mare) Locker-Lampson, G. (Wood Green)
Baldwin, Rt. Hon. Stanley Evans, Capt. H. Arthur (Leicester, E.) Locker-Lampson, Com. O. (Handsw'th)
Balfour, George (Hampstead) Eyres-Monsell, Com. Bolton M. Lorden, John William
Banbury, Rt. Hon. Sir Frederick G. Falcon, Captain Michael Lorimer, H. D.
Banks, Mitchell Falle, Major Sir Bertram Godfray Loyd, Arthur Thomas (Abingdon)
Barnett, Major Richard W. Fawkes, Major F. H. Lumley, L. R.
Barnston, Major Harry Fermor-Hesketh, Major T. Macnaghten, Hon. Sir Malcolm
Becker, Harry Flanagan, W. H. McNeill, Ronald (Kent, Canterbury)
Bell, Lieut.-Col. W. C. H. (Devizes) Ford, Patrick Johnston Malone, Major P. B. (Tottenham, S.)
Benn, Sir A. S. (Plymouth, Drake) Foreman, Sir Henry Margesson, H. D. R.
Bennett, Sir T. J. (Sevenoaks) Foxcroft, Captain Charles Talbot Mason, Lieut.-Col. C. K.
Bentinck, Lord Henry Cavendish. Fremantle, Lieut.-Colonel Francis E. Mercer, Colonel H.
Berry, Sir George Furness, G. J. Milne, J. S. Wardlaw
Betterton, Henry B. Galbraith, J. F. W. Mitchell, W. F. (Saffron Walden)
Birchall, Major J. Dearman Ganzoni, Sir John Mitchell, Sir W. Lane (Streatham)
Bird, Sir William B. M. (Chichester) Garland, C. S. Moore-Brabazon, Lieut.-Col. J. T. C.
Blades, Sir George Rowland Gates, Percy Morden, Col. W. Grant
Bowyer, Capt. G. E. W. Gaunt, Rear-Admiral Sir Guy R. Moreing, Captain Algernon H.
Boyd-Carpenter, Major A. Gilmour, Lt.-Col. Rt. Hon. Sir John Morrison-Bell, Major A. C. (Honiton)
Brass, Captain W. Gould, James C. Murchison, C. K.
Bridgeman, Rt. Hon. William Clive Greaves-Lord, Walter Nesbitt, Robert C.
Brittain, Sir Harry Greene, Lt.-Col. Sir W. (Hack'y, N.) Newman, Colonel J. R. P. (Finchley)
Brown, Major D. C. (Hexham) Grenfell, Edward C. (City of London) Newman, Sir R. H. S. D. L. (Exeter)
Brown, Brig.-Gen. Clifton (Newbury) Gretton, Colonel John Newson, Sir Percy Wilson
Bruton, Sir James Guinness, Lieut.-Col. Hon. W. E. Newton, Sir D. G. C. (Cambridge)
Buckingham, Sir H. Gwynne, Rupert S. Nicholson, Brig.-Gen. J. (Westminster)
Burn, Colonel Sir Charles Rosdew Hacking, Captain Douglas H. Nicholson, William G. (Petersfield)
Burney, Com. (Middx., Uxbridge) Hall, Lieut.-Col. Sir F. (Dulwich) O'Neill, Rt. Hon. Hugh
Butcher, Sir John George Hall, Rr-Adml Sir W. (Liv'p'l, W. D'by) Ormsby-Gore. Hon. William
Butler, H. M. (Leeds, North) Halstead, Major D. Paget, T. G.
Butt, Sir Alfred Hamilton, Sir George C. (Aitrincham) Parker, Owen (Kettering)
Button, H. S. Hannon, Patrick Joseph Henry Pattinson, S. (Horncastle)
Cadogan, Major Edward Harmsworth, Hon. E. C. (Kent) Pease, William Edwin
Campion, Lieut.-Colonel W. R. Harrison, F. C. Pennefather, De Fonblanque
Cautley, Henry Strother Harvey, Major S. E. Penny, Frederick George
Cayzer, Sir C. (Chester, City) Hawke, John Anthony Perkins, Colonel E. K.
Cecil, Rt. Hon. Sir Evelyn (Aston) Hay, Major T. W. (Norfolk, South) Perring, William George
Cecil, Rt. Hon. Lord H. (Ox. Univ.) Henn, Sir Sydney H. Philipson, Mabel
Chamberlain, Rt. Hn. J. A. (Birm., W.) Hennessy, Major J. R. G. Pollock, Rt. Hon. Sir Ernest Murray
Chamberlain, Rt. Hon. N. (Ladywood) Herbert, Dennis (Hertford, Watford) Pownall, Lieut.-Colonel Assheton
Churchman, Sir Arthur Hewett, Sir J. P. Pretyman, Rt. Hon. Ernest G.
Clarry, Reginald George Hilder, Lieut.-Colonel Frank Privett, F. J.
Clayton, G. C. Hiley, Sir Ernest Raine, W.
Cobb, Sir Cyril Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Rankin, Captain James Stuart
Cockerill, Brigadier-General G. K. Hogg, Rt. Hon. Sir D. (St. Marylebone) Rawlinson, Rt. Hon. John Fredk. Peel
Colfox, Major Wm. Phillips Hohler, Gerald Fitzroy Rees, Sir Beddoe
Colvin, Brig.-General Richard Beale Holbrook, Sir Arthur Richard Reid, D. D. (County Down)
Conway, Sir W. Martin Hood, Sir Joseph Remer, J. R.
Cope, Major William Hopkins, John W. W. Remnant, Sir James
Craig, Captain C. C. (Antrim, South) Hopkinson, A. (Lancaster, Mossley) Rhodes, Lieut.-Col. J. P.
Croft, Lieut.-Colonel Henry Page Houfton, John Plowright Richardson, Lt.-Col. Sir P. (Chertsey)
Crook, C. W. (East Ham, North) Hudson, Capt. A. Roberts, Samuel (Hereford, Hereford)
Crooke, J. Smedley (Deritend) Hunter-Weston, Lt.-Gen. Sir Aylmer Robertson-Despencer, Major (Islgtn, W.)
Curzon, Captain Viscount Hurd, Percy A. Roundell, Colonel R. F.
Dalziel, Sir D. (Lambeth, Brixton) Hutchison, G. A. C. (Midlothian, N.) Ruggles-Brise, Major E.
Davidson, J. C. C. (Hemel Hempstead) Inskip, Sir Thomas Walker H. Russell-Wells, Sir Sydney
Davidson, Major-General Sir J. H. Jackson, Lieut.-Colonel Hon. F. S. Samuel, A. M. (Surrey, Farnham)
Davies, Alfred Thomas (Lincoln) Jephcott, A. R. Samuel, Samuel (W'dsworth, Putney)
Davison, Sir W. H. (Kensington, S.) Jodrell, Sir Neville Paul Sanderson, Sir Frank B.
Dawson, Sir Phillip Johnson, Sir L. (Walthamstow, E.) Sandon, Lord
Dixon, C. H. (Rutland) Joynson-Hicks, Sir William Scott, Sir Leslie (Liverp'l, Exchange)
Doyle, N. Grattan Kelley, Major Fred (Rotherham) Shaw, Hon. Alex. (Kilmarnock)
Du Pre, Colonel William Baring Kennedy, Captain M. S. Nigel Shepperson, E. W.
Edge, Captain Sir William King, Captain Henry Douglas Shipwright, Captain D.
Edmondson, Major A. J. Kinloch-Cooke, Sir Clement Simpson-Hinchliffe, W. A.
Skelton, A. N. Titchfield, Marquess of Winterton, Earl
Smith, Sir Harold (Wavertree) Tryon, Rt. Hon. George Clement Wise, Frederick
Somerville, A. A. (Windsor) Tubbs, S. W. Wolmer, Viscount
Somerville, Daniel (Barrow-in-Furness) Turton, Edmund Russborough Wood, Rt. Hn. Edward F. L. (Ripon)
Stanley, Lord Wallace, Captain E. Wood, Sir H. K. (Woolwich, West)
Steel, Major S. Strang Ward, Col. L. (Kingston-upon-Hull) Wood, Maj. Sir S. Hill- (High Peak)
Stott, Lt.-Col. W. H. Waring, Major Walter Woodcock, Colonel H. C.
Sueter, Rear-Admiral Murray Fraser Watts, Dr. T. (Man., Withington) Worthington-Evans, Rt. Hon. Sir L.
Sugden, Sir Wilfred H. Wells, S. R. Yate, Colonel Sir Charles Edward
Sutherland, Rt. Hon. Sir William Weston, Colonel John Wakefield Yerburgh, R. D. T.
Sykes, Major-Gen. Sir Frederick H. White, Lt.-Col. G. D. (Southport) Young, Rt. Hon. E. H. (Norwich)
Thompson, Luke (Sunderland) Whitla, Sir William
Thomson, F. C. (Aberdeen, S.) Wilson, Col. M. J. (Richmond) TELLERS FOR THE NOES.—
Thornton, M. Windsor-Clive, Lieut.-Colonel George Colonel Leslie Wilson and Colonel
Winfrey, Sir Richard Gibbs.

The following proposed New Clause (Rebate to be granted on articles used in agriculture) stood on the Order Paper in the name of Captain Wedgwood Benn: Where it is shown to the satisfaction of the Commissioners of Customs and Excise that any non-excisable article on which an import duty has been charged is to be used directly or indirectly in the agricultural industry, a rebate equal to the amount of the duty paid shall be made to the importer.


Major McKenzie Wood—

Captain BENN

May I direct your attention, Sir, to the new Clause which stands in my name and that of other hon. Members, on the Order Paper? May I ask whether you will see your way to permit a Division to be taken on it? I am anxious for that, although I am not anxious to explain it at length. The matter was not raised on the Committee stage, and the point, I think, is one of some substance.


I am afraid I cannot accede to the request of the hon. and gallant Gentleman. Perhaps my intimation did not reach him. The matter was dealt with at an earlier stage of the Session, and certainly we could not take it up now.


On a point of Order. May I submit to you, Sir, that this proposed new Clause raises a different issue to that raised in the Bill? The Bill relates solely to the Safeguarding of Industries Act. This relates to the duties of Customs and Excise generally falling upon agricultural produce. It therefore raises a general question of principle. In these circumstances, might I, with respect, submit that the House should have an opportunity of recording a decision?


Perhaps I was wrong in my reference to the hon. and gallant Member's Bill. I have carefully considered the matter, and I cannot see my way to select the proposed new Clause.