§ Paragraphs (c) and (d) of Sub-section (3) of Section thirty-two of the Finance Act, 1921. (which provides for exemption of superannuation funds for Income Tax), shall cease to have effect.—[Mr. Laic.]
§ Brought up, and read the First time.
§ Major MOULTONOn a point of Order. Would not this new Clause impose a charge? It proposes to repeal a Section which provides for the remission of Income Tax on superannuation funds.
§ The DEPUTY- CHAIRMAN (Mr. Entwistle)I think it is a remission of taxation; it does not increase a tax.
§ Mr. LAWI have to appeal to the Committee for its sympathy, for the first reason because of my own timidity in a new experience, and for the second reason because of the importance of the Clause which it is my privilege to propose. I make my appeal not only to the Chancellor of the Exchequer or the Financial Secretary, but I make it to the Members of the House, because it is essential that the House should always see that the clearly expressed intention which the House records from time to time is not frustrated by any technical arrangements. I am quite sure that it is the clearly expressed intention of the House in the Finance Acts of past years and in the Income Tax Acts that organisations of working people who provide a superannuation fund shall have that fund exempt from Income Tax. In the Finance Acts of previous years you make special provision that friendly societies which pay friendly benefits, but in connection with the payment of their friendly benefits they maintain a separate fund for superannuation benefit alone, shall have their superannuation funds exempt from Income Tax. You also extend a similar consideration to trade union organisations which provide superannuation funds. A trade union can have its superannuation fund exempted from the payment of Income Tax, You also have the clear and definite intention that a number of employees in a given industry or in a given firm can have a superannuation fund established and they can get exemption from Income Tax on the one condition that the employer is a 2178 contributor to the superannuation fund. I am interested in pressing this appeal because of an organisation of working people, spoken of in the counties of Lancashire, Yorkshire, Cheshire and Derbyshire as managers in some cases, overlookers, spinning masters, carders, and so on. They are male employees in the whole of the cotton trade of these counties, and they have an organisation with friendly benefits connected. They pay sickness benefit, they provide medical benefit, they pay funeral benefit, they pay unemployment benefit, and they pay benefits connected with slackness of industry. They are all weekly wage earners. Therefore, it seems to me that with the clearly expressed intention of Finance Acts of previous years, and the Income Tax Acts which govern the Chancellor of the Exchequer, these people are reasonably entitled to have their superannuation fund exempt from the payment of Income Tax. For that reason I propose this Clause. These people are entitled to have exemption from Income Tax the superannuation fund that they have created, and which is maintained separate and distinct from the other fund from which friendly benefits are paid. They have been advised that they were a friendly society, but they have been ruled out as a friendly society by the Registrar because they are confined to membership of employés in a given industry. It has been suggested that they should be recognised as trade unions, but they have been ruled out of the title of trade unions because they do not pursue the function of collective bargaining. The freedom from Income Tax of superannuation funds should be extended to these people.
Mr. GRAHAMThis is one of many Amendments or new Clauses recommended to the Committee for which, at first sight, there appears to be a good deal to say. I think I will give an explanation which will satisfy most hon Members that there is a very sound case on the other side. Section 32 of the Act of 1921, to which the hon. Member refers, provides that employers and employés may take into account, for the computation of Income Tax assessment, contributions they pay to a superannuation fund, and that investments under the fund itself shall be exempt from tax. The two Sub sections to which the hon. Member referred are really conditions embodied 2179 in the Act. The first condition is that the employers must be contributors to the fund, and the second that both employers and workers recognise the fund. The recommendations of the Royal Commission make it perfectly clear that this substantial measure of relief will be confined to what are clearly superannuation funds, and shall not be extended out into thrift or provident spheres. If the two provisos are taken away, we should come to this, that any voluntary association might obtain the large exemption from Income Tax. I am not sure it is a thing which this House should encourage at the present time. It would not be controlled under the Registrar of Friendly Societies. My hon. Friend would open a very dangerous door. Much of the difficulty might be overcome by registration as a friendly society. If there is any difficulty on that point I am willing to consider the main method which would remove the obstacle. In any case, the method suggested in this Amendment is one which we could not possibly accept. It would go right into the existing regulations regarding superannuation funds, and as soon as it was understood by large numbers of workers themselves it would be rather keenly resented. I hope the hon. Member will not find it necessary to press the Clause.
§ Sir THOMAS INSKIPThe Financial Secretary has not told the Committee, although many Members are no doubt familiar with it, that the Commissioners have really the matter in their own hands, because the Section provides that the Commissioners may approve a superannuation fund. The Commissioners have a stock form of clauses which they rightly try to enforce upon persons applying for approval. If these stock Clauses are not accepted the Commissioners enter a non possumus and the fund fails to be approved. If it is a genuine superannuation fund the Commissioners have the power in their own hands. Sometimes these stringent conditions have prevented what are genuine super-annuation
§ funds from being approved. If (c) and (d) are withdrawn it will give the Commissioners wider powers and no exemption would be granted if the Commissioners did not give their approval. I hope the matter will be given consideration in view of the fact that the regulations are enforced strictly before they give their approval.
§ Mr. LAWI should like to have an answer to the question put by the hon. and learned Member for Central Bristol (Sir T. Inskip). I am perfectly satisfied that this superannuation fund is a bona fide superannuation fund and entitled to the provisions of the Acts.
Mr. GRAHAMI am indebted to the hon. and learned Member for central Bristol (Sir T. Inskip) for reminding me of the existence of this section in the Act I should think that in Part II of the provision probably the difficulty is met. It does give them the power to approve where the leading purpose of the fund is to provide such annuities, although that may not be the exclusive object of the scheme. That being so I think the difficulty has very largely disappeared.
§ 3.0 A.M.
§ Mr. G. BALFOURI think this is one of the most substantial Amendments moved. I have studied it closely and have arrived at the same conclusion as my right hon. and learned Friend below me (Sir T. Inskip). It strikes me that if these two Sub-sections (c) and (d) were removed the Commissioners would have power to amply protect against any abuse, but would not have the Regulations so rigid. It would be wise, I think, for the Chancellor to go to the length of saying that he would see his way between now and the Report stage to adopt this Amendment or some other words which would give effect to the Amendment.
§ Question put, "That the Clause be read a Second time."
§ The Committee divided: Ayes, 89; Noes, 190.
2183| Division No.141.] | AYES. | [3.3 a.m. |
| Balfour, George (Hampstead) | Bowyer, Captain G. E. W. | Cope, Major William |
| Barnston, Major Sir Harry | Brittain, Sir Harry | Courthope, Lieut.-Col. George L. |
| Becker, Harry | Burman, J. B. | Crooke, J. Smedley (Deritend) |
| Birchall, Major J. Dearman | Butler, Sir Geoffrey | Curzon, Captain Viscount |
| Bird, Sir R. B. (Wolverhampton, W.) | Butt, Sir Alfred | Dalkeith, Earl of |
| Blades. Sir George Rowland | Chadwick, Sir Robert Burton | Davidson, Major-General Sir J. H. |
| Blundell, F. N. | Clayton, G. C | Dawson, Sir Philip |
| Dixey, A. C. | King, Captain Henry Douglas | Russell, Alexander West (Tynemouth) |
| Eden, Captain Anthony | Larnb, J. Q. | Samuel, A. M. (Surrey, Farnham) |
| Eyres-Monsell, Com. Rt. Hon. B. M. | Law, A. | Sandeman, A. Stewart |
| Ferguson, H. | Lumley, L. R. | Sassoon, Sir Philip Albert Gustave D. |
| Gates, Percy | Maitland, Sir Arthur D. Steel- | Savery, S. S. |
| Gaunt, Rear-Admiral Sir Guy R. | Makins, Brigadier., General E. | Sheffield, Sir Berkeley |
| Gibbs, Col. Rt. Hon. George Abraham | Milne, J. S. Wardiaw | Shepperson, E. W. |
| Greene, W. P. Crawford | Moore-Brabazon, Lieut.-Col. J. T. C. | Smith-Carington, Neville W. |
| Greenwood, William (Stockport) | Morrison Bell, Major A. C. (Honiton) | Somerville, Daniel (Barrow-in-Furness) |
| Guinness, Lieut.-Col. Rt. Hon, W. E. | Nicholson, O. (Westminster) | Steel, Samuel Strang |
| Hacking, Captain Douglas H. | Nield, Rt. Hon. Sir Herbert | Stuart, Hon. J. (Moray and Nairn) |
| Hall, Lieut.-Col. Sir F. (Dulwich) | O'Neill, Rt. Hon. Hugh | Titchfield, Major the Marquess of |
| Hannon, Patrick Joseph Henry | Penny, Frederick George | Warrender, Sir Victor |
| Harland, A. | Percy, Lord Eustace (Hastings) | Wells, S. R. |
| Harmsworth, Hon. E. C. (Kent) | Perkins, Colonel E. K. | Wheler, Lieut.-Col. Granville C. H. |
| Harvey, C. M. B. (Aberd'n & Kincardne) | Philipson, Mabel | Wilson, Sir Charles H. (Leeds, Central) |
| Hennesay, Major J. R. G. | Pielou, D. P. | Windsor-Clive, Lieut.-Colonel George |
| Herbert, Dennis (Hertford, Watford) | Pownall, Lieut.-Colonel Assheton | Wise, Sir Fredric |
| Hope, Rt. Hon. J. F. (Sheffield, C.) | Raine, W. | Wragg, Herbert |
| Howard, Hn. D.(Cumberland, Northrn.) | Rhys, Hon. C. A. U. | Yerburgh, Major Robert D. T. |
| Hughes. Collingwood | Richardson, Lt.-Col. Sir P. (Chertsey) | |
| Inskip, Sir Thomas Walker H. | Roberts, Samuel (Hereford, Hereford) | TELLERS FOR THE AYES.— |
| Jackson, Lieut. Colonel Hon. F. S. | Ropner, Major L. | Mr. Romer and Mr. Deans. |
| Kindersley, Major G. M. | Roundell. Colonel R. F. | |
| NOES. | ||
| Ackroyd, T. R. | Hall, G. H. (Merthyr Tydvil) | Morris, R. H. |
| Adamson, Rt. Hon. William | Harbord, Arthur | Morrison, Herbert (Hackney, South) |
| Adamson, W. M. (Staff., Cannock) | Hardie, George D. | Morrison, R. C. (Tottenham, N.) |
| Alexander, A. V. (Sheffield, Hillsbro') | Hartshorn, Rt. Hon. Vernon | Morse, W. E. |
| Ammon, Charles George | Harvey, T. E. (Dewsbury) | Mosley, Oswald |
| Aske, Sir Robert William | Haycock, A. W. | Moulton, Major Fletcher |
| Attlee, Major Clement R. | Hayday, Arthur | Murray, Robert |
| Baker, Walter | Henderson, A. (Cardiff, South) | Murrell, Frank |
| Banton, G. | Henderson, T. (Glasgow) | Naylor, T. E. |
| Barclay, R. Noton | Henderson, W. W. (Middlesex, Enfld.) | Nixon, H. |
| Barnes, A. | Hillary, A. E. | Oliver, P. M. (Manchester, Blackley) |
| Batey, Joseph | Hindle, F. | Owen, Major G. |
| Birkett, W. N. | Hirst, G. H. | Paling, W. |
| Bonwick, A. | Hobhouse, A. L. | Palmer, E. T. |
| Briant, Frank | Hodges, Frank | Pattinson, S. (Horncastle) |
| Broad, F. A. | Hoffman, P. C. | Perry, S. F. |
| Bromfield, William | Howard, Hon. G. (Bedford, Luton) | Pethick-Lawrence, F. W. |
| Brown, A. E. (Warwick, Rugby) | Hudson, J. H. | Phillipps, Vivian |
| Brown, James (Ayr and Bute) | Isaacs, G. A. | Potts, John S. |
| Buckle, J. | Jackson, R. F. (Ipswich) | Purcell, A. A. |
| Charleton, H. C. | Jenkins, W. (Glamorgan, Neath) | Raffety, F. W. |
| Clarke, A. | Jenkins, W. A. (Brecon and Radnor) | Ramage, Captain Cecil Berestord |
| Climie, R. | John, William (Rhondda, West) | Rathbone, Hugh R. |
| Collins, Sir Godfrey (Greenock) | Johnston, Thomas (Stirling) | Rea, W. Russell |
| Compton, Joseph | Johnstone, Harcourt (Willesden, East) | Rees, Sir Beddoe |
| Comyns-Carr, A. S. | Jones, C. Sydney (Liverpool, W. Derby) | Richards, R. |
| Costello, L. W. J. | Jones, Henry Haydn (Merioneth) | Richardson, R. (Houghton-le-Spring) |
| Cove, W. G. | Jones, J. J. (West Ham, Silvertown) | Robertson, J. (Lanark, Bothwell) |
| Cowan, D. M. (Scottish Universities) | Jones, Rt. Hon. Leif (Camborne) | Romeril, H. G. |
| Crittall, V. G. | Jones, Morgan (Caerphilly) | Royle, C. |
| Darbishlre, C. W. | Jones, T. I. Mardy (Pontypridd) | Scurr, John |
| Davies, David (Montgomery) | Jowitt, W. A. (The Hartlepools) | Seely. H. M. (Norfolk, Eastern) |
| Davies, Rhys John (Westhoughton) | Kay, Sir R. Newbald | Sexton, James |
| Dickie, Captain J. P. | Kedward, R. M. | Sherwood, George Henry |
| Dickson. T. | Keens, T. | Short, Alfred (Wednesbury) |
| Dodds, S. R. | Kenworthy, Lt. Com. Hon. Joseph M. | Smith, Ben (Bermondsey, Rotherhithe) |
| Duckworth, John | Kirkwood, D, | Smith. W. R. (Norwich) |
| Dukes, C. | Lansbury, George | Snell, Harry |
| Duncan, C. | Laverack, F. J. | Snowden, Rt. Hon. Philip |
| Edwards, G. (Norfolk, Southern) | Lawson, John James | Spence, R. |
| Egan, W. H. | Leach, W. | Spero, Dr. G. E. |
| England, Colonel A. | Lee, F. | Spoor, B. G. |
| Falconer, J. | Lessing, E. | Stamford, T. W. |
| Fletcher, Lieut. Com. R. T. H. | Linfield, F, C. | Starmer, Sir Charles |
| Gardner, B. W. (West Ham, Upton) | Loverseed, J. F. | Stranger, Innes Harold |
| George, Major G. L. (Pembroke) | Lunn, William | Sturrock, J. Leng |
| Gibbins, Joseph | McEntee, V. L. | Sunlight, J. |
| Gillett, George M. | Mackinder, W. | Tattersall, J. L. |
| Gorman, William | Maclean, Neil (Glasgow, Govan) | Terrington, Lady |
| Gosling, Harry | Mansel, Sir Courtenay | Thomson, Trevelyan (Middlesbro, W.) |
| Gould, Frederick (Somerset, Frome) | March, S. | Thornton, Maxwell R. |
| Graham, W. (Edinburgh, Central) | Marley, James | Thurtle, E. |
| Greenwood, A. (Nelson and Colne) | Martin, F. (Aberdeen & Kinc'dine, E.) | Toole, J. |
| Grenfell, D. R. (Glamorgan) | Martin. W. H. (Dumbarton) | Tout, W. J. |
| Grundy, T. W. | Middleton, G | Vivian, H. |
| Guest, Dr. L. Haden (Southwark, N.) | Mills, J. E. | Wallhead, Richard C. |
| Hall, F. (York, W. R., Normanton) | Mond, H. | Ward, G. (Leicester, Bosworth) |
| Warne, G. H. | Williams, Dr, J. H. (Llancily) | Wilson, R. J. (Jarrow) |
| Watson, W. M. (Dunfermline) | Williams, Col. P. (Middlesbrough, E.) | Windsor, Walter |
| Watis-Morgan, Lt.-Col. D. (Rhondda) | Williams, Maj. A. S. (Kent, Sevenoaks) | Wright, W. |
| Webb, Rt. Hon. Sidney | Williams, T. (York, Don Valley) | Young, Andrew (Glasgow, Partick) |
| Wedgwood, Col. Rt. Hon. Josiah C. | Williams, Lt.-Col. T.S.B. (Kennington) | |
| Whiteley, W. | Willison, H. | TELLERS FOR THE NOES.— |
| Williams, A. (York, W.R., Sowerby) | Wilson, C. H. (Sheffield, Attercliffe) | Mr. Kennedy and Mr. Parkinson. |
| Williams, David (Swansea, E.) |
Question put, and agreed to.