HC Deb 21 December 1927 vol 212 cc526-8

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. D. HERBERT

I do not wish to detain the House or to waste time, but this is a Bill which passed its Second Reading last night under conditions when there were very few Members in the House who knew what was being called, and it appears to me that it is a Bill on which we should have a certain amount of explanation. I hope, therefore, that my hon. Friend the Financial Secretary to the Treasury will take the opportunity whilst we are going through the Bill in Committee to give us some reasons for this Bill, which proposes to make—

The CHAIRMAN

The hon. Member should have raised this matter last night. We are now on Clause I in Committee.

Mr. HERBERT

I should have confined myself to Clause I, which deals with a very important rule of law, and proposes to make a very big change in it. Incidentally, straying out of order, I have no doubt indicated that I was anxious for information on other parts of the Bill as well, but that will be as the various Clauses come along. But if the Financial Secretary on this important Clause can give us some general indication as to the objects and intentions of the Bill it will be very useful.

The FINANCIAL SECRETARY to the TREASURY (Mr. Arthur Michael Samuel)

I can broadly give the reasons for the Bill. Under Section 52 of the Finance Act, 1921, following the recommendations of the Royal Commission, certain funds were exempted from the payment of Income Tax on the ground that they were of a benevolent nature. These funds were for purposes of superannuation funds, widows and orphans funds, or pension funds; but they have to conform to certain rules laid down by the Commissioners of Inland Revenue and then, having conformed therewith, they are exempted from Income Tax. Certain trustees of funds, in seeking to obtain this exemption, put their funds in order and made certain adjustments. In doing so one of them, the Telegraph Construction Company, found that there was a question about a Clause in their Trust Deed which might or might not offend the law against perpetuity. The hon. Gentleman the Solicitor-General can explain the law of perpetuity better than I, but it is a rule of law which prevents a fund being held up for a longer period than a specified number of years. The Telegraph Construction Company, in order to see whether its funds were in order, took out an originating summons—

Mr. JOHNSTON

Is it in Order for an hon. Member to ask for an explanation on a point and then immediately leave the Committee?

The CHAIRMAN

It is certainly not out of order.

Mr. D. HERBERT

The hon. Member has not left the House.

Mr. SAMUEL

The Telegraph Construction Company took out a friendly summons and the case was heard by Lord Justice Russell on the 29th March, 1894, who held that it was clear that these trust funds—

Mr. KIRKWOOD

We will accept it as read.

HON. MEMBERS

"Agreed!"

Clause ordered to stand part of the Bill.

Clause 2 (Qualifications for registration of funds), ordered to stand part of the Bill.