§ Sir D. HERBERT
I beg to move, "That consideration of the Clause be postponed until after the consideration of the new Clauses."
I move this in no hostile spirit, but in the hope that we might more easily be able to get through a difficult Clause, with the main principle of which we on these benches are in complete sympathy. This Clause quite shortly is to meet the particular form of tax avoidance known as the single premium policy. Some of the insurance offices themselves, I believe, brought this matter to the attention of the revenue several years ago, as a matter which should be dealt with by legislation. Certain insurance offices were inclined to ask people to do these things, to advertise this particular method of tax avoidance, which was a little hard on some of the companies which did not do it. The fact remains that the companies are at the present time endeavouring to assist the Government to stop this method of tax avoidance within such limits as they think to be reasonable and not to interfere with the spread and general prosperity of life insurance in this country. My particular reason, under the circumstances, in asking for a postponement of the Clause, which I wish well, is this, that the Clause, as drawn, suffers from almost every failing that a difficult Clause of this kind can possibly have. The Clause is, in my view—
The hon. Member must give specific reasons why the Clause should be postponed. He cannot enter into a general discussion on its merits or demerits.
§ Sir D. HERBERT
Why I ask that it, may be postponed is this, that there is among the new Clauses one in my name which is designed with the same sort of object, and I suggest that if, between now and the time when the new Clauses are reached, the representatives of the Revenue and the life insurance offices and one or two Members of this House who are taking especial interest in this matter were to get together, it would be possible to bring before the Committee at the later stage a Clause which would 2481 go through very much more quickly. With regard to the new Clause, let me say at once that I admit that it does not go anything like the way the Government wish, but the point is that it is drawn on an entirely different plan, and there is there all the framework, which can be added to so as to cover up every single point which the Government desire to cover in the present Clause. The framework of the Clause is immensely shorter than Clause 12, much easier to understand and much less likely to be brought up in the courts for interpretation.
I am moving this Motion with the very best intentions. I am trying to get a thoroughly satisfactory Clause, and I hope the right hon. Gentleman will agree to postpone this Clause until after the consideration of the new Clauses. In the meantime, I will do all I can, and so would many of the life offices, to meet the right hon. Gentleman and his representatives in order to frame a new Clause which might be put down in the name of the Government. If I were permitted—and I say this without hesitation—I could point to at least eight different passages in this Clause the interpretation of which is very doubtful and to at least three cases in which it is pretty obvious the intention of the Government is to allow an exception from the Statute, and in every one of these cases the attempt to give an exception is absolutely nugatory and worthless. In these circumstances, and in view of the perplexity and the difficulty of the Clause, I hope the right hon. Gentleman and the Financial Secretary will agree to put down Clause 12 after the consideration of the new Clauses.
§ Mr. P. SNOWDEN
I thoroughly appreciate the spirit in which the hon. Member put forward his suggestion. May I say that since the Budget negotiations have been going on between the representatives of the life assurance companies and the Board of Inland Revenue. The hon. Member is quite right in saying that most life assurance companies are anxious that this matter should be dealt with, and I should like to acknowledge the assistance they are giving in trying to prevent these abuses, and, at the same time, put no obstacles in the way of genuine assurance policies. There are a few outstanding 2482 points upon which agreement has not been reached. Grateful as I am to the hon. Member for the kind way in which he has submitted his proposal, I am afraid that I can hardly accept it. It would be better to take this Clause now rather than at the end of the new Clauses, and I feel certain that before we get to the Report stage we shall come to a satisfactory understanding on the outstanding points with the life assurance companies, and that we can re-draft the Clause and embody whatever changes may be necessary in order to carry out the agreement which has been made. I hope the hon. Member will acquiesce in this view. There is, of course, no use in discussing the minor points in this Clause, because they may be removed by the understanding between us and the insurance companies, and I hope we shall be able to submit on the Report stage a re-drafted Clause which will meet with the general consent of the House. I am quite sure that hon. Members opposite are as anxious as we are to remove the abuses which have arisen in this matter.
§ Sir D. HERBERT
I can understand the reluctance of the right hon. Gentleman to postpone this Clause, but I am grateful for what he has said about the possibility of drafting a new Clause. A similar position to this arose on the Finance Bill in 1922. The Bill submitted dealt with the dodging of tax by what is known as the one-man company. The right hon. and learned Member for Hillhead (Sir R. Horne) was Chancellor of the Exchequer at the time, and I criticised the proposal as much as I should criticise the proposals in Clause 12. He made the same offer to us, but we were not satisfied and he himself ultimately came to the conclusion that a Committee stage on such an unsatisfactory Clause would be a waste of time. May I suggest as an alternative that the Chancellor of the Exchequer might allow this Clause to be postponed until after Whitsuntide, or until after Clause 21? That would give us a matter of 10 days between now and the next day on which the Committee deals with this Bill, and during that time some of us will, I think, be able to persuade the right hon. Gentleman that it would be much easier to get through the Clause in a revised and different form. If he insists upon taking the Clause now, 2483 some of us are bound to press strongly Amendments to almost every line. He could get rid of all these by discussing the Clause in a room. We cannot get rid of them by agreement across the Floor of the House, because one Amendment must depend upon another, and the immense extent to which the Clause has to be amended in order to make it workable and effective makes it really impossible to alter it in debate in Committee. Indeed, I suggest that if a few of the people concerned got together they would probably decide on a re-drafting of the Clause on entirely different lines. I therefore beg the Chancellor of the Exchequer to consider whether he would not be saving the time of the Committee and assisting his own course if he would postpone the Clause until a later sitting of the Committee.
Lieut.-Colonel Sir FREDERICK HALL
I join with my hon. Friend in his appeal. As I stated when the Report stage of the Financial Resolution was taken, the great majority of us on this side wish to assist the Chancellor of the Exchequer in doing away with the abuses that have grown up amongst certain insurance companies with regard to these people. We do not believe it is a legitimate form of insurance, and we set ourselves entirely against it. Admittedly people are justified in saving anything possible as long as they keep within the four corners of the law, but that principle can be stretched too far, and I say that certain insurance companies have been particularly active in advertising this form of insurance for the purpose of reducing the amount that goes into the coffers of the State.
The hon. Member is now discussing the general principle of the Clause, but the Motion before the Committee is that the Clause be postponed.
Sir F. HALL
I was merely telling the Chancellor of the Exchequer that many of us are completely opposed to the operations that have taken place with certain insurance companies, and that we want to assist him. Is it advisable to go on wasting a vast amount of time in discussing things that the right hon. Gentleman knows full well will involve considerable alteration in the Clause? I can see the difficulty of leaving the Clause until after the new Clauses, but will there be 2484 any disastrous effect by leaving the Clause in abeyance until after the Whitsuntide Recess?
§ Mr. P. SNOWDEN
There are not the usual party divisions on this matter, and we are all anxious to do what is best to save the time of the Committee. I am advised, however, that it is very unlikely that the negotiations with the life offices can be completed before we reach the end of the new Clauses. I am very anxious that we should not have a long, and what may prove to be an unnecessary, debate upon this Clause now. Really I do not see very much difference in result between the suggestion that has been made by the hon. Member for Watford (Sir D. Herbert) and that which I have made, namely, that we should add this Clause to the Bill now, but on the distinct understanding that wherever Amendments may be necessary to give effect to the agreement reached those Amendments shall be embodied in the Clause and not form a new Clause. I do not think it necessary to strike out the Clause altogether and to draft an entirely new Clause. The necessary Amendments may be of a rather drastic character, but not quite so drastic as to necessitate throwing the Clause into the waste-paper basket.
§ Sir A. STEEL-MAITLAND
There is a very great difference between taking the course that the Chancellor of the Exchequer proposes and what we suggest. What he suggests is a comparatively brief discussion on the Clause now, and that we should do everything else necessary after he has discussed the matter with his expert officers and the insurance offices. It is a very different state of affairs from that which happened on Clause 10. On Clause 10 what was practically an agreement was come to on a precise point of substance, not as to the way in which it would be expressed or as to the methods by which it would be carried out. Therefore it was reasonable that we should agree to the passing of Clause 10 and allow it to be brought up again on Report, knowing quite well that there would be no difference then in the point of substance. My hon. Friend the Member for Watford (Sir D. Herbert) is more versed in the matters of detail in the present Clause than I am. I also have had discussions with representatives of insurance companies, and it seems to me that the 2485 Clause as it stands will call for fundamental reconstruction from the point of view of the Chancellor of the Exchequer himself. Subsection (3, c) needs to be recast. It is clear, therefore, that we cannot treat this Clause in the same way as Clause 10. What we should have before us is really a new Clause, drafted after consultation with the insurance offices.
§ Mr. P. SNOWDEN
There is at least this in common between this Clause and Clause 10, that there is a large measure of agreement between the two sides of the Committee. The difference is that these matters which are outstanding, and which are being discussed with the insurance companies, are by no means as numerous as hon. Members on the other side assume.
§ Mr. SNOWDEN
They are very important. Sub-section (3, c) to which the right hon. Gentleman referred is one which has recently been under discussion between the parties and I understand a very large measure of agreement has been gained. It is agreed that the Clause needs some revision. This is the position. We may postpone the Clause to the end of the New Clauses, but we should be in exactly the same position then as we are in now. [HON. MEMBERS: "No!"] Oh yes. We should be in exactly the same position. We might have such a discussion as we shall have to-night if we proceed with this Clause; but if we were not then in a position to know what was the result of the discussions with the insurance companies, we could not get any further, and we should have to wait until the Report stage. As between the two courses, it is just about as broad as it is long, but if there is any advantage at all, I think it is on the side of the course which I have suggested.
§ Sir D. HERBERT
I am afraid I can hardly agree with the right hon. Gentleman. The difference is that under my proposal hon. Members would have the opportunity of considering the Clause in a Committee stage and on a Report stage. The right hon. Gentleman knows that, quite apart from the question of getting only one stage instead of two, the methods which are available to hon. Members of discussing and amending, on 2486 the Report stage, a complicated Clause of this kind are very much less than those which they have in Committee. We should not on a Clause of this kind allow ourselves to be deprived of the Committee stage. I am perfectly certain that if we discussed this Clause tonight with all the Amendments which have been put down to it and if we tried to make it anything like a serious Committee stage, we should possibly spend all night in discussing this Clause which would not be a particularly good thing from any point of view. Possibly when we had come to the end of it, we should have done no good whatever if the Government merely used the big stick and employed their majority and refused to accept any Amendments. It would either be that or else we should have amended the Clause in various ways, by consent, but in such a manner that at the end it would probably be almost worse than if it had not been amended at all.
This Clause cannot be amended satisfactorily in that way. This Clause will be no use until it is amended, if not redrafted, round a table by perhaps less than a dozen people. As soon as that has been done, then we can get a Clause which we can pass through the Committee stage in a matter of three or four hours without ill-temper, instead of spending a whole night upon it with the risk of bad temper. At the risk of appearing very persistent, I would ask the right hon. Gentleman to withdraw this Clause, and to bring up another Clause at any stage he likes, but do let us try to get rid of the hopeless and very unpleasant task of having to try to discuss in this Committee a Clause of this kind.
§ Mr. A. M. SAMUEL
This Clause is one of the most difficult in the Bill, and is, I think, about as difficult a Clause, as any of us have ever had to tackle during our Parliamentary experience. We start from this point of view, that if we can help the Chancellor of the Exchequer to stop tax-dodging we are quite willing to do so. We offer no opposition to this Clause as far as it is intended to stop tax-dodging, but at the same time there are many defects in it which we would like to see altered, and I think the right hon. Gentleman himself, when he has considered all the aspects of our case, will agree with our view in that 2487 respect. But we must not make these alterations in a hurry and we require at least the two stages in order to lick the Clause into shape. My own impression is that we should not make a good job of this Clause even if we spent two nights and two days debating it in Committee in its present form.
We do not want this to be a Clause which, for the next five years, will lead to constant litigation. If we are to have a Clause of this kind, let us have it considered at a round-table conference of the leading men in the insurance world who, I am sure, are just as anxious as we are to help the right hon. Gentleman to put an end to tax-dodging, and who would be willing to help him to recast the Clause in such a way as to give effect to what the right hon. Gentleman is desirous of doing in that respect, while at the same time doing no injustice to those who wish to effect insurance policies. This Clause, as it now stands, would operate most unfairly against elderly people, or people of impaired lives, who wish to take up short term policies, and who may desire to borrow money upon them. I urge the Chancellor of the Exchequer to accept our proposal in the spirit in which it is offered. Let him meet us in such a way that it will be possible to get an effective Clause hammered out, without doing hardship to anybody. It is a highly technical subject upon which we should have the opinion of those people who understand infinitely more than we do about the nuances of insurance; and by adopting that course, we may save the people of the country a great deal of trouble and expense in litigation.
§ Mr. P. SNOWDEN
Of course, my main object is to save time. I do not want to have two discussions covering the same ground, one of which would be altogether futile, and if I could be assured that I should be in a position, by the time we reach the end of the new Clauses, to submit Amendments to revise the Clause, that would be satisfactory. I quite realise that it would save time, as compared with the course of spending the whole of the coming night in futile discussion. This discussion has been carried on in such a friendly and agreeable way that I feel reluctant to appear adamant, and I am willing that we should postpone the consideration of this Clause 2488 until the end of the new Clauses. I will do my best in the meantime to advance the negotiations or conversations, so that I shall be able to put the decision before the Committee when we reach die end of the new Clauses. May I add this, that a Committee of the House of Commons is not a suitable body to deal with a complicated and highly technical matter of this kind, and I am sure that the best way to get a good Clause and an acceptable Clause would be to adopt the suggestion, if it were practicable, that has been made to get a small body of men who really understand this question round a table to hammer out the whole matter, because we in this Committee are anxious to devise some practical means by which the abuse we are trying to remedy should be removed. I am sure that my hon. and learned Friend the Attorney-General will be delighted to meet the hon. Member opposite and to go over these points with him. I am sure that in such a conversation as that the services of the hon. Member would be invaluable.
§ Sir A. STEEL-MAITLAND
We acknowledge the spirit in which the Chancellor of the Exchequer has met the representations made to him. We are anxious to have the situation quite clear, and I gather that, if a new Clause is re-drafted or this Clause comes in an amended form, or in whatever form it ultimately reaches us at the end of the new Clauses, we will be free to discuss it quite fully, with our rights unencumbered—
§ Sir A. STEEL-MAITLAND
We only want to make that clear. If the right hon. Gentleman is agreeable to that, it is a wise course, because it is quite clear that in a matter of this kind we cannot originate proposals easily in Committee. The Committee stage is suitable for criticising, but not suitable for originating. It will be better, therefore, if we can deal in Committee with a Clause that has been thought out between the right hon. Gentleman and insurance companies.
§ Sir D. HERBERT
I am very grateful to the Chancellor of the Exchequer for what he has said. So far as the exact form of the Motion is concerned, I will meet his difficulty. The form in which I moved it was "That the consideration of Clause 12 be postponed until after the consideration of new Clauses." If I 2489 were to move merely that consideration be postponed, it would come on at the end of the Bill, and before the new Clauses.
The Question put to the Committee was, "That the consideration of Clause 12 be postponed until after the consideration of new Clauses."
§ Sir D. HERBERT
That is exactly what I stated. What I was saying was that if, with permission, I proposed the Motion in a different form, namely, "That consideration of Clause 12 be postponed," it would come in before the new Clauses, and if the Chancellor wishes that I am ready to do it.