SURTAX ON SETTLED INCOME (Hansard, 17 April 1946)

§ Mr. York (Ripon)
I think I am right in saying that this is a Resolution which will, in future, prohibit the making of seven-year covenants to charitable and other beneficiaries in order to avoid paying Surtax. It is a very great pity that this should have been brought in, for a variety of reasons. We are not given any indication of the size of this problem. For example, if the Treasury is losing £1 million a year it would be something to worry about, but we are not told how much money is being lost. There are a great number of very worthy institutions and causes which are benefiting to a very large extent by the use of the seven-year covenant. It is not always realised that a large number of these seven-year covenants are paid by people who do not pay the highest rate of Surtax. Even the learned Solicitor-General, on his £5,000 a year, may be giving some of these covenants, and he does not pay a high rate of Surtax, or at any rate not a very high rate. That is a general question.
I now want to ask a question on a particular point. It may be rather too technical to he answered now, but I should like attention to be given to it in the future. There are many people who give 2804 pensions to their old servants on a seven-year covenant. That applies particularly to certain landed estates, where the pension can be appreciably higher by reason of the fact that it is a seven-year covenant, and therefore the donor of the covenant does not have to pay Income Tax or Surtax on the amount. It appears to me from this Resolution that the words "neither in the service of the settlor "may cover the case of a pensioner who was in the service of the settlor. As this is a most useful method of giving pensions to people who have served well in the past, I feel it would be ungracious and unkind of the Government if they were to take away this right.

§ Major Sir Jocelyn Lucas (Portsmouth, South)
Is not it a fact that a very large number of these covenants have been made in response to advertisements by the Red Cross? Had this money not been given to the Red Cross the money would have had to be found by the Government, who stood behind the Red Cross in their war work.

§ Mr. Attewell
The Government pay it, and others get the honour.

Mr. Callaģhan
It was given by the Government in any case.

§ Sir J. Lucas
No, it was not given by the Government. The Red Cross advertised that the money was doubled this way.

§ Mr. Attewell
The Government gave 19s. 6d. out of every £1.

Mr. Callaģhan
I disagree completely with the hon. Member for Ripon (Mr. York) when he says it is a very great pity this Resolution should have been brought in. In my view it should have been brought in years ago, because, as the Chancellor of the Exchequer said, this is a ramp, which Surtax payers have been using for years in order to canalise their Surtax liability into channels they desire and not into the revenue channels. There are two types, as I see it. First, there is the seven-year covenant, under which the settlor undertakes to pay a certain amount to a hospital in deduction of tax. The result is that the State pays to that hospital that amount in Income Tax and Surtax which the payer is entitled to de- 2805 duct, from his total tax liability. The second type is that to which the hon. Member for Ripon referred, the people, particularly those with landed estates, who give pensions to their old servants Why should the State pay these pensions? Why should these landlords be public benefactors at the public expense? That is the issue here.

§ Mr. York
Will the hon. Gentleman allow me? If he uses that argument, then the pensioner of any firm is a pensioner of the State, because if a firm does pay pensions to its ex-employees, those pensions are allowed against the firm's Income Tax.

Mr. Callaģhan
May I take the House for a moment through some of the processes by which this racket has been operated? The Duke of Westminster in 1932 or 1933—

§ Captain Crookshank (Gainsborough)
On a point of Order, Sir. Is it in Order for the hon. Gentleman to call first a ramp and then a racket a practice which up to this moment has been completely within the law? The hon. Gentleman may not approve of the law, but up to this moment it has been the law. I submit that it is out of Order for words of that kind to be used with regard to perfectly legal operations. I ask you, Sir, to consider whether he should not withdraw the words.

§ Mr. Speaker
I think we are really allowed to use fairly strong language about what we do not approve. It may have been legal but, after all, one can have a legal ramp.

§ Captain Crookshank
Does that apply also to the word "racket "? That was the last word the hon. Member used.

§ Mr. Speaker
I think the words "ramp" and "racket" have similar meanings, and I think therefore, the word "racket" can be included.

Mr. Callaģhan
I have no doubt that the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) will not like to hear the actions of the Duke of Westminster quoted as a ramp or a racket, but I will not embarrass you, Sir, by subjecting you to further points of Order, and I will avoid using these descriptive nouns.

§ Earl Winterton (Horsham)
On a point of Order. Is it in Order for the hon. Gentleman to refer in the manner he has to a Member of another place?

§ Mr. Speaker
I am not quite sure, but I think the hon. Member was referring to a Member of another place in his individual capacity as a citizen. I think that we are entitled to cite the case of a Member of another place in his individual capacity as a citizen.

Sir W. Darlinģ
Is it public knowledge or secret information the hon. Member for South Cardiff (Mr. Callaghan) has secured in another capacity?

Mr. Callaģhan
If hon. Gentlemen opposite will be less anxious to protect these people and prefer to hear the case, I think we shall find I am not out of Order. This gentleman—there is no need for me to use many adjectives, because the facts stand out—in 1932 or 1933 made a number of deeds under the Act as it stands.

Sir W. Darlinģ
Entirely legally.

Mr. Callaģhan
The purpose of those deeds was to ensure that his estate servants should he paid moneys out of his Surtax and Income Tax in lieu of—

§ Captain Crookshank
May I raise another point of Order with you, Sir? On what basis can the hon. Gentleman be giving this House information about the private tax arrangements of an individual member of the public, let alone a Member of another place? But whoever he is, what authority has the hon. Gentleman to say whether this gentleman entered into deeds, for whatever purpose?

§ Mr. Speaker
I have no knowledge of the individual case to which the hon. Gentleman is referring, but the hon. Gentleman refers to it on his own responsibility.

§ Captain Crookshank
Further to that point of Order. The hon. Gentleman gave the name. Why is he able to give this information?

§ Mr. Speaker
I say that I have no knowledge of the case to which the hon. Gentleman refers.

Sir W. Darlinģ
Is it in Order, Sir, for an hon. Member who, I understand from an official book, was formerly a member 2807 of the Inland Revenue Department, to disclose to this House such information as may have come to him in his official capacity?

§ Mr. Speaker
I have no knowledge of what the hon. Member was before he entered this House. The hon. Member may refer to a book, but I cannot read all of them. The hon. Gentleman makes his statement on his own responsibility.

Mr. Douģlas (Battersea, North)
On a point of Order. Is it in Order for an hon. Member to insinuate that a Member of this House is disclosing information he obtained in his official capacity, confidentially, as a civil servant?

Sir W. Darlinģ
How does he know?

§ Mr. Speaker
I am not quite sure that an insinuation was made. I think it was a question the hon. Gentleman asked.

§ Mr. Stanley
Surely, it would be in Order if, instead of the term he used, the hon. Gentleman just described it as a ramp.

§ Mr. Speaker
When we come to the word "ramp" I have a little doubt, because I heard the Leader of the Opposition earlier today say that other proposals were a ramp.

§ Mr. Stanley
Is the answer to my point of Order that I am entitled to describe the language of the hon. Member as a ramp?

Mr. Callaģhan
Perhaps we have now cleared up all the points of Order, and I may again be allowed to enter the Debate. I will satisfy the curiosity of hon. Members opposite as to how this information came to me. The plain truth is—and if hon. Members had allowed me to say this ten minutes ago we could have saved a considerable amount of time—that this legal case was taken to the House of Lords. It was heard by the Special Commissioners, and it went from them to the King's Bench Division. The King's Bench Division found in favour of the Revenue Department, at which time the score was two nil for the Revenue Department. It then went to the Court of Appeal, where it went against the Revenue, and it became two to one, and, finally, it went to the House of Lords, where the score became two all, and if hon. Members care to go to the Library 2808 they will be able to read the full details. I say that this Resolution is long overdue, and that it should have been introduced by a Conservative Government years ago if they had had any regard for the public interest and the public purse. This has become a method by which, as Lord Atkin said in giving his judgment on this case, Surtax payers have been able to rid themselves of a considerable amount of their Surtax liability, at the public expense. That is why this Resolution is necessary.
Let me refer once again to the Duke of Westminster. He made a series of deeds for his employees whose services ranged in length from four years to 40 years, under which he undertook to pay them, by means of seven years covenants, certain sums of money. He wanted these sums to be regarded as in lieu of wages, but, under the Truck Act, he was not able to say that in so many words, and so instead he wrote to all of his estate servants, Mr. Allman, the gardener, and others, and said in effect, "I realise you have a perfect right to claim your wages, but I hope you will regard this deed as being in satisfaction of part of your wages." He did that not only for his estate servants, but for Mr. Blow, a Fellow of the Royal Institute of British Architects, to whom he was paying £2,000 a year for looking after his affairs. As Lord Atkin has said, it was trying to rid the Duke of Surtax liability, and the payment was costing him not £2,000 a year, but maybe £200 a year, and the State was paying the balance. Is that the sort of thing which hon. Members opposite wish to defend? Call it a legal ramp or what you like, it is certainly a racket.

§ Earl Winterton
On a point of Order, Mr. Speaker. Has it not been held again and again by your predecessors, and is it not laid down in Erskine May, that a Member of this House may not make a reflection on the personal honour of a Member of another place?

§ Mr. Speaker
This is a case which, apparently, has been to the House of Lords as a law case. The hon. Member is merely quoting evidence given before the public, which has also been quoted in the Press. Therefore, it cannot be a reflection on the Member of another place, but is a public matter.

§ Earl Winterton
I think that the hon. Gentleman is quite entitled to refer to a case. Possibly, Mr. Speaker, your atten- 2809 tion was for a moment diverted when the hon. Gentleman said it was a racket. I ask you definitely whether it is in Order to describe the action of a Member of another place as "a racket".

§ Mr. Speaker
I do not know if the hon. Gentleman described the action of a Member of another place as a racket. I thought that he was quoting a legal case and that he quoted a judgment from which he regarded the whole system as a racket. If that is so it would be open to any hon. Member in this House to refer to it. Surely it would be perfectly in Order to state his opinion of the existing law.

§ Earl Winterton
I understand you to say, Mr. Speaker, that the judge accepted this as a racket but that was not what the hon. Gentleman said at all. In the hearing of everyone on this side of the House the hon. Gentleman said that it was a racket, referring to the action of the Duke of Westminster, and I ask you whether that is in Order.

§ Mr. Speaker
He described the whole system as a racket and that is not a reflection upon a Member of another place. The Duke of Westminster happened to be the individual brought up in the case. but it might have been anyone else.

Mr. Callaģhan
I will leave the matter to speak for itself Here was a taxpayer who was paying an architect £2,000 a year for his services, and he drew up a deed which said that Mr. Blow, the architect, was being paid "in consideration of past services and that for motives of concern for his interest" the taxpayer is desirous to secure for him £2,000 a year which the State mostly pays. Hon. Members opposite can describe that in any way they like. I know what I call it.

§ Mr. Keeling
I am not concerned to defend settlements on servants. I want to say something about the effect of this Resolution on charities. I have yet to hear it suggested that these settlements on charities are a racket. Either they are desirable or they are not desirable. If they are desirable, how can they be described as a racket? If they are not desirable, how was it that the Treasury—the Government—with their eyes perfectly open—encouraged these seven year settlements on charities? This Resolution 2810 is going to have a very serious effect on charities, and it will undoubtedly act as a deterrent to the benevolent public from making these settlements. I want to know whether the Chancellor of the Exchequer really persists in his intention to apply this new arrangement to charities. I would draw his attention to the last three lines of the Resolution, which exempts settlements which are made: for the benefit of an individual named in the settlement, and the individual to whom it is payable or for whose benefit it is applicable is neither in the service of the settlor nor accustomed to. act as the settlor's solicitor or agent. I want to know why charities should not be added to that exemption. Today, under the law, which under those last three lines is not going to be interfered with, you can make a settlement on a spinster aunt for seven years, and she will get the benefit, and you will get the benefit of a reduction in Surtax; but if you make it on a home for spinster aunts in general you are going to be penalised under this provision. What could be more absurd than that? I ask the Chancellor of the Exchequer to consider whether there can be any justification at all for penalising charities in the way in which he proposes to do under this Resolution.

§ Mr. Pritt
I would like to say a word or two largely on the question of this distribution to charities. The plain truth is surely this: If you give fro a year to a charity, you deprive yourself of fro and give the charity £10. So long as charities exist, that is a very reasonable and ordinary thing to do, if your income permits you to do it. I suppose that the provision was originally meant to provide a little relief from taxed income, but someone hit on the idea that if you wrapped it up in a covenant, you gave £10 and the Government, in fact, gave £3, £6 or £7 to a charity. Thus by giving money to a charity, a donor compels the Government to go short of money. The money goes to the charity whether it is a charity of which the general public would approve or not.
9.30 p.m.
Speaking for myself, I do not suppose I am any more fasticams than other people who occasionally have fro to spare. I was giving a sum of money to a benevolent association of my own profession a few years ago, and I was asked by a very 2811 respectable, elderly member of my profession, who is in charge of this charity, whether I would enter into one of these covenants. I do not suppose I am any more morally scrupulous than anyone else, but having looked at it I came to the conclusion it was a racket, and I said I would not do it. I expected to be snubbed for being too pious, instead of which I got a letter from the old gentleman—who I am,tire was a member of the Party opposite—in which he agreed that it was merely a racket. That is how the thing struck me. if anyone wants to give to a charity, let him give it out of his own pocket.

§ Mr. Walter Fletcher
Hon. Members on the other side of the House have referred to this scheme as a racket. I think it is a misnomer. It is a super-racket. What they object to is when it comes under the Super Tax rate, but they are perfectly well prepared to swallow it when it comes under the Income Tax rate. I think we should ask the Chancellor to clear our consciences, and our pockets, and do away with this thing altogether on Income Tax as well as Surtax. Hon. Members opposite seem to have an elastic kind of conscience which allows them to accept it as long as only Income Tax is concerned but not if it is Surtax.

Major Leģģe-Bourke (Isle of Ely)
There are two points which arise out of what has been said by the hon. and learned Member for North Hammersmith (Mr. Pritt). I think they are important and should be borne in mind on this matter. One of the reasons why these covenants were asked for was not because of tax evasion, but because so many charities had found out how difficult it was to budget year by year if they did not know what was coming in. They have got some assurance of what their income will be through this scheme.

§ Mr. Pritt
If that is so, why does every charity which asks people to covenant for seven years, point out that it would help in tax payments?

Major Leģģe-Bourke
I think I made it clear that the main point from the charities' aspect, was that they should have a consistent income coming in, and by the covenant they know they are going to get a certain amount. I believe that there are charities which do that. I am not going to defend anything said by 2812 the hon. Member for South Cardiff (Mr. Callaghan), but I should like to support my hon. Friend the Member for Twickenham (Mr. Keeling) in what he said. I believe that the charities were helped by this, and I hope that reconsideration will be given to the way in which the Resolution is drafted.

§ The Solicitor-General
We have had a long Debate on this Resolution, and a certain amount of heat has been engendered, which I do not think would have been engendered if we had looked at the thing fairly and clearly, and had seen what does take place. No one has got anything against charities and everyone hopes that deserving charities will continue to flourish. But look at the figures and see what happens under these seven year covenants. Suppose a person has an income of over £20,000 a year, taxable at the appropriate rate of Income Tax and Surtax. If that person contributes £1,000 a year to a charity under the terms of a seven year covenant, the result is that he pays out of his own pocket out of that £1000 no more than £25 and the rest of the £1,000 is paid by the Treasury. Those figures are arithmetically correct. That is the position. Whether one calls it a racket, or by any other epithet, it cannot logically or rationally be justified.

§ Mr. Keeling
rose—

§ The Solicitor-General
Perhaps it would be better if the hon. Gentleman would let me develop my argument. Nobody could logically justify that position, however much one wants to see deserving charities flourish and have plenty of funds at their disposal. My hon. Friend the Member for South Cardiff (Mr. Callaghan) quoted a case which was heard in the House of of Lords. His argument did not seem to be understood by Members opposite. What he did say was not that it was a racket, but that it was a legal racket. That was not criticism against the Noble Lord concerned in the case, so much as against the system of law which made that possible. That system has to be altered, and that is what this Resolution sets out to do.
The hon. Member for Ripon (Mr. York) started by saying, "Does it really matter and has it got to dimensions which make it worthy of being embodied in a Resolution of this sort?" I understood 2813 the hon. Member to say that if the Treasury lost £1,000,000 a year as the result of not being paid Surtax under the terms of seven-year covenants, he would be disposed to support the Resolution. Well, I can give him the figure. The amount which is lost by the Treasury every year, as the result of these seven year covenants, is £1,250,000—

Sir W. Darlinģ
rose—

§ The Solicitor-General
The Resolution provides that payment made under seven-year covenants shall not qualify for deductions for Surtax purposes. That is all we are seeking to do.

§ Mr. Nicholson
rose—

§ The Solicitor-General
I have said perfectly clearly, and I repeat, that the loss to the Treasury, as a result of the seven-year covenants, is now in the order of £1,250,000 a year.

§ Mr. Stanley
rose—

§ The Solicitor-General
We are not in any way interfering with charities. They are entitled to be relieved of the liability to pay Income Tax on contributions made to them. That position is not affected. All we are seeking to do by legislation, for which this Resolution paves the way, is to provide that if a person wishes to make contributions to charity, that charity may claim repayment of tax, but the person who makes the contribution, if he makes it under the terms of a seven-year covenant, shall not be entitled to deduct the amount of his contribution for the purpose of his Surtax assessment. The figure I have given can be verified by a simple mathematical calculation by applying the ordinary tax and Surtax rates appropriate to incomes over £20,000 a year. The conclusion is inescapable that out of every £1000 paid to charity, the taxpayer pays no more than £25. It is a perfectly indefensible position. It is ridiculous that a person who gains kudos by being a contributor to the extent of £1,000 per annum to charity should pay only £25.

Sir W. Darlinģ
How many of the £20,000 class of people is the hon. and learned Gentleman referring to?

§ The Solicitor-General
The number of deeds is, I think, 250,000

Sir W. Darlinģ
Will the hon. and learned Gentleman allow me—

§ The Solicitor-General
What I have said is arithmetically correct. It is undoubtedly fantastic that the Treasury should be mulcted, year after year, of a sum in excess of £1 million in order that people who have very heavy Surtax incomes should gain kudos by making payments to charities which, in fact, they never make, and which are paid out of the pockets of the general body of taxpayers.

§ Mr. Stanley
May I ask the Chancellor of the Exchequer a question, since the Solicitor-General refused to give an answer? The Solicitor-General mentioned the sum of £1,250,000 lost by the Treasury every year. All I wanted to ask, although the Solicitor-General was not prepared to give me an opportunity to do so, was whether that is the sum lost by the Income Tax and Surtax portion of these seven year grants, or the Surtax portion alone?

§ Mr. Dalton
The figure quoted by my hon. and learned Friend is the amount which we hope to recover by this very moderate Amendment of the law. Let me hasten to add that some people think this proposal is too moderate and that these contributions should be disallowed not only for Surtax but for Income Tax also; and for that there is some case, but being anxious in these matters not to press too hard, I have limited my proposal at this stage to disallowing—

§ Earl Winterton
It is a racket.

§ Mr. Dalton
So it is. I said in my Budget speech that it has become a bit of a ramp.

§ Earl Winterton
Since the right hon. Gentleman referred to me, I said it was—to use a term which has been held to be in Order—a racket on the part of the Government to avoid placing this burden on the backs of their own supporters.

§ Mr. Dalton
Whether it is a ramp or a racket, we are going to stop it. We begin by stopping it in respect of the Surtax. I cannot believe that seriously any hon. or right hon. Gentleman opposite can defend a state of affairs which has been explained so lucidly by my hon. and learned Friend the Solicitor-General. If people are making contributions to charity, we are very happy that they should continue to do so, but they should 2815 not, in effect, claim to make contributions to charity when 19s. 6d. out of every £ they purport to pay is found by the Treasury. The short answer to the right hon. Gentleman the Member for West Bristol (Mr. Stanley) is that the figure quoted by my hon. and learned Friend is the amount lost in respect of the Surtax allowance alone. It is that which we seek by this Amendment to recover.

§ Sir Hugh Lucas-Tooth (Hendon, South)
If this system is a ramp in the case of charities, why is it not also a ramp in the excepted cases mentioned in the last three lines of the Resolution?

§ The Solicitor-General
I speak again by leave of the House. It was thought that, in the case of relatives and people of that sort, it was not unreasonable that provision should be made, and the right to claim deduction against Surtax assessments nevertheless retained. That is why the Resolution makes an exception in the case where the settlor divests himself of the capital comprised by the settlement, and also where he makes a settlement in favour of a particular individual for his own use, which is designed to provide for the case of relatives and similar dependants. There is the further proviso in the Resolution that any such beneficiary is not to be a person who is in the employment of the settlor, or a person who is his solicitor or agent. The object of that proviso is to prevent the operation of the law as laid down in the case about the Duke of Westminster, to which reference has been made in this Debate. It is simply a concession in the case of bona fide dispositions in order to support relatives and other similarly dependent persons.

§ Mr. Assheton
Considerable heat has been engendered in the course of this not very lengthy Debate, and a certain amount of prejudice has undoubtedly been introduced, particularly by the speech of the hon. Member for South Cardiff (Mr. Callaghan).

Mr. Callaģhan
I wanted it to be.

§ Mr. Assheton
The hon. Member wanted to introduce it and he was quite successful. He takes a great interest in these affairs. He was for some years with the Board of Inland Revenue and no doubt watches closely the cases taken to the House of Lords.

Mr. Callaģhan
And, may I say, caused a great deal of indignation among the staff of the Board of Inland Revenue.

§ Mr. Assheton
I was saying that the hon. Member obviously took a great deal of interest in these cases and watched those which were taken to the House of Lords. He has taken advantage of his knowledge and experience to introduce into his speech a considerable amount of prejudice. I was making a statement which was perfectly true and which the hon. Member has accepted.
I should like to make one point in relation to the question raised by my hon. Friend the hon. Member for Ripon (Mr. York), who wanted to secure the position of pensioned employees in the case of a landed estate. I hope that the Chancellor will agree with me that such pensioned employees are in fact protected under the last two lines of this Resolution as drafted because once they have retired they are no longer in the service of the settlor. The learned Solicitor-General agrees that that is the position—and it is quite right that it should be so—and I therefore take exception to what the hon. Member for South Cardiff said. In the case of an ordinary landed estate the method of accountancy for calculating Income Tax is different from that adopted by a company. In the case of a limited liability company the pensions of the servants are a charge against the profits of the company. In the case of the landed estate there may not be sufficient net income from the estate to pay the pensions of the servants who have retired from working on that estate, and it is therefore obviously right that the Chancellor should make this provision because it merely puts the proprietor of the landed estate in exactly the same position as the limited liability company. In view of this I think that the hon. Member for South Cardiff did less than justice to the case made by my hon. Friend the Member for Ripon. We on this side of the House do not intend to vote against this Resolution, but we shall want to scrutinise the Clauses very carefully when we see them in the Finance Bill.

Sir W. Darlinģ
I think this is a very important matter and that this Debate has been unduly truncated because I have not heard anything said from either side 2817 of the House on behalf of the Surtax payers. It may be that the experience of being a Surtax payer is a rare one—at least on the other side of the House. It is difficult for hon and right hon. Members to have a sympathetic or understanding approach to this matter. Taxation without representation was looked upon as an evil in the days of Edmund Burke; I think taxation without representation on the severe scale upon which it falls on Surtax payers is undoubtedly evil, and hon. and right hon. Members opposite do not know from their own experience—

§ Mr. John Paton
On a point of Order. Is this argument relevant to the Motion we are discussing?

§ Mr. Speaker
No doubt the hon. Member noticed that I was leaning rather forward in my chair. I was wondering whether the hon. Member for South Edinburgh (Sir W. Darling) was about to develop a general argument on Surtax, and if so I should have stopped him.

Sir W. Darlinģ
There is no need in this case to develop a general argument, but I thought that, in view of the fact that a restriction was being imposed upon the free rights hitherto enjoyed by Surtax payers, and in view of what hon Members and, indeed, right hon. Members opposite have said about a racket and a ramp, it would be permissible for me to say something on the subject.

§ Mr. Speaker
That would be going outside the scope of the discussion.

Sir W. Darlinģ
If that would be beyond the scope which the Rules of the House permit, I will, if you will allow me, follow the assured and well-trodden track of the Duke of Westminster. Apparently that path, which I myself thought a little doubtful, is one which I may pursue with the encouragement and enlightenment not only of the hon. Member for South Cardiff (Mr. Callaghan) but of the Chancellor of the Exchequer himself. In that connection the House is greatly enlightened by the specialist knowledge of hon. and right hon. Members who have had the advantage of being members of the staff of the Inland Revenue. It is the tradition, the proud tradition, of this House that our varied experiences, in obscure as well as in notable circumstances, has 2818 brought rich contributions to our Debates. Therefore I welcome the intervention of one who has been a member of the staff of the Inland Revenue. I listened to the hon. Member for South Cardiff, but I was surprised that after so concentrated, and I have no doubt constant and highly intelligent, perusal of difficult documents, he was not able to make a better speech.
As to his remarks about such covenants as we are discussing, it is true to say, as I can, from my own knowledge and not without some experience, that those covenants have, almost without exception—in fact, I cannot think of any exception —been paid partly by the State and partly by the covenanters, and they have always been benevolent in their intention. Before the Government dry up the springs of charity, let them bear in mind what has happened. Were those gifts immoral in their direction? Were they devoted to some vile purpose or contrary to the best interests of the State? Did they do any evil in any direction at any time? Were they covenants that any honest citizen could have said were undesirable? If the answer to those questions is "No," then His Majesty's Government are taking a step which will stop the outpourings of human charity. They will prevent some individual who has rightly acquired, by his own legal activities, the purchase and the possession of property, from disposing of it in his own way. [HON. MEMBERS: "No.']
There is a phrase saying that a man can do what he likes with his own. The new attack upon property will recoil upon the heads of those who make it. If this Resolution is approved, many good causes will suffer and many great public works will be weakened.

Mr. Callaģhan
Does the hon. Member mean that the springs of charity will dry up if the Surtax payer cannot contribute to charities at the public expense?

Sir W. Darlinģ
I only know what has inspired the springs of charity up to now, the generous heart and open hand of good people. We are told by His Majesty's Government that they are going to substitute for all these generous outpourings of willing hands some niggardly proposal of a highly artificial and compli 2819 cated piece of machinery, known as the National Health Insurance Scheme. if I were a sick and suffering person, and I had to choose between the monuments of personal charity I see around me and the airy prospects opening out in the future and which are going to come from the Government Front Bench, I would prefer rather to rely upon what is here than upon expectations of something which might not be realised. It will be apparent in this House that His Majesty's Government, while seizing revenue, as we learned from an earlier Resolution, by putting a£1 duty on the right to sell liquor in aeroplanes, are drying up£I,250,000 of generous donations given by generous people. That will be the position—although with a lavish hand they encourage the consumption of drink on aeroplanes, with a niggardly hand they withdraw what has been the established practice of many generous citizens for generations.