HC Deb 07 December 1950 vol 482 cc655-7

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

Mr. Manningham-Buller

Again I seek information, and I make no apology for asking for it, even though I disagree with the right hon. and learned Gentleman as to the conclusions that any spectator of our proceedings on the last occasion would draw as to who were the friends and who were the enemies of the people whom this Bill is intended to benefit.

As I understand it, this Clause says that contributions to be made under this Bill shall not qualify for Income Tax relief. Could the right hon. and learned Gentleman say exactly how this will operate, bearing in mind, as I understand the Bill, that the person concerned will only receive a lump sum less the contribution in cases where the contribution is payable? In those circumstances, I fail to see how the contribution, which really will never come into his hand, could possibly qualify for relief from Income Tax.

The Attorney-General

This is rather a technical Income Tax point. The object is to ensure that officers who are affected by the Bill do not receive an undeserved Income Tax benefit. The lump sum is not subject to tax, but it might be possible for an officer who had contributed towards his widow's pension by a reduction or a refund of his lump sum to claim some Income Tax relief on the ground that the contribution had been made, in the words of the Income Tax Act of 1918: … under any Act of Parliament liable to the payment of any sum … to secure a deferred annuity to his widow … That would not be right, and that is why this provision is necessary.

Sir Herbert Williams (Croydon, East)

I am not too much impressed by the statement of the Attorney-General. This is taking away something that these people would get if this Clause were not in the Bill. It is designed to deprive people of something which they would get under the normal operation of the law. The Attorney-General defended it on the ground that they receive under another Clause of the Bill a lump sum payment which can be treated as a capital sum, and is therefore free of tax. Hon. Members should read Clause 18, which states: Relief from income tax shall not be allowed to any person under section thirty-two of the Income Tax Act, 1918 (which provides relief for, amongst other things, contributions to secure deferred annuities to widows … The persons concerned will not get this relief under this Bill, but they would be deprived of what other persons normally would get if they were making a certain kind of transaction.

The Attorney-General indicated dissent.

Sir H. Williams

The Attorney-General shakes his head, but I think I am right. If, for example, a man retires from some kind of employment and a condition of his retirement is the payment of a lump sum, that is a capital payment and it is free of tax. A large number of people in a similar position might be concerned with firms' pensions schemes and contributions under the pensions schemes. These contributions are free of tax. Therefore, I am not quite convinced that the Attorney-General is right when he says that my argument is wrong. If he is satisfied that he is right. I hope he will clear my mind.

The Attorney-General

That is more than I can undertake to do. If the hon. Member will look at HANSARD in the morning, I dare say his mind will be clarified, and he will be able to understand that what I have said is correct.

Might I take this opportunity of correcting a statement I made a minute or two ago. The hon. and learned Gentleman the Member for Northants, South (Mr. Manningham-Buller), asked me whether a judge who died in the intervening period would be covered. He would not. That is the result of an Amendment we have already passed, but I will look into the position about that. I did say he would be, and I want to correct it.

Mr. Manningham-Buller

If we are making it retrospective—and quite rightly so—to the date of the presentation of the Bill in the case of retirement, we should also ensure that if death occurs in the intervening period that would be covered. I hope the right hon. and learned Gentleman will be able to do that.

Sir H. Williams

The Attorney-General tells me to read HANSARD tomorrow to understand what he said. He is now correcting something which he has just said. Perhaps he will advise we whether I am to read the authorised version or the revised version, and will the revised version be authorised?

Question put, and agreed to.

Clause ordered to stand part of the Bill.

Clauses 19 to 23 ordered to stand part of the Bill.