Section eight of the Finance (No. 2) Act, 1947, shall have effect with the addition of the following subsection:—
(8) Notwithstanding anything in the previous provisions of this section interest in respect of any tax chargeable in respect of any profits or income which have arisen from sources outside the United Kingdom in the currency of another country shall not begin to run from any date before three months after the said profits or income become freely available to the person on whom the tax is charged in respect of that income for conversion into currency of the United Kingdom in cases where such conversion is rendered impossible by the effect of control exercised by or on behalf of the government of the country, where the income arises."—[Mr. Maudling.]
§ Brought up, and read the First time.
§ 7.15 p.m.
§ Mr. Maudling (Barnet)
I beg to move, "That the Clause be read a Second time."
Compared with the issues which the Committee have been considering, this is a relatively small point, and the amount of money involved to the Exchequer also is small, but I hope that this new Clause will be listened to with sympathy on the other side of the Committee, because the grounds on which it is based are grounds of justice. I do not know whether it is social justice or distributive justice, but it seems to me to be justice.
The point at issue is this: Suppose a company is operating overseas and receives certain money in the currency of that country, and that currency is blocked by the operation of the Government of that country. A company resident in London earns a sum of money in Buenos Aires, the payment in pesos are blocked in Buenos Aires and the proceeds cannot be transferred to this country. Nevertheless, the sum represented by these pesos appears in the Income Tax assessment of the company concerned. As soon as the assesment of the company is settled or determined on appeal, the company becomes liable to pay Income Tax in sterling on the equivalent of the pesos.
The company becomes liable to pay tax in sterling, and if the tax remains unpaid, the company becomes also liable to pay interest on the outstanding amount. That, 1554 it seems to me, is not a fair situation from the taxpayer's point of view. The company concerned, although it has earned foreign exchange, cannot get the benefit of it because it is unable to transmit the money to this country. The Revenue authorities, I understand, will not be prepared to accept payment in foreign exchange. They require payment in sterling. If the company cannot get the sterling out of which to pay the Income Tax assessment, it seems to me that in those circumstances it is quite wrong that the company should become liable to pay interest.
The purpose of this new Clause is to provide that until the foreign exchange concerned is unfrozen and the proceeds are transmitted to this country, the company earning the money should not be liable to pay interest on the outstanding assessment. It may be argued that although the money cannot be transmitted, the company possessing it is earning interest on the money in Buenos Aires. I think that the answer is that if that interest has accumulated and is finally transmitted to this country it will have to bear tax whereas the interest paid by the company on the outstanding assessment cannot be charged against tax. I think that in the present circumstances companies are being asked to pay Income Tax on sums which they have earned abroad, but which they cannot enjoy in this country.
I hope that the Solicitor-General will listen with sympathy to this argument, because on a similar point the other evening in connection with a Clause dealing with the recovery of German enemy debts, I put it to him that it was wrong to take the recovery into consideration until the person making the recovery was able to enjoy the proceeds. I think that he concurred in that argument. This is precisely the same argument, that until the individual obtains in sterling the foreign exchange he has earned, he should not be liable to pay interest on tax assessment overdue.
§ Lieut.-Commander Gurney Braithwaite (Bristol, North-West)
The spectacle on the Treasury Bench of the right hon. and learned Solicitor-General leads us to hope 1555 that this new Clause may find favour with His Majesty's Government. It has been our experience so far, in previous stages of the Bill, that when the right hon. and learned Gentleman is in charge an amenable atmosphere immediately prevails, and he generally meets our modest requests. Quite apart from the presence of the Law Officer who enjoys this reputation, the case in equity is so strong that no one can for a moment imagine the Government resisting it.
My hon. Friend the Member for Barnet (Mr. Maudling) has laid it before the Committee in the most lucid manner, and I am certain the Solicitor-General will realise at once that this new Clause, differing as it does from the wide issues cm the previous new Clause which we have discussed for some three hours, merely asks for a modest adjustment. This is not a case of the Government failing to collect their Revenue. All that the new Clause seeks to do is to ask for postponement of such payment until the money is available here in this country. To do the opposite, and to charge these arrears of Income Tax in circumstances where the taxpayer is unable to provide the money because it has been blocked by the action of another Government, seems to be comparable only to starting a heavy cart up a steep hill, putting on all the brakes and then flogging the unfortunate horse for his failure to pull the load to the top.
It is quite true that there is an unhappy precedent for this sort of thing, but it is of a rather different character, namely, that when the Special Contribution was levied in the Finance Act of two years ago, there was an interest charge made on payments in arrears before assessment had been even computed or agreed upon. I hope that the Solicitor-General is not going to quote so undesirable a precedent. This is an entirely different situation. This is a case where the money is kept abroad. I cannot conceive that the Government will engage in such an act of fiscal sadism as to charge taxation in such circumstances. I shall not stand between Members and the Solicitor-General, who I know is anxious to rise to his feet and accept this Clause.
§ The Solicitor-General (Sir Frank Soskice)
The Clause goes a great deal too far, but may I say at once that I 1556 think it possible to go some distance which I hope will be satisfactory to the hon. Member for Barnet (Mr. Maudling), in meeting his wishes? Stated simply and without qualification, there seems to be a certain amount of justice in the proposal put forward, but the difficulty is that there is a wide variety of cases. We may have a trader or individual who has a small foreign income that is frozen in the country in which it arises, and a large income in this country. There can be no reasonable grounds in his case for withholding payment, when it can be made from his income here, in respect of his assets in another country.
Foreign exchange restrictions differ in various countries—some are looser and some are stricter. Many companies trading in foreign countries for their own purposes leave a good deal of their income there to carry on their trade in those countries. It would give a good deal of scope for evasion if there were not some inducement for companies to try and realise their assets and get them here. It might be very easy for them not to press an application, or in some other way to avoid getting their income here on the pretext that it is frozen, whereas in point of fact the exchange system would permit an application under given circumstances.
The hon. Member also pointed to the fact that we might have a company here which, in spite of its frozen income abroad, invests that income abroad and earns interest on it. It is perfectly true that they have to pay English Income Tax and Profits Tax. He might also have said that they would have to pay the foreign income tax and profits tax, but under our new unilateral system there would, broadly speaking, be a charge of only one lot of tax upon it. In principle, this can be said against the Clause, that there are many other reasons which might make it difficult for an individual to pay tax apart from the fact that his income is frozen. There are many other considerations that can be envisaged to excuse payment.
As Members know, as my right hon. and learned Friend so stated in answer to a Question put to him, when the situation arises in which a trader has income that is frozen abroad, the practice of the Revenue authorities is not to call for payment where it would involve 1557 serious hardship. Where the taxpayer has a substantial income in this country from which he can pay the Revenue authorities, they quite rightly require payment to be made. As the law stands, in cases in which they agree not to press for payment, the 1947 Act imposes an interest charge and makes it obligatory on the Revenue authorities to charge interest. It seems right, therefore, that in those cases where they think it is not appropriate to press for payment they should not also be obliged to impose an interest charge.
The proposal I have to make is that where the Revenue authorities, owing to the existence of some hardship, do not require payment of tax in accordance with their practice—that is to say, they hold over payment—they should also not be obliged to impose an interest charge on the unpaid tax. If the hon. Member agrees to withdraw the Clause, I propose to put down a suitable Amendment between now and Report stage in those terms.
My proposal is that in a case where, owing to hardship and in accordance with the practice of the Revenue authorities, they do not require immediate payment of tax, and where they are bound by statute to impose an interest charge, they should not be bound by statute to impose that charge, and therefore the payment which is held over, and for so long as it is held over, will not carry an interest charge. I think that meets the justice of the case, and I ask the hon. Member to consider whether he ought not to withdraw his Clause.
§ Mr. Manningham-Buller (Northants, South)
As usual, the Solicitor-General has endeavoured to be conciliatory, but on this occasion he has been far less forthcoming than on previous occasions in the course of our discussions. There are many precedents for the acceptance of Amendments and Clauses from this side without substantial alterations. The Solicitor-General is basing his opposition to this Clause, which has been moved in such a reasonable and clear speech by my hon. Friend the Member for Barnet (Mr. Maudling), upon four grounds which do not stand close examination. I hope that on further consideration he will say he will have the matter reconsidered.
We welcome, of course, the slight concession the Solicitor-General has given us. 1558 Obviously, it is inequitable that, where the Revenue authorities regard the payment of tax due as involving serious hardship and so postpone payment, interest on that tax should automatically accrue. Apart from anything else, whether the Clause is withdrawn or not, now that this point has been drawn to the attention of the Solicitor-General, I should have thought he would have said, without making any bargain about it, that the Government will put this matter right and he will take powers to relieve from interest these payments where the Revenue authorities consider there is hardship.
The last ground that he advanced was that if this Clause were passed there would be no inducement to companies who earn income overseas to bring their money back here. That is not doing justice to this Clause, because before any company could take advantage of it they would have to establish affirmatively and, in my view, conclusively, that they tried to bring the money back and that they had been prevented by reason of the exchange restrictions imposed by a foreign government. I cannot feel that so long as those two conditions are there, there is any possibility of evasion of tax by reason of a company with foreign income not making the effort to bring it back here. If that effort were not made, relief from Income Tax liability would not arise. I suggest therefore, that the right hon. and learned Gentleman's argument has no force in it.
Mr. Donovan (Leicester, North-East)
This Clause would need redrafting if the onus were put upon the taxpayer to prove the relevant facts.
§ Mr. Manningham-Buller
I should have thought from the Clause that the onus would have laid upon those seeking to take advantage of it—the company in question—but if there be any doubt about it, that is a matter of redrafting which can easily be corrected. I am more concerned in trying to get to the principle of this matter, and I am seeking to answer the argument of the right right hon. and learned Gentleman that this could not be accepted in principle because there would be no inducement to people overseas to bring their income back. In answer to that, I am saying 1559 that I should have thought that, provided the relief from tax only arises when it is established that this money cannot be brought back here, there would be no inducement to the companies not to get their money back. I hope I have made the point clear to the right hon. and learned Gentleman, because I do not want to take up any more time than I need do on this Clause.
Another argument put forward was that this money, if left overseas, might earn interest. It probably would. It might be invested, but there again any interest that the money earned would in itself surely be liable to tax in this country, if the original capital represented money that was due for taxation in this country. I should have thought that that was not a very valid reason for rejecting the Clause, which deals, subject to adequate safeguards, with a matter of principle.
I have dealt with all the arguments which the Solicitor-General advanced except with regard to the first—that it was not right to seek to relieve a company, which earns the greater part of its income in this country, from taxation liability in respect of certain income earned overseas which is blocked. Why should the Inland Revenue be left to judge what, in their opinion, is a case involving serious hardship? Would it not be better in Statute Law—if possible to lay down clearly the position? After all, the principle which the right hon. and learned Gentleman is seeking to retain might mean that a company, in the course of time, would become denuded of all its assets in this country through payment of tax, while holding large sums in blocked capital overseas.
The existing practice of recognising hardship recognises the inequality of the present principles. While welcoming the concession that the right hon. and learned Gentleman has indicated that he is prepared to give, and asserting that that concession should not be made conditional in any shape or form because it is obviously right that it should be given, I ask the Solicitor-General to give further consideration to this matter, because if he does not I doubt whether my hon. Friends will be satisfied with what he has proposed.
§ Mr. Drayson (Skipton)
The point which occurs to me after the Solicitor-General's 1560 remarks is that he is expecting far too much of the traders. The first thing about this profit, which is subject to tax, is that it has already been ascertained. When it has been established that an industrial concern or individual has made a profit overseas, which cannot be brought immediately to this country, the matter is in the hands of the exchange control authorities. The national, having acquired foreign currency which he is anxious to convert into sterling, discovers that the transaction must be handled by the Bank of England and through the machinery of exchange control. The individual or his agents can go to the government which is blocking the capital, but that he should be expected to go and get that particular amount of money released is expecting rather too much.
Once a foreign government has indulged in exchange restrictions, then it is a matter that can only be settled between the exchange control authorities in this country and the foreign government concerned. If there is no exchange control arising, there is no excuse for the individual not bringing back his capital to this country, but where the fact of repatriation is beyond his control then I should have thought that the case was established quite definitely without his having to prove to the authorities that he has made every effort to recover his funds.
I am not satisfied with the Solicitor-General's final remarks. He says that some instructions will be given so that the Revenue authorities shall not be obliged to charge interest on these amounts. There are two points arising here. First, if the profit is subject to tax it will have been ascertained, and if it cannot be brought back to this country it will be for reasons beyond the control of the firm or individual concerned. If it is within their control to bring it back, nobody would be adverse to interest being charged if they failed to discharge their debt by repatriating this money. Where the exchange control authorities can inform the Inland Revenue authorities that this money cannot be readily repatriated, then I think no interest should be charged, and the question of "not being obliged to charge it" should be put in more emphatic terms.
§ Mr. Nabarro (Kidderminster)
In order that the Committee may be fully apprised 1561 of the financial perspective, may I ask what would be the cost to the Government for this year and for a full year if the Clause were accepted, and similarly, the cost if the concession suggested by the Solicitor-General were substituted. In my opinion the sum of money involved is so tiny that it would not be unreasonable to ask the Government to accept the Clause.
§ Mr. Watkinson (Woking)
The extraordinary facing-both-ways behaviour of the Government bears hardly upon business men in matters of taxation and is a great block to and weight upon people who are trying to do what they have been asked to do by the Government—go out into foreign markets and do more business for this country.
I should like to bring to the Solicitor-General's notice a case raised by a constituent of mine. I understand that in Brazil there is legislation which prohibits the remittance of profits in excess of 8 per cent. on capital. There is a case in point of a British concern which has obeyed the behest of the present Government by increasing its commitments in Brazil. It finds itself now denuded of its sterling resources in this country by the operation of a Brazilian financial measure over which it has no control.
I am sure that the cost to the country of the present proposal will be extremely small, but the Government might thereby give a little encouragement to many businesses trading abroad under difficult conditions. They would also do something to correct the facing-both-ways attitude by which, on the one hand, they press the business community to go ahead and find more business in overseas markets and say by inference that unless business men do so they are not pulling their weight in the Socialist State; and, on the other hand, they make it very difficult. They are not playing the part, which I believe the Government should play, of assisting the business community to go abroad for trade. I think the Clause should be accepted by the Government in its entirety. I do not think it is an important financial matter but it would be a great encouragement, particularly to businesses trading in South America.
§ Mr. Hollis (Devizes)
I think my hon. Friend the Member for Woking (Mr. Watkinson) has sufficiently shown the 1562 Solicitor-General that cost cannot really have any place in the consideration of this matter. I join with him in pressing the Clause upon the Solicitor-General from the point of view of national interest. The principle that a firm earning one income in this country and another income abroad should be considered under an obligation to pay Income Tax immediately on both incomes solely out of the domestic income because the foreign income is not convertible is very dangerous. It is obviously in the public interest that domestic firms should open up foreign branches, but this kind of legislation would be an enormous discouragement. I join in pleading with the Solicitor-General to make this concession, which would cost very little and would enormously recoup itself in the encouragement to traders to continue the export drive.
§ 7.45 p.m.
§ Mr. Niall Macpherson (Dumfries)
I should like to throw the Solicitor-General's argument back at him. I have lived in a country where it was impossible to remit profits. The impression we got was that the Treasury were not bringing sufficient pressure on that country to enable the profits to be remitted because they were able to get their taxes without doing so. It is not a matter of companies wishing to leave profits out there, because if a company cannot get its profits back there is precious little advantage to it in investing the profit in the other country. I remember a case where it was actually not possible even to get interest on the profits that had been made. The profits had to be placed in a blocked account on which there was no interest, yet the company were having at the same time to pay interest on its property.
I see the Solicitor-General's difficulty, but I would remind him that, as a matter of practice, most companies are paying the tax rather than pay the interest. As a matter of principle, surely that is wrong. A criterion should not be whether the company can pay the tax but whether the profits have been remitted to this country or not. On that matter of principle we should stand in this Committee. The Solicitor-General should state quite clearly that the Treasury will do their best to assist traders to get their money 1563 back and that when the money is back, and only then, will the Treasury tax it.
§ Sir William Darling (Edinburgh, South)
The refusal of the Government to accept the Clause is a matter that the Board of Trade should look at. Business men who have stormed foreign countries for trade are now treated as guilty men and are being punished. That is hardly in keeping with the policy expressed by the President of the Board of Trade. To penalise a business man who is doing business overseas under great difficulties simply because the Government cannot make effective exchange arrangements is a very grievous hardship.
The difficulty arises because the Government are unable to come to satisfactory exchange control arrangements with countries with which trade is being done. That is a matter for which the business man is not responsible but the burden is placed on him and he is penalised. Having made a profit which he cannot get his hands on or materialise, he is being charged upon it by His Majesty's Government. That is outrageous. The preposterous suggestion was made by the Solicitor-General that because a man has an income in this country he should pay taxation out of it upon the profits which he cannot materialise from another country. That is grossly unfair. I am thinking of the large insurance companies many of which have done business under great difficulties in South America. If it is the policy of His Majesty's Government that they are to be charged upon profits which they cannot bring to this country, it will have a very disquieting effect. Savings in this country are also indirectly involved.
Like my hon. Friend the Member for Kidderminster (Mr. Nabarro), I should be surprised if a large sum is involved and if it is really worth the time we have spent discussing it. Doubtless the Solicitor-General knows what the sum is. It must be very trifling, and if it is, his promise to treat these matters considerately is not enough. He should accept the Clause in its entirety and reassure those who are doing business overseas that the difficulties they are undergoing, which are not of their creation, shall not be added to by His Majesty's Government but that everything 1564 will be done to facilitate their efforts to expand our trade.
§ Mr. Eccles
I am sure that the Solicitor-General will agree that we are asking for a very small concession. Now that the Government give large guarantees through the Export Credit Guarantees Department, some of which run into enormous sums of money, for the purpose of inducing traders to go into markets where exchange convertibility is by no means assured, is it not reasonable to ask the Solicitor-General to give us this very small concession? When one considers that the United States Government, as one of the provisions of the E.C.A. Act, actually offer a guarantee of dollar convertibility for principal and interest up to 300 million dollars to approved firms who are investing overseas, one sees what an enormous inducement such a guarantee can be.
I am not in favour of guaranteeing what I might call unilateral convertibility. One needs to bring some pressure on foreign countries. If they want capital they must play fair. I should not be in favour of giving away everything in that respect and saying that if anyone puts British money into a foreign country the British Government will guarantee to get it out again. There should be some pressure on the foreign country to come to a proper trade and payments agreement with us.
This is a very small thing and it is a deterrent which arises simply from our own Income Tax procedure. I hope that between now and the next stage we shall get, not just a little concession, but something which really covers the whole thing.
§ The Solicitor-General
I have listened carefully to the arguments, but I am very sorry to say that I feel that I cannot go further than the proposal which I made. I would say at once that it is wrong to think that the Government are not doing what they can to assist traders and British taxpayers in this respect. They are doing all they can in negotiations, for example, with countries like the Argentine, to get them to relax or abolish the restrictions on the remittance of trading profits, so that the assumption made by two hon. Members is really without foundation.
1565 I should like the Committee to consider it in this light. I said in the course of my former speech that there are many cases of hardship and that if one started saying that a case of hardship, which might not be as severe as other cases of hardship where interest is charged, were a ground for an exemption, it would be very difficult to resist very many claims on very many other grounds. The result would be that in a certain space of time it would be impossible to administer this provision with regard to interest. Also, it really is nothing like as simple as hon. Members feel.
I think hon. Members have looked in far too disparaging a light at the proposal which I have made. My right hon. Friend was asked a question in regard to the situation of these incomes frozen in foreign countries and he said that where payment of the tax in question could not be made at the due date without serious hardship, it was the practice of the Inland Revenue authorities to allow payment to stand over until funds to meet it became available. That is the practice. Section 8 of the 1947 Act imposes the interest charge. As that section stands at the moment, it is obligatory upon the Revenue authorities to charge interest upon these tax debts even if they are allowed to stand over. My proposal is that it should not be obligatory to impose the interest charge in cases in which the Revenue authorities think it right that the tax debt should stand over. I think that that would meet the kind of case which hon. Gentlemen opposite have been describing.
If one takes the case of a large company with a small trading income abroad and a large trading income in this country, I suggest that it is quite unreasonable that that company, having ample income and assets from which to pay the tax on the foreign income, should not be called upon to pay it. [HON. MEMBERS: "Why"?] I suggest that in a case of that sort it would be perfectly proper that the interest charge should be imposed in the event of their not paying. That is one kind of case, and that kind of case would be covered if I accepted the Clause in its present form. It would mean that in such a case no interest charge would be made. I hope that the Committee will agree that it is quite unreasonable to press me to go as far as that.
1566 Let us take the other kind of case in which it really is difficult to expect a taxpayer to pay, where it involves really serious hardship because he has no assets here and nothing out of which he can pay. In those cases the Revenue authorities allow the collection of the tax to stand over. My proposal is that in those cases the interest charge should not of necessity be imposed pursuant to the terms of the Statute; the Statute should in that regard be relaxed. No doubt the Revenue authorities would not ask for payment of interest in a case of that sort. That is the proposal that I make, and I make it in the firm belief that it meets the kind of case in which it would be hard to impose a charge on the taxpayer.
Hon. Members referred to the fact that companies which invest their frozen foreign income have to pay British Income Tax on it. That is perfectly true. If they have a large amount of frozen foreign income invested overseas which really should be paid in tax, and they draw income from it which they may use for the purposes of their trade overseas and they pay British tax on it, the untaxed portion is what I might describe as a net revenue to them. It is not unreasonable that in a case like that, if they can pay their tax out of other assets without serious hardship, they should be charged the interest charge on that invested foreign income.
Therefore, I am afraid that, although I have listened carefully to the arguments that have been advanced. I cannot see my way to go further than the proposal which I made, my main reason being that if one goes to the length to which this Clause invites the Government to go, it is logically impossible not to start making a whole number of other exceptions to the obligation to impose the interest charge, and if one does that one might as well put a pen through the Section imposing the interest charge. In quite a short space of time it would be unworkable, and its object of inducing reasonably early payment of Income Tax would certainly not be achieved and the Section might just as well not be in the 1947 Act, I hope that the Committee will agree that my proposal is reasonable and that I could not reasonably be asked to go further.
§ Mr. Nabarro
Before the right hon. and learned Gentleman sits down, will 1567 he answer the questions I put to him? If there is any doubt about them, I will repeat them: first, what would it cost in a full year if the Clause were accepted in toto, and what would it cost this year; second, what would the proposal of the right hon. and learned Gentleman cost in a full year and what would it cost this year?
§ The Solicitor-General
It is really next to impossible to give anything like a reasonable estimate. As I said earlier, the exchange control systems of foreign countries differ very greatly. They depend in large measure on the making of an application for permission to take foreign income out of the country concerned, and if there were the relaxation which is proposed in the Clause, it is impossible to say what sort of applications would be made. As I pointed out, it is often to the advantage of companies to leave income in foreign countries because they use it for the purpose of their trading enterprises in those countries. It is really very difficult to give anything like a reliable estimate of the figure. I quite agree that it cannot be a large sum, but the object of the imposition of the interest charge, as hon. Members will remember when they think back to the Debates which we had on the second Finance Bill in 1947, was to induce the earlier payment of Income Tax.
§ 8.0 p.m.
§ Mr. Nabarro
Surely the argument adduced in the Debate on the 1947 Finance Bill was simply that this interest charge would be levied to expedite payment of Income Tax and Profits Tax and Surtax in this country, and it was never intended that it should be applied to overdue amounts in respect of foreign investments.
§ The Solicitor-General
It was to expedite the payment of British Income Tax which is imposed on the income of British traders in this country, but it is also imposed on them in respect of their income arising in other countries. Therefore, it is directly within the purpose of the Section.
§ Mr. Maudling
Naturally I am grateful to the Solicitor-General for the concession he has made, and I hope he will not think me ungrateful if I say I still feel there is an issue of principle between us on this matter. As far as I can see, 1568 in making his concession the Solicitor-General based it on the argument of hardship. In other words, the Government will make a concession where there is a hardship. I was trying to base my argument on the issue of justice. People should not pay interest on a tax assessment when the sum for which they are being assessed is not available to them. Therefore, I cannot see how any consideration arise of the size of the sum involved and the relative size of the assets in this country. I feel there is a fundamental principle of issue between us on this matter.
§ Mr. Manningham-Buller
I was disappointed with the right hon. and learned Gentleman's reply to this Debate for it shows that he has not fully appreciated the weight of the case we are putting in support of this new Clause on a matter of principle. Of course, we welcome his concession, for it is obviously right that such a change should be made in the present law. I do not wish to appear to minimise the extent of that alteration of the law, but it only amounts to this, that relief from payment of interest will only be granted in those cases where the Revenue come to the conclusion that there is hardship. So the number of cases in which that relief is granted will depend upon the judgment of the Revenue.
The right hon. and learned Gentleman has sought to impress upon us the difficulty of determining between different hard cases. I recognise that difficulty exists but, so far as his concession is concerned, that again will depend in each case upon the length of the Chancellor's foot—if I may use that expression. I feel it is quite inequitable to say that interest shall be paid on tax due in respect of monies which the owner cannot bring back into this country. I can see no justification for saying that such interest should be paid merely because there are other assets available in this country upon which, if necessary, distraint could be levied. That is a matter of principle.
I am not particularly tied to the wording of this new Clause, although it is good, but I am disappointed that the right hon. and learned Gentleman does not realise the justice of our case and has not said that he will give further consideration to this matter. No one wants to see any such Clause as this used for the purposes of tax evasion. I believe it 1569 is possible to draw the Clause in such a way that this would not occur successfully—indeed, to draw it in such a way that there is every inducement to these companies to make every effort to get their money back to this country.
While we welcome the efforts the Treasury are making to get relaxation of these exchange restrictions, it would be a strong incentive to the Treasury to make even greater efforts to secure that relaxation because, if the Solicitor-General
§ accepted this new Clause, it would then have very little operation. I am disappointed with the reply, and unless the right hon. and learned Gentleman can go a bit further we shall have no other course open to us than to show our disappointment in the Division Lobby.
§ Question put, "That the Clause be read a Second time."
§ The Committee divided: Ayes, 276; Noes, 297.1573
|Division No. 41.]||AYES||[8.9 p.m.|
|Aitken, W. T.||Deedes W F.||Johnson, Howard S. (Kemptown)|
|Alport, C. J. M.||Digby, S. Wingfield||Jones, A. (Hall Green)|
|Amery, J. (Preston, N.)||Dodds-Parker, A. D||Joynson-Hicks, Hon. L. W|
|Amory, D. Heathcoat (Tiverton)||Donner, P. W.||Kaberry, D.|
|Arbuthnot, John||Douglas-Hamilton, Lord M||Keeling, E. H.|
|Ashton, H. (Chelmsford)||Drayson, G. B.||Kerr, H. W. (Cambridge)|
|Assheton, Rt. Hon. R. (Blackburn, W.)||Drewe, C.||Kingsmill, Lt.-Col. W. H.|
|Astor, Hon. M.||Dugdale, Maj. Sir T. (Richmond)||Lambert, Hon. G.|
|Baker, P.||Duncan, Capt. J. A. L.||Lancaster, Col. C. G|
|Baldock, J. M.||Dunglass, Lord||Langford-Holt, J.|
|Baldwin, A. E.||Duthie, W. S.||Law, Rt. Hon. R. K|
|Banks, Col. C||Eccles, D. M.||Leather, E. H. C.|
|Baxter, A. B||Eden, Rt. Hon. A.||Legge-Bourke, Maj. E. A. H|
|Beamish, Maj. T. V. H.||Elliot, Lieut.-Col. Rt. Hon. Walter||Lindsay, Martin|
|Bell, R. M.||Erroll, F. J.||Linstead, H. N.|
|Bennett, Sir P. (Edgbaston)||Fisher, Nigel||Llewellyn, D.|
|Bennett, R. F. B. (Gosport)||Fletcher, W. (Bury)||Lloyd, Rt. Hon. G. (King's Norton)|
|Bevins, J. R. (Liverpool, Toxteth)||Fort, R.||Lloyd, Maj. Guy (Renfrew, E.)|
|Birch, Nigel||Foster, J. G.||Lloyd, Selwyn (Wirral)|
|Bishop, F. P.||Fraser, Hon. H. C. P. (Stone)||Lockwood, Lt.-Col. J. C.|
|Black, C. W.||Fraser, Sir I. (Lonsdale)||Longden, G. J. M. (Herts, S. W.)|
|Boles, Lt-Col. D. C. (Wells)||Galbraith, Cmdr. T D. (Pollok)||Low, A. R. W.|
|Boothby, R.||Gammans, L. D||Lucas, Major Sir J. (Portsmouth. S)|
|Bossom, A. C.||Garner-Evans, E. H (Denbigh)||Lucas, P. B. (Brentford)|
|Bower, N.||Gates, Maj. E. E.||Lucas-Tooth, Sir H.|
|Boyd-Carpenter, J. A.||Glyn, Sir R.||Lyttelton, Rt. Hon. O.|
|Bracken, Rt. Hon. Brendan||Gomme-Duncan, Col. A.||McCallum, Maj. D.|
|Brains, B.||Gridley, Sir A.||McCorquodate, Rt. Hon. M. S.|
|Braithwaite, Lt.-Comdr. J. G.||Grimston, Hon. J. (St. Albans)||Macdonald, Sir P (I. of Wight)|
|Bromley-Davenport, Lt.-Col. W.||Grimston, R. V. (Westbury)||Mackeson, Brig. H. R.|
|Brooke, H. (Hampstead)||Harden, J. R. E.||McKibbin, A|
|Browne, J. N. (Govan)||Hare, Hon. J. H. (Woodbridge)||McKie, J. H (Galloway)|
|Buchan-Hepburn, P. G. T.||Harris, F. W. (Croydon, N.)||Maclay, Hon. J. S.|
|Bullock, Capt. M.||Harris, R. R. (Heston)||Maclean, F H. R.|
|Bullus, Wing-Commander E. E.||Harvey, Air-Codre A. V. (Macclesfield)||MacLeod, Iain (Enfield, W.)|
|Burden, Squadron-Leader F. A.||Harvey, I. (Harrow, E.)||MacLeod, John (Ross and Cromarty)|
|Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)||Hay, John||Macpherson, N. (Dumfries)|
|Carr, L. R. (Mitcham)||Head, Brig. A. H||Maitland, Comdr. J. W|
|Carson, Hon. E.||Heald, L. F||Manningham-Buller, R. E.|
|Channon, H.||Heath, Col. E. R.||Marlowe, A. A. H.|
|Churchill, Rt. Hon. W. S.||Henderson, John (Cathcart)||Marples, A. E.|
|Clarke, Col. R. S. (East Grinstead)||Hicks-Beach, Maj. W W||Marshall, D. (Bodmin)|
|Clarke, Brig. T. H. (Portsmouth, W.)||Higgs, J. M. C.||Marshall, S. H. (Sutton)|
|Clyde, J. L.||Hill, Mrs. E. (Wythenshawe)||Maude, A. E. U. (Ealing, S.)|
|Colegate, A.||Hill, Dr. C. (Luton)||Maude, J. C. (Exeter)|
|Conant, Maj. R. J. E.||Hirst, Geoffrey||Maudling, R.|
|Cooper, A E. (Ilford, S.)||Hogg, Hon. Q.||Mellor, Sir J.|
|Cooper-Key, E. M.||Hollis, M. C.||Molson, A. H. E.|
|Corbet, Mrs. F. K. (Peckham)||Holmes, Sir J. Stanley (Harwich)||Morrison, Maj. J. G. (Salisbury)|
|Corbett, Lieut.-Col, U. (Ludlow)||Hope, Lord J||Morrison, Rt. Hon. W. S. (Cirencester)|
|Craddock, G. B. (Spelthorne)||Hopkinson, H. L. D'A||Mott-Radclyffe, C. E.|
|Cranborne, Viscount||Hornsby-Smith, Miss P||Nabarro, G.|
|Cross, Rt. Hon. Sir R.||Horsbrugh, Miss F.||Nicholls, H.|
|Crosthwaite-Eyre, Col. O. E.||Howard, G. R. (St. Ives)||Nicholson, G.|
|Crouch, R. F||Howard, S. G. (Cambridgeshire)||Nield, B. (Chester)|
|Crowder, Capt. John F. E. (Finchley)||Hudson, Sir Austin (Lewisham, N.)||Noble, Comdr. A. H. P.|
|Crowder, F. P. (Ruislip-Northwood)||Hudson, Rt. Hon. R. S. (Southport)||Nugent, G. R. H.|
|Cundiff, F. W.||Hudson, W. R. A. (Hull, N.)||Nutting, Anthony|
|Cuthbert, W. N.||Hulbert, Wing-Cdr. N. J.||Oakshott, H. D.|
|Darling, Sir W. Y. (Edinburgh, S.)||Hutchinson, Geoffrey (Ilford, N.)||Odey, G. W.|
|Davidson, Viscountess||Hutchison, Lt.-Com. Clark (E'b'rgh W.)||O'Neill, Rt. Hon. Sir H.|
|Davies, Nigel (Epping)||Hyde, H. M.||Ormsby-Gore, Hon. W. D.|
|de Chair, S.||Hylton-Foster, H. B.||Orr, Capt. L. P. S.|
|De la Bère, R.||Jeffreys, General Sir G.||Orr-Ewing, Charles Ian (Hendon, N.)|
|Jennings, R.||Orr-Ewing, Ian L. (Weston-super-Mare)|
|Osborne, C.||Smith, E. Martin (Grantham)||Turton, R. H.|
|Perkins, W. R. D||Smithers, Peter H. B. (Winchester)||Tweedsmuir, Lady|
|Peto, Brig. C. H. M.||Smithers, Sir W (Orpington)||Vane, W. M. F.|
|Pickthorn, K.||Smyth, Brig. J. G. (Norwood)||Vaughan-Morgan, J. K.|
|Pitman, I. J.||Snadden, W. McN.||Vosper, D. F.|
|Powell, J. Enoch||Soames, Capt. C.||Wade, D. W.|
|Prescott, Stanley||Spearman, A. C. M.||Wakefield, E. B. (Derbyshire, W.)|
|Price, H. A. (Lewisham, W.)||Spence, H. R. (Aberdeenshire, W.)||Wakefield, Sir W. W. (St. Marylebone)|
|Prior-Palmer, Brig. O.||Spens, Sir P. (Kensington, S.)||Walker-Smith, D. C.|
|Profumo, J. D.||Stanley, Capt. Hon. R. (N. Fylde)||Ward, Hon. G. R. (Worcester)|
|Raikes, H. V.||Stevens, G. P.||Ward, Miss I. (Tynemouth)|
|Rayner, Brig. R.||Steward, W. A. (Woolwich, W.)||Waterhouse, Capt. C.|
|Redmayne, M.||Stoddart-Scott, Col. M.||Watkinson, H.|
|Remnant, Hon. P.||Storey, S.||Watt, Sir G. S. Harvie|
|Renton, D. L. M.||Strauss, Henry (Norwich, S.)||Webbe, Sir H. (London)|
|Roberts, P. G. (Heeley)||Stuart, Rt. Hon. J. (Moray)||White, J. Baker (Canterbury)|
|Robertson, Sir D. (Caithness)||Studholme, H. G.||Williams, C. (Torquay)|
|Robinson, J. Roland (Blackpool, S.)||Summers, G. S.||Williams, Gerald (Tonbridge)|
|Robson-Brown, W. (Esher)||Sutcliffe, H.||Williams, Sir H. G. (Croydon, E.)|
|Rodgers, John (Sevenoaks)||Taylor, C. S. (Eastbourne)||Wills, G.|
|Roper, Sir H||Taylor, W. J. (Bradford, N.)||Wilson, Geoffrey (Truro)|
|Ropner, Col L||Teeling, William||Winterton, Rt. Hon. Earl|
|Ross, Sir R. D. (Londonderry)||Thomas, J. P. L. (Hereford)||Wood, Hon. R.|
|Russell, R. S.||Thompson, K. P. (Walton)||York, C.|
|Ryder, Capt. R. E. D||Thompson, R. H. M. (Croydon, W.)||Young, Sir A. S. L.|
|Savory, Prof. D. L.||Thorneycroft, G. E. P. (Monmouth)|
|Scott, Donald||Thornton-Kemsley, C. N.||TELLERS FOR THE AYES:|
|Shepherd, W. S. (Cheadle)||Tilney, John||Major Wheatley and|
|Smiles, Lt.-Col. Sir W.||Touche, G. C.||Mr. T. G. D. Galbraith.|
|Acland, Sir Richard||Cripps, Rt. Hon. Sir S.||Griffiths, Rt. Hon. J. (Llanelly)|
|Adams, Richard||Crosland, C. A. R.||Griffiths, W. D. (Exchange)|
|Albu, A. H.||Crossman, R. H. S.||Gunter, R. J.|
|Allen, A. C. (Bosworth)||Cullen, Mrs. A.||Hale, J. (Rochdale)|
|Anderson, F. (Whitehaven)||Daggar, G.||Hale, Leslie (Oldham, W.)|
|Attlee, R. Hon. C. R.||Daines, P.||Hall, J. (Gateshead, W.)|
|Awbery, S. S.||Darling, G. (Hillsboro')||Hall, Rt. Hn. W. Glenvil (Colne V'll'y)|
|Ayles, W. H.||Davies, A. Edward (Stoke, N.)||Hamilton, W. W.|
|Bacon, Miss A.||Davies, Ernest (Enfield, E.)||Hannan, W.|
|Baird, J||Davies, Harold (Leek)||Hardman, D. R.|
|Balfour, A.||Davies, R. J. (Westhoughton)||Hardy, E. A.|
|Barnes, Rt. Hon. A. J.||Davies, S. O. (Merthyr)||Hargreaves, A.|
|Bartley, P.||de Freitas, Geoffrey||Harrison, J.|
|Bellenger, Rt. Hon. F. J.||Deer, G.||Hastings, Dr. Somerville|
|Benson, G.||Delargy, H. J.||Hayman, F. H.|
|Beswick, F.||Dodds, N. N.||Henderson, Rt. Hon. A. (Rowley Regis)|
|Bevan, Rt. Hon. A. (Ebbw Vale)||Donnelly, D.||Herbison, Miss M.|
|Bing, G. H. C.||Donovan, T. N.||Hewitson, Capt. M.|
|Blackburn, A. R.||Driberg, T. E. N.||Hobson, C. R.|
|Blenkinsop, A.||Dugdale, Rt. Hon. J. (W. Bromwich)||Holman, P.|
|Boardman, H.||Dye, S.||Holmes, H. E. (Hemsworth)|
|Booth, A.||Ede, Rt. Hon. J. C.||Houghton, Douglas|
|Bottomley, A. G.||Edelman, M.||Hoy, J.|
|Bowen, R||Edwards, John (Brighouse)||Hubbard, T.|
|Bowles, F. G. (Nuneaton)||Edwards, Rt. Hon. N. (Caerphilly)||Hudson, J. H. (Ealing, N.)|
|Braddock, Mrs. E. M.||Edwards, W. J. (Stepney)||Hughes, Emrys (S. Ayr)|
|Brockway, A. Fenner||Evans, Albert (Islington, S. W.)||Hughes, Hector (Aberdeen, N.)|
|Brook, D. (Halifax)||Evans, E. (Lowestoft)||Hughes, Moelwyn (Islington, N.)|
|Brooks, T. J. (Normanton)||Evans, S. N. (Wednesbury)||Hynd, H. (Accrington)|
|Broughton, Dr. A. D. D.||Ewart, R.||Hynd, J. B. (Attercliffe)|
|Brown, George (Belper)||Fernyhough, E.||Irvine, A. J. (Edge Hill)|
|Brown, T. J. (Ince)||Field, Capt. W. J.||Irving, W. J. (Wood Green)|
|Burke, W. A.||Finch, H. J.||Isaacs, Rt. Hon. G. A.|
|Burton, Miss E.||Fletcher, E. G. M. (Islington, E.)||Janner, B.|
|Butler, H. W. (Hackney, S.)||Follick, M.||Jay, D. P. T.|
|Callaghan, James||Forman, J. C.||Jeger, G. (Goole)|
|Carmichael, James||Fraser, T. (Hamilton)||Jenkins, R. H.|
|Castle, Mrs. B. A.||Freeman, J. (Watford)||Johnson, James (Rugby)|
|Champion, A. J.||Freeman, Peter (Newport)||Johnston, Douglas (Paisley)|
|Chetwynd, G. R.||Gaitskell, Rt. Hon. H. T. N.||Jones, D. T. (Hartlepool)|
|Clunie, J.||Ganley, Mrs. C. S.||Jones, Frederick Elwyn (West Ham, S.)|
|Cocks, F. S.||George, Lady M. Lloyd||Jones, Jack (Rotherham)|
|Coldrick, W.||Gibson, C. W.||Jones, William Elwyn (Conway)|
|Collick, P.||Gilzean, A.||Keenan, W.|
|Collindridge, F.||Glanville, J. E. (Consett)||Kenyon, C.|
|Cook, T. F.||Gooch, E. G.||Key, Rt. Hon. C. W.|
|Cooper, G. (Middlesbrough, W.)||Gordon, Walker, Rt. Hon. P. C.||King, H. M.|
|Cooper, J. (Deptford)||Granville, E. (Eye)||Kinley, J.|
|Corbet, Mrs. F. K. (Peckham)||Greenwood, A. W. J. (Rossendale)||Kirkwood, Rt. Hon. D.|
|Cove, W. G.||Greenwood, Rt. Hn. Arthur (Wakefield)||Lang, Rev. G.|
|Craddock, George (Bradford, S.)||Grenfell, D. R.||Lee, F. (Newton)|
|Crawley, A.||Grey, C. F.||Lee, Miss J. (Cannock)|
|Griffiths, D. (Rother Valley)||Lever, L. M. (Ardwick)|
|Lever, N. H. (Cheetham)||Paling, Will T. (Dewsbury)||Taylor, R. J. (Morpeth)|
|Lewis, A. W. J. (West Ham, N.)||Pannell, T. C.||Thomas, D. E. (Aberdare)|
|Lewis, J. (Bolton, W.)||Pargiter, G. A.||Thomas, George (Cardiff)|
|Lipton, Lt.-Col. M.||Paton, J.||Thomas, I. O. (Wrekin)|
|Logan, D. G.||Pearson, A.||Thomas, I R. (Rhondda, W.)|
|Longden, F. (Small Heath)||Peart, T. F.||Thorneycroft, Harry (Clayton)|
|McAllister, G.||Poole, Cecil||Thurtle, Ernest|
|MacColl, J. E.||Popplewell, E.||Timmons, J.|
|McGhee, H. G.||Porter, G.||Tomlinson, Rt. Hon. G.|
|McInnes, J.||Price, M Philips (Gloucestershire, W.)||Tomney, F.|
|Mack, J. D||Proctor, W. T||Turner-Samuels, M|
|McKay, J. (Wallsend)||Pryde, D. J||Usborne, Henry|
|Mackay, R. W. G. (Reading, N.)||Pursey, Comdr H||Vernon, Mai. W. F.|
|McLeavy, F||Rankin, J.||Viant, S. P.|
|MacMillan, M. K. (Western Isles)||Rees, Mrs. D.||Wallace, H. W.|
|McNeil, Rt. Hon. H.||Reeves, J.||Watkins, T. E.|
|MacPherson, Malcolm (Stirling)||Reid, T. (Swindon)||Webb, Rt. Hon. M. (Bradford C.)|
|Mainwaring, W. H.||Reid, W. (Camlachie)||Weitzman, D.|
|Mallalieu, E. L. (Brigg)||Rhodes, H.||Wells, P. L. (Faversham)|
|Mallalieu, J. P. W. (Huddersfield, E.)||Richards, R.||Wells, W. T. (Walsall)|
|Mann, Mrs. J.||Robens, A.||West, D. G.|
|Manuel, A. C.||Roberts, Emrys (Merioneth)||Wheatley, Rt. Hn. John (Edinb'gh, E.)|
|Marquand, Rt. Hon. H. A.||Roberts, Goronwy (Caernarvonshire)||White, Mrs. E. (E. Flint)|
|Mathers, Rt. Hon. George||Robertson, J. J. (Berwick)||White, H. (Derbyshire, N. E.)|
|Mellish, R. J.||Rogers, G. H. R. (Kensington, N.)||Whiteley, Rt. Hon. W.|
|Messer, F.||Ross, William (Kilmarnock)||Wigg, George|
|Middleton, Mrs. L.||Royle, C.||Wilcock, Group-Capt C. A. B.|
|Mikardo, Ian||Shackleton, E. A. A.||Wilkes, L.|
|Mitchison, G. R.||Shawcross, Rt. Hon. Sir H||Wilkins, W. A.|
|Moeran, E. W.||Shinwell, Rt. Hon. E.||Willey, F. T (Sunderland)|
|Monslow, W.||Shurmer, P. L. E.||Willey, O. G. (Cleveland)|
|Moody, A. S.||Silverman, J, (Erdington)||Williams, D. J. (Neath)|
|Morgan, Dr. H. B.||Silverman, S. S. (Nelson)||Williams, Ronald (Wigan)|
|Morley, R.||Simmons, C. J.||Williams, W. T. (Hammersmith, S.)|
|Morris, P. (Swansea, W.)||Slater, J.||Wilson, Rt. Hon. J. H. (Huyton)|
|Morrison, Rt. Hon. H. (Lewisham, S.)||Smith, Ellis (Stoke, S.)||Winterbottom, I. (Nottingham, C)|
|Mort, D. L.||Snow, J. W.||Winterbottom, R. E. (Brightside)|
|Moyle, A.||Sorensen, R. W.||Wise, Major F. J.|
|Mulley, F. W.||Soskice, Rt. Hon. Sir F.||Woodburn, Rt. Hon. A.|
|Murray, J. D.||Sparks, J. A.||Woods, Rev. G. S.|
|Nally, W.||Steele, T.||Wyatt, W. L.|
|Neal, H.||Stewart, Michael (Fulham, E.)||Yates, V. F.|
|Noel-Baker, Rt. Hon. P. J.||Strachey, Rt. Hon. J.||Younger, Hon. Kenneth|
|Oldfield, W. H.||Strauss, Rt. Hon. G. R. (Vauxhall)|
|Oliver, G. H||Stross, Dr. B.||TELLERS FOR THE NOES:|
|Orbach, M.||Summerskill, Rt. Hon. Edith||Mr. Bowden and|
|Padley, W. E||Sylvester, G. O.||Mr. Kenneth Robinson.|
|Paling, Rt. Hon. Wilfred (Dearne V'lly)||Taylor, H. B. (Mansfield)|