HC Deb 13 June 1951 vol 488 cc2453-71

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

Mr. Eccles

My hon. Friends and I do not desire to move our Amendment in page 26, line 8, at the end, to insert: and (c) that price is not reasonable in all the circumstances. It may be for the convenience of the Committee if I say that we have three subsequent Amendments, in line 11, to leave out "shall," and to insert: may if the Commissioners so direct, in line 17, to leave out from "therein," to the end of line 19, and in page 27, line 14, to leave out subsection (6), which we understand that the Chair has been good enough to select. In order to make progress with the Bill we do not propose to move these Amendments tonight, but we hope that we shall have a chance to put them down on Report stage and that in the meantime the Government will give them full consideration, because they are important Amendments.

Mr. Logan (Liverpool, Scotland)

On a point of order, Sir Charles. Yesterday the ruling was quite contrary to that. It was stated by the Chair yesterday that if Amendments were taken collectively they all fell if one fell. What is the ruling to be now?

The Deputy-Chairman

The hon. Member misunderstands the position. None of the Amendments is being moved. We are now on the Question of the Clause standing part of the Bill.

10.45 p.m.

Mr. Eccles

This is another bad Clause, and we shall have to object to it strongly. The clue to this Clause is in subsection (6), which provides that Rule 7 of the General Rules of Income Tax shall cease to have effect. General Rule 7 of the Income Tax Act of 1918 deals with the assessment of a resident person as agent of a non-resident, where the latter has control over the former and business arrangements between them are so arranged that the resident makes less profit than he might be expected to earn. This enables the full tax to be assessed on the resident on his own account. That seems a pretty stiff rule to deal with possible evasion of tax by those outside the Kingdom having business dealings through agents inside the Kingdom.

But in the Government's view that is no longer enough to prevent the un-attractiveness of doing business in this country, now that we have the level of taxation imposed by the Socialists, requiring something stiffer. This Clause is clearly inserted into the Bill in order to give another turn to the screw. The Clause is needed, like the previous Clause, because there are only two ways to counter the centrifugal effects of Socialist taxation. One can stop, or try to stop, companies and persons taking their businesses away from Socialist Britain in one of two ways. Either one can reduce the rate of taxation in this country and persuade them to stay here of their own accord—which is what we on this side of the Committee would do—or one must impose fines and imprisonment.

The Chancellor of the Exchequer has said that because the Opposition did not vote against the rise in Income Tax and Profits Tax it must accept the coercive alternative, and that that is the reason for this Clause. Our reply is that if we had charge of the expenditure side of the Budget a very different situation would arise, and it would no longer be necessary for coercive Clauses to be put into the Bill.

This particular Clause deals with sales between associated persons, one inside this country and the other outside, and, of course, largely between a company here and a company abroad over which it has control, or the other way round. It seeks to substitute, in computing taxation liabilities, the price at which the sale would have been expected to take place at arm's length for the price at which the sale was in fact made. In other words, if a United Kingdom company sold something too cheaply to a foreign company—that is, too cheaply in the eyes of the Treasury—the Treasury will fix the price at some higher level for the purpose of taxation. This strikes at the roots of much of the established methods of doing business overseas.

Let me take an instance with which hon. Gentlemen opposite must be familiar. If one is starting a branch shop in a new area, it is frequently the practice to sell goods cheap, from the central depot to that particular branch shop so that it may win customers by offering attractive prices while the branch is getting on to its feet. That is a method which has often been used to great advantage in establishing British goods in new markets.

I do not doubt for a moment that in the dollar drive many British manufacturing companies will be found deliberately, and quite rightly, selling goods to the United States of America too cheap, to start with, so as to get into a market where they had not been before. Now they are struck at by this Clause. Is there any hon. Member opposite who has knowledge of the Co-op.? If so, he will know that the Co-operative Societies use precisely this method for breaking into a new territory when establishing a branch.

Mr. Nally

The hon. Gentleman cannot really get away with that. One of my criticisms, as a Co-op member, is that this is precisely a tactic which the Co-op does not adopt. I will undertake to produce a whole list of illustrations where Co-operative Societies have opened branches in new areas and the boards of directors have ruled that they should not offer industrial cut-price lines. Let the hon. Gentleman see me and I will give him examples.

Mr. Eccles

In order not to delay the Committee I will meet the hon. Member at some suitable time afterwards; but multiple shops have always done something of this sort to establish themselves in new areas. But, be that as it may, the Committee must agree that, when entering a new market overseas, not to be allowed to sell something cheaply in the first instance is an absurd prohibition.

There is this extra point. It is very difficult for anyone to say what price ought to be charged. Take, for instance, a motorcar shipped abroad in parts to be assembled in the foreign country by an assembly plant which may or may not be owned by the manufacturing company here. What is the right price for the parts which are being sent abroad? How is the Treasury to compute what the price of a broken-down motor car ought to be? It is an impossible demand.

Now let us turn to the other class of transactions—the sales of shares. On a previous Clause to this Bill I mentioned that it is very common, and very necessary, when developing risky enterprises, to say to those who take the first bite at the cherry—those who put their money out at a time when it is quite uncertain whether the concern will reach the profitable stage—that, if successful, they can have another allotment of shares at a price fixed at the first issue.

If the business is successful the price goes up and the associates get their second allotment at a price below the market. Why not? It is one of the ways for inducing people to take on propositions for which no certain returns exist, and that is how our overseas affairs have been arranged. In Queen Elizabeth's Reign, when men like Drake set off round the world, people put up money knowing that if he found treasure they would make a large profit. There has to be some prize of that kind in a risky business, and a common method of doing it is struck at in this Clause.

We owe this Clause to oppressive taxation. One can imagine transactions of the kind aimed at which will dodge a certain 3mount of tax, but here again, as on previous occasions while we have discussed this Bill, I ask "Is the price worth paying?" A vast range of transactions are here brought within the ambit of the Treasury, for the Clause makes it mandatory upon the Treasury to look into all sales between a company here and a company overseas. The Treasury cannot say, "This man is really worth going after; he has done something bad, and has evaded a great deal of tax." Not at all. As the Clause is drafted, they must go after every single person and every single transaction.

One can see what an amount of work is coming into the Treasury if they are to inspect the price of pretty well everything that is sold by a company here to a subsidiary company overseas. It really passes one's imagination how we can be governed in a country whose whole life depends upon industry and trade by right hon. Gentlemen who introduce a Clause like this which so clearly strikes at a normal and widespread practice of business and will put at the mercy of the Treasury every export which is made to an associated company.

The Attorney-General

I shall reply very shortly to the speech to which we have just listened. The Clause deals with a form of tax avoidance which certainly does exist and which again threatens to assume great proportions. Stock is transferred by a United Kingdom company to a subsidiary abroad, with the result that the profit which should have come to the United Kingdom does not do so. The Clause deliberately excludes the case in which a buyer and seller are retained in the United Kingdom with the result that, in the case of the buyer or seller, the profit which should be made upon a disposal of the stock at its true price is brought into account.

With regard to the difficulty of assessing prices, that is very far from insurmountable. The conception of an arms-length price arrived at by persons acting independently of one another is one which should not be unduly difficult to interpret in terms of £.s.d., and it is upon that basis of price that the Clause works. Certainly, the Clause acts automatically, but its effect, broadly speaking, is to bring into the taxation net cases where that profit is not subjected to tax but where it clearly exists and by rights ought to be brought into the taxation scheme.

Mr. Lyttelton

I am really amazed by the reply of the right hon. and learned Gentleman. It really shows that, whatever the legal implications are, he has no idea of the administrative complexities which will be raised by this Clause. I am afraid, even at this hour, that I must ask the Committee to bear with me in giving instances of what I mean, which are familiar to all of us who have established businesses overseas.

I am thinking of my own experience of two Indian manufacturing businesses controlled by my company. These questions arise, and I would ask the Committee to remember that they have to be resolved by the Treasury, and every day that goes by it becomes more and more clear that the Treasury Department knows nothing about business. What happens is that a power station is erected in India. A lot of the heavy plant has to be supplied from here. The question arises all through as to what price the controlling company in England is to supply a subsidiary company in India.

The first thing is, is it to be at factory cost, or is it at factory cost plus overheads—I cannot get any answer because the Treasury do not know—or is it at factory cost, plus overhead expenses, plus interest on the money during the period of shipment? It is no good the Attorney-General saying that anyone can answer this. It means we shall get a committee set-up by the Treasury who will then say they will not give any reason for their decision. The next thing is that they will rapidly collect a staff of 500 or 600 chartered accountants who cannot obtain employment elsewhere, and then will set themselves down to try to solve these questions, which are at the moment a matter of the greatest delicacy. I assure the right hon. and learned Gentleman that one cannot build up a business overseas except by supplying some of the mass-production components from this country at very cut prices.

11.0 p.m.

If I was selling components to an Indian factory at a cost other than that at which I supplied them to a British customer, I should fall within the mischief of the Clause. The thing is just another instance of the complete disregard of all business considerations. Provided that the hon. Member for Sowerby (Mr. Houghton) can be satisfied that somebody is evading tax, he will accept any damage to the country's trade.

This simply will not do. The thing is complete nonsense from top to bottom. I hope that the Treasury will look at the Amendments which have been put down in the name of my hon. Friend the Member for Chippenham (Mr. Eccles) and others and will study whether they will not do something to improve the Clause. We have already told the Committee that we do not propose to move them tonight, but I am beginning rather to regret that. [HON. MEMBERS: "Go ahead."] Certainly; if hon. Members opposite wish to go on all night, I am quite willing. [Interruption.] The Deputy-Leader of the House, apparently, wishes me to expand my argument, but I am not going to succumb to the temptation. But he does it so nicely and in so persuasive a way, and has such a vast knowledge of overseas business, that I am almost obliged to turn aside and develop the argument for the next half-hour or so.

However, as I have always been able to resist temptation, and I will simply summarise my remarks by saying that the Attorney-General, famous in this Committee for his courtesy and untiring devotion to his duty, has given an answer so perfunctory as not to make it possible for us to develop the argument. Unless the Treasury make great changes in this Clause, they will once more be burying their heads in the sand. For the sake of catching one or two exceptional cases of tax evasion, they will retard the expansion of our assets overseas and do great damage to British trade.

Mr. Selwyn Lloyd

This matter has been dealt with in such a perfunctory manner by the Attorney-General that I wish as briefly as I can to put another aspect of this matter before him. I have with me a memorandum which has been sent to me by a company, whose name I will not mention. It is a United Kingdom public company. The majority of the shares are held by an American company, but a number of them are held in the United Kingdom and are quoted on the London Stock Exchange.

The company's business is the manufacture of machines used by boot and shoe manufacturers. It supplies some 80 to 90 per cent. of the machines so used in the United Kingdom, and it also sells a number of other accessories. It has a considerable export trade, either through its own subsidiary companies or through subsidiaries of the American parent company.

Under agreements and following the practice of many years past, business between the company, the American parent company, and the subsidiaries of both, has been done on a costs basis, and the benefits to the United Kingdom from these practices have been very considerable. It must be pretty obvious to most hon. Members what those benefits would be. Exports in highly specialised machines and other products have been fostered. The increase in the total quantities of each model manufactured here tends to reduce the prices to United Kingdom manufacturers. Thirdly, the company can acquire at cost price, either as prototypes or for marketing here, machines produced by the American company or by other subsidiaries.

Therefore, this arrangement, which I do not believe is at all uncommon, has meant considerable savings in dollar currency to this country. These arrangements were never designed to avoid taxation; they have been entered into in order to promote international trade. As a result of the action which the Government propose to take, I assume that all the transactions of that group of companies will be reviewed by the Treasury.

What will be the effect of that? I should think it is perfectly obvious that the overseas subsidiaries of the parent company will no longer purchase anything from this country. They are going to get their machines from one of the other subsidiaries or from the parent company itself in America. The Dominion subsidiaries will be encouraged to expand their business at the expense of the company which is registered in this country. If this company has to pay full market value for the prototypes and machines imported from America, then of course that will affect the dollar balance.

The operation of this Clause is going to cause serious detriment to the employment and industry of this country. Hon. Members opposite who claim to represent the wage-earners should think twice before letting this sort of Clause go through. It really is absolutely undiluted nonsense for the Government to put forward this Clause at all. It will cut across every sort of transaction to which I have been referring. I believe the ultimate cost to this country will be infinitely greater than the small loss to the Revenue that may occur in particular cases.

Sir Ian Fraser (Morecambe and Lonsdale)

May I ask the Attorney-General if the penalties involved in this Clause would apply in a situation such as this. Suppose one has in a Dominion country a parent company and over here a subsidiary company wholly owned by that parent company. The subsidiary company is in the City of London and acts as a buying agent for the company in the Dominions, undertaking all the purchases that it requires from this British market? Supposing part of the arrangement was that a different rate would be charged to the subsidiary here in London by its parent and that it would charge at arm's length upon the open market. Would such an arrangement fall under the penalties of this Clause, because there are very many cases in which companies overseas find it convenient to have a London office taking the form of a subsidiary company?

If, in fact, such an arrangement is to be penalised, nothing would be easier than for the overseas company to liquidate its London office and do its business elsewhere, either in another capital or through another arrangement. Therefore, nothing would be gained by the Treasury, except that they would have caused a very great inconvenience to those who like to use the City of London for shipping and insuring and who like to buy from British manufacturers.

The Attorney-General

I replied rather shortly because I was under the apprehension that probably further discussion of the Clause would take place at a later stage of our deliberations. That is why I communicated in brief form the general purpose and object of the Clause.

I accept that it is not easy always—and sometimes it is extremely difficult—to assess what is meant by "arm's length prices." Stock is sent at or under cost and at different rates of commission, which it is difficult to know exactly, from one foreign company to another company. In those cases of considerable difficulty I think I said that they would have been insurmountable. But the prices could be calculated, and it would be perfectly possible to take into account the factors which might influence prices in order to arrive at a figure which would be the figure at which two persons dealing at arm's length would fix upon as the price.

I certainly did not mean to convey the impression that it would be perfectly easy to arrive at a price which would conform to the formula. In the generality of cases it may be difficult; experience will tell. In many cases of which we know it is a simple case of a sale of stock which stands in the books as x £s, at a price in £.s.d. which is x minus y. The difference is easily ascertainable by a simple process of deduction. In that kind of case there is no difficulty. I am not saying that the application of this Clause in all cases will be one which does not raise fairly complicated problems. I have no doubt that in the case cited by the right hon. Gentleman it would be difficult to calculate the proper basis of the price and what factors should be taken into consideration. The hon. Member for Chippenham (Mr. Eccles) indicated, perhaps rather more fully than I did, some of the difficulties which he felt, and I replied by stating what was at any rate the general idea of the Clause.

As the hon. Gentleman said, it is always a question of whether we should take steps to bring a particular type of transaction within the tax net, or whether it is too difficult to do so and whether the cost would be too great. But we feel that the transactions which have come to our notice are such that they require that we should take some definite action to stop them, because they are a potential source of increasing loss of revenue to the Inland Revenue.

That is why we have embodied this Clause in this Bill. I have endeavoured to indicate only the outline of why we have done it and what is the general object of it, as there will no doubt be later discussions in which reference will be made to the Clause in more detail.

Sir I. Fraser

What of the kind of transaction about which I inquired?

The Attorney-General

It depends on the precise nature of the business. There has to be a sale, and if the sale was between the parent company and the subsidiary the Clause would operate. If it was simply a case of one company consigning goods to another as agent to sell, or a contract to sell between the parent company and a third party, the Clause would not operate.

Mr. Lyttelton

I must carry this a little further, because it is still obvious that the Treasury Bench have no idea of what they are letting themselves in for. The Attorney-General quite properly said that the only transaction on which it was possible to calculate the differential was where stock was sold or proposed to be sold in this country. But that does not get us any further. What we want to know, having calculated that, is whether it will fall within this Clause? That is the point. Supposing I sell at cost, without deducting any profit, a number of components to an Indian Company. Is that coming within this Clause? Of course it is. The only transaction which lies outside this Clause is a transaction which can be proved to be at international parity after the deduction of shipping costs and at the appropriate rate of exchange.

If it could be shown that I am selling to the British Railways parts for a diesel locomotive at x price and supplying my Indian company with the same parts at the same price f.o.b. I should find myself hounded by the Treasury if I made no deduction for not making the profit I should have made if I were a Treasury blue-eyed boy. It is difficult to know exactly what price ought to be charged.

I regret very much ever having attempted to build up a business in India. I shall have to keep two or three officials permanently residing at the Treasury to find out what I am to do. They will have to build a hostel which will include a dormitory—in which the hon. Member for Bilston (Mr. Nally) will no doubt lie down occasionally—while they find out whether I am liable to a £10,000 fine or two years as a guest of His Majesty. The thing is utterly impossible.

The Government reply only deepens my anxiety. I beg the Chancellor to look at this again. There is no other way to remedy it except by tearing up the Clause and beginning again; and if he wishes to obtain some guidance in the way he should go he should study the Amendments we have put down.

11.15 p.m.

Mr. Nally

It may be 11 a.m., or 11 a.m., but I see no reason why we on this side of the Committee should stand for the juvenile wisecracks of the right hon. Gentleman on a matter of some importance. It will be noticed in HANSARD tomorrow how the right hon. Gentleman referred to what he did in India and in this country, and it was rather noticeable that in the four references he made to the companies with which he is associated he used the personal pronoun. The truth of the matter is that the right hon. Gentleman has really no business at this time of night to get up and say the sort of thing he did, unless he and the Opposition are prepared to pursue the Amendments they have put down. No matter what arrangements have been made between the two sides, the right hon. Gentleman should pursue his Amendments, and I am not prepared—

Hon. Members

I!

The Deputy-Chairman

Order, order. I really cannot hear what the hon. Gentleman is saying.

Mr. Nally

I thought it was an elementary assumption in the House that we were all equal, even the youngest of us, despite our varied capabilities. Speaking as an individual Member, it seems to me a quite improper arrangement, and after the speech of the right hon. Gentleman and the phrases he used about what is embodied in the Clause the Government are espousing, I conceive it to be the duty of the Opposition to press all their Amendments.

Mr. Lyttelton

The hon. Gentleman appears not only to be acting as Deputy-Leader of the House but also to be leading the Opposition. I must warn him against the very heavy load of responsibility he is assuming.

Mr. Nally

The right hon. Gentleman has made an accusation that he ought to withdraw. I have a certain measure of good taste, and the one ambition I certainly have never had is to become that. If the right hon. Gentleman believes in what he is saying—and he spoke in terms of what might be described as those of an elevated and honest barrow-boy—he ought logically to pursue each Amendment.

Mr. Martin Lindsay (Solihull)

On a point of order. Is the hon. Gentleman in order in calling the right hon. Gentleman an "elevated barrow-boy?"

The Deputy-Chairman

I did not hear the hon. Gentleman.

Mr. Nally

I said "elevated and honest." If the right hon. Gentleman believes everything he has said, then he has no alternative but to proceed with the Amendments. If he does not do so, I can only assume that the Opposition are completely insincere about this Clause, and that in the sort of arrangements that have been made tonight about the order of Business the Committee will be presented to the country as being completely dishonest.

The Attorney-General

May I bring the debate back to the Clause? The right hon. Gentleman has obviously pointed to difficulties of importance. It had been the intention of the Committee earlier to discuss these Amendments one by one. They will be discussed at a later date, and we can then go thoroughly into the details of the Clause and investigate the difficulties. We feel that this Clause is one we cannot do without. It is essential to deal with certain types of tax evasion, but at a later stage we will have to give serious consideration to the difficulties that have been pointed out.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 302; Noes, 282.

Division No. 135.] AYES [11.20 p.m.
Acland, Sir Richard Bacon, Miss Alice Bing, G. H. C.
Adams, Richard Baird, J. Blenkinsop, A.
Albu, A. H. Balfour, A. Blyton, W. R.
Allen, Arthur (Bosworth) Barnes, Rt. Hon. A. J. Boardman, H.
Allen, Scholefield (Crewe) Bartley, P. Booth, A.
Anderson, Alexander (Motherwell) Bellenger, Rt. Hon. F. J. Bottomley, A. G.
Anderson, Frank (Whitehaven) Benn, Wedgwood Bowden, H. W.
Allies, Rt. Hon. C. R. Benson, G. Bowles, F. G. (Nuneaton)
Awbery, S. S. Beswick, F. Brook, Dryden (Halifax)
Ayles, W. H. Bevan, Rt. Hon. A. (Ebbw Vale) Brooks, T. J. (Normanton)
Broughton, Dr. A. D. D. Hargreaves, A. Neal, Harold (Bolsover)
Brown, Rt. Hon. George (Belper) Hastings, S. Noel-Baker, Rt. Hon. P. J.
Brown, Thomas (Ince) Hayman, F. H. O'Brien, T.
Burke, W. A. Henderson, Rt. Hn. Arthur (Tipton) Oldfield, W. H.
Burton, Miss E. Herbison, Miss M. Oliver, G. H.
Butler, Herbert (Hackney, S.) Hewitson, Capt. M. Orbach, M.
Carmichael, J. Hobson, C. R. Padley, W. E.
Castle, Mrs. B. A Holman, P. Paling, Rt. Hon. Wilfred (Dearne V'lly)
Champion, A. J. Holmes, Horace (Hemsworth) Paling, Will T. (Dewsbury)
Chetwynd, G. R. Houghton, D. Pannell, T. C.
Clunie, J. Hoy, J. Pargiter, G. A.
Cocks, F. S. Hubbard, T. Parker, J.
Coldrick, W. Hudson, James (Ealing, N.) Paton, J.
Collick, P. Hughes, Emrys (S. Ayrshire) Pearson, A.
Collindridge, F. Hughes, Hector (Aberdeen, N.) Peart, T. F.
Cook, T. F. Hynd, H. (Accrington) Porter, G.
Cooper, Geoffrey (Middlesbrough, W.) Hynd, J. B. (Attercliffe) Price, Philips (Gloucestershire, W.)
Cooper, John (Deptford) Irvine, A. J. (Edge Hill) Proctor, W. T.
Corbet, Mrs. Freda (Peckham) Irving, W. J. (Wood Green) Pryde, D. J.
Cove, W. G. Isaacs, Rt. Hon G. A. Pursey, Cmdr. H.
Craddock, George (Bradford, S.) Janner, B. Rankin, J.
Crawley, A. Jay, D. P. T. Rees, Mrs. D.
Crosland, C. A. R. Jeger, George (Goole) Reeves, J.
Crossman, R. H. S. Jeger, Dr. Santo (St. Pancras, S.) Reid, Thomas (Swindon)
Cullen, Mrs. A. Jenkins, R. H. Raid, William (Camlachie)
Daines, P. Johnson, James (Rugby) Rhodes, H.
Dalton, Rt. Hon. H. Johnston, Douglas (Paisley) Richards, R.
Darling, George (Hillsborough) Jones, David (Hartlepool) Robens, Rt. Hon. A.
Davies, A. Edward (Stoke, N.) Jones, Frederick Elwyn (W. Ham, S.) Roberts, Emrys (Merioneth)
Davies, Rt. Hon. Clement (Montgomery) Jones, Jack (Rotherham) Roberts, Goronwy (Caernarvonshire)
Davies, Harold (Leek) Jones, William Elwyn (Conway) Robertson, J. J. (Berwick)
Davies, Stephen (Merthyr) Keenan, W. Robinson, Kenneth (St. Pancras, N.)
de Freitas, Geoffrey Kenyan, C. Rogers, George (Kensington, N.)
Deer, G. Key, Rt. Hon. C. W. Ross, William
Dodds, N. N. King, Dr. H. M. Royle, C.
Donnelly, D. Kinghorn, Sqn. Ldr. E. Shackleton, E. A. A.
Driberg, T. E. N. Kinley, J. Shawcross, Rt. Hon. Sir Hartley
Dugdale, Rt. Hon. J. (W. Bromwich) Lang, Gordon Shinwell, Rt. Hon. E.
Dye, S. Lee, Frederick (Newton) Shurmer, P. L. E.
Silverman, Julius (Erdington)
Ede, Rt. Hon. J. C. Lee, Miss Jennie (Cannock) Silverman, Sydney (Nelson)
Edelman, M. Lever, Harold (Cheetham) Simmons, C. J.
Edwards, John (Brighouse) Lever, Leslie (Ardwick) Slater, J.
Edwards Rt. Hon. Ness (Caerphilly) Lewis, Arthur (West Ham, N.) Smith, Ellis (Stoke, S.)
Edwards, W. J. (Stepney) Lewis, John (Bolton, W.) Smith, Norman (Nottingham, S.)
Evans, Albert (Islington, S. W.) Lindgren, G. S. Snow, J. W.
Evans, Edward (Lowestoft) Lipton, Lt.-Col. M. Sorensen, R. W.
Evans, Stanley (Wednesbury) Logan, D. G. Soskice, Rt. Hon Sir Frank
Ewart, R. Longden, Fred (Small Heath) Sparks, J. A.
Fernyhough, E. McAllister, G. Steele, T.
Field, Capt. W. J. MacColl, J. E. Stewart, Michael (Fulham, E.)
Finch, H. J. Macdonald, A. J. F. (Roxburgh) Stokes, Rt. Hon. R. R.
Fletcher, Eric (Islington, E.) McGhee, H. G. Strachey, Rt. Hon. J.
Follick, M. McGovern, J. Strauss, Rt. Hon. George (Vauxhall)
Foot, M. M. McInnes, J. Stross, Dr. Barnett
Forman, J. C. Mack, J. D. Summerskill, Rt. Hon. Edith
Fraser, Thomas (Hamilton) McKay, John (Wallsend) Sylvester, G. O.
Freeman, John (Watford) Mackay, R. W. G. (Reading, N.) Taylor, Bernard (Mansfield)
Freeman, Peter (Newport) McLeavy, F. Taylor, Robert (Morpeth)
Gaitskell, Rt. Hon. H. T. N. MacMillan, Malcolm (Western Isles) Thomas, David (Aberdare)
Ganley, Mrs. C. S. McNeil, Rt. Hon. H. Thomas, George (Cardiff)
George, Lady Megan Lloyd MacPherson, Malcolm (Stirling) Thomas, Iorwerth (Rhondda, W.)
Gibson, C. W. Mainwaring, W. H. Thomas, Ivor Owen (Wrekin)
Gilzean, A. Mallalieu, E. L. (Brigg) Thorneycroft, Harry (Clayton)
Glanville, James (Consett) Mallalieu, J. P. W. (Huddersfield, E.) Thurtle, Ernest
Gooch, E. G. Mann, Mrs. Jean Timmons, J.
Gordon-Walker, Rt. Hon. P. C. Manuel, A. C. Tomney, F.
Granville, Edgar (Eye) Marquand, Rt. Hon. H. A. Turner-Samuels, M.
Greenwood, Anthony (Rossendale) Mathers, Rt. Hon. G. Ungoed-Thomas, Sir Lynn
Greenwood, Rt. Hn. Arthur (Wakefield) Mellish, R. J. Usborne, H.
Grenfell, Rt. Hon. D. R. Messer, F. Vernon, W. F.
Grey, C. F. Middleton, Mrs. L. Viant, S. P.
Griffiths, David (Rother Valley) Mikardo, Ian. Wade, D. W.
Griffiths, Rt. Hon. James (Llanelly) Mitchison, G. R. Wallace, H. W
Griffiths, William (Exchange) Moeran, E. W. Watkins, T. E.
Grimond, J. Monslow, W. Webb, Rt. Hon M. (Bradford, C.)
Gunter, R. J. Moody, A. S. Weitzman, D.
Hale, Joseph (Rochdale) Morgan, Dr. H. B. Wells, Percy (Faversham)
Hale, Leslie (Oldham, W.) Morley, R. Wells, William (Walsall)
Hall, Rt. Hon. Glenvil (Colne Valley) Morris, Percy (Swansea, W.) West, D. G.
Hall, John (Gateshead, W.) Morrison, Rt. Hon. H. (Lewisham. S.) Wheatley, Rt. Hon. John (Edinb'gh E.)
Hamilton, W. W. Mort, D. L. White, Mrs. Eirene (E. Flint)
Hannan, W. Moyle, A. White, Henry (Derbyshire, N.E.)
Hardman, D. R. Mulley, F. W. Whiteley, Rt. Hon. W.
Hardy, E. A. Nally, W. Wigg, G.
Wilcock, Group Capt. C. A. B. Williams, Ronald (Wigan) Woodburn, Rt. Hon. A.
Wilkes, L. Williams, Rt. Hon. Thomas (Don V'lly) Woods, Rev. G. S.
Wilkins, W. A. Williams, W. T. (Hammersmith, S.) Wyatt, W. L.
Willey, Frederick (Sunderland) Wilson, Rt. Hon. Harold (Huyton) Yates, V. F.
Willey, Octavius (Cleveland) Winterbottom, Ian (Nottingham, C.) Younger, Rt. Hon. K.
Williams, David (Neath) Winterbottom, Richard (Brightside)
Williams, Rev. Llywelyn (Abertillery) Wise, F. J. TELLERS FOR THE AYES:
Mr. Popplewell and Mr. Delargy.
NOES
Aitken, W. T. Duthie, W. S. Lloyd, Rt. Hon. G. (King's Norton)
Alport, C. J. M. Eccles, D. M. Lloyd, Maj. Guy (Renfrew, E.)
Amery, Julian (Preston, N.) Eden, Rt. Hon. A. Lloyd, Selwyn (Wirral)
Amory, Heathcoat (Tiverton) Erroll, F. J. Lockwood, Lt.-Col. J. C.
Arbuthnot, John Fisher, Nigel Longden, Gilbert (Herts, S. W.)
Ashton, H. (Chelmsford) Fort, R. Low, A. R. W.
Assheton, Rt. Hon. R. (Blackburn, W.) Foster, John Lucas, Sir Jocelyn (Portsmouth, S.)
Astor, Hon. M. L. Fraser, Hon. Hugh (Stone) Lucas, P. B. (Brentford)
Baker, P. A. D. Fraser, Sir Ian (Morecambe & Lonsdale) Lucas-Tooth, Sir Hugh
Baldock, Lt.-Cmdr. J. M. Fyfe, Rt. Hon. Sir David Maxwell Lyttelton, Rt. Hon. O.
Baldwin, A. E. Gage, C. H. McAdden, S. J.
Banks, Col. C. Galbraith, Cmdr. T. D. (Pollok) McCorquodale, Rt. Hon. M. S.
Baxter, A. B. Galbraith, T. G. D. (Hillhead) Macdonald, Sir Peter (I. of Wight)
Beamish, Maj. Tufton Gammans, L. D. Mackeson, Brig. H. R.
Bell, R. M. Garner-Evans, E. H. (Denbigh) McKibbin, A.
Bennett, Sir Peter (Edgbaston) Gates, Maj. E. E. McKie, J. H. (Galloway)
Bennett, Dr. Reginald (Gosport) Glyn, Sir Ralph Maclay, Hon. John
Bennett, William (Woodside) Gomme-Duncan, Col. A. Maclean, Fitzroy
Bevins, J. R. (Liverpool, Toxteth) Gridley, Sir Arnold MacLeod, Iain (Enfield, W.)
Birch, Nigel Grimston, Hon. John (St. Albans) MacLeod, John (Ross and Cromarty)
Bishop, F. P. Grimston, Robert (Westbury) Macmillan, Rt. Hon Harold (Bromley)
Black, C. W. Harden, J. R. E. Macpherson, Major Niall (Dumfries)
Boles, Lt.-Col. D. C. (Wells) Hare, Hon. J. H. (Woodbridge) Maitland, Cmdr. J. W.
Boothby, R. Harris, Frederic (Croydon, N.) Manningham-Buller, R. E.
Bossom, A. C. Harris, Reader (Heston) Marlowe, A. A. H.
Boyd-Carpenter, J. A. Harvey, Air Cdre. A. V. (Macclesfield) Marples, A. E.
Boyle, Sir Edward Harvey, Ian (Harrow, E.) Marshall, Douglas (Bodmin)
Bracken, Rt. Hon. B. Harvie-Watt, Sir George Maude, Angus (Ealing, S.)
Braine, B. R. Hay, John Maude, John (Exeter)
Braithwaite, Sir Albert (Harrow, W.) Head, Brig. A. H. Maudling, R.
Braithwaite, Lt.-Cr. G. (Bristol, N. W.) Headlam, Lt.-Col. Rt. Hon. Sir Cuthbert Medlicott, Brig. F
Bromley-Davenport, Lt.-Col. W. Heald, Lionel Mellor, Sir John
Brooke, Henry (Hampstead) Heath, Edward Molson, A. H. E.
Browne, Jack (Govan) Henderson, John (Cathcart) Monckton, Sir Walter
Buchan-Hepburn, P. G. T. Hicks-Beach, Maj. W. W. Moore, Lt.-Col. Sir Thomas
Bullock, Capt. M. Higgs, J. M. C. Morrison, John (Salisbury)
Bullus, Wing Commander E. E. Hill, Dr. Charles (Luton) Morrison, Rt. Hon W. S. (Cirencester)
Burden, F. A. Hill, Mrs. E. (Wythenshawe) Mott-Radclyffe, C. E.
Butcher, H. W. Hinchingbrooke, Viscount Nabarro, G.
Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n) Hirst, Geoffrey Nicholls, Harmar
Carr, Robert (Mitcham) Hollis, M. C. Nicholson, G.
Carson, Hon. E. Holmes, Sir Stanley (Harwich) Nield, Basil (Chester)
Channon, H. Hope, Lord John Noble, Cmdr. A. H. P.
Churchill, Rt. Hon. W. S. Hopkinson, Henry Nugent, G. R. H.
Clarke, Col. Ralph (East Grinstead) Hornsby-Smith, Miss P. Nutting, Anthony
Clarke, Brig. Terence (Portsmouth, W.) Horsbrugh, Rt. Hon. Florence Oakshott, H. D.
Clyde, J. L. Howard, Gerald (Cambridgeshire) Odey, G. W.
Colegate, A. Howard, Greville (St. Ives) O'Neill, Rt. Hon. Sir Hugh
Cooper, Sqn. Ldr. Albert (Ilford, S.) Hudson, Sir Austin (Lewisham, N.) Ormsby-Gore, Hon. W. D.
Cooper-Key, E. M. Hudson, Rt. Hon. Robert (Southport) Orr, Capt. L. P. S.
Orr-Ewing, Charles Ian (Hendon, N.)
Corbett, Lt.-Col. Uvedale (Ludlow) Hudson, W. R. A. (Hull, N.) Orr-Ewing, Ian L. (Weston-super-Mare)
Craddock, Beresford (Spelthorne) Hurd, A. R. Osborne, C.
Cranborne, Viscount Hutchinson, Geoffrey (Ilford, N.) Peake, Rt. Hon. O.
Crookshank, Capt. Rt. Hon. H. F. C. Hutchison, Lt.-Com. Clark (E'b'rgh W.) Perkins, W. R. D.
Crosthwaite-Eyre, Col. O. E. Hutchison, Col. James (Glasgow) Peto, Brig. C. H. M.
Crouch, R. F. Hyde, Lt.-Col. H. M. Pitman, I. J.
Crowder, Capt. John (Finchley) Hylton-Foster, H. B. Powell, J. Enoch
Crowder, Petre (Ruislip—Northwood) Jennings, R. Price, Henry (Lewisham, W.)
Cundiff, F. W. Johnson, Howard (Kemptown) Prior-Palmer, Brig. O.
Cuthbert, W. N. Jones, A. (Hall Green) Profumo, J. D.
Darling, Sir William (Edinburgh, S.) Joynson-Hicks, Hon. L. W. Raikes, H. V.
Davidson, Viscountess Kaberry, D. Rayner, Brig. R.
Davies, Nigel (Epping) Kerr, H. W. (Cambridge) Redmayne, M.
de Chair, Somerset Kingsmill, Lt.-Col. W. H. Remnant, Hon. P.
De la Bère, R. Lambert, Hon. G. Renton, D. L. M.
Deedes, W. F. Lancaster, Col. C. G. Roberts, Maj. Peter (Heeley)
Dodds-Parker, A. D. Langford-Holt, J. Robertson, Sir David (Caithness)
Donner, P. W. Law, Rt. Hon. R. K. Robinson, Roland (Blackpool, S.)
Douglas-Hamilton, Lord Malcolm Leather, E. H. C. Robson-Brown, W.
Drayson, G. B. Legge-Bourke, Maj. E. A. H. Rodgers, John (Sevenoaks)
Drewe, C. Lennox-Boyd, A. T. Roper, Sir Harold
Dugdale, Maj. Sir T. (Richmond) Lindsay, Martin Ropner, Col. L.
Duncan, Capt. J. A. L. Linstead, H. N. Russell, R. S.
Dunglass, Lord Llewellyn, D. Ryder, Capt. R. E. D.
Salter, Rt. Hon. Sir Arthur Studholme, H. G. Wakefield, Sir Wavell (Marylebone)
Sandys, Rt. Hon D. Summers, G. S. Walker-Smith, D. C.
Savory, Prof. D. L. Sutcliffe, H. Ward, Hon. George (Worcester)
Scott, Donald Taylor, Charles (Eastbourne) Ward, Miss I. (Tynemouth)
Shepherd, William Taylor, William (Bradford, N.) Waterhouse, Capt. Rt. Hon. C.
Smiles, Lt.-Col. Sir Walter Teeling, W. Watkinson, H.
Smithers, Peter (Winchester) Teevan, T. L. Webbe, Sir H. (London & Westminster)
Smyth, Brig. J. G. (Norwood) Thomas, J. P. L. (Hereford) Wheatley, Maj. M. J. (Poole)
Snadden, W. McN. Thompson, Kenneth Pugh (Walton) White, Baker (Canterbury)
Soames, Capt. C. Thompson, Lt.-Cmdr. R. (Croydon, W.) Williams, Charles (Torquay)
Spearman, A. C. M. Thorneycroft, Peter (Monmouth) Williams, Gerald (Tonbridge)
Spence, H. R. (Aberdeenshire, W.) Thornton-Kemsley, Col. C. N. Williams, Sir Herbert (Croydon, E.)
Spens, Sir Patrick (Kensington, S.) Thorp, Brig. R. A. F. Wills, G.
Stanley, Capt. Hon. Richard (N. Fylde) Tilney, John Wilson, Geoffrey (Truro)
Stevens, G. P. Turner, H. F. L. Winterton, Rt. Hon. Earl
Steward, W. A. (Woolwich, W.) Turton, R. H. Wood, Hon. R.
Stewart, Henderson (Fife, E.) Tweedsmuir, Lady York, C.
Stoddart-Scott, Col. M. Vane, W. M. F.
Storey, S. Vaughan-Morgan, J. K. TELLERS FOR THE NOES:
Strauss, Henry (Norwich, S.) Vosper, D. F. Major Conant and Mr. Digby.
Stuart, Rt. Hon. James (Moray) Wakefield, Edward (Derbyshire, W.)

Clauses 34 to 38 ordered to stand part of the Bill.

To report Progress; and ask leave to sit again.—[Mr. Ede.]

Committee report Progress; to sit again Tomorrow.