§ Mr. F. J. Erroll (Altrincham and Sale)
I beg to move, in page 51, line 30, to leave out "of metal."
This small Amendment is designed to draw attention to the fact that the concessions in regard to the mining industry are to be given only to those concerns which mine metal and those which procure oil from below the surface of the earth. It seems rather unreasonable that these concessions, valuable as they are, should be confined to metal mines and not be extended to non-metalliferous mining. I want to stress the importance of industrial diamonds to the rearmament industry, and, therefore, the need for them to receive comparable benefit and relief.
Earlier speakers have referred to the importance of the china clay industry, to which no comparable relief is being given. There are other important nonmetal mining activities such as mica mining, salt mining, sulphur mining. I submit that if the case is made for metal mining, it is equally good for the mining of non-metals. I hope, therefore, that my right hon. Friend will accept our amendment and thus give this relief to all those firms and people engaged in the hazardous occupation of mining.
§ Mr. Anthony Crosland (Gloucestershire, South)
This Amendment raises an important point because the concessions which the Chancellor made last week applied to oil companies, mining companies and asbestos companies, whereas this Clause is much more restricted. I have some sympathy with the hon. Member for Altrincham and Sale (Mr. Erroll), who said that it cannot be 952 argued that the materials he mentioned are less important than the ones mentioned in the Clause. The Clause is drawn rather narrowly and, if we make concessions of this kind, the logic is to make them widely. I hope, therefore, that we shall have a sympathetic answer from the Government.
§ Mr. Gaitskell
I wish briefly to support the hon. Member for Altrincham and Sale (Mr. Erroll) and my hon. Friend the Member for Gloucestershire, South (Mr. Crosland). If we are to make concessions to mineral companies there seems to be no point in drawing a distinction between metals and other mineral products. I do not know for certain, but I imagine that, for example, anhydrite is not a metal; nevertheless, it is an extremely important product which we hope will prove to be the basis of the production of a large amount of sulphuric acid in this country, and so replace imported supplies of sulphur.
Therefore, it would be absurd to exclude companies mining anhydrite from the benefits of this concession. I do not propose to prolong the proceedings, but we shall need a good deal of convincing from the Solicitor-General before he rejects this Amendment and refuses to do anything about the matter.
§ Mr. Charles Williams (Torquay)
Because I have a rather closer connection with this matter than some people, may I ask the Chancellor once again seriously to consider the position of the china clay industry? It is true that it is comparatively prosperous, but it is of immense value to the export trade. Apart from the mineral mentioned by the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell), there are many other substances such as gypsum, pitchblend, etc.
I could give the Committee a long list with a large number of arguments, but I will not do so. It is obvious that the Treasury have not considered this matter and I hope the Government will include these other materials and make the Clause much more simple.
§ The Solicitor-General (Sir Reginald Manningham-Buller)
I can do no more than repeat to my right hon. Friend the Member for Torquay (Mr. C. Williams) what I have said already about the china clay industry, namely, that it is under consideration.
953 We agree with the general principle raised by my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) and by the right hon. Gentleman and hon. Gentleman opposite. The intention of this Clause is similar to that behind the 1940 Finance Act. The right hon. Gentleman will remember that there power was given to the board of referees to give extra percentage allowances, like those proposed in the new Clause, to concerns engaged on working minerals from a natural source of a wasting nature. That power was quite general but, in fact, apart from a small percentage in relation to coal, the only cases in which the board of referees granted these additional percentages were those of metal mines and oil wells. This Clause has been limited to metal mines and oil wells to obviate going back to the board of referees.
The Committee will appreciate that instead of it being left to the discretion of the board of referees to fix a varying percentage for different industries, the percentages here are fixed, and to that extent this Clause operates as a clarifying medium and is more simple in scope than the Finance Act, 1940. We will give consideration to the case of industrial diamonds, to which my hon. Friend referred. I say that without in any way indicating whether we shall, after giving further consideration to that matter, decide to extend this Clause to include them or not.
§ Mr. Gaitskell
Why should the hon. and learned Gentleman limit himself to industrial diamonds? As the right hon. Gentleman the Member for Torquay (Mr. C. Williams) rightly said, one could give any number of examples. There was the report of a Committee, appointed by my right hon. Friend the Member for Easington (Mr. Shinwell), which made a preliminary survey of the country's mineral resources. If the Solicitor-General studies that, he will find that the resources, although not as adequate as we should like, are at least considerably larger than many people suppose. We are anxious to see those resources developed. Here, surely, is an opportunity for giving a little encouragement to this development.
If all that the Solicitor-General is saying is, "Never mind. We had it in the Finance Act, 1940, that the concessions were to relate to minerals of a wasting 954 character" —I do not quite know of a mine which is not of a wasting character, but I daresay there is a legal answer to that. If all that the hon. and learned Gentleman is saying is that it was found that the applications under that Act were limited to metal and oil wells, at least there is no harm in putting in the very phrase that he used himself, "minerals of a wasting character," or something of that kind.
In the circumstances, the Solicitor-General's answer is extremely inadequate, and I should be disposed to press the matter considerably further.
§ Sir Herbert Williams (Croydon, East)
I had not realised, when this discussion started, that it had a bearing on a later Amendment to a new Clause in the name of the Chancellor of the Exchequer.
The chairman of an industry which is called the ballast and sand industry is one of my constituents, and some years ago, at his request, I became its president. It is the second largest productive industry of the country. It lifts about 50 million tons a year out of the earth, and incidentally, in the process defaces the countryside a little. That industry is very necessary to the conduct of the country's industry generally. Without its products no aerodrome can be constructed, no roads made, no houses built, and no large civil engineering enterprise of any kind whatever could be carried on—and yet it is a wasting asset.
Under existing circumstances, those engaged in it are being pressed to produce, probably, more than is economically desirable from the long-term viewpoint of the industry; and from their purely selfish point of view, some of them will lose money by producing too much just now. Therefore, I think that they ought to be brought into the scope of some Clause like this. Our more definite proposal appears on page 1513 of the Order Paper as an Amendment to the Chancellor's new Clause, which relates not to new enterprises, but to existing ones in respect of asbestos and, I think, oil.
I simply want to make a first claim for this very important industry, without which, as I have said, we cannot carry out the re-armament programme at all, or housing, or anything which matters to the development of the country. Therefore, if the industry is to be forced to 955 produce too rapidly now, it will be in difficulties in the future. There will be great difficulties in the future anyhow, because in 50 years from now, as far as can be made out, the whole of the country's supplies will have been exhausted.
The committee under the chairmanship of Major Water, V.C., which is investigating the whole problem, is comprised jointly of the Ministry of Works, the Ministry of Town and Country Planning, representatives of the industry and of the Geological Survey, and its reports indicate that supplies may be exhausted in 50 years and that in the meantime the people concerned will be ruined through the system of taxation. I hope, therefore, that Her Majesty's Ministers will give very careful consideration to the later Amendment to the Chancellor's new Clause.
§ 4.15 p.m.
§ Mr. Mitchison
I find myself in a little difficulty, because I am concerned as a director in a company which mines fluorspar. Fluorspar is always found with lead, and it is a little difficult to know what kind of mining that is within the present definition. This is one of the matters that the Millard Tucker Committee have considered, although, of course, in connection with Income Tax. They have, however, considered the general point, and paragraph 229, on page 76, of their Report quotes from the Income Tax Act, 1945, the definition ofmine, oil well, or other source of mineral deposits of a wasting nature.I think that it was that, or some similar, statutory definition that the Solicitor-General had in mind when he was speaking.
The Millard Tucker Committee, after considering the matter generally, came to the conclusion that the business profits of a concern of the kind in question could not be properly computed without a proper allowance for depletion of minerals. Apparently the case that led them to that general conclusion was what they themselves described as an "extreme" case.
It is not often that I have to give such direct support to the hon. Member for Croydon, East (Sir H. Williams), but they took the very case that he has mentioned. In paragraph 233 of their Report 956 they point out that if one is mining sand and gravel, onebuys a piece of land, takes out the sand and gravel either for sale or for use in the building side of its business, and after a short time is left with nothing but a hole in the ground which is valueless.It is perfectly obvious that on logical grounds there can be no distinction, and it is equally obvious that the experienced Committee who prepared the Report—dealing, I agree, primarily with Income Tax, but dealing with the general question of taxation also—formed their opinion and made it perfectly clear that that opinion applied to all cases of a wasting asset of this kind—metal, gravel or whatever it might be.
§ Mr. Erroll
I do not expect that my hon. and learned Friend the Solicitor-General, when he studied the Amendment as it appears on the Order Paper, thought that there would be quite such a well presented case for a widening of the relief. Now that he has agreed to consider the case of industrial diamonds, I assure him that the case is equally justifiable for other non-metals which are mined both in this country and overseas. I am wondering, therefore, now that he has heard the arguments from both sides of the Committee, whether before the Report stage he would be prepared to consider all these nonmetals, and not just industrial diamonds.
§ Mr. E. Fletcher
I, too, hope that the Chancellor of the Exchequer who has listened to the discussion will have been impressed by the arguments that have been addressed to him from both sides of the Committee. I think it is now clear that the considerations which are made out for giving special concessions to companies dealing in oil wells or mines, apply with at least equal force to any companies having any kind of mines, whether metal or the marginal cases which might be called metal or something else, such as salt, china clay, and all these other things.
The point, surely, which has impressed itself upon the Chancellor's mind is that the basis for giving the additional relief is the fact that these companies are dealing with wasting assets, and, therefore, are entitled to special consideration. It does not seem that there can be any clear line of demarcation between companies owning oil wells or mines of metal, from any other company, such as the 957 sand and gravel companies—whether technically they are mines I do not know, nor am I sure whether mines are the same as quarries for this purpose.
Surely the principle is that any company which deals in wasting assets of that kind is in a quite different category from the company which is making textiles or aeroplanes, or products which are sold abroad, and, therefore. is entitled to special consideration. The matter was considered by the Millard Tucker Committee. We have a duty to encourage companies engaged in this kind of work in our own land, and I hope that in view of the representations from both sides of the Committee the Chancellor will at least say he will look at it sympathetically between now and Report stage.
§ The Solicitor-General
Hon. Members on both sides of the Committee have referred to particular industries in respect of which they felt that a case could be made out for expanding this Clause. It must be borne in mind that under the 1940 Act it was possible for those industries to come before the board of referees and make out their case for an increased percentage.
Apart from coal where they gave a small increase, the board of referees gave increases only in relation to metal mining and oil companies and, therefore, their decision, I suggest, casts some doubt upon whether some of these additional industries can come within the intention of this Clause, which is limited to metal mining and oil companies. We will give consideration to the question of asbestos. In the case of sand and gravel there is a new Clause on the Order Paper dealing with output and I think it would be more convenient to discuss that, which is a rather separate issue, when we come to the Clause.
Having regard to the decision of the Board of Referees, while we will consider the position of china clay and also asbestos, and industrial diamonds—
§ The Solicitor-General
I am not in a position to give any assurance on that. Certainly, there was no case made out before the Board of Referees—
§ The Solicitor-General
I am not in a position to give an assurance with regard to that. I am not sure whether it amounts to an asset from a source of a wasting nature within the meaning of the Finance Act, 1940. I cannot be more frank than that. The Committee must bear in mind the extra reliefs which are being given in addition to all companies, whether they come within this Clause or not.
§ Mr. Douglas Jay (Battersea, North)
We are not fully convinced. As I see it, the difficulty is why there should be any discrimination between a metal outright and a mineral which is not a metal. I am sure that what the right hon and learned Gentleman says is correct. It may be the case that other companies outside the metal field did not succeed in convincing the Board of Referees, for what reason we do not know, during the war period.
But that, surely, is no reason for not giving them a chance to do so in quite different circumstances in the future. I am glad the right hon. and learned Gentleman has agreed to look at china clay. That is a most vital and valuable industry, not only to the West Country, but to the whole of our export trade. It would be ridiculous to have a tin mine in Cornwall getting this concession and a china clay works a mile or two away being denied it. It is, however, not merely a matter of china clay. There are the anhydrite deposits in West Cumberland which are near iron ore mines. Why should the concession go to iron ore and not to anhydrite?
The right hon. and learned Gentleman is not right in assuming that anhydrite is not a wasting asset. Only this morning I was listening to an expert on anhydrite who informed me, and one or two others, that the deposits in West Cumberland will last only for a limited period of years. The right hon. and learned Gentleman can check that up if he will not take it from me, but I do not think we could expect it to be otherwise.
Then there is the question of potash in North Yorkshire which is a very important recent discovery. I take it that potash is a mineral and not a metal. Why should potash be denied this concession? I cannot see any argument for this curious discrimination, and I am sure that a real chemist or geologist could adduce many more examples than I can. Would not it be possible for the Government to say 959 that they will consider anhydrites, potash. gypsum and fluorspar, which I thought was a metal, and any other materials which fall into this category?
§ The Solicitor-General
I do not want to appear to obstruct the proceedings of the Committee. I can say to the right hon. Gentleman that we will look into the position of anhydrite. I am not sure whether it comes within the purpose of this Clause. If we had the machinery, which would involve a lot of work, it would be easy, but here we are trying to simplify the thing to a definite class of industry which comes within the definition, and I cannot give any further assurance.
§ Mr. Gaitskell
Do we understand that the Government are prepared to look at all the cases mentioned and at the Amendment of the hon. Member for Altrincham and Sale (Mr. Erroll) and see whether they can agree to this on Report stage? There may be arguments against it, but I must say I have not heard any so far. I do not think that the argument about machinery is so formidable.
Happily the number of producers of minerals in this country is not large. We have not the mineral resources we should have liked. I hope that the Chancellor will realise the strong argument in favour of non-discrimination, and that he will consider whether concessions can be made on the basis of a wasting asset instead of in the limited field on which the present Bill is based; and even adding thereto a few individual cases. Many other cases could have been mentioned but we merely selected the most obvious.
§ The Chancellor of the Exchequer (Mr. R. A. Butler)
I think that my right hon. and learned Friend the Solicitor-General has given a sufficient assurance. He has already given a concession on china clay and industrial diamonds and said we will consider anhydrite sympathetically. The right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) and his hon. Friends, and hon. Gentlemen on this side of the Committee are pushing us very far.
We have to pay attention to some simple considerations such as these, namely, that the capital expenditure on the natural source in question—and this is the old understanding of the Referees 960 —may be exhausted at a greater rate than in the case of other classes of trades or businesses. If in trying to be fair in this matter we get away from that we become unfair to other trades or businesses.
Provided that hon. Gentlemen will realise we are trying to be fair I will support the understanding given by the Solicitor-General; and it may well be possible to cover the case of anhydrites. We will look at that and pay attention to the references to other matters, but I do not want to go beyond the point at which it would be unfair in relation to other trades or businesses.
I was surprised that we could discuss sand and ballast now because there is a new Clause later on the Order Paper to which an Amendment has been put down in the name of the hon. Member for Croydon, East (Sir H. Williams). If we are to have a double discussion on everything we shall never get through the Bill.
§ Mr. Erroll
We are all desirous of making rapid progress, but we seem to have embarked upon a curious kind of auction. Every time the Solicitor-General gets up we have one more concession or are promised consideration. If the case is good for industrial diamonds or asbestos, and anhydrite deserves consideration, why are they not all deserving of consideration?
I suggest that the Solicitor-General might say that he will look at all the representations made to him between now and Report stage. I hope he will not feel too tied by what happened in 1940. That is 12 years ago and a lot has happened since. Conditions which applied in 1940 are not applicable today. Other classes of industry might not then have thought it necessary to apply to the Board of Referees. Because they did not in 1940 is no reason why they should have been debarred, but for our intervention today, from the benefits which are now reluctantly to be given to them.
I suggest that the Solicitor-General should arm himself in his argument, if he needs additional argument, with the Treasury certificate. That gives all the power which he requires to safeguard himself against the abuses and difficulties which he thinks will arise. The Treasury must certify that the output is in the 961 national interest. There is a safeguard, if safeguard be needed.
I suggest that, meantime, he can concede the small point of agreeing to consider the representations of all nonmetal miners in addition to those who have been mentioned today. By way of helping him in his Dutch auction, if he prefers to proceed in that way, I suggest that next time he should concede the case of borax.
§ Mr. Gaitskell
It is obvious that it is not good enough to promise to consider a limited number of minerals. We want the Chancellor to undertake to consider, in effect, this Amendment which proposes to delete the words, "of metal." It may be that there are difficulties about drawing a line between mining generally and
§ other forms of business activity. We have not yet heard much about those difficulties.
§ The hon. Member for Altrincham and Sale (Mr. Erroll) has just indicated ways in which he thinks that those difficulties might be overcome. We are not asking a great deal. We are asking that between now and the Report stage the Chancellor should look at the whole matter again. I must emphasise that it is the whole matter that we want him to look at. I hope that he will do that, otherwise I advise hon. Members to divide the Committee.
§ Question put, "That 'of metal' stand part of the Clause."
§ The Committee divided: Ayes, 219; Noes, 182.963
|Division No 144]||AYES||[4.31 p.m.|
|Aitken, W. T.||Donner, P. W.||Keeling, Sir Edward|
|Allan, R. A. (Paddington, S.)||Doughty, C. J. A.||Lambert, Hon. G.|
|Alport, C. J. M.||Douglas-Hamilton, Lord Malcolm||Lambton, Viscount|
|Amory, Heathcoat (Tiverton)||Drewe, C.||Lancaster, Col. C. G.|
|Anstruther-Gray, Major W. J.||Dugdale, Maj. Rt. Hn. Sir T (Richmond)||Law, Rt. Hon. R. K.|
|Arbuthnot, John||Duncan, Capt. J. A. L.||Legge-Bourke, Maj. E. A. H.|
|Ashton, H. (Chelmsford)||Duthie, W. S.||Legh, P. R. (Petersfield)|
|Assheton, Rt. Hon R. (Blackburn, W)||Elliot, Rt. Hon. W. E||Lloyd, Maj. Guy (Renfrew, E.)|
|Astor, Hon. J. J. (Plymouth, Sutton)||Erroll, F. J||Lloyd, Rt. Hon. Selwyn (Wirral)|
|Baker, P. A. D.||Fell, A.||Lockwood, Lt.-Col. J. C.|
|Baldock, Lt.-Cmdr. J. M.||Fisher, Nigel||Longden, Gilbert (Herts, S.W.)|
|Baldwin, A. E.||Fletcher-Cooke, C||Low, A. R. W.|
|Barber, A. P. L.||Fort, R.||Lucas, Sir Jocelyn (Portsmouth, S.)|
|Baxter, A. B.||Foster, John||Lucas, P. B. (Brantford)|
|Beach, Maj. Hicks||Fraser, Sir Ian (Morecambe & Lonsdale)||Lucas-Tooth, Sir Hugh|
|Bell, Ronald (Bucks, S.)||Galbraith, Cmdr. T. D (Pollok)||McAdden, S. J.|
|Bennett, F. M. (Reading, N.)||Gammans, L. D.||McCorquodale, Rt. Hon. M. S|
|Bennett, William (Woodside)||Garner-Evans, E. H.||Macdonald, Sir Peter (I of Wight)|
|Bevins, J. R. (Toxteth)||George, Rt. Hon. Maj. G. Lloyd||Mackeson, Brig. H. R.|
|Bishop, F. P.||Godber, J. B.||McKie, J. H. (Galloway)|
|Bossom, A. C.||Gough, C. F. H.||Maclean, Fitzroy|
|Boyd-Carpenter, J. A.||Graham, Sir Fergus||MacLeod, Rt. Hon. Iain (Enfield, W.)|
|Boyle, Sir Edward||Gridley, Sir Arnold||MacLeod, John (Ross and Cromarty)|
|Braine, B. R.||Grimston, Hon. John (St. Albans)||Macpherson, Maj. Niall (Dumfries)|
|Braithwaite, Lt.-Cdr G (Bristol, N.W.)||Grimston, Sir Robert (Westbury)||Maitland, Patrick (Lanark)|
|Brooman-White, R. C.||Harden, J. R. E||Manningham-Buller, Sir R. E.|
|Browne, Jack (Govan)||Hare, Hon J. H||Marlowe, A. A. H.|
|Buchan-Hepburn, Rt. Hon. P. G. T.||Harvey, Air Cdre. A. V. (Macclesfield)||Marples, A. E.|
|Bullard, D. G.||Harvey, Ian (Harrow, E.)||Marshall, Douglas (Bodmin)|
|Bullus, Wing Commander E. E.||Harvie-Watt, Sir George||Marshall, Sidney (Sutton)|
|Burden, F. F. A.||Head, Rt. Hon. A. H.||Maude, Angus|
|Butcher, H. W||Heath, Edward||Maudling, R.|
|Butler, Rt. Hon. R. A. (Saffron Walden)||Higgs, J. M. C.||Maydon, Lt.-Comdr. S. L.C.|
|Carr, Robert (Mitcham)||Hinchingbrooke, Viscount||Medlicott, Brig. F.|
|Carson, Hon. E.||Holland-Martin, C. J.||Mellor, Sir John|
|Cary, Sir Robert||Hollis, M. C.||Moore, Lt.-Col. Sir Thomas|
|Channon, H.||Holmes, Sir Stanley (Harwich)||Morrison, John (Salisbury)|
|Clarke, Col. Ralph (East Grinstead)||Holt, A. F||Nabarro, G. D. N.|
|Clarke, Brig. Terence (Portsmouth, W)||Hopkinson, Henry||Nicholson, Godfrey (Farnham)|
|Cole, Norman||Hornsby-Smith, Miss M. P||Nicolson, Nigel (Bournemouth, E.)|
|Conant, Maj. R. J. E.||Horobin, I. M.||Noble, Cmdr. A. H. P|
|Cooper-Key, E. M.||Horsbrugh, Rt. Hon. Florence||Nugent, G. R. H.|
|Craddock, Beresford (Spelthorne)||Hudson, Sir Austin (Lewisham, N.)||Oakshott, H. D.|
|Cranborne, Viscount||Hudson, W. R. A. (Hull, N.)||Odey, G. W.|
|Crookshank, Capt. Rt. Hon. H F C||Hulbert, Wing Cmdr. N. J||O'Neill, Rt. Hon. Sir H. (Antrim, N)|
|Crosthwaite-Eyre, Col. O. E||Hurd, A. R.||Ormsby-Gore, Hon. W. D|
|Crouch, R. F.||Hutchinson, Sir Geoffrey (Ilford, N.)||Orr-Ewing, Ian L (Weston-super-Mare)|
|Cuthbert, W. N.||Hutchison, Lt.-Com. Clark (E'b'rgh W.)||Osborne, C.|
|Darling, Sir William (Edinburgh, S.)||Hylton-Foster, H. B. H.||Partridge, E.|
|Deedes, W. F.||Jenkins, R. C. D. (Dulwich)||Peake, Rt. Hon O|
|Digby, S. Wingfield||Johnson, Eric (Blackley)||Perkins, W. R. D|
|Dodds-Parker, A. D.||Jones, A. (Hall Green)||Peto, Brig. C. H. M|
|Donaldson, Cmdr. C. E. McA||Joynson-Hicks, Hon. L. W.||Peyton, J. W. W|
|Pickthorn, K. W. M.||Smithers, Peter (Winchester)||Thorneyoroft, Rt. Hn. Peter (Monmouth)|
|Pitman, I. J.||Spearman, A. C. M.||Tilney, John|
|Powell, J. Enoch||Spence, H. R. (Aberdeenshire, W.)||Turner, H. F. L.|
|Price, Henry (Lewisham. W.)||Spans, Sir Patrick (Kensington, S.)||Turton, R. H.|
|Prior-Palmer, Brig O. L.||Stanley, Capt. Hon. Richard||Vane, W. M. F|
|Profumo, J. D.||Stevens, G. P.||Vosper, D. F|
|Raikes, H. V.||Steward, W. A. (Woolwich, W.)||Wakefield, Edward (Derbyshire, W.)|
|Rayner, Brig. R.||Stewart, Henderson (Fife, E.)||Wakefield, Sir Wavell (Marylebone)|
|Remnant, Hon P.||Stoddart-Scott, Col. M.||Walker-Smith, D. C.|
|Roberts, Peter (Heeley)||Storey, S.||Ward, Miss I. (Tynemouth)|
|Robertson, Sir David||Strauss, Henry (Norwich, S.)||Wellwood, W.|
|Robson-Brown, W.||Stuart, Rt. Hon. James (Moray)||White, Baker (Canterbury)|
|Rodgers, John (Sevenoaks)||Studholme, H. G.||Williams, Rt. Hon. Charles (Torquay)|
|Roper, Sir Harold||Summers, G. S.||Williams, Sir Herbert (Croydon, E.)|
|Ropner, Col. Sir Leonard||Sutcliffe, H.||Williams, R. Dudley (Exeter)|
|Russell, R. S.||Taylor, Charles (Eastbourne)||Wills, G.|
|Ryder, Capt. R. E. D.||Taylor, William (Bradford, N.)||Wilson, Geoffrey (Truro)|
|Salter, Rt. Hon. Sir Arthur||Teeling, W||Wood, Hon. R.|
|Schofield, Lt.-Col. W. (Rochdale)||Thomas, Rt. Hon J. P. L. (Hereford)|
|Scott, R. Donald||Thompson, Kenneth (Walton)||TELLERS FOR THE NOES:|
|Scott-Miller, Comdr. R.||Thompson, Lt.-Cdr. R. (Croydon, W.)||Mr. T. G. D. Galbraith and|
|Acland, Sir Richard||Hannan, W.||Plummer, Sir Leslie|
|Albu, A. H.||Hardy, E. A.||Porter, G.|
|Awbery, S. S.||Hargreaves, A.||Price, Joseph T. (Westhoughton)|
|Bartley, P.||Harrison, J. (Nottingham, E.)||Pryde, D. J.|
|Bellenger, Rt. Hon. F. J.||Hayman, F. H.||Rankin, John|
|Bence, C. R.||Henderson, Rt. Hon. A. (Rowley Regis)||Reeves, J.|
|Benn, Wedgwood||Herbison, Miss M.||Reid, Thomas (Swindon)|
|Benson, G.||Hobson, C. R.||Reid, William (Camlachie)|
|Bevan, Rt. Hon. A. (Ebbw Vale)||Holman, P.||Rhodes, H.|
|Blackburn, F.||Holmes, Horace (Hemsworth)||Roberts, Albert (Nurmanton)|
|Blenkinsop, A.||Houghton, Douglas||Robinson, Kenneth (St. Pancras, N.)|
|Blyton, W. R.||Hoy, J. H.||Rogers, George (Kensington, N.)|
|Braddock, Mrs. Elizabeth||Hudson, James (Ealing, N.)||Schofield, S. (Barnsley)|
|Brockway, A. F.||Hughes, Emrys (S. Ayrshire)||Shackleton, E. A. A|
|Brook, Dryden (Halifax)||Hynd, H. (Accrington)||Shinwell, Rt. Hon. E.|
|Broughton, Dr. A. D. D.||Hynd, J. B. (Attercliffe)||Shurmer, P. L. E.|
|Brown, Thomas (Ince)||Irvine, A. J. (Edge Hill)||Silverman, Julius (Erdington)|
|Burke, W. A.||Isaacs, Rt. Hon. G. A.||Silverman, Sydney (Nelson)|
|Burton, Miss F. E.||Janner, B.||Simmons, C. J. (Brierley Hill)|
|Callaghan, L. J.||Jay, Rt. Hon. D. P. T.||Slater, J.|
|Castle, Mrs. B. A.||Jeger, George (Goole)||Smith, Ellis (Stoke, S.)|
|Champion, A. J.||Jeger, Dr. Santo (St. Pancras, S.)||Smith, Norman (Nottingham, S.)|
|Chapman, W. D.||Jenkins, R. H. (Stechford)||Snow, J. W.|
|Chetwynd, G. R.||Johnson, James (Rugby)||Sorensen, R. W.|
|Clunie, J.||Johnston, Douglas (Paisley)||Sparks, J. A|
|Cocks, F. S.||Jones, David (Hartlepool)||Steele, T.|
|Coldrick, W.||Jones, Frederick Elwyn (West Ham, S.)||Stewart, Michael (Fulham, E.)|
|Collick, P. H.||Jones, Jack (Rotherham)||Stokes, Rt. Hon. R. R.|
|Crosland, C. A. R.||Keenan, W.||Strachey, Rt. Hon. J.|
|Cullen, Mrs. A.||Key, Rt. Hon. C. W.||Strauss, Rt. Hon. George (Vauxhall)|
|Daines, P.||Kinley, J.||Summerskill, Rt. Hon. E.|
|Dalton, Rt. Hon. H||Lee, Frederick (Newton)||Swingler, S. T.|
|Davies, A. Edward (Stoke, N.)||Lewis, Arthur||Sylvester, G. O.|
|Davies, Ernest (Enfield, E.)||Lindgren, G. S.||Taylor, John (West Lothian)|
|Davies, Harold (Leek)||Lipton, Lt.-Col M.||Taylor, Rt. Hon. Robert (Morpeth)|
|Deer, G.||Logan, D. G.||Thomas, David (Aberdare)|
|Dodds, N. N.||MacColl, J. E.||Thomas, Ivor Owen (Wrekin)|
|Donnelly, D. L.||McGhee, H. G.||Thorneycroft, Harry (Clayton)|
|Driberg, T. E. N.||McInnes, J.||Thurtle, Ernest|
|Ede, Rt. Hon. J. C.||McLeavy, F.||Tomney, F.|
|Edwards, John (Brighouse)||MacPherson, Malcolm (Stirling)||Viant, S. P.|
|Edwards, Rt. Hon. Ness (Caerphilly)||Mainwaring, W. H.||Wallace, H. W.|
|Edwards, W. J. (Stepney)||Mallalieu, J. P. W. (Huddersfield, E.)||Webb, Rt. Hon. M. (Bradford, C.)|
|Evans, Albert (Islington, S. W.)||Manuel, A. C.||Wells, Percy (Faversham)|
|Evans, Edward (Lowestoft)||Mellish, R. J.||Wells, William (Walsall)|
|Field, W. J.||Mikardo, Ian||West, D. G.|
|Fienburgh, W.||Mitchison, G. R.||Wheatley, Rt. Hon. John|
|Fletcher, Eric (Islington, E.)||Morrison, Rt. Hon. H. (Lewisham, S.)||White, Henry (Derbyshire, N. E.)|
|Follick, M.||Moyle, A.||Wigg, George|
|Forman, J. C||Mulley, F. W.||Wilkins, W. A.|
|Fraser, Thomas (Hamilton)||Murray, J. D.||Willey, Frederick (Sunderland, N.)|
|Freeman, John (Watford)||Noel-Baker, Rt. Hon. P. J.||Williams, Ronald (Wigan)|
|Gaitskell, Rt. Hon. H. T. N.||O'Brien, T.||Williams, Rt. Hon. Thomas (Don V'll'y)|
|Gibson, C. W.||Oliver, G. H.||Williams, W. R. (Droylsden)|
|Glanville, James||Oswald, T.||Williams, W. T. (Hammersmith, S.)|
|Grey, C. F.||Padley, W. E.||Wilson, Rt. Hon. Harold (Huyton)|
|Griffiths, David (Rother Valley)||Paget, R. T.||Woodburn, Rt. Hon. A.|
|Griffiths, Rt. Hon. James (Llanelly)||Paling, Rt. Hon. W. (Dearne Valley)||Wyatt, W. L.|
|Griffiths, William (Exchange)||Pannell, Charles|
|Hale, Leslie (Oldham, W.)||Pargiter, G. A.||TELLERS FOR THE NOES:|
|Hall, John (Gateshead, W.)||Paton, J.||Mr. Royle and Mr. Arthur Allen.|
|Hamilton, W. W.||Pearson, A|
Question put, and agreed to.
§ The Solicitor-General
I beg to move, in page 51, line 30, at the end, to insert "four per cent."
This Amendment is in anticipation of the new Clause put down by my right hon. Friend, under which, for Excess Profits Levy purposes, borrowed money will rank for the allowance of 4 per cent., in addition to the deduction of the interest in the computation of profits. Its effect will be that companies in this particular section will be entitled to the additional percentage on top of the percentage on the borrowed money.
§ Amendment agreed to.
§ The Solicitor-General
I beg to move, in page 51, line 31, to leave out "and."
I think it would be convenient for the Committee if we were to take this Amendment and the next three together, as they all deal with the same point. The second Amendment—in line 31, after the third "cent.," to insert "and fourteen per cent."—is merely consequential on the Chancellor's proposal to give an increase of 2 per cent. in the extra percentage allowance of 10 per cent. or 12 per cent. for director-controlled companies. The first two Amendments give effect to the decision which my right hon. Friend has already announced to increase the percentage allowances to companies because these allowances are increased from 4 to 6 per cent. in the one case and from 2 to 3 per cent. in the other.
§ Amendment agreed to.
§ Further Amendments made: In page 51, line 31, after third "cent.," insert "and fourteen per cent."
§ In line 35, leave out "four," and insert "six."
§ In line 37, leave out "two," and insert "three." —[The Solicitor-General.]
§ 4.45 p.m.
§ Mr. Roy Jenkins (Birmingham, Stechford)
I beg to move, in page 52, line 10, at the end, to insert:and provided also that if after an estimate (herein referred to as the earlier estimate) of the total potential output of a source has been made for the purposes of this subsection, it shall appear on an estimate of such output (herein referred to as the later estimate) being made for the purposes of any subsequent chargeable accounting period that the earlier estimate as too low by not less than ten per cent., the liability of the body corporate in question to the excess profits tax for all 966 chargeable accounting periods prior to the chargeable accounting period for the purposes of which the later estimate was made shall if the body corporate so require he recomputed accordingly, and all necessary reliefs by way of repayment or otherwise shall be afforded to such body corporate, but no such recomputation shall be made in any case in which the result thereof would or might be to increase the liability of that body corporate or any other person to the excess profits levy or to any other tax.First of all, I have to tell the Committee that there is, unfortunately, a bad drafting error in this Amendment. We very much regret it, but it is not entirely unknown that even the Treasury Bench, with all the assistance available to them, have been known to make one or two small errors in drafting. The error is that the word "low" should be "high."
The purpose of the Amendment is to clear up what seems to be an illogical anomaly, and, at the same time, to give a small concession to certain companies. We are here dealing with companies operating metal mines and oil wells, and the Bill provides that where the estimated life of the source is less than 30 years, the companies are able to add this 6 per cent., and, where the estimated life is more than 30 years, to add 3 per cent.
The position under the Clause as it stands is that an estimate of the life of the source, apparently, has to be made in each chargeable accounting period, and if, subsequently, it appears that the estimate is false, there is no provision for any retrospective correction. I could quite understand that, in operating this tax, the Government are anxious to have some finality, but, on the other hand, if one deals with other parts of this Bill concerning the Excess Profits Tax—and I am now thinking of the overriding 18 per cent.—the Government seem to have no desire at all to reach any finality, but wish to go on correcting and re-correcting year after year in the same complicated way, as long as the company remains in existence.
It seems peculiar that there should be no allowance made here for the correction of which proves to be an original error, and I should have thought that the Solicitor-General, if he is to reply, would have been prepared to admit that, in the case of estimating the life of sources such as those with which we are dealing here, it was only too possible to say, in 967 a particular year, that the life of the source may be 35 years, whereas, in a year or two, the expectation of life from time at which the previous estimate was made was, in fact, not 35 years, but only 20 or 25 years, something which would bring that source into a different category so far as these considerations are concerned.
I would urge upon the Government that, although this is not a big point, it is a point of substance, and that they should see whether they cannot bring such companies into line with the provisions as far as the over-riding tax is concerned, so that, where an estimate has been proved false, retrospective correction could be allowed, which would be a small benefit to the companies concerned.
§ The Solicitor-General
The alteration of the Amendment is of a rather drastic character, and I am now unable to make the powerful speech which I was hoping to make in dealing with the Amendment as it was drafted. It has now been completely reversed, and, though I make no complaint at all, its effect would be the exact opposite of that of the Amendment on the Order Paper.
§ Mr. Jenkins
I think I am right in saying that, as originally drafted, the Amendment had no effect at all.
§ The Solicitor-General
No; I do not think so. As I understand the effect would be that, if a company had been so unwise as to invoke the operation of the Amendment as it was originally drawn, the only effect would have been to lower the percentage to which that company was entitled, and so increase its liability to E.P.T. It would not, in fact, have been a relief.
May I now deal with the point of the Amendment as it has been altered? The hon. Gentleman indicated that there is a great deal to be said about regarding a tax of this sort as being final. Although we may say that there is an argument there, if we suppose that the first estimate was shown by a later estimate to be wrong, and we provided machinery whereby the first estimate could be corrected, it could be equally true that a subsequent estimate might prove both the first and the second estimates to have been wrong; and so we may go on. I 968 can assure the hon. Gentleman that the mining industry itself has not raised this point, and, if they have felt that it was one of great importance, no doubt they would have done so. In these circumstances, and having regard to the desirability of finality, we think it would be best to leave the Clause as it stands and not accept an Amendment on the lines proposed by the hon. Gentleman.
§ Sir Frank Soskice (Sheffield, Neepsend)
I think that we have had a disappointing answer. It is, as I understand it, that we might have estimate No. 1 which puts the life of a mine at, say, 35 years, and then we might have estimate No. 2 which brings it down to 25 years, and that if the matter stopped there, there would be a good deal in it. The hon. and learned Gentleman, asked why, in these circumstances, we cannot do what is manifest justice said the reason was because there might be a third estimate which put up the period once more to 35 years, or even to 45 years.
That seems to me to be a most unlikely hypothesis. Everything is possible in this most extraordinary world, I quite agree, but in my submission that is a somewhat tenuous argument. The hon. and learned Gentleman agreed that there might be an erroneous estimate—an estimate which may turn out on a subsequent re-calculation to have been wholly erroneous—and that it might, in those circumstances, appear that a company was paying the Excess Profits Levy at a higher rate than it would be paying if the proper estimate had been made in the first instance.
Having accepted that as the first stage in the consideration of this Amendment and having accepted the logic and the justice of that position, the hon. and learned Gentleman then says the Government will do nothing about it. What he is really saying is that the Government will not accept this Amendment, or indeed any other Amendment, simply because it may subsequently turn out that there might be a third, fourth or fifth estimate which may be wrong.
1 do not know whether the hon. and learned Gentleman really thinks that that is a kind of argument on which one can ride off in a matter of this sort. I could have understood it if he had begun his argument by saying that such an error 969 is never made. I would then have disagreed with him on the facts, because, so understand, it is an error which can easily be made. But, as I say, having accepted the justice of the argument behind the Amendment and then to say that it is proposed to do nothing at all about it simply because in some very rare cases there may be a third or fourth estimate which may differ from the first or second, seems to me the most illogical position to take up.
We do not like this tax at all as it stands, but, if we are going to have it, for goodness sake let us make it as logical and as sensible as we can. Quite clearly, to tax a company on the basis of a purely mistaken estimate is neither logical nor fair. The fact that the mining interests have not hit upon this particular defect in the structure of the tax does not strike me as a good argument for rejecting this Amendment. No doubt there are many other defects in the tax which will be unearthed as time goes on.
But here is a defect which has been brought to the light of day, and, surely, having accepted the justice of the case, and having had put before him a draft which he may or may not like—we did our best to give such assistance as we could by our drafting—the hon. and learned Gentleman will, I hope, be so good as to say that he will take it away with him and study it, and that if he cannot improve upon it he will at least do something to remove this obvious injustice.
If he is really troubled that there might be a third, fourth or fifth estimate which might belie the first or the second, that is quite an easy situation to provide for. He merely has to say that the recalculation can be made once or twice, and no more. What we have done, foreseeing the possibility that there may be a number of different estimates in the life of a mine, is to say that there shall be no re-computation unless the estimate is shown to be at least 10 per cent. out. Having put in that safeguard, I should have thought we had gone a long way to make the Clause work.
If there were to be a re-calculation each time it was said that the original estimate was at all out, then I would agree with the hon. and learned Gentleman that perhaps we had made for instability, but having put in the safe- 970 guard that a company must be able to show at least a 10 per cent. error, I should have thought we had put on the Order Paper a very workable Amendment.
I very much hope that the hon. and learned Gentleman will not merely stonewall in that very unsympathetic manner when he really has no case for doing so. Those who briefed him in this matter have not given him anything to say, and I hope he will say that he wants better briefing than that, and that if he does not get it he must accept the justice and cogency of the arguments from this side of the Committee.
§ The Solicitor-General
I am rather surprised that the right hon. and learned Gentleman should take up that attitude on this Amendment. As he knows perfectly well, this is really not the Amendment moved by his hon. Friend. The Amendment on the Order Paper is quite different owing to the drafting error. In dealing with the arguments which I advanced, the right hon. and learned Gentleman seemed to appreciate that there might be difficulty with a number of estimates, but the point which I stressed was that put by the hon. Member for Stechford (Mr. Jenkins), the desirability of there being finality in regard to this tax. I am advised that if a clear error were made in the computation of the tax that could be adjusted under Clause 54 (2). Therefore, I am very doubtful whether any complicated procedure of this sort is really necessary at all.
However, I can tell the right hon. and learned Gentleman that we are not at all unsympathetic on this point, and that we certainly want to make this tax as fair and as equitable as it can be made. We have had very little opportunity to consider what is the real point behind the Amendment, because I am sure the right hon. and learned Gentleman will agree that it is not immediately apparent on reading the Amendment on the Order Paper. Therefore, I can say to the right hon. and learned Gentleman that although I cannot give him any assurance that we will make any Amendment—indeed, I doubt very much whether one is necessary in view of the powers in Clause 54 (2)—we will certainly consider the matter again between now and the Report stage now that we know what is at the back of the Amendment.
§ Mr. Peter Roberts (Sheffield, Heeley)
I am glad that my hon. and learned Friend the Solicitor-General has said that he will look at this matter again, because he used one argument which I did not quite follow. He said that because representations had not been made to him by industry he felt that this Amendment should not be considered. I hope that argument will not be allowed to go unchallenged either on this Amendment or on any other.
§ Mr. Jenkins
The hon. and learned Solicitor-General complained that the Amendment on the Order Paper was rather different from that originally put forward, but his second speech was utterly different from his first speech, and I imagine that he had time for a little thought between the two. He began by saying that he himself was shocked at what he had said in his first speech. I do not know whether that is significant or not.
I am glad that the hon. Member for Heeley (Mr. P. Roberts)—although I do not often agree with him—emphasised the point about there being no pressure from mining interests. The Chancellor of the Exchequer was extremely annoyed the other day when he thought that somebody on this side of the Committee was accusing him of giving way to City pressure. He said that was absolute nonsense. Therefore, it is no good the hon. and learned Gentleman the Solicitor-General coming along and saying that this is not a serious point because there has been no pressure from mining interests.
I am glad to know that he is now taking up a more sympathetic attitude, because he really did put forward a number of rather contradictory reasons for not accepting this Amendment. If I now understand him to say that because of the drafting error he wants more time to look at it, and that if the point is not covered by Clause 54 (2) he will put something down on the Report stage, I shall be satisfied.
§ 5.0 p.m.
§ The Solicitor-General
I am not committing myself or the Government to putting anything down, but we shall look into it very carefully.
§ Amendment, by leave, withdrawn.
§ Clause, as amended, ordered to stand part of the Bill.