In subsection (1) of section one hundred and sixty of the Income Tax Act, 1952 (which provides for expenses allowances to be chargeable to tax subject to any claim being made for money expended "wholly, exclusively and necessarily" in performing the duties of the office or employment), the second paragraph of the said subsection (1) shall be amended to read as follows:—
Provided that nothing in this subsection shall prevent a claim for a deduction being made under paragraph 7 of the said Ninth Schedule in such form and detail as the surveyor may prescribe in respect of any money expended wholly, exclusively and necessarily in performing the duties of the office or employment."—[Mr. Houghton.]
§ Brought up, and read the First time.
§ Mr. Houghton
I beg to move, "That the Clause be read a Second time."
The Clause proposes to add a few words to the second paragraph of Section 160 (1) of the Income Tax Act, 1952. It proposes that the paragraph shall be amended to read as follows:Provided that nothing in this subsection shall prevent a claim for a deduction being made under paragraph 7 of the said Ninth Schedule…Here it is proposed to insert:…in such form and detail as the surveyor may prescribe…That is the end of the new words. The paragraph will then continue:…in respect of any money expended wholly, exclusively and necessarily in performing the duties of the office or employment.The background to the new Clause is the rumpus that we have had lately on the subject of directors' expenses and Income Tax. I do not propose to go into the details of the case about which there was a complaint by the Institute of Directors and which was the subject of an apology by the Board of Inland Revenue conveyed in a letter to Brigadier-General Sir Edward Spears by the Financial Secretary on 6th May. There has been some correspondence about it in the "Financial Times" since then, and there have been Questions in the House, and, to an extent at all events, I think 1207 that the facts of that case are now known. Anyway, I am satisfied that I know the full facts.
The inspector of taxes concerned in that case is a member of the Inland Revenue Staff Association, of which I am the general secretary, and, as was his right, he came to tell me all about it from his point of view. Whether or not that apology was justified is not material to our discussion on the Clause, though it was the spark which set off quite a few explosions. The apology from Somerset House was more welcome to a lot of people than if it had come from Moscow.
Either because it was unexpected or because it was so unusual, the very surprise of it overcame the stolid businesslike qualities of many directors, and they were moved to an emotional reaction. Many of them sat down straightaway during their busy day and wrote letters to the Press. They tell us that they have not got time in their export drive to supply information asked for by the Inland Revenue, but on occasion they find time to write long letters to the newspapers and the professional journals complaining about the treatment which they get from the Inland Revenue.
Let us take note in this Committee of the fact that there has been a lot of complaint lately from directors of companies and high executives and from their professional advisers about the questions which are being asked by the Inland Revenue on matters concerning benefits in kind and expenses allowances. That is a serious matter, and the Committee ought to consider it in a responsible spirit.
What has happened to bring about this wave of resentment and hostility towards the Inland Revenue, which is, after all, merely discharging a difficult and unpleasant task imposed upon it by the House of Commons? It is the belief that the Inland Revenue is probably going too far and asking too many questions about too many things. The Institute of Directors, in the evidence which it has given to the Royal Commission on Taxation, has alleged that directors are asked to supply an unnecessary amount of detail, that a claimant has to submit to a searching inquisition and that inspectors make the procedure as difficult and as unpleasant for the claimant as possible.
1208 These are serious allegations against the wisdom and tolerance of the Inland Revenue authority in discharging their duty.
This new Clause is an attempt to recover somewhat the ground which has been lost recently by exchanges which have taken place between the Financial Secretary and the Institute of Directors to give the honest taxpayer some reassurance that this Committee will uphold the law, and to give to the hard pressed Inland Revenue authority a reassurance of our confidence in them—
§ Notice taken that 40 Members were not present;
§ House counted, and, 40 Members being present—
§ 8.32 p.m.
§ Mr. Houghton
My hon. Friend the Member for Leith (Mr. Hoy) has caused the obligatory attendance of many company directors who are Members of the House. I was glad to see them if only for a brief interval. I have just said what is the purpose of this new Clause. It has to do solely with administration. It does not raise any principle of taxation, because the principle of this matter was settled in Part IV of the Finance Act, 1948, when the House wrote into the Income Tax legislation authority for the taxation of benefits in kind and the treating of expense allowances as perquisites in the case of company directors and in the case also of persons other than directors receiving more than £2,000 a year.
That was done in 1948, and since then it has been written into the Consolidated Income Tax Act, 1952. I explain that only to clear up any doubt as to whether the provisions of the Income Tax Act, 1952, were, in fact, inaugurated in that year or whether they dated from an earlier time. They do date from an earlier time, from 1948 when there was a Labour Chancellor of the Exchequer.
None will question the rightness of the principle passed by this House in the Finance Act, 1948, on the Income Tax liability of benefits in kind and expense allowances in the case of company directors and other higher executives, because at that time there was undoubtedly a great deal about the personal expenditure of a good many business men that 1209 left much to be explained. The ordinary worker could not understand how it was that, under conditions of heavy and, to some people, penal taxation, many of those in business were able apparently to maintain a standard of life and of personal expenditure which hardly squared with what taxation was supposed to do to personal incomes. There was no doubt that at that time many people were seeking benefits in kind as an alternative to remuneration and were also seeking personal expenses allowances as an alternative to remuneration.
The reason why it was necessary specially to legislate on these matters was because of the uncertainty of the law regarding the Income Tax liability of benefits in kind and of expenses allowances before that time. There had been rulings of the courts in years past which led generally to the conclusion that benefits in kind were assessable to Income Tax only if they were convertible into money; to be money's worth was not enough, they had to be convertible into money. That was the general belief established by a number of settled cases about benefits in kind, and there were many company directors who were receiving benefits in kind which they could not convert to their personal use, or at least they could not convert into money, and assessments upon which, therefore, under the law as it stood before 1948 were unlikely to be upheld if appeals were made.
So what the 1948 Act did was to provide that all expenses allowances of company directors and others getting more than £2,000 a year should be treated as perquisites of the office or employment, and that the director or employee should be assessable to Income Tax accordingly. As regards benefits in kind, in Section 161 of the Income Tax Act of 1952 very rigorous conditions were laid down regarding the assessment to Income Tax of living or other accommodation, entertainments, domestic or other services, or all other benefits or facilities of whatsoever nature. No Act of Parliament could go further than that—"of whatsoever nature." And as regards those, it said that they were to be valued and the value of the benefits in kind was to be regarded as having been refunded to the director or the employee concerned and charged to Income Tax accordingly.
1210 The provisions of Section 160 which deal with expenses allowances, whilst saying that these allowances should be treated as the perquisites of office and added to emoluments for Income Tax purposes, says thatnothing in that Section shall prevent a claim being made under paragraph 7 of the Ninth Schedule of the Income Tax Act, 1952, in respect of any money expended wholly, exclusively and necessarily in performing the duties of the office or employment.That is to say, if a director or other person covered by those Sections received an expense allowance, he could ask for Income Tax relief on such amount of that allowance as was expended wholly, necessarily and exclusively in the performance of his office, but any balance not so expended obviously formed part of the Income Tax assessment on the person concerned.
It is that particular paragraph of Section 160 that this new Clause proposes to alter by inserting the words:in such form and detail as the surveyor may prescribe.They would remove any doubts about the rights of the surveyor to ask for such information in support of such claim as he thought necessary and just in the circumstances of an individual case.
In order to complete the picture of explanation, I ought to add that where a company makes payments to a director or provides him with benefits in kind which the company itself certifies are wholly used and expended in the performance of the duties of a director or employee, the surveyor who, in modern parlance is the inspector of taxes, has the power to make what is called a dispensation. That is to say, to the extent that he is satisfied that these payments certified by the company are wholly used and expended in the performance of the duties of the office, he may give straight away a certificate of exemption of these amounts and they would not be taxable on the recipient.
The only form of which I am aware in this connection—although much has been said about the issue of forms lately—is the one which the Inland Revenue issues to companies asking for a declaration of any such amount paid to directors and others which the companies cannot certify as being wholly and necessarily expended in the performance of the office 1211 and which, therefore, may require some inquiry and consideration by the Inland Revenue. That form is called P.11D.
I hasten to add that the letter "P" does not stand for "persecution." It is a series letter only used for certain forms. Nor does the letter "D" stand for "damned." It refers to directors. This form asks the company or the employer to make a declaration of such expense allowances for 'benefits in kind as are paid to directors or other employees in the higher income ranges which are not the subject of dispensation and which the Inland Revenue, therefore, must know about.
The new Clause makes no fundamental change either in the obligation of the taxpayer or in the powers of the inspector. It is really a token of confidence in the administration of the Income Tax Act by those entrusted with it and a vote of confidence in Her Majesty's Government in their resolve to uphold the law, which I understand to be the policy of the Exchequer.
A good deal of nonsense, but quite a lot of good sense, has been written lately about this troublesome matter. I commend to hon. and right hon. Members opposite an article in the "Economist" of 19th June, which I think is the fairest and most balanced comment on this matter that I have read recently, although there was in the "Manchester Guardian" of 23rd June a very helpful and understanding letter, written by a correspondent signing himself "Incognito." In both the article and the letter there is an appreciation of the difficulties of bath the taxpayer and of the Inland Revenue.
Now the issue is quite plain for the Committee to consider. Are we to uphold the law or are we not? I am sure that the answer would be, "Yes we are." However much hon. Members opposite may have disliked the Sections in Part IV of the Finance Act, 1948—when I was not a Member of the House and cannot therefore say what was the nature of the debate at that time—and however much they disliked what they feared might be the beginnings of some kind of inquisition, it must be acknowledged that those Sections were necessary then and are necessary today.
1212 8.45 p.m.
If they were not there I think right hon. and hon. Members opposite would agree that abuses would occur again and that many people would have much more access to the resources of their companies than the great mass of workers lower down, using their incomes to ensure the best arrangements for their remuneration and facilities to enable them to get the best level of wealth they could at the lowest level of tax. That is only natural. The doctrine has been freely expressed by hon. Members opposite that a taxpayer is entitled to make any rearrangement of his affairs open to him in order to lessen the burden of taxation, and that applies to company directors as to anyone else; they are as freely entitled to use their influence as anyone else.
I am sure it would be agreed that we cannot let these Sections go out of Chapter II, Part IV of the Income Tax Act, 1952. If we cannot let them go but must keep them, they must be applied and administered. The question is, how is that to be done? Here we have to weigh in the balance all those qualities of tolerant yet efficient administration for which our Civil Service is noted throughout the world. Literally, inspectors of taxes, by the powers they have under the Act, could press for every bit of information they thought desirable to enable them to judge matters which come to them for decision, although let us not lose sight of the fact that in the background there are the local commissioners who are the appellant body if any dispute arises between the taxpayer and the local Inland Revenue officers.
Commissioners are locally appointed and are composed for the most part of persons who fully appreciate all the problems of business directors and others of substantial means. All commissioners of taxes have substantial means, and no one going before the commissioners of taxes could plead that they were not being tried by their peers, for they would be. It is other people who are not quite so certain that they are being tried by their peers, but company directors are not among them.
Those with whom Chapter II of Part IV of the 1952 Act was concerned can go to the local commissioners of taxes with every confidence that they will get 1213 a fair hearing of any complaint they make about unjust treatment by a local inspector of taxes. Many of those who complain attach the whole of the blame to the Inland Revenue and say that it is the Inland Revenue which should mend its ways and which is depriving the taxpayer of a fair deal in this difficult matter.
Hon. Members may ask what this new Clause will do which is not done already. It would be a token of the right of the inspector in the discharge of his duty to prescribe the form and detail in which he may ask for information regarding expenses allowances and benefits in kind which he must look into if a proper Income Tax assessment is to be made. This does not mean that the law will be administered any more rigorously than in the past. It does not mean that the Inland Revenue will get more vexatious in its dealings with directors than in the past.
The Chancellor has repeated not only his admiration for the work of this Department, but his determination to uphold it in the reasonable exercise of its duties. I think that everyone will agree that it is simply impossible to do the job which the Inland Revenue has to do without asking questions. These questions must be asked. There is simply no alternative. Information may be given about lump sums and expenses allowances. There may be obvious questions to ask, and a number of things to ask about benefits in kind. Taxpayers must understand why the Inland Revenue is doing what it has to do and how just and fair it is that they should co-operate.
Take, for example, the case I recently mentioned, of the company director of hotels and shops whose remuneration was 5s. 9d. a week. His firm paid him just enough to buy his insurance stamp. All the rest came out of the firm; his living expenses, his food, his clothing, his travel expenses, his holidays, his children's schooling, his wife's fur coat—everything came out of the firm. He had only 5s. 9d. a week. Clearly, a lot of questions had to be asked about that. Some assessment had to be made of what was the worth of those benefits in kind. It was probably right that he should live on the firm when visiting the hotels or inspecting the shops. But, when he was at home, he should be paying his 1214 way like the rest of us. But he was living on the firm.
In this particular case, I have no doubt, after quite a lot of questions and inquiries, the Inspector of Taxes decided—and it was agreed by the taxpayer's professional adviser—that his personal benefits in kind were worth £2,500 a year. The question asked by the professional adviser was, how was his client to pay the tax? He would be assessed on £2,500 which would include Surtax as well. "My client had no money"—says this professional adviser in a letter to the "Accountant"—"How can he pay? He has gone to his firm, and they say, 'We are not paying. We are paying you no more money, 5s. 9d. is enough for you. You are living on the firm for everything else. You must do the best you can.'"
The professional adviser was asking all the other professional advisers who read the "Accountant," "What does A do now?" The advice given in the "Accountant" was, first of all, that this was a case for a vigorously conducted appeal—notwithstanding the fact that the professional adviser had agreed that £2,500 was a proper figure. No, a vigorously conducted appeal was called for, and then various suggestions and possibilities—I will not call them loopholes—various possibilities of the situation were explained in a most erudite and technical way.
I do not know how it will end. Possibly, when the appeal is over, the assessment will be upheld, and this taxpayer, who is getting 5s. 9d. a week and living to the extent of £2,500 a year on the firm, will just turn out his pockets and say, "I cannot pay." It would not be in order for me to pursue the possible sequel to that plea, because the man would then pass out of the hands of the inspector into the equally tender hands of the collector who would, of course, have certain powers either of recovery or of bankruptcy. This is an indication of the sort of thing that can arise.
I read also in the "Accountant" recently a letter which had been received from an inspector of taxes. It was published in full except that the names of the taxpayer and the inspector were left out. It was presented to the, professional fraternity, and anyone else who reads the magazine, as another outrageous example of the inquisitorial methods of the Inland Revenue.
1215 Anyone who understands the nature of these cases would realise in a moment that when the inspector inquires about a claim for over £3,000 for car expenses when a man is running four cars, it is not unreasonable to ask the taxpayer whether his wife had the exclusive use of one car. Does anyone in this Committee with four motor-cars deprive his wife of the exclusive use of one, even if they are all on the firm? Any hon. Member who would like to offer evidence for our information on that matter shall have the floor immediately as far as I am concerned, provided he will put all four cars in a common pool to enable my hon. Friends who have not got cars to get home at nights.
Seriously, however, questions have to be asked. Forms of questionnaire or some other paper device or interview must be gone through in order to get the information. Much of this is done amicably, and agreements are arrived at. I do not want to exaggerate the extent to which this kind of tax avoidance goes on. Many volunteer the information. Most people reply to the questions honestly and truthfully, but there are some who are most difficult to deal with.
It is for the protection of the honest taxpayer that we must uphold the reasonable exercise of the powers given to the Inland Revenue. If the Committee once departs from that principle, then the whole standard of taxation machinery will begin to decline. We are said to have the most efficient system of direct taxation in the world, and I believe that to be true. There are many other countries where a similar system of direct taxation has proved quite impossible to administer. I venture the opinion that if France had had as efficient a system of direct taxation as this country has, redistribution of incomes and greater social security would have been possible there.
§ Mr. John Arbuthnot (Dover)
On a point of order. Is redistribution of incomes a matter which comes within the new Clause?
§ The Chairman
I thought that the hon. Member was going a bit beyond the new Clause. We have spent a long time on it already.
§ Mr. Houghton
I thought that it was up to the hon. Member who was speaking to illustrate his arguments with reference to wider considerations. Behind the Clause lies a most important principle of administrative efficiency in what we all agree is a difficult and delicate statutory provision. All the time the administration of these Sections of the Income Tax Act is on a knife edge. At any moment the taxpayer can go off the deep end and write a letter to the Chancellor. At any moment temper can give way. Of course, sometimes the officer of the Inland Revenue may find it extremely difficult to maintain his customary calm and dispassionate approach. On the whole, however, I think that without any doubt more complaints are made against Inland Revenue officials and their dealings in this matter than are justified in the circumstances.
I trust that the Financial Secretary, when he replies, will take the opportunity of clearing up beyond any further doubt just where the Government stand on this question. Damage has been done in recent weeks. It need not have been done, and as far as possible it should now be repaired. Let us say to all—to those in the Inland Revenue and to taxpayers, honest, indifferent and bad—that this is the law—that it is essential to uphold it and that in the interests of equity of our taxation system reasonable taxpayers will co-operate with reasonable officials and that we put the stamp of approval on what has happened. This will echo the words of the concluding sentence of the article in the "Economist," to which I have referred, which says:The real question is whether the law as it now stands is administered fairly and reasonably. To that question, the fair answer seems to be Yes.
§ Mr. F. J. Erroll (Altrincham and Sale)
It says:the fair answer seems to be a qualified Yesif the hon. Member quotes it correctly.
§ Mr. Houghton
To that question, the fair answer seems to be a qualified Yes.I thank the hon. Member.
§ Mr. Houghton
I have acknowledged that I did not say the word "qualified." Anyhow, the "Economist" says: "a qualified Yes." I do not think there is a big difference. The Administration has its job to do, and I am sure that we need not introduce the word "qualified."
§ Mr. Houghton
I question whether in the circumstances the word "qualified" need be introduced.
Let the Financial Secretary say what is his opinion of the Administration, and I hope we may then get from him the mark of approval on the Administration which does not even include the word "qualified." There is nothing seriously wrong with "qualified" if those who wish to view it that way use that word. It is a most difficult problem to do it to the absolute satisfaction of everybody, but as to the general fairness of the administration I think there can be no serious doubt.
§ The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)
As I understood the hon. Member for Sowerby (Mr. Houghton) during his speech, which did not err on the side of brevity, his proposal, as he explained it, would not make any substantial alteration in the existing law. Indeed, he did not put it forward on those grounds.
Three times the hon. Member defended his proposal on what, I think, I can fairly describe as psychological grounds. He used the phrases "a token of confidence," "an attempt to recover ground which has been lost," and "a vote of confidence." As I understand the hon. Member—I do not think I am misrepresenting him—his purpose is not to remedy what he would regard as a manifest defect in the legal powers of the Revenue in this respect. It was substantially to establish the general confidence, to demonstrate, to give a demonstration of, to discuss the general confidence of this Committee in the administration of our tax law.
So far as that aspect is concerned, it can be dealt with in a moment. My right hon. Friend the Chancellor of the Exchequer, as the hon. Member for Sowerby acknowledged, went out of his way the other day to express his confidence in the way in which what the hon. 1218 Member rightly described as "this difficult and complex task" was discharged. I should certainly wish to say that, over this infinitely difficult field which inevitably arouses strong feelings, we are singularly fortunate in this country in having our very complex law of taxation administered by a body as efficient and as able as the Board of Inland Revenue.
Where I would differ from the hon. Gentleman is in the suggestion made in the earlier part of his speech that that confidence is in any way shaken by the fact that when, as must always happen in any great organisation, it is thought that one particular member of that staff has gone too far, the position is weakened. I would say to the Committee in all sincerity that all the reasonable organisations with which I have been associated are distinguished more by their willingness to admit a rare error than by their obstinate attempts to justify everything they have ever done in all circumstances.
I agree entirely with the hon. Gentleman that the vast majority of these cases are cases with which hon. Members are never troubled, because they are settled amicably and in the most friendly way between the local inspector on the one hand and the taxpayer on the other. If the purpose of the new Clause is to elicit once more an expression of the confidence of Her Majesty's Government in the administration of the Inland Revenue, that assurance is given here and now.
It is really quite a different thing to write a token or a vote of confidence into the law, and we have, therefore, considered, as this is put forward as projected legislation, whether it would, in fact, have any effect at all. Whatever the desire to produce a token or vote of confidence may be, this Committee does not want to write into an Act of Parliament something that is unnecessary, and that, as far as the legislative work of the Committee is concerned, would be enacting a fact. I would ask hon. Members who are less familiar than the hon. Member for Sowerby with the way in which the matter works to consider what the existing provision is, in order to make up their minds whether there is any purpose to be served by putting these words into the existing law.
Let us see, in the first place, what it is that the hon. Member proposes to do. 1219 He proposes to add in the middle of the proviso to what is now Section 160 of the Income Tax Act, 1952—which is a consolidation statute, consolidating the earlier provisions—at the point after the reference to paragraph 7 of the Ninth Schedule, in which it is enacted that claims can be made for a deduction in respect of money "wholly, exclusively and necessarily" spent in performing the duties of the office, the words—in such form and detail as the surveyor may prescribe.Let us see what effect, if any, that would have. We can best test it by going through what actually happens. In the first place, under the provisions brought into force a couple of years ago, the form to which the hon. Member quite accurately referred—form P.11D—is served on the company which is the employer of the director or executive over £2,000 a year. On that form, the company is required to give information, among other things, about expenses, payments, and benefits in kind to directors or such employees, sums paid in satisfaction of expenses incurred by the director or employee, the cost of providing benefits in kind or facilities or assets transferred, and, similarly, fees, bonuses, commissions, etc. The company is required under penalty to provide that information, and, that information having been provided, the next step is to assess this as income. Then it is for him to explain that these monies were expended wholly, necessarily and exclusively in performing his duties.
The onus is upon the director to establish this, and to satisfy the inspector that the money was paid to him for those purposes and expended for those purposes. That can be done in a wide variety of ways. As the hon. Member for Sowerby said, in certain easy cases what are called "dispensations" are given, to prevent the inspector and the director concerned going through a lot of formalities in regard to expenses which are well-known and which are repeated year after year. Nobody wants to interfere with that. On the other hand, the amount of information that the inspector may require before he is satisfied that the director has discharged the onus which is upon him that the moneys were paid to him for those expenses will vary from case to case.
1220 Consider the case of a director of a reputable and well-known public company who, on a salary of £5,000, claims £30 paid in respect of travelling expenses. I doubt whether any very close detail would be required in the normal case. Take another case, nothing like so extreme as that which the hon. Member for Sowerby chose, of a director of a private company who, on a salary of £1,000, is running a figure of £5,000 for expenses. I have no doubt that very considerable detail would generally, and properly, be asked for. Be the information required great or small, it is still for the taxpayer, in this case the director, to establish to the satisfaction of the inspector that the moneys come within the Section.
The inspector can ask for such information as he likes, and if the information is not furnished he has the very easy remedy of simply disallowing the claim and of assessing the director to tax. Naturally, the matter does not stop there. If the director whose expenses are disallowed objects to that decision, one of two things happens: either he acquiesces reluctantly or enthusiastically and pays the tax on that amount, or he appeals to the Commissioners under the procedure to which the hon. Member for Sowerby referred. I agree with the hon. Member that the people concerned get a very fair deal before the Commissioners. I am glad to pay that tribute to them. If the matter goes to the Commissioners it is still for the taxpayer to establish his case. Otherwise, he is taxed on that amount.
Looking at the picture in that light, a proposal formally to enact that the claim shall be made in such form and detail as the surveyor may prescribe is unnecessary. The right hon. Gentleman opposite asked what was the objection to it in that case, and I will deal with that point. If something is unnecessary, it is wrong to insert it in legislation. After all, those who have to construe these things have said time and again that in construing them they try to attach some importance to the intentions of this House.
§ 9.15 p.m.
§ Mr. Boyd-Carpenter
That is done for the avoidance of doubt, but there is no doubt here at all to avoid. I would say in all seriousness that it is really a novel argument to say, "Admittedly it will have no effect, but it will do no harm."
As I was saying when the right hon. Gentleman intervened, there are people outside who have to seek to construe the legislation which this House enacts, and perhaps particularly in financial matters that is something of no little difficulty. If we are really going to put into a statute words which we deem to be unnecessary, we are really quite deliberately adding to the confusion of legislation.
For that reason, I suggest that it would be a wrong thing to do, and that we really cannot justify doing it, because, as the right hon. and learned Member for Neepsend (Sir F. Soskice) knows so well, when a proposal is put into an Act which is admitted to be meaningless, it is not a fact which can be drawn to the attention of the court. We have to try to attach some meaning to it. Therefore, I say that if this were a proposal which had some practical effect, I would be very happy to consider it on its merits.
§ Sir F. Soskice
It would help me very much if the right hon. Gentleman would point to the provision in the Income Tax Act, 1952, which in terms empowers the surveyor to prescribe the form and detail upon which claims for expenses may be made? Would he be so good as to say which is the provision?
§ Mr. Boyd-Carpenter
I think that the right hon. and learned Gentleman must have failed to apprehend my argument, which is no doubt my own fault, from the very fact that he puts that question. The sole point which I was putting to the Committee was that it was quite unnecessary to have such a power because we are here dealing with a case in which it is necessary for the taxpayer to satisfy the surveyor. If it is necessary for the taxpayer to do that, then it really seems to me to be adding a completely unnecessary thing to say that he must be bound to satisfy the surveyor in a particular form prescribed by him.
Let us look at the matter as one of common sense. I am trying to satisfy the right hon. and learned Gentleman 1222 who has asked for information in whatever form he likes. If I am trying to satisfy him, I try to give him the information, and it really is not necessary for him to be armed, in addition, with powers to prescribe the particular form in which I furnish it. He will ask the question, and I shall have the best possible incentive for trying to answer it.
For that reason, it really seems to me that it is unnecessary to prescribe this thing because these words are inserted nowhere else, as the right hon. and learned Gentleman knows perfectly well. As I understood him, the hon. Member for Sowerby did not suggest that the inspectors were handicapped in any way by the fact that these words were not inserted. He put it, as the right hon. and learned Gentleman no doubt heard, on a largely psychological basis, with which I have sought to deal.
I suggest, with respect, that the hon. Gentleman by doing this would not, in fact, put the inspectors in any stronger position than they are at present for obtaining such information as may be required to establish that this is a bona fide claim. In those circumstances, it really would not be in accordance with the responsibilities of this Committee or of the Government for us to add words which really are not necessary, and which add nothing to the powers of the officials concerned.
§ Sir F. Soskice
We have listened to the kind of speech at which the Financial Secretary has shown himself very adept. He skilfully skirted round the point of substance made by my hon. Friend the Member for Sowerby (Mr. Houghton) in a speech which, according to the Financial Secretary, did not err on the side of brevity. I am sorry that he said that. I thought it was certainly not a sentence too long, and perhaps I may say to the Financial Secretary that were I to point out the respects in which his own oratory errs I would be pointing to features so well known to the House as to be hardly worth while recapitulating.
May I get back to the main point of this debate? It is a debate we have had every year for some time now because, as the Financial Secretary himself said last year, the evasion of the provisions as to legitimate deduction of expenses is a serious problem. When we were in office 1223 we introduced the provisions, to which my hon. Friend referred, in Chapter II, Part VI, of the Income Tax Act, 1952. We did it because it was generally recognised then, as it is generally recognised now, that expenses are claimed which are not admissible, and by half untruths, if not complete untruths, a deduction is procured in respect of those expenses.
I should have thought that the Financial Secretary would be ready to accept that if there is one thing which exasperates respectable taxpayers it is to see the obvious evasion which goes on, as anyone can see, in the streets, restaurants and elsewhere. One has only to see the new, expensive, flash cars being driven up and down the streets, and the enormous amounts paid for meals in restaurants, which obviously cannot be paid for out of net income and which are not, whatever pretence the Financial Secretary may seek to set up, paid for except out of expenses which are not, or ought not to be deductable.
When I say that that is most exasperating, I must say that I do not charge directors, as directors, with doing that sort of thing. I say that directors, for the most part, are people as respectable as other taxpayers. Respectable directors, who are the vast majority, must feel absolutely furious to see other directors letting them down by abusing the expenses provisions. Some taxpayers come under Schedule D and others under Schedule E, but if there is one thing which infuriates not only people earning wages, teachers taxed under Schedule E, architects and others and the great body of respectable directors who do their level best to comply strictly with the Income Tax provisions, it is to see this constant abuse which is practised by—I am quite certain—a small minority of taxpayers and which is not stopped, or adequately stopped, by the Government.
We revert to the subject year after year, because we think it our duty to 4he vast body of respectable taxpayers—I do not mind whether they are directors, Schedule E or Schedule D taxpayers—who try to obey the law and who are driven to the point of exasperation by seeing these constant abuses going on under their very noses. That is why we come back to the subject this year. So long as this goes on, and so long as we hear the type of com 1224 placent speech from Ministers to which we have just listened, we feel that it is our duty to go on prodding the Government and trying to get them to take action to stop, or to diminish, this abuse.
As I say, when we were in office we devised the sections which are under discussion at the moment. They are sections which, broadly speaking, require that sums paid by companies to directors and highly-paid executives as expenses shall be taxable subject to this: that if the taxpayer—executive or director—in question can affirmatively satisfy the surveyor that he has a legitimate claim to deduct a payment that is allowed. We introduced a complicated set of provisions designed to achieve that end.
The fact is—and the evidence of one's own eyes tells one—that those provisions have not succeeded. Therefore, my hon. Friend, in a speech which was not one second too long having regard to the importance of the subject with which he was dealing, makes a new proposal to enable the Government to press on still further in an endeavour to stop up this leak of the nation's revenue into the pockets of persons who have no right to it.
The Financial Secretary did not say whether he, recognises that there is a problem or not. He skirted round it. He avoided dealing with the point of substance and went into a whole rigmarole of form, and rather sketchy form at that. He said first of all—and I am within the recollection of the Committee—that this proposal does not make any change in the existing law. I suppose he had in mind Section 31 of the Income Tax Act, 1952, which gives certain powers. But when I ventured to intervene, and he finally gave way, and I asked him if he could point to any provision in the Income Tax code which enables the surveyor to say, as this proposal does, that expenses are not to be claimed unless they are formulated in accordance with a form and by reference to details which the surveyor is to be entitled to prescribe, he could not point to any such provision in the Income Tax code and he agreed that there was not one.
He then changed his ground and said that all that he had been maintaining was that this provision was not necessary. Well, it is our best effort. It is 1225 what we suggest. If the problem still persists—and I ask the Financial Secretary to contradict me if he really thinks it does not persist—let the Government, of which he is such a distinguished member, take some steps themselves to try to mitigate the loss.
What we really deplore is this completely supine attitude, both physically and intellectually at the moment, which the Financial Secretary—still more supine now—adopts towards this really very distressing problem which involves, as I say, so much bad feeling among so many millions of honest taxpayers. What my hon. Friend said—and he speaks with more experience on this subject than anybody else in the Committee—was that we could not pretend that the proposal was a panacea. It is obviously not that. We do not pretend that if these powers are given to the surveyor, as if by a stroke of the wand this abuse will stop, but this proposal does provide a power which does not exist at the moment.
The Financial Secretary said that at the moment the onus is on the taxpayer to make good his claim to deduction of expenses. Of course, it is in law, but I should have thought it was the experience of most people that in practice what happens is that a large claim for expenses is put in. It is unspecified. No detail is given, and then a long wrangle starts between the surveyor and the taxpayer, the surveyor writing letters and endeavouring in vain to ascertain the details, until at long last the unfortunate surveyor is almost overwhelmed with paper and is constrained to allow more than he ought to allow literally to get to some kind of finality in the matter.
If the surveyor can say, "If you wish to put forward these claims—if, for example, you wish to deduct the cost of running six motor cars and want to have a claim in respect of the expense of running them, you must say what the six motor cars are used for, what the mileage is for each for business purposes "—if he is entitled to say that that kind of question is to be answered at the outset by the taxpayer who claims the expense, then we should be much nearer to getting something like machinery that will come nearer to working. At least, when the surveyor gets the claim he will have it in a pretty particularised form. At the 1226 moment, he very often simply gets a lump sum, and it is for him to try to ferret out the details. I should have thought that very often it is next to impossible to do so, especially when one gets unco-operative taxpayers.
The Financial Secretary says that the surveyor's remedy is easy and that all he has to do is to disallow the claim. It is far from easy. That type of taxpayer is very persistent. The more respectable taxpayers do not find themselves in that situation because they do not put forward that type of claim. It is the somewhat arrogant and often quite unscrupulous taxpayers who get away with this kind of thing. The Opposition think it is high time the Government did something to stop it.
I do not want to incur the reproof that my hon. Friend quite improperly incurred from the Financial Secretary, and, therefore, having restated the point which apparently the Financial Secretary did not comprehend, although it was very clearly stated by my hon. Friend, I hope that we shall have a better answer from the Financial Secretary if he proposes to intervene in the debate again. If he does not intervene again, I hope that my hon. Friends will mark by going into the division Lobbies their sense of keen displeasure at the attitude which the Financial Secretary has adopted towards the very reasonable proposal which has been made to deal with a very urgent problem.
§ Mr, Boyd-Carpenter
I rise only because the right hon. and learned Gentleman the Member for Neepsend (Sir F. Soskice) was courteous enough to observe that, in his opinion, in my earlier observations I did not deal with what he was pleased to call the point of substance. I do not want to waste the time of the Committee by recalling the earlier debate, but the right hon. and learned Gentleman will know well that his hon. Friend the Member for Sowerby (Mr. Houghton) raised in substance two psychological points on this proposal. I dealt with them at some length, and I do not propose to repeat myself.
However, the right hon. and learned Gentleman introduced the general question of tax avoidance or evasion and complained, a little unfairly I think, that I had not anticipated him by dealing with 1227 the general topic. As he said, he and his right hon. Friend have in different forms, and in different forms of words, raised these points each year, and we have sought to deal with them on their merits.
The right hon. and learned Gentleman asked me whether we are concerned to prevent tax avoidance or evasion. As he knows perfectly well, the answer is that we are But then the right hon. and learned Gentleman, admitting that his own proposal really would not make much difference, said that it is up to the Government to propose something else. That suggestion springs from the attitude of mind on the other side of the Committee with which most hon. Members on his side of the Committee profoundly disagree. It is the attitude of mind that one must resort to legislation to deal with almost every problem.
The right hon. and learned Gentleman's suggestion was that, if anything was wrong, it was incumbent upon us either to accept his proposals for legislation or ourselves to introduce a legislative project. I profoundly disagree. As I said during last year's debate, I believe that,
§ in general, the legal powers for tax enforcement in this country are adequate, and I believe that the remedy for such abuses as exist—I do not think that they exist on any great scale, but I am not concerned to deny that they do exist—is not by piling additional legal sanctions upon the Executive but by sensible and steady administration. I believe that the fact that the Inland Revenue have succeeded in overcoming many of the arrears of work which presented to them very great problems in the post-war years is enabling steadier and fuller examination to be given, and even better administration.
§ Therefore, I would say to the right hon. and learned Gentleman that, in rejecting his proposals for legislation and in offering under this head no proposals for legislation ourselves, we are certainly not suggesting that we do not concern ourselves very fully with this problem. We believe that it is best tackled in the way in which we are tackling it, by steady and sensible administration.
§ Question put.
§ The Committee divided: Ayes, 242; Noes, 279.1231
|Division No. 183.]||AYES||[9.36 p.m|
|Acland, Sir Richard||Crosland, C. A. R.||Grey, C. F.|
|Adams, Richard||Grossman, R. H. S||Griffiths, David (Rother Valley)|
|Albu, A. H.||Cullen, Mrs. A||Griffiths, Rt. Hon. Jamas (Llanelly)|
|Anderson, Frank (Whitehaven)||Daines, P.||Hale, Leslie|
|Awbery, S. S.||Dalton, Rt. Hon. H.||Hall, Rt. Hon. Glenvil (Colne Valley)|
|Bacon, Miss Alice||Darling, George (Hillsborough)||Hamilton, W. W.|
|Baird, J.||Davies, Ernest (Enfield, E.)||Hannan, W|
|Balfour, A.||Davies, Harold (Leek)||Hardy, E. A.|
|Barnes, Rt. Hon A J||Davies, Stephen (Merthyr)||Hargreaves, A.|
|Bartley, P.||de Freitas, Geoffrey||Harrison, J. (Nottingham, E.)|
|Bellenger, Rt.Hon. F. J||Deer, G.||Hastings, S.|
|Bence, C. R.||Delargy, H. J||Hayman, F. H.|
|Benn, Hon. Wedgwood||Dodds, N. N.||Henderson, Rt. Hon A. (Rowley Regis)|
|Benton, G.||Donnelly, D. L.||Herbison, Miss M.|
|Beswick, F.||Driberg, T. E. N.||Hewitson, Capt. M|
|Bevan, RI. Hon. A (Ebbw Vale)||Dugdale, Rt. Hon. John (W. Bromwich)||Hobson, C. R.|
|Bing, G. H. C.||Ede, Rt. Hon J. C.||Holman, P.|
|Blackburn, F.||Edelman, M.||Holmes, Horace|
|Blenkinsop, A.||Edwards, Rt. Hon. John (Brighouse)||Houghton, Douglas|
|Blyton, W R||Edwards, Rt. Hon. Ness (Caerphilly)||Hudson, James (Ealing, N.)|
|Boardman, H||Evans, Albert (Islington, S.W.)||Hughes, Emrys (S. Ayrshire)|
|Bottomley, Rt. Hon A. G||Evans, Edward (Lowestoft)||Hughes, Hector (Aberdeen, N.)|
|Bowden, H. W||Evans, Stanley (Wednesbury)||Hynd, H. (Accrington)|
|Bowles, F. G.||Fernyhough, E.||Hynd, J. B. (Attercliffe)|
|Braddock, Mrs. Elizabeth||Fienburgh, W.||Irvine, A. J. (Edge Hill)|
|Brockway, A. F.||Finch, H. J.||Irving, W. J. (Wood Green)|
|Broughton, Dr A. D D||Fletcher, Eric (Islington, E.)||Isaacs, Rt. Hon. G. A.|
|Brown, Rt. Hon George (Belper)||Follick, M.||Janner, B.|
|Brown, Thomas (Ince)||Foot, M. M.||Jay, Rt. Hon. D. P. T.|
|Butler, Herbert (Hackney, S.)||Forman, J. C.||Jeger, George (Goole)|
|Callaghan, L. J||Fraser, Thomas (Hamilton)||Jeger, Mrs. Lena|
|Champion, A J||Freeman, Peter (Newport)||Jenkins, R. H. (Stechford)|
|Chetwynd, G R||Gaitskell, Rt. Hon. H. T. N.||Johnson, James (Rugby)|
|Clunie, J.||Gibson, C. W.||Jones, David (Hartlepool)|
|Coldrick, W||Glanville, James||Jones, Jack (Rotherham)|
|Collick, P. H||Gooch, E. G.||Jones, T. W. (Merioneth)|
|Cove, W. G.||Gordon Walker, Rt. Hon. P C.||Keenan, W|
|Craddock, George (Bradford, S.)||Greenwood, Anthony||Kenyon, C.|
|Key, Rt. Hon. C. W.||Paling, Will T. (Dewsbury)||Stokes, Rt. Hon. R. R.|
|King, Dr. H. M.||Palmer, A. M. F.||Strachey, Rt. Hon. J.|
|Kinley, J.||Pannell, Charles||Stress, Dr. Barnett|
|Lawson, G. M.||Pargiter, G. A||Summerskill, Rt. Hon. E.|
|Lee, Frederick (Newton)||Parker, J.||Sylvester, G. O.|
|Lee, Min Jennie (Cannock)||Paton, J.||Taylor, Bernard (Mansfield)|
|Lever, Harold (Chestham)||Peart, T. F.||Taylor, John (West Lothian)|
|Lever, Leslie (Ardwick)||Plummer, Sir Leslie||Taylor, Rt. Hon. Robert (Morpeth)|
|Lewis, Arthur||Popplewell, E.||Thomas, George (Cardiff)|
|Lindgren, G. S.||Porter, G.||Thomas, Ivor Owen (Wrekin)|
|Lipton, Lt.-Col. M.||Price, J. T. (Westhoughton)||Thomson, George (Dundee, E.)|
|Logan, D. G.||Price, Philips (Gloucestershire, W.)||Thornton, E.|
|MacColl, J. E.||Proctor, W. T.||Timmons, J.|
|McGhee, H. G.||Pryde, D. J.||Tomney, F.|
|McGovern, J.||Pursey, Cmdr. H.||Usborne, H. C.|
|McInnes, J.||Rankin, John||Viant, S. P.|
|McKay, John (Wallsend)||Reeves, J.||Wallace, H. W.|
|McLeavy, F.||Reid, Thomas (Swindon)||Warbey, W. N.|
|MacMillan, M. K. (Western Isles)||Raid, William (Camlachie)||Watkins, T. E.|
|MacPherson, Malcolm (Stirling)||Robens, Rt. Hon. A.||Weitzman, D.|
|Mainwaring, W. H.||Roberts, Albert (Normanton)||Wells, Percy (Faversham)|
|Mallalieu, E. L. (Brigs)||Roberts, Gorenwy (Caernarvon)||Wells, William (Walsall)|
|Mallalieu, J. P. W. (Huddersfield, E.)||Robinson, Kenneth (St. Pancras, N.)||Wheeldon, W. E.|
|Mann, Mrs. Jean||Rogers, George (Kensington, N.)||White, Mrs. Eirene (E. Flint)|
|Manuel, A. C.||Ross, William||White, Henry (Derbyshire, N.E.)|
|Marquand, Rt. Hon. H. A.||Royle, C.||Wigg, George|
|Mason, Roy||Shackleton, E. A. A.||Wilcock, Group Capt. C. A. B.|
|Mayhew. C. P.||Shawcross, Rt. Hon. Sir Hartley||Wilkins, W. A.|
|Mellish, R. J.||Shinwell, Rt. Hon. E.||Willey, F. T.|
|Messer, Sir F.||Short, E. W.||Williams, David (Neath)|
|Mikardo, Ian||Shurmer, P. L. E.||Williams, Rev. Llywelyn (Abertillery)|
|Mitchison, G. R.||Silverman, Julius (Erdington)||Williams, Rt. Hon. Thomas (Don V'll'y)|
|Monslow, W.||Silverman, Sydney (Nelson)||Williams, W. R. (Droyleden)|
|Morgan, Dr. H. B- W.||Simmons, C. J. (Brierley HM)||Williams, W. T. (Hammersmith, S.)|
|Morley, R.||Skeffington, A. M.||Willis, E. G.|
|Mulley, F. W.||Slater, Mrs. H. (Stoke-on-Trent)||Wilson, Rt. Hon. Harold (Huyton)|
|Noel-Baker, Rt. Hon. P. J.||Slater, J. (Durham, Sedgefield)||Winterbottom, Richard (Brightside)|
|Oldfield, W. H.||Smith, Ellis (Stoke, S.)||Woodburn, Rt. Hon. A.|
|Oliver, G. H.||Smith, Norman (Nottingham, S.)||Wyatt, W. L.|
|Orbach, M.||Snow, J. W.||Yates, V. F.|
|Oswald, T.||Sorensen, R. W.|
|Padley, W. E.||Soskice, Rt. Hon. Sir Frank||TELLERS FOR THE AYES:|
|Paget, R. T.||Sparks, J. A.||Mr. Pearson and Mr. Arthur Allen.|
|Paling, Rt. Hon. W. (Dearne Valley)||Steele, T.|
|Aitken, W. T.||Butcher, Sir Herbert||Ford, Mrs. Patricia|
|Allan, R. A. (Paddington, S.)||Campbell, Sir David||Fort, R.|
|Alport, C. J. M.||Gary, Sir Robert||Foster, John|
|Amery, Julian (Preston, N.)||Channon, H,||Fraser, Hon. Hugh (Stone)|
|Amory, Rt. Hon. Heathcoat (Tiverton)||Clarke, Col. Ralph (East Grins lead)||Fraser, Sir Ian (Morecambe & Lonsdale)|
|Arbuthnot, John||Clarke, Brig. Terence (Portsmouth, W.)||Galbraith, Rt. Hon. T. D. (Pollok)|
|Assheton, Rt. Hon. R. (Blackburn, W.)||Clyde, Rt. Hon. J. L.||Galbraith, T. G. D. (Hillhead)|
|Astor, Hon. J. J.||Cole, Norman||Gammans, L. D.|
|Baldock, Lt.-Comdr. J. M.||Colegate, W. A.||George, Rt. Hon. Maj, G. Lloyd|
|Baldwin, A. E.||Conant, Maj. Sir Roger||Glover, D.|
|Barlow, Sir John||Cooper-Key, E. M.||Godber, J. B.|
|Baxter, Sir Beverley||Craddock, Beresford (Spelthorne)||Gomme-Duncan, Col. A.|
|Beach, Major Hicks||Crosthwalte-Eyre, Col. O. E.||Gough, C. F. H.|
|Bell, Philip (Bolton, E.)||Crouch, R. F.||Gower, H. R.|
|Bell, Ronald (Bucks, S.)||Crowder, Sir John (Finchley)||Graham, Sir Fergus|
|Bennett, F. M. (Reading, N.)||Crowder, Petre (Rulslip—Northwood)||Grimond, J.|
|Bennett, Dr. Reginald (Gospert)||Darling, Sir William (Edinburgh, S.)||Grimston, Hon. John (St. Albans)|
|Bennett, William (Woodside)||Davidson, Viscountess||Grimston, Sir Robert (Westbury)|
|Bevins, J. R. (Toxteth)||Deedes, W. F.||Hall, John (Wycombe)|
|Birch, Nigel||Digby, S. Wingfield||Harden, J. R. E.|
|Bishop, F. P.||Dodds-Parker, A. D.||Hare, Hon. J. H.|
|Black, C. W.||Donaldson, Cmdr. C. E. McA.||Harris, Frederic (Croydon, N.)|
|Boothby, Sir R. J. G.||Doughty, C. J. A.||Harris, Reader (Heston)|
|Bossom, Sir A. C||Douglas-Hamilton, Lord Malcolm||Harrison, Col. J. H. (Eye)|
|Boyd-Carpenter, Rt. Hon. J. A||Drayton, G. B-||Harvey, Air Cdre. A. V. (Macclesfield)|
|Boyle, Sir Edward||Drewe, Sir C.||Harvey, Ian (Harrow, E.)|
|Braine, B. R.||Dugdale, Rt. Hon. Sir T. (Richmond)||Harvie-Watt, Sir George|
|Braithwaite, Sir Albert (Harrow, W.)||Duncan, Capt. J. A. L.||Hay, John|
|Braithwaite, Sir Gurney||Duthie, W. S.||Head, Rt. Hon. A. H.|
|Bromley-Davenport, Lt.-Col. W. H.||Eccles, Rt. Hon. Sir D. M.||Heald, Rt. Hon. Sir Lionel|
|Brooke, Henry (Hampstead)||Eden, J. B. (Bournemouth, West)||Heath, Edward|
|Brooman-White, R. C||Elliot, Rt. Hon. W. E||Higgs, J. M. C.|
|Brown, Jack (Govan)||Erroll, F. J.||Hill, Dr. Charles (Luton)|
|Buchan-Hepburn, Rt. Hon. P. G. T.||Finlay, Graeme||Hill, Mrs. E. (Wythenshawe)|
|Bullard, D. G.||Fisher, Nigel||Hinchingbrooke, Viscount|
|Bullus, Wing Commander E. E||Fleetwood-Heskath, R. F||Hirst, Geoflrey|
|Burden, F. F. A.||Fletcher-Cooke, C.||Holland-Martin, C. J|
|Hollis, M. C.||Marlowe, A. A. H.||Schofield, Lt.-Col. W.|
|Holt, A. F.||Marples, A. E.||Scott, R. Donald|
|Hope, Lord John||Marshall, Douglas (Bodmin)||Scott-Miller, Cmdr. R.|
|Hopkinson, Rt. Hon. Henry||Maude, Angus||Shepherd, William|
|Hornsby-Smith, Miss M. P.||Maudling, R.||Simon, J. E. S. (Middlesbrough, W.)|
|Horobin, I. M.||Maydon, Lt.-Comdr. S. L. C.||Smithers, Peter (Winchester)|
|Horsbrugh, Rt. Hon. Florence||Medlicott, Brig. F.||Smithers, Sir Waldron (Orpington)|
|Howard, Gerald (Cambridgeshire)||Mellor, Sir John||Smyth, Brig. J. G. (Norwood)|
|Howard, Hon. Greville (St. Ives)||Molson, A. H. E.||Snadden, W. McN.|
|Hudson, Sir Austin (Lewisham, N.)||Monckton, Rt. Hon. Sir Walter||Spearman, A. C. M.|
|Hulbert, Wing Cdr. N. J.||Moore, Sir Thomas||Speir, R. M.|
|Hurd, A. R.||Morrison, John (Salisbury)||Spence, H. R. (Aberdeenshire, W.)|
|Hutchison, Sir Ian Clark (E'b'rgh, W.)||Mott-Radclyffe, C. E.||Spens, Rt. Hon. Sir P. (Kensington, S.)|
|Hyde, Lt.-Col. H. M.||Nabarro, G. D. N.||Stanley, Capt. Hon. Richard|
|Hylton-Foster, H. B. H.||Neave, Airey||Steward, W. A. (Woolwich, W.)|
|Iremonger, T. L.||Nicholls, Harmar||Stewart, Henderson (Fife, E.)|
|Jenkins, Robert (Dulwich)||Nicholson, Godfrey (Farnham)||Stoddart-Scott, Col. M.|
|Jennings, Sir Roland||Noble, Comdr. A. H. P.||Storey, S.|
|Johnson, Eric (Blackley)||Nugent, G. R. H.||Strauss, Henry (Norwich, S.)|
|Jones, A. (Hall Green)||Nutting, Anthony||Stuart, Rt. Hon. James (Moray)|
|Joynson-Hicks, Hon. L. W.||Oakshott, H. D.||Studholme, H. G.|
|Kerby, Capt. H. B.||Odey, G. W.||Summers, G. S.|
|Kerr, H. W.||O'Neill, Hon. Phelim (Co. Antrim, N.)||Sutcliffe, Sir Harold|
|Lambert, Hon. G.||Ormsby-Gore, Hon. W. D.||Taylor, Sir Charles (Eastbourne)|
|Lambton, Viscount||Orr, Capt. L. P. S.||Taylor, William (Bradford, N.)|
|Lancaster, Col. C. G.||Orr-Ewing, Charles Ian (Hendon, N.)||Teeling, W|
|Langford-Holt, J. A.||Osborne, C.||Thomas, Rt. Hon. J. P. L. (Hereford)|
|Leather, E. H. C.||Page, R. G.||Thomas, Leslie (Canterbury)|
|Legge-Bourke, Maj. E. A. H.||Peake, Rt. Hon. O.||Thompson, Kenneth (Walton)|
|Legh, Hon. Peter (Petersfield)||Perkins, Sir Robert||Thorneycroft, Rt. Hn. Peter (Monmouth)|
|Lindsay, Martin||Peto, Brig. C. H. M.||Thornton-Kemsley, Col. C. N.|
|Linstead, Sir H. N.||Pickthorn, K. W. M.||Tilney, John|
|Llewellyn, D. T.||Pilkington, Capt. R. A.||Touche, Sir Gordon|
|Lloyd, Rt. Hon. G. (King's Norton)||Pitman, I. J.||Turner, H. F. L.|
|Lloyd, Maj. Sir Guy (Renfrew, E.)||Pitt, Miss E. M.||Turton, R. H,|
|Lockwood, Lt.-Col. J. C.||Powell, J. Enoch||Tweedsmuir, Lady|
|Longden, Gilbert||Price, Henry (Lewisham, W.)||Vane, W. M. F.|
|Lucas, Sir Jocelyn (Portsmouth, S.)||Prior-Palmer, Brig. O. L.||Vosper, D. F.|
|Lucas, P. B, (Brentford)||Raikes, Sir Victor||Wade, D. W.|
|Lucas-Tooth, Sir Hugh||Ramsden, J. E.||Wakefield, Edward (Derbyshire, W.)|
|Lyttelton, Rt. Hon. O.||Rayner, Brig. R.||Wakefield, Sir Wavell (St. Marylebone)|
|McAdden, S. J.||Redmayne, M.||Walker-Smith, D. C.|
|McCorquodale, Rt. Hon. M. S.||Rees-Davies, W. R.||Wall, Major Patrick|
|Macdonald, Sir Peter||Remnant, Hon. P.||Ward, Miss I. (Tynemouth)|
|Mackeson, Brig. Sir Harry||Renton, D. L. M.||Waterhouse, Capt. Rt. Hon. C.|
|McKibbin, A. J.||Ridsdale, J. E.||Watkinson, H, A.|
|Mackie, J. H. (Galloway)||Roberts, Peter (Heeley)||Webbe, Sir H. (London & Westminster)|
|Maclay, Rt. Hon. John||Robertson, Sir David||Wellwood, W.|
|Maclean, Fitzroy||Robinson, Sir Roland (Blackpool, S.)||Williams, Rt. Hon. Charles (Torquay)|
|Macleod, Rt. Hon. Iain (Enfield, W.)||Robson Brown, W.||Williams, Sir Herbert (Croydon, E.)|
|MacLeod, John (Ross and Cromarty)||Rodgers, John (Sevenoaks)||Williams, Paul (Sunderland, S)|
|Macmillan, Rt. Hon. Harold (Bromley)||Roper, Sir Harold||Williams, R. Dudley (Exeter)|
|Macpherson, Niall (Dumfries)||Ropner, Col. Sir Leonard||Wills, G.|
|Maitland, Comdr. J. F. W. (Horncastle)||Russell, R. S.||Wilson, Geoffrey (Truro)|
|Maitland, Patrick (Lanark)||Ryder, Capt. R. E. D.|
|Manningham-Buller, Rt. Hn. Sir Reginald||Sandys, Rt. Hon. D.||TELLERS FOR THE NOES:|
|Markham, Major Sir Frank||Savory, Prof. Sir Douglas||Mr. Kaberry and|
|Mr. Richard Thompson.|
Question put, and agreed to.