HC Deb 08 December 1955 vol 547 cc586-621
Mr. E. Fletcher

I beg to move in page 3, line 2, to leave out "seven" and insert "six."

Mr. Deputy-Speaker (Sir Charles MacAndrew)

I think that this Amendment and the Amendment in the name of the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) in the same line, to leave out "fifty" and insert "forty," might be discussed together, with the opportunity for the House to divide on both, if that is desired.

Mr. Fletcher

I am much obliged to you, Sir Charles. I think that it would be for the convenience of the House if we discussed both these Amendments together and if we on this side reserved the right to have a Division on both Amendments.

In a sense the Amendments are related but they raise different arithmetical points. The Chancellor of the Exchequer will remember, as will the Financial Secretary, that we had a very interesting, although, from our point of view, not a very satisfactory debate on this Clause during the Committee stage. One reason these Amendments have been put down is that we were so dissatisfied with the half-hearted, or, shall I say, not very satisfactory explanation, which we had from the Treasury Bench in the Government's attempt to justify Clause 3.

Clause 3, curious as it may seem, is the one Clause in the Bill which gives any kind of concession or relief to any kind of taxpayer. It is somewhat significant and, no doubt, illustrative of Tory Party philosophy, that this concession is given to the very limited, and, I should have thought, already privileged class of Lloyd's underwriters. I have no prejudice against Lloyd's underwriters, but I should have thought that the House, before accepting the Chancellor's proposals, should examine very critically indeed whether, in a Budget which is designed to curb inflation and produce revenue, it is really necessary to grant these very considerable concessions to Lloyd's underwriters, which will have the effect of increasing the very substantial privileges which they already enjoy over all other sections of the community.

As we are aware, the position of a Lloyd's underwriter today is this. If he earns a profit in any given year of £14,000—I take that figure because it is a convenient one and, in view of this Clause, does not seem to me to be inappropriate—instead of being under a liability, like any other individual who makes such a profit, of having to pay Income Tax and Surtax on it, he has the great advantage of being able to put £5,000, or at any rate £4,900 of it, in a special fund.

I mention those figures because under the existing Act of 1952 he can place in a special reserve fund £5,000, or 35 per cent. of his profit. According to my calculation, which I do not guarantee, 35 per cent. of £14,000 is £4,900 and, therefore, on the illustration which I have taken, he can in round figures place £5,000 into a special reserve fund without any kind of liability, at any rate for the time being, and perhaps for ever, on that amount. Of course he would then reduce the sum for which he is assessable to tax from £14,000 to £9,000.

5.0 p.m.

I fully understand the reasons which induced earlier Chancellors to make the concession. It was for the express purpose of giving some encouragement to Lloyd's underwriters to carry on the business which they have been carrying on for a great many years, and which, by its very nature, debars them from forming public companies. I appreciate that if they were able to form public companies, and have their affairs dealt with and their profits taxed on that basis, they might be able to obtain certain other advantages. However, I do not think anybody would deny that the history of Estate Duty has shown that Lloyd's underwriters—as my hon. Friend the Member for St. Pancras, North (Mr. K. Robinson) pointed out in our earlier debates—are by the very nature of things not particularly hard-working individuals, because the actual hard work is done by others for them, and their function is to accept risks, make profits and from time to time to pay out losses.

The object of the Amendment is, by way of compromise, to give the Government an opportunity to reconsider their proposals. To take the illustration that I have already given, the Government's proposal is that in future a Lloyd's underwriter who makes a profit of £14,000 in a year should be able to place £7,000 into his special reserve and thereby avoid tax liability on £7,000, as distinct from the £5,000 at present.

It seems to me that there might be something to be said for the Clause if we had had any detailed justification for it from the Treasury but we have had none. We have been told, on the one hand, that certain representations have been made by Lloyd's underwriters, but during the Committee stage we were told that a great many Lloyd's underwriters did not feel particularly enthusiastic about the Clause.

We have been given no figures to indicate what the advantage to the country would be. We have been told that the concession would cost about £500,000, and it has been suggested, in very vague language, by the Financial Secretary that, unless this further concession is made, we shall not be able to get the full benefit of dollar earnings by undertaking insurance business which we should otherwise enjoy. I very much doubt whether, in saying that, justice is being done to Lloyd's underwriters.

I very much doubt whether they will be deterred from undertaking the maximum dollar business and other business if we decline to give them this additional tax privilege. Moreover, we have no reason to suppose that the dollar earnings which will result if the further concession is made are likely to be sufficiently substantial to justify a departure from the ordinary provisions that we are making in the Bill.

I could not understand why the Financial Secretary, who is putting forward this extraordinary Clause, could not give us a figure. He was pressed in Committee to give us a single figure for our net invisible exports from insurance. He declined to give any figure, and the extraordinary reason which he put forward for his failure to give the information was that the figure fluctuated from year to year. As I said to him at the time, if he did not know the figure, how could he tell that it fluctuated? I hope that since then the right hon. Gentleman—we know he is not really as simple as that—will have made further inquiries and will be able to do himself more justice than he did in Committee.

We hoped in Committee, and hope again now, that, if the Government are seriously-minded about giving this further inducement and privilege to Lloyd's underwriters, they will at any rate see the justice of making it conditional upon, and coupling it with, some obligation on the part of underwriters to do a certain amount of dollar insurance business or insurance business outside the country each year in order to qualify for the additional benefit.

The Government resisted that proposal in Committee. It would be wrong for me to refer to that matter further on this Amendment, because it is the subject of a subsequent Amendment which I understand will be called and which I hope will be accepted. Whether or not the Amendment is accepted, I hope that enough has been said on the subject in our debates to convince the Government that, if it is really necessary to give some further inducement to Lloyd's underwriters, justice would be done to them—more than done to them—consistent with the Government's obligations to all other taxpayers, if there were a modest increase in the existing limits from £5,000 to £6,000 and from 35 per cent. to 40 per cent. respectively.

Moreover, if the Amendment were accepted, it would very greatly reduce the extremely complex calculations and accountancy tasks which, as the right hon. Gentleman admitted, will result from the Clause as drafted. He said that it baffled him and could only be sorted out by accountants. The Amendment would reduce that complexity and afford the Government an opportunity to consider the matter afresh.

Mr. Kenneth Robinson (St. Pancras, North)

I beg to second the Amendment.

In our discussions on the Clause in Committee, reference was made to the small category of persons for which these concessions are being made. I said that the vast majority of Lloyd's underwriters did little or no work, at any rate in the underwriting field. This provoked one Lloyd's underwriter to send me a somewhat irate letter claiming that he worked very hard indeed, although, apparently, he had sufficient time to read our proceedings in the OFFICIAL REPORT. Of course, it is not true that no Lloyd's underwriter works hard. There are underwriting agents, themselves underwriters, who frequently work quite hard, but I still stand by what I said in Committee, that the vast majority do nothing at all beyond paying large sums into their banking accounts from time to time.

When we discussed the Clause in Committee, hon. Member after hon. Member on this side of the Committee begged the Government to give some figures to support their claim that the concession was justified. We asked for one year's figures or for three years' figures. All we got from the Financial Secretary was the very vague and unsatisfactory statement that the figures fluctuated. I have an unworthy suspicion that the right hon. Gentleman had some figures, but the trouble with them was that they did not back up his argument, and therefore the only thing to do was to keep them from the Committee.

The right hon. Gentleman has had time, since the Committee stage, to get figures, and to select from them those which will, to some extent, justify the case which he is trying to make. I hope that on this occasion we shall be told something about the benefits which have accrued to the country from foreign or dollar insurance by Lloyd's underwriters, or the insurance industry as a whole, over the past three or five years. I know that the results fluctuate, and that is why I ask for them over a period. In the absence of those figures, we must assume that this business does not represent the admirable invisible export which it is made out to represent by Lloyd's underwriters themselves and by the Government.

I wish to make a further point about the second Amendment. Even were the Government able to convince us that this is a legitimate concession, which so far they have failed to do, I can well understand that, with the general rise in costs since 1952, it might be necessary or desirable to increase the amount of money which an underwriter can place in his special reserve fund. But I can see no justification whatever for increasing the percentage of his profit which he is permitted to place in this special insurance fund. Costs rise, the value of ships and commodities rise, premiums rise, profits rise and so do losses. Why is it necessary to permit these underwriters to put 50 per cent. instead of the existing 35 per cent. into a special reserve fund? If the Government think it necessary, how does that tie up with the hurricane losses, which was one reason put forward by the right hon. Gentleman for including this Clause in an emergency Finance Bill at this time?

I hope that the repeated requests for information from the right hon. Gentleman have not fallen on deaf ears, and that he will be able to convince us that there are sound reasons for making this extended concession to Lloyd's underwriters.

5.15 p.m.

The Financial Secretary to the Treasury (Mr. Henry Brooke)

I assure both the hon. Member for Islington, East (Mr. E. Fletcher) and the hon. Member for St. Pancras, North (Mr. K. Robinson) that the Clause does not baffle me. I hope that I may be able to prove that to the House. I welcome the opportunity, afforded by this Amendment, of speaking further, because I have granted from the beginning that this is a complex matter and I wish to give as much information and explanation as I can.

The hon. Member for Islington, East said that the Clause would cause a loss of revenue of £500,000 a year. He will appreciate, as I pointed out during the Committee stage discussions, that the £500,000 is calculated on the assumption that full use is made of the powers given by the Clause. If, as has been alleged by some hon. Members, the provision will not prove attractive to Lloyd's underwriters, then the figure, instead of being £500,000, will be a very small one, or nothing at all. I would also point out—because £500,000 is a substantial sum—that in any case it will taper off. This is not an exemption from Surtax, it is a deferment of Surtax, and in due course, as underwriters die or go out of business, the Surtax will become payable; so that this is not even £500,000 a year ad infinitum. The amount will dwindle as the Surtax becomes payable.

The hon. Member for Islington, East fell into another error. I hope that he will accept my assurance that I am not casting any blame on him, because this is not an easy matter to follow. The proposed 50 per cent. limit is not actually as much as he thought. He made the calculation that under the existing statutory powers, on an income of £14,000 a year it would be possible to put to reserve about £5,000, being 35 per cent. of £14,000. That is not correct, because the hon. Gentleman overlooked the fact that in the case of Lloyd's underwriters the gross equivalent of the Profits Tax which they pay—by "gross equivalent" I mean after adding back Income Tax at the standard rate—is deducted in computing their total income for Surtax purposes, and also in computing their profits for the purposes of these limits. So that these percentages are worked out, not on the full profits of an underwriter, but on a figure reached by deducting from the underwriter's profit the gross equivalent of Profits Tax which he has to pay.

The calculation works out rather differently. I have taken £14,500 rather than £14,000 for the purposes of my example. Assuming a gross profit of £14,500, the limit which the underwriter is allowed to put to reserve free of Surtax under the present statutory powers is not £5,000, but £2,364 or thereabouts. If this Clause is accepted, the limit will go up, not to £7,000 in such a case, but to about £3,500. In other words, because of the Profits Tax deduction, the present limit, which is 35 per cent., works out in practice at between 16 per cent. and 20 per cent. of the gross profits: and the new limit of 50 per cent. will work out, roughly, at about 24 per cent. to 29 per cent. of the gross profits.

The hon. Member for St. Pancras, North suggested that there might be a case for raising the global figure but not the percentage. I am not sure whether he appreciates that it is normally the percentage figure which applies, and not the global figure, and that only those whose profits are very large would be cut short by the global figure. The global figure is inserted simply so that there shall be a ceiling if the underwriter's profits are very large in a particular year.

Both hon. Members asked whether I could give some further information in support of this Clause. I may have difficulty in not trespassing on the scope of the next Amendment if I do so, but the whole matter hangs together, and I think it right, when speaking on the first Amendment, to seek to justify it as a whole. I have been considering what further figures I could properly give to the House. The official annual summary, published by the Board of Trade, of statements of assurance business will show that, in 1954, the total premium income of insurance companies and Lloyd's combined amounted to about £1,250 million; that is, the total premium income from all sources. Of that, Lloyd's accounted for about £225 million. That is the order of magnitude of the premium income. In the case of Lloyd's—and, after all, it is Lloyd's that we are now discussing—the proportion of the premium income from overseas is more than half the total. That shows the size of the proposition.

Hon. Members have asked if I could also give the net earnings from overseas business. I am afraid that I am not in a position to give that information. So far as I know, it was not given by the previous Government, and I really must tell the House that it would not be in the public interest to state how much we are making by way of net profit upon overseas insurance business every year. I say that with a full sense of responsibility and with no desire to hold anything back from the House. I have given those figures of net premium income, which show the size of the problem which we are considering.

Mr. Jay

The right hon. Member gave us the figures of total premium income from overseas, but not the net earnings. Could he at least give us the total premium income from dollar countries?

Mr. Brooke

In the case of Lloyd's, the premium income from dollar sources is very nearly half the total premium income.

Mr. Jay

I only want to get the facts clear. I thought the right hon. Gentleman said that in the case of Lloyd's the total premium income from overseas was half the total premium income from all sources. I asked him how much of the total premium income from overseas is from dollar countries. They may both be half. Is that what he meant?

Mr. Brooke

The right hon. Gentleman is quite right to ask these questions—and I want to make the position clear. In 1954, the total premium income of Lloyds, from all sources, was about £225 million. Nearly half the total in an ordinary year—I cannot say precisely what it was in 1954—is from dollar sources, and well over half is from overseas. I hope that I have made that clear.

The next question is, why should it be necessary or desirable to take extra powers for increasing the reserves? It has been indicated to the House from the start of our debates that this proposal arose out of the heavy losses suffered through the hurricanes of 1954—losses which affected both English and American insurers. That is the origin of the matter, and what we have to consider is whether special action should be taken to enable Lloyd's underwriters to continue to write these serious risks overseas, because their recent experience has been such as to cause people to wonder whether they can carry these risks unless they are in a position to enlarge their reserves.

As I understand, in these days an increasing amount of dollar business which demands a really massive reserve is coming on to the market. I am referring in particular to what are called excess-of-loss reinsurances for catastrophic risks. As anybody who knows anything about insurance realises, this sort of business may be, and normally is, profitable over a sufficient number of years, but it may take heavy knocks in any one year, and insurers need great financial strength if they are to write that sort of excess-of-loss reinsurance against catastrophe.

If British insurers can offer reinsurance cover upon this type of business they can thereby get the offer of a good deal of much less hazardous reinsurance business and other business. As, again, everybody who has been in insurance knows, if they are not willing to take the less attractive business which may carry considerable risks with it, although it is profitable over a long period, they are not so likely to get the opportunity of taking the bread and butter business which does not carry anything like the same degree of risk.

I must put it to the House that it is desirable that Lloyd's underwriters should not have to stand off from that type of business. As I say, there has been heavy loss, and yet it is clearly in the interests of our balance of payments that we should go on with this business, and not pull out of it.

Mr. Chapman

All through the debates on this Clause we have had statements about the heavy loss which has been incurred. Is the right hon. Gentleman in a position to give any figures, not of the losses of the companies but of the losses which have been underwritten by them? We have never been given that information.

Mr. Brooke

It really would not be right for me to do so. I could not disclose here the losses of Lloyd's or of individual underwriters, but it must be clear to anybody who has studied what has been happening in the world that substantial losses have been incurred.

The one question which is at issue is whether, by this Clause, we can improve our balance of payments. Speaking generally, we wish British people to go out in the world, everywhere, getting export trade. Similarly, we hope that they will go out getting insurance business. I submit to the House that it will be well worth while to allow this extension of the Surtax-free reserves, in order that this business may be maintained and increased.

There is one other point which I think the House will appreciate. Under the new system laid down in the Bill, where the additions to reserves involve only deferment of Surtax, and not exemption from it, it is no longer quite so important to determine the ceilings or the limits. Both in the 1949 and the 1952 Act a substantially greater advantage was given, in that there was complete exemption from Surtax, and the limit then set a definite ceiling to the amount of Surtax for which exemption could be obtained. In this case, no consideration of that sort enters into the matter. I do not say that the House should not look very carefully at these figures, but in that respect they are less important than the figures which have been under consideration when earlier Bills have been before the House. I hope that both hon. Members who have spoken will appreciate that I have done all I can to give the fullest information upon the matter. With that explanation, I hope that they may be willing to withdraw the Amendment.

Mr. Jay

At least the Financial Secretary has now given us some figures. I do not really know why he could not have given them to us during the Committee stage. That would have avoided a good deal of argument. Nevertheless, I am far from convinced that they make out his case. He has told us that the total premium income from dollar countries overseas is about £100 million. I agree that that is a substantial sum, but that is not really the sum which is at issue in this argument. That is the total premium income. From that, presumably, are to be deducted both the losses of which he spoke—or the claims, or whatever they are called—and, secondly, the expenses of winning that premium income.

What we are concerned with is the net figure. because it is only the net figure which is a positive help to our dollar balance of payments. We do not know without seeing the figures whether in fact, net, it is a positive balance or not. Can the Financial Secretary at least assure us that, after deducting claims and expenses, there is something of the £100 million left, and not a minus quantity?

5.30 p.m.

Mr. Brooke

I can give that assurance to the right hon. Gentleman. My right hon. Friend would not have brought forward this proposal if it were simply a matter of expanding a losing business. It is a profitable business.

Mr. Jay

I am glad to have extracted that amount of information from the hon. Gentleman. He made so much about the losses on the hurricanes that I did not expect that information. Whatever that loss may be, that is not the relevant figure. We are concerned here with how far that can be increased by the tax concession which the Financial Secretary is now proposing and that is an even smaller sum. We are led to the conclusion that the Government hope to achieve some increase which they are not prepared to formulate to the House but which is a good deal less than the £100 million, after making both these deductions.

We are dealing with a tax concession to one particular kind of taxpayer; we

ought to look very narrowly at a special concession for the benefit of one particular group. I am sure that most Lloyd's underwriters work hard, in spite of what has been said in this debate. Nevertheless it has been agreed that, by and large, they are fairly wealthy people. We are being asked to make a considerable concession to them on rather hazy, shady, misty arguments, without very full figures. That is why we complain of the action of the Government, in a Budget which imposes many heavy burdens on ordinary people all over the community.

We are told that the balance of payments position is so serious under the administration of the Chancellor of the Exchequer that we have to put a tax on dustbins, sieves, cinder sifters, and similar things. I have serious doubts whether the Chancellor really believes that the taxes on these household articles will solve the balance of payments position. I am unconvinced, in the absence of stronger arguments, that this is really the time for giving a special concession to one particular class of fairly wealthy Surtax payers. Unless we are to have further figures and more convincing arguments I shall advise my hon. Friends to divide in favour of this Amendment.

Question put, That "seven" stand part of the Bill:—

The House divided: Ayes 244, Noes 190.

Division No. 73.] AYES [5.35 p.m.
Agnew, Comdr. P. G. Braithwaite, Sir Albert (Harrow, W.) Dodds-Parker, A. D.
Aitken, W. T. Bromley-Davenport, Lt.-Col. W. H. Doughty, C. J. A.
Allan, R. A. (Paddington, S.) Brooke, Rt. Hon. Henry Drayson, G. B.
Alport, C. J. M. Brooman-White, R. C. Duncan, Capt. J. A. L.
Amery, Julian (Preston, N.) Buchan-Hepburn, Rt. Hon. P. G. T. Duthie, W. S.
Amory, Rt. Hn. Heathcoat (Tiverton) Burden, F. F. A. Elliot, Rt. Hon. W. E.
Anstruther-Gray, Major W. J. Butcher, Sir Herbert Emmet, Hon. Mrs. Evelyn
Arbuthnot, John Butler, Rt. Hn. R. A. (Saffron Walden) Errington, Sir Eric
Armstrong, C. W. Campbell, Sir David Erroll, F. J.
Ashton, H. Carr, Robert Farey-Jones, F. W.
Astor, Hon. J. J. Cary, Sir Robert Fell, A.
Atkins, H. E. Channon, H. Finlay, Graeme
Baldwin, A. E. Chichester-Clark, R. Fisher, Nigel
Balniel, Lord Cole, Norman Fletcher-Cooke, C.
Barber, Anthony Cooper, Sqn. Ldr. Albert Fort, R.
Barlow, Sir John Cordeaux, Lt.-Col. J. K. Foster, John
Barter, John Corfield, Capt. F. V. Freeth, D. K.
Baxter, Sir Beverley Craddook, Beresford (Spelthorne) George, J. C. (Pollok)
Bell, Ronald (Bucks, S.) Crookshank, Capt. Rt. Hn. H. F. C. Glover, D.
Bevins, J. R. (Toxteth) Crosthwaite-Eyre, Col. O. E. Godber, J. B.
Bidgood, J. C. Crouch, R. F. Comme-Duncan, Col. A.
Biggs-Davison, J. A. Crowder, Sir John (Finchley) Gough, C. F. H.
Birch, Rt. Hon. Nigel Crowder, Petre (Ruislip—Northwood) Gower, H. R.
Bishop, F. P. Cunningham, Knox Graham, Sir Fergus
Body, R. F. Currie, G. B. H. Green, A.
Boothby, Sir Robert Dance, J. C. G. Grimond, J.
Bossom, Sir A. C. D'Avigdor-Goldsmid, Sir Henry Grosvenor, Lt.-Col. R. G.
Bowen, E. R. (Cardigan) Deedes, W. F. Gurden, Harold
Boyle, Sir Edward Digby, Simon Wingfield Hall, John (Wycombe)
Hare, Hon. J. H. Low, Rt. Hon. A. R. W. Renton, D. L. M.
Harris, Frederic (Croydon, N.) Lucas, Sir Jocelyn (Portsmouth, S.) Robertson, Sir David
Harrison, A. B. C. (Maldon) Lucas-Tooth, Sir Hugh Rodgers, John (Sevenoaks)
Harvey, Air Cdre. A. V. (Macclesfd) McAdden, S. J. Roper, Sir Harold
Harvey, John (Walthamstow, E.) Macdonald, Sir Peter Ropner, col. Sir Leonard
Head, Rt. Hon. A. H. Mackeson, Brig. Sir Harry Russell, R. S.
Heald, Rt. Hon. Sir Lionel Mackie, J. H. (Galloway) Sharpies, R. C.
Heath, Edward McLaughlin, Mrs. P. Simon, J. E. S. (Middlesbrough, W.)
Hicks-Beach, Maj. W. W. Maclay, Rt. Hon. John Smyth, Brig. J. G. (Norwood)
Hill, John (S. Norfolk) Macleod, Rt. Hn. Iain (Enfield, W.) Soames, Capt. C.
Hirst, Geoffrey Macmillan, Rt. Hn. Harold (Bromley) Spearman, A. C. M.
Holland-Martin, C. J. Macpherson, Niall (Dumfries) Speir, R. M.
Holt, A. F. Maddan, Martin Spens, Rt. Hn. Sir P. (Kens'gt'n, S.
Hope, Lord John Maitland, Cdr. J.F.W. (Horncastle) Stanley, Capt. Hon. Richard
Hornsby-Smith, Miss M. P. Maitland, Hon. Patrick (Lanark) Stevens, Geoffrey
Horsbrush, Rt. Hon. Dame Florence Markham, Major Sir Frank Steward, Sir William (Woolwich, W.)
Howard, Gerald (Cambridgeshire) Marlowe, A. A. H. Stewart, Henderson (Fife, E.)
Howard, Hon. Greville (St. Ives) Marples, A. E. Stoddart-Scott, Col. M.
Howard, John (Test) Marshall, Douglas Storey, S.
Hudson, Sir Austin (Lewisham, N.) Mathew, R. Stuart, Rt. Hon. James (Moray)
Hughes Hallet, Vice-Admiral J. Maude, Angus Summers, G. S. (Aylesbury)
Hughes-Young, M. H. C. Mawby, R. L. Sumner, W. D. M. (Orpington)
Hulbert, Sir Norman Maydon, Lt.-Comdr. S. L. C.
Hurd, A. R. Medlicott, Sir Frank Taylor, William (Bradford. N.)
Hutchison, Sir Ian Clark (E'b'gh, W.) Monckton, Rt. Hon. Sir Waller Thomas, Rt. Hon. J. P. L. (Hereford)
Hyde, Montgomery Moore, Sir Thomas Thomas, Leslie (Canterbury)
Hylton-Foster, Sir H. B. H. Morrison, John (Salisbury) Thomas, P. J. M. (Conway)
Iremonger, T. L. Nabarro, G. D. N. Thompson, Kenneth (Walton)
Irvine, Bryant Godman (Rye) Nairn, D. L. S. Thompson, Lt.-Cdr. R. (Croydon, S.)
Jennings, J. C. (Burton) Neave, Airey Thorneycroft, Rt. Hon. P.
Jennings, Sir Roland (Hallam) Nicholson, Godfrey (Farnham) Thornton-Kemsley, C. N.
Johnson, Dr. Donald (Carlisle) Nicolson, N. (B'n'm'th, E. & Chr'ch) Touche, Sir Gordon
Johnson, Eric (Blackley) Nield, Basil (Chester) Turton, Rt. Hon. R. H.
Jones, A. (Hall Green) Noble, Comdr. A. H. P. Vaughan-Morgan, J. K.
Keegan, D. Oakshott, H. D. Vickers, Miss J. H.
Kerby, Capt. H. B. O'Neill, Hn. Phelim (Co. Antrim, N.) Vosper, D. F.
Kerr, H. W. Ormsby-Gore, Hon. W. D. Wade, D. W.
Kershaw, J. A. Orr, Capt. L. P. S. Wakefield, Edward (Derbyshire, W.)
Kirk, P. M. Orr-Ewing, Charles Ian (Hendon, N.) Wakefield, Sir Waved (St. M'lebone)
Lagden, G. W. Osborne, C. Walker-Smith, D. C.
Lambert, Hon. G. Page, R. G. Ward, Hon. George (Worcester)
Lambton, Viscount Panned, N. A. (Kirkdale) Ward, Dame Irene (Tynemouth)
Lancaster, Col. C. G. Partridge, E. Webbe, Sir H.
Leather, E. H. C. Pilkington, Capt. R. A. Whitelaw, W.S.I. (Penrith & Border)
Leavey, J. A. Pitman, I. J. Williams, Paul (Sunderland, S.)
Leburn, W. G. Pitt, Miss E. M. Williams, R. Dudley (Exeter)
Legge-Bourke, Maj. E. A. H. Pott, H. P. Wilson, Geoffrey (Truro)
Legh, Hon. Peter (Petersfield) Powell, J. Enoch Wood, Hon. R.
Lennox-Boyd, Rt. Hon. A. T. Price, David (Eastleigh) Woollam, John Victor
Lindsay, Hon. James (Devon, N.) Price, Henry (Lewisham, W.) Yates, William (The Wrekin)
Lindsay, Martin (Sollihull) Raikes, Sir Victor
Lloyd, Rt. Hon. Selwyn (Wirral) Ramsden, J. E. TELLERS FOR THE AYES:
Lloyd-George, Maj. Rt. Hon. G. Redmayne, M. Mr. Wills and
Longden, Gilbert Remnant, Hon. P. Colonel J. H. Harrison.
Ainsley, J. W. Chapman, W. D, Evans, Edward (Lowestoft)
Albu, A. H. Chetwynd, G. R. Evans, Stanley (Wednesbury)
Allen, Scholefield (Crewe) Clunie, J. Fernyhough, E.
Bacon, Miss Alice Coldrick, W. Fletcher, Eric
Balfour, A. Collick, P. H. (Birkenhead) Forman, J. C.
Bartley, P. Collins, V.J. (Shoreditch & Finsbury) Fraser, Thomas (Hamilton)
Benn, Hn. Wedgwood (Bristol, S.E.) Corbet, Mrs. Freda Gaitskell, Rt. Hon. H. T. N.
Benson, G. Cove, W. G. Gibson, C. W.
Beswick, F. Craddook, George (Bradford, S.) Gordon Walker, Rt. Hon. P. C.
Bevan, Rt. Hon. A. (Ebbw Vale) Cronin, J. D.
Blackburn, F. Crossman, R. H. S. Greenwood, Anthony
Benkinsop, A. Cullen, Mrs. A. Grey, C. F.
Blyton, W. R. Daines, P. Griffiths, David (Rother Valley)
Bottomley, Rt. Hon. A. G. Dalton, Rt. Hon. H. Griffiths, Rt. Hon. James (Llanelly)
Bowden, H. W. (Leicester, S.W.) Darling, George (Hillsborough) Griffiths, William (Exchange)
Boyd, T. C. Davies, Stephen (Merthyr) Hale, Leslie
Braddock, Mrs. Elizabeth Deer, G. Hall, Rt. Hn. Clenvil (Colne Valley)
Brockway, A. F. de Freitas, Geoffrey Hamilton, W. W.
Broughton, Dr. A. D. D. Delargy, H. J. Harrison, J. (Nottingham, N.)
Burke, W. A. Dodds, N. N. Hastings, S.
Butler, Herbert (Hackney, C.) Donnelly, D, L. Healey, Denis
Butler, Mrs. Joyce (Wood Green) Dugdale, Rt. Hn. John (W. Brmwch) Henderson, Rt. Hn. A. (R'wl'y Regis)
Callaghan, L. J. Ede, Rt. Hon. J. C. Herbison, Miss M.
Carmichael, J. Edwards, Rt. Hon. John (Brighouse) Holman, P.
Castle, Mrs. B. A. Edwards, Rt. Hon. Ness (Caerphilly) Holmes, Horace
Champion, A. J. Edwards, W. J. (Stepney) Hubbard, T. F.
Hughes, Emrys (S. Ayrshire) Neal, Harold (Bolsover) Steele, T.
Hughes, Hector (Aberdeen, N.) Noel-Baker, Francis (Swindon) Stokes, Rt. Hon. R. R. (Ipswich)
Hunter, A. E. Oram, A. E. Strachey, Rt. Hon. J.
Hynd, H. (Accrington) Orbach, M. Strauss, Rt. Hon. George (Vauxhall)
Irving, S. (Dartford) Oswald, T. Summerskill, Rt. Hon. E.
Jay, Rt. Hon. D. P. T. Owen, W.J. Sylvester, G. O.
Jeger, George (Goole) Padley, W, E. Taylor, Bernard (Mansfield)
Jeger, Mrs. Lena (Holbn & st.Pncs, S.) Paling, Will T. (Dewsbury) Taylor, John (West Lothian)
Jenkins, Roy (Stechford) Palmer, A. M. F. Thomas, Iorwerth (Rhondda, W.)
Johnson, James (Rugby) Panned, Charles (Leeds, W.) Thomson, George (Dundee, E.)
Jones, Rt. Hn. A. Creech (Wakefield) Pargiter, G. A, Tomney, F.
Jones, Elwyn (W. Ham, S.) Parkin, B. T. Turner-Samuels, M.
Jones, Jack (Rotherham) Pearson, A.
Kenyon, C Peart, T. F. Ungoed-Thomas, Sir Lynn
Key, Rt. Hon. C. W. Plummer, Sir Leslie Viant, S. P.
King, Dr. H. M. Popplewell, E. Warbey, W. N.
Lawson, G. M. Price, J. T. (Westhoughton) Weitzman, D.
Ledger, R. J. Price, Philips (Gloucestershire, W.) Wells, Percy (Faversham)
Lee, Frederick (Newton) Proctor, W. T. Wells, William (Walsall, N.)
Lee, Miss Jennie (Cannock) Rankin, John West, D. G.
Lever, Harold (Cheetham) Reeves, J. Wheeldon, W. E.
Lewis, Arthur Reid, William White, Mrs. Eirene (E. Flint)
Lipton, Lt.-Col. M. Rhodes, H. White, Henry (Derbyshire, N.E.)
MacColl, J. E. Robens, Rt. Hon. A. Wigg, George
McKay, John (Wallsend) Roberts, Albert (Normanton) Wilkins, W. A.
McLeavy, Frank Robinson, Kenneth (St. Pancras, N.) Willey, Frederick
MacPherson, Malcolm (Stirling) Rogers, George (Kensington, N.) Williams, David (Neath)
Mahon, S. Ross, William Williams, Rev. Llywelyn (Ab'tillery)
Mallalieu, E. L. (Brigg) Royle, C. Williams, W. R. (Openshaw)
Marquand, Rt. Hon. H. A. Shinwell, Rt. Hon. E. Williams, W. T. (Barons Court)
Mason, Roy Silverman, Julius (Aston) Wills, Eustace (Edinburgh, E.)
Messer, Sir F. Silverman, Sydney (Nelson) Wilson, Rt. Hon. Harold (Huyton)
Mikardo, Ian Simmons, C. J. (Brierley Hill) Winterbottom, Richard
Mitchison, G. R. Skeffington, A. M. Woodburn, Rt. Hon. A.
Monslow, W. Slater, Mrs. H. (Stoke, N.) Yates, V. (Ladywood)
Morrison, Rt. Hn. Herbert (Lewis'm,S.) Slater, J. (Sedgefield) Zilliacus, K.
Moss, R. Snow, J. W.
Moyle, A. Sorensen, R. W. TELLERS FOR THE NOES:
Mulley, F. W. Sparks, J. A. Mr. A. Allen and Mr. Short.
Mr. E. Fletcher (Islington, East)

I beg to move, in page 3, line 2, to leave out "fifty" and to insert "forty."

Mr. K. Robinson

I beg formally to second the Amendment.

Question put, That "fifty" stand part of the Bill:—

The House proceeded to a Division:

Mr. Fletcher

(seated and covered): On a point of order. I think you will agree, Mr. Deputy-Speaker, that when you collected the voices there were several shouts of "No," but not a single shout of "Aye." May I assume that there is no need to have a Division, because the House was unanimous in deciding "No"?

Mr. Deputy-Speaker

There was certainly far more volume of "Noes," but I certainly did hear certain voices in the affirmative, and, therefore, decided to have a Division.

Mr. Callaghan

(seated and covered): Further to that point of order, Mr. Deputy-Speaker. None of us on this side heard any voice at all from the Government benches—none of us. May I ask whether you heard any voices from the Government benches?

Mr. Deputy-Speaker

I expressed my opinion from the probability of the case that the "Ayes" had it, and I am proving it by having a Division.

Mr. Harold Wilson (Huyton)

(seated and covered): On a point of order. Would it not be in accordance with the dignity of this House—

Mr. Deputy-Speaker

The Question is that "fifty" stand part of the Bill.

Mr. Wilson

(seated and covered): On a new point of order, Mr. Deputy-Speaker. Would it not be in accordance with the dignity of the House if either you or Mr. Speaker were to direct the Serjeant at Arms to get a new hat for our use? The condition of this one is deplorable.

Mr. Deputy-Speaker

Order. I cannot hear the right hon. Gentleman.

Mr. Wilson

(seated and covered): I was asking if, in accordance with the dignity of the House, would you direct the Serjeant at Arms to get a new and, if possible, up-to-date hat for use in raising points of order during a Division? This one is at least 50 years old and in a very bad condition. I would suggest that, if the Serjeant at Arms is precluded because of the Purchase Tax on hats from getting one, the Chancellor should introduce a Supplementary Estimate for the purpose.

Division No. 74.] AYES [5.44 p.m.
Agnew, Cmdr. P. G. George, J. C. (Pollok) Maclay, Rt. Hon. John
Aitken, W. T. Glover, D. Macleod, Rt. Hn. Iain (Enfield, W.)
Allan, R. A. (Paddington, S.) Godber, J. B. Macmillan, Rt. Hn. Harold (Bromley)
Alport, C. J. M. Gomme-Duncan, Col. A. Macpherson, Niall (Dumfries)
Amery, Julian (Preston, N.) Gough, C. F. H. Maddan, Martin
Amory, Rt. Hn. Heathcoat (Tiverton) Gower, H. R. Maitland, Cdr. J. F. W. (Horncastle)
Anstruther-Gray, Major W. J. Graham, Sir Fergus Maitland, Hon. Patrick (Lanark)
Arbuthnot, John Green, A. Markham, Major Sir Frank
Armstrong, C. W. Grimond, J. Marlowe, A. A. H.
Ashton, H. Grosvenor, Lt.-Col. R. G. Marples, A. E.
Astor, Hon. J. J. Gurden, Harold Marshall, Douglas
Atkins, H. E. Hall, John (Wycombe) Mathew, R.
Baldwin, A. E. Hare, Hon. J. H. Maude, Angus
Balniel, Lord Harris, Frederic (Croydon, N.W.) Mawby, R. L.
Barber, Anthony Harrison, A. B. C. (Maldon) Maydon, Lt.-Comdr, S. L. C.
Barlow, Sir John Harrison, Col. J. H. (Eye) Medlicott, Sir Frank
Barter, John Harvey, Air Cdre. A. V. (Macclesfd) Monckton, Rt. Hon. Sir Walter
Baxter, Sir Beverley Harvey, John (Walthamstow, E.) Moore, Sir Thomas
Head, Rt. Hon. A. H. Morrison, John (Salisbury)
Bell, Ronald (Bucks, S.) Heald, Rt. Hon. Sir Lionel Nabarro, G. D. N.
Bevins, J. R. (Toxteth) Heath, Edward Nairn, D. L. S.
Bidgood, J. C. Hicks-Beach, Maj. W. W. Neave, Airey
Biggs-Davison, J. A. Hill, John (S. Norfolk) Nicholson, Godfrey (Farnham)
Birch, Rt. Hon. Nigel Hirst, Geoffrey Nicolson, N. (B'n'm'th, E. & Chr'ch)
Bishop, F. P. Holland-Martin, C. J. Nield, Basil (Chester)
Body, R. F. Holt, A. F. Noble, Comdr. A. H. P.
Boothby, Sir Robert Hope, Lord John Oakshott, H. D.
Bossom, Sir A. C. Hornsby-Smith, Miss M. P. O'Neill, Hn. Phelim (Co. Antrim, N.)
Bowen, E. R. (Cardigan) Horsbrugh, Rt. Hon. Dame Florence Ormsby-Gore, Hon. W. D.
Boyle, Sir Edward Howard, Gerald (Cambridgeshire) Orr, Capt. L. P. S.
Braithwaite, Sir Albert (Harrow, W.) Howard, Hon. Greville (St. Ives) Orr-Ewing, Charles Ian (Hendon, N.)
Brooke, Rt. Hon. Henry Howard, John (Test) Osborne, C.
Brooman-White, R. C. Hudson, Sir Austin (Lewisham, N.) Page, R. G.
Buchan-Hepburn, Rt. Hon. P. G. T. Hughes Hallett, Vice-Admiral J. Pannell, N. A. (Kirkdale)
Burden, F. F. A. Hughes-Young, M. H. C. Partridge, E.
Butcher, Sir Herbert Hulbert, Sir Norman Pilkington, Capt. R. A.
Butler, Rt. Hn. R.A. (Saffron Walden) Hurd, A. R. Pitman, I. J.
Campbell, Sir David Hutchison, Sir Ian Clark (E'b'gh, W.) Pitt, Miss E. M.
Carr, Robert Hyde, Montgomery Pott, H. P.
Cary, Sir Robert Hylton-Foster, Sir H. B. H. Powell, J. Enoch
Channon, H. Iremonger, T. L. Price, David (Eastleigh)
Chichester-Clark, R. Irvine, Bryant Godman (Rye) Price, Henry (Lewisham, W.)
Cole, Norman Jennings, J. C. (Burton) Raikes, Sir Victor
Cooper, Sqn. Ldr. Albert Jennings, Sir Roland (Hallam) Ramsden, J. E.
Cordeaux, Lt.-Col. J. K. Johnson, Dr. Donald (Carlisle) Remnant, Hon. P.
Corfield, Capt. F. V. Johnson, Eric (Blackley) Renton, D. L. M.
Craddock, Beresford (Spelthorne) Jones, A. (Hall Green) Robertson, Sir David
Crookshank, Capt. Rt. Hn. H. F. C. Keegan, D. Rodgers, John (Sevenoaks)
Crosthwaite-Eyre, Col. O. E. Kerby, Capt. H. B. Roper, Sir Harold
Crouch, R. F. Kerr, H. W. Ropner, Col. Sir Leonard
Crowder, Sir John (Finchley) Kershaw, J. A. Russell, R. S.
Crowder, Petre (Ruislip—Northwood) Kirk, P. M. Sharpies, R. C.
Cunningham, Knox Lagden, G. W. Simon, J. E. S. (Middlesbrough, W.)
Currie, G. B. H. Lambert, Hon. G. Smyth, Brig. J. G. (Norwood)
Dance, J. C. G. Lambton, Viscount Soames, Capt. C.
Deeds, W. F. Lancaster, Col. C. G. Spearman, A. C. M.
Digby, Simon Wingfield Leather, E. H. C. Speir, R. M.
Dodds-Parker, A. D. Leavey, J. A. Spens, Rt. Hn. Sir P. (Kensgt'n, S.)
Doughty, C. J. A. Leburn, W. G. Stanley, Capt. Hon. Richard
Drayson, G. B. Legge-Bourke, Maj. E. A. H. Stevens, Geoffrey
Duncan, Capt. J. A. L. Legh, Hon. Peter (Petersfield)
Duthie, W. S. Lennox-Boyd, Rt. Hon. A. T. Steward, Sir William (Woolwich, W.)
Elliot, Rt. Hon, W. E. Lindsay, Hon. James (Devon, N.) Stewart, Henderson (Fife, E.)
Emmet, Hon. Mrs. Evelyn Lindsay, Martin (Solihull) Stoddart-Scott, Col. M.
Errington, Sir Eric Lloyd, Rt. Hon. Selwyn (Wirral) Storey, S.
Erroll, F. J. Lloyd-George, Maj. Rt. Hon. G. Stuart, Rt. Hon. James (Moray)
Farey-Jones, F. W. Longden, Gilbert Summers, G. S. (Aylesbury)
Fell, A. Lucas, Sir Jocelyn (Portsmouth, S.) Sumner, W. D. M. (Orpington)
Finlay, Graeme Lucas-Tooth, Sir Hugh Taylor, William (Bradford, N.)
Fisher, Nigel McAdden, S. J. Thomas, Rt. Hn. J. P. L. (Hereford)
Fletcher-Cooke, C. Macdonald, Sir Peter Thomas, Leslie (Canterbury)
Fort, R. Mackeson, Brig. Sir Harry Thomas, P. J. M. (Conway)
Foster, John Mackie, J. H. (Galloway) Thompson, Kenneth (Walton)
Freeth, D. K. McLaughlin, Mrs. P. Thompson, Lt.-Cdr. R. (Croydon, S.)
Mr. Deputy-Speaker

I will give instructions on those lines.

Ayes 241. Nos 186.

Thorneycroft, Rt. Hon. P. Wakefield, Edward (Derbyshire, W.) Williams, R. Dudley (Exeter)
Thornton-Kemsley, C. N. Wakefield, Sir Wavell (St. M'lebone) Wilson, Geoffrey (Truro)
Touche, Sir Gordon Walker-Smith, D. C. Wood, Hon. R.
Turton, Rt. Hon. R. H. Ward, Hon. George (Worcester) Woollam, John Victor
Vaughan-Morgan, J. K. Ward, Dame Irene (Tynemouth) Yates, William (The Wrekin)
Vickers, Miss D. H. Webbe, Sir H.
Vosper, D. F. Whitelaw, W.S.I.(Penrith & Border) TELLERS FOR THE AYES:
Wade, D. W. Williams, Paul (Sunderland, S.) Mr. Redmayne and Mr. Wills.
Ainsley, J. W. Griffiths, William (Exchange) Plummer, Sir Leslie
Albu, A. H. Hale, Leslie Popplewell, E.
Allen, Scholefield (Crewe) Hall, Rt. Hn. Glenvil (Colne Valley) Price, J. T. (Westhoughon)
Bacon, Miss Alice Hamilton, W. W. Price, Philips (Gloucestershire, W.)
Bartley P. Harrison, J. (Nottingham, N.) Proctor, W. T.
Benn, Hn. Wedgwood (Bristol, S.E.) Hastings, S. Rankin, John
Benson, G. Healey, Denis Reeves, J.
Beswick, F. Henderson, Rt. Hn. A. (Rwly Regis) Reid, William
Bevan, Rt. Hon. A. (Ebbw Vale) Herbison, Miss M, Rhodes, H.
Blackburn, F. Holman, P. Robens, Rt. Hon. A.
Blenkinsop, A. Holmes, Horace Roberts, Albert (Normanton)
Blyton, W. R. Hubbard, T. F. Robinson, Kenneth (St. Pancras, N.)
Bowden, H. W. (Leicester, S.W.) Hughes, Emrys (S. Ayrshire) Rogers, George (Kensington, N.)
Boyd, T. C. Hughes, Hector (Aberdeen, N.) Ross, William
Braddock, Mrs. Elizabeth Hunter, A. E. Royle, C.
Brockway, A. F. Hynd, H. (Accrington) Shinwell, Rt. Hon. E.
Broughton, Dr. A. D. D. Irving, S. (Dartford) Silverman, Julius (Aston)
Burke, W. A. Jay, Rt. Hon. D. P. T. Silverman, Sydney (Nelson)
Jeger, George (Goole) Simmons, C. J. (Brierley Hill)
Butler, Herbert (Hackney, C.) Jeger, Mrs. Lena (Holbn & St. Pncs., S.) Skeffington, A. M.
Butler, Mrs. Joyce (Wood Green) Jenkins, Roy (Stechford) Slater, Mrs. H. (Stoke, N.)
Callaghan, L. J. Johnson, James (Rugby) Slater, J. (Sedgefield)
Carmichael, J. Jones, Rt. Hn. A. Creech (Wakefield) Sorensen, R. W.
Castle, Mrs. B. A. Jones, Elwyn (W. Ham, S.) Sparks, J. A.
Champion, A. J. Jones, Jack (Rotherham)
Chapman, W. D. Kenyon, C. Steele, T.
Chetwynd, G. R. Key, Rt. Hon. C. W. Stokes, Rt. Hon. R. R. (Ipswich)
Clunie, J. King, Dr. H. M. Strachey, Rt. Hon. J.
Coldrick, W. Lawson, G. M. Strauss, Rt. Hon. George (Vauxhall)
Collick, P. H. (Birkenhead) Ledger, R. J. Summerskill, Rt. Hon. E.
Collins, V. J. (Shoreditch & Finsbury) Lee, Frederick (Newton) Sylvester, G. O.
Corbet, Mrs. Freda Lever, Harold (Cheetham) Taylor, Bernard (Mansfield)
Cove, W. G. Lewis, Arthur Taylor, John (West Lothian)
Craddock, George (Bradford, S.) Lipton, Lt.-Col. M. Thomas, Iorwerth (Rhondda, W.)
Cronin, J. D. MacColl, J. E. Thomson, George (Dundee, E.)
Crossman, R. H. S. McKay John (Wallsend) Tomney, F.
Cullen, Mrs. A. McLeavy, Frank Turner-Samuels, M.
Daines, P. MacPherson, Malcolm (Stirling) Ungoed-Thomas, Sir Lynn
Dalton, Rt. Hon. H. Mahon, s. Viant, S. P.
Darling, George (Hillsborough) Mallalieu, E. L. (Brigg) Warbey, W, N.
Davies, Stephen (Merthyr) Marquand, Rt. Hon. H. A. Weitzman, D.
Deer, G. Mason, Roy Wells, Percy (Faversham)
de Freitas, Geoffrey Messer, Sir F. Wells, William (Walsall, N.)
Delargy, H. J. Mikardo, Ian West, D. G.
Dodds, N. N. Mitchison, G. R. Wheeldon, W. E.
Donnelly, D. L. Monslow, W. White, Mrs. Eirene (E. Flint)
Dugdale, Rt. Hn. John (W. Brmwch) Morrison, Rt. Hn. Herbert (Lewis'h, S.) White, Henry (Derbyshire, N.E.)
Ede, Rt. Hon. J. C. Moss, R. Wigg, George
Edwards, Rt. Hon. John (Brighouse) Moyle, A. Wilkins, W. A.
Edwards, Rt. Hon. Ness (Caerphilly) Mulley, F. W. Willey, Frederick
Edwards, W. J. (Stepney) Neal, Harold (Bolsover) Williams, David (Neath)
Evans, Edward (Lowestoft) Noel-Baker, Francis (Swindon) Williams, Rev. Llywelyn (Ab'tillery)
Evans, Stanley (Wednesbury) Oram, A. E, Williams, W. R. (Openshaw)
Fernyhough, E. Orbach, M. Williams, W. T. (Barons Court)
Fletcher, Eric Oswald, T. Willis, Eustace (Edinburgh, E.)
Forman, J. C. Owen, W. J. Wilson, Rt. Hon. Harold (Huyton)
Fraser, Thomas (Hamilton) Padley, W. E. Winterbottom, Richard
Gaitskell, Rt. Hon. H. T. N. Paling, Will T. (Dewsbury) Woodburn, Rt. Hon. A.
Gibson, C. W. Palmer, A. M. F. Yates, V. (Ladywood)
Gordon Walker, Rt. Hon. P. C. Pannell, Charles (Leeds, W.) Zilliacus, K.
Greenwood, Anthony Pargiter, G. A.
Grey, C. F. Parkin, B. T. TELLERS FOR THE NOES:
Griffiths, David (Rother Valley) Pearson, A. Mr. A. Allen and Mr. Short.
Griffiths, Rt. Hon. James (Llanelly) Peart, T. F.
Mr. Hugh Gaitskell (Leeds, South)

I beg to move. in page 3, line 10, at the end to insert: Provided also that the said amendment shall not apply, unless the underwriter can show to the satisfaction of the surveyor of taxes that in the year preceding the year of assessment he has either received a premium income amounting to not less than the sum of ten thousand dollars in the currency of the United States of America or paid losses amounting to not less than that sum in that currency. This Amendment has been put down because of a reply given by the Financial Secretary, in Committee. It will be recalled that we then tabled a similar Amendment, but the amount mentioned in it was 1,000 dollars. The purpose of the Amendment was to ensure that the concession to underwriters should go only to those who could show that they had a premium income in dollars.

In commenting on our Amendment, the Financial Secretary said it was quite unnecessary because every underwriter had at any rate some dollar business. He implied, as I think he will agree, that to insert the figure of 1,000 dollars would rule nobody out at all. We said at the time that if that were the case it was our figure which was wrong and not the general principle. Accordingly, we have now put down a similar Amendment substituting the words "ten thousand dollars for the words" one thousand dollars."

I do not think it is necessary for me to go over all the arguments in favour of giving a greater incentive to underwriters to obtain dollar business. The whole of the Government's argument for making this concession is precisely that the dollar income is important to us, and there are therefore no arguments about it. In the circumstances, I feel sure that the principle implied in the Amendment is accepted by the Government—namely, that the concession should go to those who do what appears to be a reasonable, though not an excessive, amount of dollar business.

I do not propose to argue the matter further. We think we have substantially met the Financial Secretary's point of view in our Amendment and we hope he can tell us, on behalf of the Government, that he is prepared to accept it.

Mr. H. Brooke

I have not a word to say against the objective which the right hon. Member for Leeds, South (Mr. Gaitskell) specified—that we should seek to encourage, as far as possible, people who are doing dollar business and earning dollars. I would remind him, however, that it was not my only objection to the Amendment in Committee that a limit of 1,000 dollars a year would be a somewhat foolish limit. I gave other reasons and I will repeat them if he wishes. Since he said he would not repeat his case, however, perhaps the most helpful thing is for me to address myself to the practical effects which the Amendment would have if it were accepted.

The Amendment suggests that the provisions in Clause 3 about Lloyd's underwriters are to be a sort of reward for earning dollars. In the Amendment the right hon. Gentleman would provide that nobody could have advantage of the Clause unless he could show this premium income in dollars or could prove that he had suffered losses in dollars. But, of course, it is not as a reward for earning dollars that the Chancellor has introduced the Clause; it is as a stimulus to them to go out and earn more dollars. In a sense, therefore, the Amendment puts the cart before the horse.

If the right hon. Gentleman will examine carefully with me what would happen, I think he will see that it would be ill-advised to write an Amendment like this into the Bill. The whole object of the Clause is to help underwriters to build up the substantial reserves which are necessary for carrying on overseas business, and especially American business, on an increasing scale. The trouble is that the Amendment would handicap all the newer underwriters—those who are in process of building up their business.

Some hon. Members have suggested that this Lloyd's underwriting is easy money for old gentlemen with a pile of money already. Surely the very people they would want to see entering it, therefore, are the vigorous young men who want to push ahead. Those are the people who would be rather heavily hit by the Amendment. They have not yet had time to build up enough reserves to enable them to do American business on a large scale and they would be just the people who would be debarred from building up reserves. If they are to be so restricted—and restricted in a discriminatory fashion, if I may say so—it would be rash of them to go ahead with the business which we want them to do.

6.0 p.m.

There is also a further consideration which I think the right hon. Member will quickly appreciate. It is that an Amendment of this kind might easily tempt some underwriters to build up their dollar premium income by accepting imprudent risks. Here is the test, "You are not to have certain advantages until you can show to the surveyor of taxes that you are receiving a premium income amounting to no less a sum than 10,000 dollars. If you have not got that precise sum you must somehow get it by the end of the year." That is the sort of incentive one ought not to hold out to anyone in the insurance business. We ought not to give them artificial tax advantages for working up their premium by hook or by crook to a certain level—

Mr. M. Turner-Samuels (Gloucester)

That is a very unfortunate expression.

Mr. Brooke

Not at all. It is just what I am trying to indicate—that this would be a temptation to accept unsound business.

Mr. Turner-Samuels

The right hon. Gentleman said "by hook or by crook."

Mr. Brooke

I should have thought the hon. and learned Member would understand that phrase by now.

Mr. Turner-Samuels

Yes, that is true. That is why I queried it.

Mr. Brooke

The other part of the Amendment, in certain circumstances, would make the payment of losses amounting to 10,000 dollars the criterion. It would be a mistake to make the test the payment of losses in dollars up to a certain amount. The time for adding to reserves is surely the time when one's experience is favourable, not when it is unfavourable. To choose a moment when one is making substantial losses to add to one's reserves, again seems to be putting the cart before the horse. It is when a man's profits are high that he should have the opportunity to use those substantial profits to enable him to go out and do further business.

There is a further point I would put to the right hon. Member. He was a member of the Government when the original provision was inserted in the law in 1949. It was extended in 1952 and there was opportunity for criticising it on just these grounds at that time, yet no criticism was voiced. On both those occasions, as I have said when speaking on a previous Amendment, the House was making a more liberal concession to underwriters in the sense that the House was granting complete exemption from Surtax unless the underwriter withdrew from business before the end of his life. In this case there is no question of complete exemption. Therefore, it would seem rather strange that when we are making a less forthright concession we should seek to tie it up with this artificial restriction, or criterion, which is inserted in the Amendment.

For those reasons, I hope that the right hon. Member will feel disposed to withdraw the Amendment. I recognise entirely the purpose with which he has moved it. I hope I showed on the Committee stage that the idea was by no means antipathetic to us, but as I also said on Committee stage that it would be a new feature in our tax laws if one were to give people tax advantages because they had earned their income in a certain way and not in another way. For all those reasons and because this really would have practical effects which would be adverse to the type of business the House is seeking to encourage, I could not recommend the House to accept the Amendment.

Mr. K. Robinson

I think the House was gratified to note, in the course of the remarks of the Financial Secretary on the last Amendment, that he claimed he thoroughly understood the Clause. I do not know whether that would equip him for taking up the profession of accountancy or underwriting in the future when the electors of Hampstead decide to follow the excellent example of their neighbours in the St. Pancras constituency do.

Be that as it may, the right hon. Gentleman does not understand the practice of underwriting, or he would not have advanced the arguments he has advanced this afternoon. He admitted freely that one of the objections to the Amendment has been over-ridden by our stepping up the limit from 1,000 to 10,000 dollars, but he put forward two other main objections, neither of which holds water. In the first case, the right hon. Gentleman said that a limit of this kind would discourage new, young, vigorous underwriters from pushing ahead. That, as I suggested before, discloses a complete ignorance of the way in which Lloyds works.

A new, young, vigorous underwriter is a man who goes to the Committee of Lloyd's with £10,000 or £20,000 and says, "I want to become an underwriting member." Almost invariably, that man joins an existing underwriting syndicate where the work is done by an underwriting agent and his premium in dollars, or any other currency, is exactly the same as that of any existing member of that syndicate who has the same share of the risks of underwriting. So the young underwriter would not be in any way deterred by the fact that he has to show a premium of 10,000 dollars before lie can take advantage of the concession.

Another objection of the right hon. Gentleman was that it would be a bad thing because this proposal would tend to encourage underwriters to accept imprudent risks. The right hon. Gentleman has already told us in the course of debates in Committee that a large part of the dollar business is in the form of excess loss risks. If I may remind the right hon. Gentleman of the fact, it was I who told him that on Committee stage, so there is no difference between us. Those are the very risks which time and again bring catastrophic losses, risks which the American insurance market is only too happy to unload on to Lloyd's and the British insurance market because that relieves the Americans of liability.

From time to time there are hurricanes which bring about losses even on these excess loss risks. When we do not have hurricanes in the United States, we often have very bad floods and underwriting this excess loss business which carries a very low rate of premium is, on balance, an unprofitable business. By implication, the Financial Secretary accepts that fact because he said that the underwriters have to accept that type of risk in order to get more attractive bread and butter business. That is perfectly true and, in the parlance of Lloyd's brokers, that business is known as the "bribe" to get the unattractive business underwritten. But I still say that we have no information which suggests that the net value of this business to the invisible exports of this country justifies this concession, or that it is a positive rather than a negative amount on balance.

In those circumstances, I do not think that any of the objections made by the Financial Secretary holds water. The Amendment seems perfectly reasonable and is only an attempt to include in the Bill one of the reasons that the Government have put forward for making this concession.

Mr. E. Fletcher

We had a very laboured speech from the Financial Secretary. I want to ask him one question. Does he, by this Clause, want to give a benefit to Lloyd's underwriters who do not earn any dollar revenue for this country? When all has been said about this Amendment, the issue resolves itself into that simple question.

The only ground on which the Financial Secretary has ever tried to justify this additional concession and privilege to Lloyd's underwriters is that it will help our balance of payments and produce some dollar income. We therefore want to know whether the right hon. Gentleman also wishes that the benefit of this privilege should be extended to those of Lloyd's underwriters who do not do any dollar risk insurance and do not bring any, or any substantial, dollar revenue to this country. If the Financial Secretary does want to help such underwriters, the whole basis of his attempted justification of the Clause fails. If he does not want to assist them, he should accept the Amendment. The issue seems to me to be as simple as that.

When one discounts all the verbiage of the right hon. Gentleman, there is very little more to be said. He endeavoured to say that it would be something novel to write into our Income Tax legislation a taxation provision that was conditional upon some special kind of income. That is the wrong way to look at it. It is the Financial Secretary who, by the Clause, is writing something novel into our Income Tax legislation.

I know that the principle was adopted in 1949 and extended in 1952, but the Clause carries it a stage further. The fact remains that this special privilege of relief from Surtax to help a small limited class of taxpayer is something entirely novel in our Income Tax code. Therefore, its extension can only be justified upon grounds of national advantage. The whole object of the Amendment is to tie the additional privileges to the earning of dollar revenue. There can be no administrative difficulty in giving effect to our Amendment, and I hope that before we conclude this discussion we shall have from the Financial Secretary a clear answer to this specific question.

Mr. Parkin

A word ought to be said in reply to the Financial Secretary's suggestion that criticisms of the kind that have been voiced this afternoon were not made five or six years ago when similar concessions were being made in the Budgets of those years. The reason why the discussion was not prolonged at the time was that hon. Gentlemen opposite would gladly accept anything which improved the position of Lloyd's underwriters—or, for that matter, anyone else in the City—and members of the party who then supported the Government fully understood the object of the concession. It was for one purpose and one purpose only: to help the export trade, it being in this case the export of a peculiar kind of insurance.

We understand perfectly that if we have to earn a living in the world, we must supply what our customers need. If they need a special type of umbrella or handwoven tie, or a peculiar type of insurance, we ought to try to sell it, but the Financial Secretary must not expect Members on this side of the House to admit that, as far as our home affairs are concerned, any aspect of the country's economic life ought to depend on the existence of a number of very rich men. That is an old theory which is surely outworn by now, and least of all ought such a theory to be put forward in connection with insurance.

We must, therefore, protest at any attempt to smuggle in through this concession, the backing up of a quite outmoded method of insuring general risks. If it is necessary because customers overseas are interested in placing that insurance in that way, naturally we would support any thing that would bring earnings from overseas into this country, but to extend it as a general principle or to expect any kind of support for it from this side of the House, is going too far, and the right hon. Gentleman must expect opposition from us.

6.15 p.m.

Mr. Chapman

I have listened to both days of debate on this matter and I must say that the Financial Secretary's replies on this latest occasion were the most inadequate of the lot. He said that it would be quite wrong to include the Amendment because it would mean that the small firm which went out to get new insurance business in the dollar areas would not obtain the benefit. The right hon. Gentleman has never given that as the prime reason for this concession at any previous stage of the Bill. His reason for this concession to Lloyd's has been nothing to do with getting new business but has been the recent catastrophes, which, we are told, have denuded the reserve funds. The right hon. Gentleman now comes along with a totally new argument on the Amendment.

Secondly, the right hon. Gentleman said that the Amendment would harm the underwriters because they would not at this stage be doing £10,000 worth of dollar business. If they are not doing it, they do not need any help at present. Their reserve funds should be quite big enough to carry the risks on £10,000 worth of dollar business at the present time. I fail to see that at this time we ought to be going out of our way to give increased tax concessions to new business in America on this small scale.

When the right hon. Gentleman said that it is because it is a great business involving new losses that the concession has been introduced in the first place, his argument amounted to a lot of mumbo-jumbo. He did not see any justification for not meeting the perfectly reasonable request contained in the Amendment. Its intention, after all, is to say, "Unless you are doing business that will be subject to enormous risks on the scales that have been so catastrophic, you do not deserve the amendment in the law."

The way in which we put it in the Amendment is reasonable. Underwriters must be doing reasonable business, and it must therefore, by definition, be of the kind that might suffer great catastrophe. Up to that point, as my hon. Friend the Member for St. Pancras, North (Mr. K. Robinson) said, it is likely to be the more lucrative business. Why, therefore, is the tax concession needed? The Financial Secretary has made the poorest case that we have heard made on any stage of the Bill.

Mr. H. Brooke

I should like, briefly, to take up the points that have been made. The hon. Member for St. Pancras, North (Mr. K. Robinson) seems to be still seeking to convey to the House that the only insurance business which comes from the United States to London is the business that the American insurer will not touch. If the hon. Member had been concerned with insurance himself, I do not think he would repeat that kind of statement.

The hon. Member for Islington, East (Mr. E. Fletcher) sought to suggest that a considerable number of people who did not deserve it would be able to get the benefit of the Clause.

Mr. E. Fletcher

I asked the right hon. Gentleman whether it was the Government's intention to give the benefit of this concession to underwriters who do not do any substantial amount of dollar insurance underwriting.

Mr. Brooke

I said during the Committee stage that a substantial part of the business of all, or virtually all, Lloyd's syndicates already consisted of risks outside the United Kingdom. On the previous Amendment, I gave facts and figures in support of the case that a substantial part of Lloyd's business is with America.

The Amendment mentions only dollars but the House will appreciate that dollars are not the only currency with which we are interested. Lloyd's underwriters are doing the country a good service—and so is any other exporter, of either visible or invisible exports—if they are earning other hard currencies in addition to dollars.

The hon. Member for Northfield (Mr. Chapman) was particularly concerned about the underwriter who, it seemed to him, did not qualify for any advantage because he was not doing the business. I do not think the hon. Member quite appreciates that, as I said, this provision is intended as an incentive and not as a reward. If a man is not doing much dollar business, it is thoroughly desirable to give him an incentive to do more. The Amendment, however, would be a handicap to him in building up his reserves to do business on a larger scale. The hon. Member spoke as though these provisions were concerned only with an enormous business on a grand scale, but surely he knows that large risks are split up between many underwriters and that the amount carried by any one in any given case may be quite small though the totality of the risk may be enormous.

My case against the Amendment is not that its underlying purpose is wrong, but simply that it would not improve the Bill. It would create certain practical difficulties, and it would not secure any worthwhile result. The incentive must be a general incentive.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 169, Noes 224.

Mitchison, G. R. Robens, Rt. Hon. A. Tomney, F.
Monslow, W. Roberts, Albert (Normanton) Turner-Samuels, M.
Morrison, Rt. Hn. Herbert (Lewis'm, S.) Robinson, Kenneth (St. Pancras, N.) Ungoed-Thomas, Sir Lynn
Moyle, A. Rogers, George (Kensington, N.) Viant, S. P.
Neal, Harold (Bolsover) Ross, William Warbey, W.N.
Oram, A. E. Royle, C. Weitzman, D.
Orbach, M. Shinwell, Rt. Hon. E. Wells, Percy (Faversham)
Oswald, T. Silverman, Julius (Aston) Wheeldon, W. E.
Owen, W. J. Silverman, Sydney (Nelson) White, Mrs. Eirene (E. Flint)
Padley, W. E. Simmons, C. J. (Brierley Hill) White, Henry (Derbyshire, N.E.)
Paling, Will T. (Dewsbury) Skeffington, A. M. Wigg, George
Palmer, A. M. F. Slater, Mrs. H. (Stoke, N.) Wilkins, W. A.
Pannell, Charles (Leeds, W.) Slater, J. (Sedgefield) Willey, Frederick
Parker, J. Sorensen, R. W. Williams, David (Neath)
Parkin, B. T. Sparks, J. A. Williams, Rev. Llywelyn (Ab'tillery)
Pearson, A. Steele, T. Williams, W. R. (Openshaw)
Popplewell, E. Strachey, R. Hon. J. Williams, W. T. (Barons Court)
Price, J. T. (Westhoughton) Strauss, Rt. Hon. George (Vauxhall) Willis, Eustace (Edinburgh, E.)
Price, Philips (Gloucestershire, W.) Summerskill, Rt. Hon. E. Wilson, Rt. Hon. Harold (Huyton)
Proctor, W. T. Sylvester, G. O. Woodburn, Rt. Hon. A.
Rankin, John Taylor, Bernard (Mansfield) Yates, v. (Ladywood)
Reeves, J. Taylor, John (West Lothian) Zilliacus, K.
Reid, William Thomas, Iorwerth (Rhondda, W.)
Rhodes, H, Thomson, George (Dundee, E.) TELLERS FOR THE AYES:
Mr. A. Allen and Mr. Short.
Agnew, Cmdr. P. G. Digby, Simon Wingfield Kerby, Capt. H. B.
Aitken, W. T. Doughty, C. J. A. Kerr, H. W.
Allan, R. A. (Paddington, E.) Duncan, Capt. J. A. L. Kershaw, J. A.
Alport, C. J. M. Emmet, Hon. Mrs. Evelyn Kirk, P. M.
Amery, Julian (Preston, N.) Errington, Sir Eric Lagden, G. W.
Amory, Rt. Hn. Heathcoat (Tiverton) Farey-Jones, F. W. Lambert, Hon. G.
Anstruther-Gray, Major W. J. Fell, A. Lambton, Viscount
Arbuthnot, John Finlay, Graeme Lancaster, Col. C. G.
Armstrong, C. W. Fisher, Nigel Leather, E. H. C.
Ashton, H. Fort, R. Leavey, J. A.
Astor, Hon. J. J. Fraser, Hon. Hugh (Stone) Leburn, W. G.
Atkins, H. E. Freeth, D. K. Legg-Bourke, Maj. E. A. H.
Baldwin, A. E. George, J. C. (Pollok) Legh, Hon. Peter (Petersfield)
Balniel, Lord Glover, D. Lindsay Hon. James (Devon, N.)
Barber, Anthony Gomme-Duncan, Col. A. Lindsay, Martin (Solihull)
Barlow, Sir John Gough, C. F. H. Lloyd, Rt. Hon. Selwyn (Wirral)
Barter, John Gower, H. R. Lloyd-George, Maj. Rt. Hon. C.
Baxter, Sir Beverley Graham, Sir Fergus Longden, Gilbert
Bell, Ronald (Bucks, S.) Grant-Ferris, Wg Cdr. R.(Nantwich) Lucas, Sir Jocelyn (Portsmouth, S.)
Bevins, J. R. (Toxteth) Green, A. Lucas-Tooth, Sir Hugh
Bidgood, J. c. Grimond, J. McAdden, S. J.
Biggs-Davison, J. A. Grosvenor, Lt.-Col. R. G. Macdonald, Sir Peter
Birch, Rt. Hon. Nigel Gurden, Harold Mackeson, Brig. Sir Harry
Bishop, F. P. Hall, John (Wycombe) Mackie, J. H. (Galloway)
Body, R, F. Harris, Frederic (Croydon, N.W.) McLaughlin, Mrs. P.
Boothby, Sir Robert Harrison, Col. J. H. (Eye) Maclay, Rt. Hon. John
Bossom, Sir A. C. Harvey, Air Cdre. A. V. (Macclesfd) Macleod, Rt. Hn. Iain (Enfield, W.)
Bowen, E. R. (Cardigan) Harvey, John (Walthamstow, E.) Macmillan, Rt. Hn. Harold(Bromley)
Boyle, Sir Edward Head, Rt. Hon. A. H. Macpherson, Niall (Dumfries)
Braithwaite, Sir Albert (Harrow, W.) Heald, Rt. Hon. Sir Lionel Maddan, Martin
Brooke, Rt. Hon. Henry Heath, Edward Maitland, Cdr. J. F. W. (Horncastle)
Brooman-White, R. C. Hicks-Beach, Maj. W. W. Markham, Major Sir Frank
Browne, J. Nixon (Craigton) Hill, John (S. Norfolk) Marlowe, A. A. H.
Buchan-Hepburn, Rt. Hon. P. G. T. Hirst, Geoffrey Marples, A. E.
Burden, F. F. A. Holland-Martin, C. J.
Butcher, Sir Herbert Hope, Lord John Marshall, Douglas
Butler, Rt. Hn. R. A.(Saffron Walden) Hornsby-Smith, Mitt M. P. Mathew, R.
Campbell, Sir David Horsbrugh, Rt. Hon. Dame Florence Mawby, R. L.
Carr, Robert Howard, Gerald (Cambridgeshire) Maydon, Lt.-Comdr, S. L. C.
Gary, Sir Robert Howard, Hon. Greville (St. Ives) Medlicott, Sir Frank
Channon, H. Howard, John (Test) Monckton, Rt. Hon. Sir Walter
Chichester-Clark, R. Hudson, Sir Austin (Lewisham, N.) Moore, Sir Thomas
Cole, Norman Hughes, Hallett, Vice-Admiral J. Morrison, John (Salisbury)
Cordeaux, Lt.-Col. J. K. Hughes-Young, M. H. C. Nabarro, G. D. N.
Corfield, Capt. F. V. Hulbert, Sir Norman Nairn, D. L. S.
Craddock, Beresford (Spelthorne) Kurd, A. R. Neave, Airey
Crookshank, Capt. Rt. Hn. H. F. C. Hutchison, Sir Ian Clark (E'bgh, W.) Nicholson, Godfrey (Farnham)
Crosthwaite-Eyre, Col. O. E. Hyde, Montgomery Nicolson, N. (B'n'm'th, E. & Chr'ch)
Crouch, R. F. Hylton-Foster, Sir H. B. H. Nield, Basil (Chester)
Crowder, Sir John (Finchley) Iremonger, T. L. Noble, Comdr, A. H. P.
Crowder, Petre (Ruislip—Northwood) Irvine, Bryant Godman (Rye) Oakshott, H. D.
Cunningham, Knox Jennings, J. C. (Burton) O'Neill, Hn. Phelim (Co. Antrim, N.)
Currie, G. B. H. Johnson, Dr. Donald (Carlisle) Ormsby-Gore, Hon. W. D.
Dance, J. C. G. Johnson, Eric (Blackley) Orr, Capt. L. P. S.
D'Avigdor-Goldsmid, Sir Henry Jones, A. (Hall Green) Orr-Ewing, Charles Ian (Hendon, N.)
Deedes, W. F. Keegan, D. Osborne, C.
Page, R. G. Smyth, Brig. J. G. (Norwood) Vickers, Miss J. H.
Pannell, N. A. (Kirkdale) Spearman, A. C. M. Vosper, D. F.
Partridge, E. Speir, R. M. Wade, D. W.
Pilkington, Capt. R. A. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.) Wakefield, Edward (Derbyshire, W.)
Pitman, I. J. Stanley, Capt. Hon. Richard Wakefield, Sir Wavell (St. M'lebone)
Pitt, Miss E. M. Steward, Sir William (Woolwich, W.) Walker-Smith, D. C.
Pott, H. P. Stewart, Henderson (Fife, E.) Ward, Hon. George (Worcester)
Price, David (Eastleigh) Stoddart-Scott, Col. M. Ward, Dame Irene (Tynemouth)
Price, Henry (Lewisham, W.) Storey, S. Webbe, Sir H.
Raikes, Sir Victor Stuart, Rt. Hon. James (Moray) Whitelaw, W.S.I.(Penrith & Border)
Ramsden, J. E. Summers, G. S. (Aylesbury) Williams, Paul (Sunderland, S.)
Redmayne, M. Sumner, W. D. M. (Orpington) Williams, R. Dudley (Exeter)
Remnant, Hon. P. Taylor, William (Bradford, N.) Wills, G. (Bridgwater)
Renton, D. L. M. Thomas, Rt. Hn. J. P. L. (Hereford) Wilson, Geoffrey (Truro)
Rodgers, John (Sevenoaks) Thomas, Leslie (Canterbury) Wood, Hon. R.
Roper, Sir Harold Thomas, P. J. M. (Conway) Woollam, John Victor
Ropner, Col. Sir Leonard Thompson, Kenneth (Walton) Yates, William (The Wrekin)
Russell, R. S. Thornton-Kemsley, C. N.
Sharples, R. c. Touche, Sir Gordon TELLERS FOR THE NOES:
Simon, J. E. S. (Middlesbrough, W.) Vaughan-Morgan, J. K. Mr. R. Thompson and Mr. Godber.

6.30 p.m.

Mr. H. Brooke

I beg to move, in page 4, line 21, to leave out from "and" to "and" in line 22 and to insert: assessments may be made in respect of tax so chargeable at any time within the period permitted by subsection (2) of section forty-seven of the Income Tax Act, 1952 (which, as extended by subsection (3) of section two hundred and twenty-nine of that Act provides that surtax and other assessments on the personal representatives of a deceased person in respect of income arising before the death must he made within three years from the year in which the death occurred), notwithstanding the time limit in subsection (1) of that section (which provides that assessments shall be made within six years from the year to which the assessments relate).". The Amendment deals with a small but useful point. Hon. Members will see that subsection (4) removes for the purpose of the Clause the time limit on the making of assessments. That is necessary under this conception, because when a person dies it may not be six years only which it will be necessary to go back to assess the Surtax but a longer period. It has come to my right hon. Friend's attention that the subsection might also render it possible for considerable delay to take place before any assessment is made after the death of the underwriter.

At present, under the existing law, which is Section 47 (2) of the Income Tax Act, 1952, an assessment on a dead man's personal representatives in respect of the income of the man who has died must be made not later than three years after the end of the year of assessment in which his death occurred. That is a valuable safeguard for the executors. That three-year protection would also be swept away by subsection (4) if we did not introduce the Amendment.

The sole purpose of the Amendment, therefore, is to make it clear that that three-year limit after the death of the underwriter shall be preserved and that it will not be open to the authorities to delay beyond the normal period of three years the making of the assessment.

Mr. E. Fletcher

I am glad to see that the Financial Secretary has realised the strength of what we said to him in Committee. Some of my hon. Friends and I protested about the hardship that would result to a great many people, particularly executors, if the Bill were allowed to remain in its present form. I said then that it was really intolerable to nut into an Act of Parliament a provision that there should be no time limit whatever within which the Inland Revenue could make an assessment of this kind. I am not sure whether I am entitled to the credit for the change now announced. What is more likely is that the Financial Secretary has been reading what was said by the Lord Chief Justice, Lord Goddard, at the Old Bailey yesterday in the case of Walter Schick and Hyman Jack Glenton.

The Lord Chief Justice had some very severe strictures to make upon the remissness of the Revenue officials in the gross delay on their part in dealing with tax matters. He went so far as to say that it was cruel to keep people in suspense and that it was because of the cruelty that had been imposed unnecessarily by Revenue officials that in the case of these two criminals, tax evaders, he refrained from the course which he otherwise would have taken of sending them to prison. If it is cruelty in the case of criminals, a fortiori it is cruelty to keep innocent people in protracted suspense about the amount of their tax liability.

This is not an isolated case, and I am glad that the Amendment gives us an opportunity to protest about some of the delays that are taking place in the Inland Revenue Department on this subject. There is no justification for them at all. It seems to me scandalous that those who were responsible for framing this Bill should, in the first place, have had the audacity to put into it a Clause which would have enabled the Revenue, without giving the taxpayer any redress at all, to have a completely unlimited time to make assessments before the taxpayer could take it that the liability was determined. It would have been bad enough in the case of a living person, but the position would have been absolutely intolerable in the case of those who administer estates for the benefit of widows and orphans. There could have been no justification for it at all.

I am glad to find that although we have had no success so far in securing reliefs from the Chancellor in the Finance Bill, the right hon. Gentleman has seen the force of our argument in this matter and has himself put forward the Amendment.

Amendment agreed to.