§ 12. Mr. Osborne
asked the Chancellor of the Exchequer if he will consider amending the Finance Act so that bonus shares given to workpeople are free of Income Tax in the same way as they are to shareholders, and so encourage schemes to make workers into shareholders.
§ Mr. H. Brooke
It would, I think, be unfair to single out for preferential treatment benefits of this kind from other forms of incentive payment, such as cash bonuses. Indeed, such a concession might discourage other valuable profit-sharing, co-partnership or incentive schemes.
§ Mr. Osborne
But is not my right hon. Friend aware that, if bonuses are given to employees, they have to pay Income Tax on them? If we are really to make our workers shareholders in our concerns, that hindrance ought to be taken away. Will my right hon. Friend try to do something about it?
§ Mr. Brooke
I have pointed out in my answer the difficulty that my hon. Friend's suggestion would raise in distinguishing these from other forms of incentive payments.
§ Mr. Holt
Is not there discrimination here against employees as compared with 480 shareholders? Is the Minister aware of a recent announcement of a new issue by Bowaters, in which the rights of profit on the new £1 stock are 12s. 6d.? Why cannot he give the same kind of concession if Bowaters wishes to let its employees buy some of this new issue?
§ Mr. Brooke
I think that the hon. Member is apt to have overlooked the fact that a bonus issue of shares to shareholders tends to affect the value of the existing shares which those people hold.