HC Deb 30 June 1955 vol 543 cc479-80
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.

13. Mr. Holt

asked the Chancellor of the Exchequer if he will introduce legislation which will permit employees to buy shares in their employer's firm below the current market price without their being liable to a tax assessment for the difference between the market price and the purchase price.

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 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.