§ Now I have certain proposals to make in the field of direct taxation. The Finance Bill will be very short, and will involve little detailed amendment of the tax codes. When hon. Members examine the Resolutions they will see that there will rightly be opportunity for discussion of various aspects of the Purchase Tax, and of the other measures which I am about to mention; but there will be no need for a General Resolution. I must, however, include provisions to deal with two subsidiary matters which are related to the main purpose of the Bill.
§ The first of these—and they are comparatively minor, but I will mention them—will deal with an avoidance device known as "dividend stripping," operated by certain financial concerns, by which the liquid reserves of companies are extracted free of Surtax at considerable loss to the Revenue. I cannot allow either this practice or this loss to continue.
§ Secondly, I propose, subject to conditions, to extend the relief from Surtax which is allowed to Lloyd's underwriters on profits which they pay into special reserve funds. Lloyd's is an important source of overseas income, and I hope this measure will enable them to maintain and expand their foreign business in the face of adverse circumstances, so as to assist our balance of payments.