HC Deb 10 July 1956 vol 556 cc309-27

(1) In relation to a claimant to whom this section applies subsection (1) of section two hundred and eleven of the Income Tax Act, 1952 (which subsection provides earned income relief), as amended, shall have effect with the substitution for references to two-ninths and to four hundred and fifty pounds of references to one-quarter and to five hundred pounds.

(2) This section applies to a claimant whose earned income is chargeable to tax under Schedule E or who, if his earned income is chargeable to tax under Case II of Schedule D or partly under that case and otherwise under Schedule E, makes an election under the next following subsection.

(3) For the purposes of this section a claimant may elect to have his earned income, if or in so far as it is chargeable under Case II of Schedule D, computed under Schedule E, so that Rule 7 of the rules applicable to Schedule E and appearing in the Ninth Schedule to that Act shall apply accordingly:

Provided that any additional liability to tax imposed on a claimant by reason of such an election shall not in any case exceed the additional relief allowed to that claimant by virtue of subsection (1) of this section.—[Mr. Roy Jenkins.]

Brought up, and read the First time.

Mr. Roy Jenkins

I beg to move, That the Clause be read a Second time.

This Clause is an attempt to introduce into our Income Tax law the small beginnings of a new principle. The principle is broadly in line with one of the recommendations of the minority report of the Royal Commission on Taxation of Profits and Income, though the problem to which the Clause seeks to draw attention was recognised not only by the minority but also by the majority of that Royal Commission.

The problem is this. There is at the present time a sharp difference, and a consequent unfairness, between the treatment of expenses which are allowed by the Revenue to be deducted by taxpayers who happen to be assessed under Schedule D and those who happen to be assessed under Schedule E. I very much doubt if any hon. Member in the House would seek to dispute the fact that there is a difference and an unfairness in the treat- ment of these two classes at the present time. The unfairness arises from the fact that those who are assessed under Schedule E as carrying on an office or employment can have expenses allowed only if they are "wholly, exclusively and necessarily" incurred in order to carry on that office or employment, whereas those who carry on a trade, profession or vocation and are assessed under Schedule D are enabled to deduct expenses from their taxable income provided that they are "wholly and exclusively" incurred.

The difference is an extremely important difference, because in the one case the word "necessarily" applies and in the other case it does not apply. This comparatively small difference in words without doubt makes a very great difference in treatment in practice. Those carrying on a trade or vocation and assessed under Schedule D are in any case in a very much more favourable position, in that they have, by capital allowances and other means, a possibility of safeguarding against the wearing out of the equipment which they use in earning the income, whereas that is not available to someone operating under Schedule E and carrying on an ordinary job.

8.45 p.m.

On top of that there is the difference to which I want primarily to call attention. It is the question of whether expenses are "necessarily" incurred. Without doubt, a great number of expenses which are allowed by the Revenue under Schedule D are not necessarily incurred in the sense that if they were not incurred in the year in question, it would not be possible in that year to earn the income on which the tax is levied. It may be argued that a great part of advertising and business expenses is not necessary even to earn future profits, but without any question at all a great part of expenditure of this type is devoted to the earning of future and not current profits against which the expenditure is offset.

On the other hand, one knows perfectly well that anyone operating under Schedule E is certainly not allowed to charge as expenses some item of expenditure which he incurs with a view to increasing his future earning capacity. Certainly, someone assessed under Schedule E would not be able to take a future employer to lunch and charge that as expenses on the ground that if he got on well with the employer he might get a better job and have a greater earning capacity as a result.

It cannot be disputed that there is a great difference of treatment between someone assessed under Schedule D—he might be a businessman, someone carrying on a professional occupation, or one of a wide variety of vocations who can charge anything which is "wholly and exclusively" incurred—and someone charged under Schedule E who has to prove that it is "necessarily" incurred and is restricted in other ways in which the other persons are not restricted.

The existence of this problem was recognised by all members of the Royal Commission on the Taxation of Profits and Income, but the two sides differed in the method by which they sought to meet it. The majority—I think wrongly, and I will indicate why in a moment—thought that the best thing to do was to widen the position of Schedule E taxpayers and to put them in a position approximately the same as that which Schedule D taxpayers already enjoyed. I think that that is a mistaken approach to the problem, because it would have opened wide avenues for further tax avoidance which we very much want to avoid.

As a slight variant of that point, I think that it was mistaken even more strongly because we want to do nothing at present to narrow the tax base. Some of my right hon. and hon. Friends and I have tried to argue at an earlier stage that one of the disadvantages in our present tax structure is that we have a very high pyramid of tax rates constructed on a rather narrow basis of taxable income, in other words, that a great part of what is in fact income is excluded from the tax base and that as a result we have rates of tax which are nominally extremely high and which may bear extremely hardly on people who happen to be in the position that all their income constitutes part of the tax base, but bear less hardly on other people, a large part of whose income is outside the tax base. Thus it is undesirable to approach the problem by any further whittling away of the tax base.

In this new Clause we have attempted to adopt in a slightly modified form, not the proposal of the majority of the Royal Commission for opening up the amount of expenses which may be charged for Schedule E taxpayers, but that put forward by the minority. That is to recognise that there is a real difference and that it is a cause of unfairness and grievance. We have attempted to solve it not by allowing any more expenses to be charged by anybody, but saying to the Schedule E taxpayer, "You are in an unfair position and we will recognise that by giving you an additional earned income allowance which will not be available to the Schedule D taxpayer who is much more fortunately placed from the point of view of expenses."

The Clause increases the earned income allowance for Schedule E taxpayers from two-ninths to one-quarter. In a sense this is a token increase. In moving the Clause my hon. Friends and I are seeking to establish the principle that unfairness exists in the treatment accorded to taxpayers assessed under the two Schedules, and we submit that this proposal is, broadly, the correct method of remedying that unfairness. We are not specially concerned about the difference between two-ninths and one-quarter.

The Clause goes a little further in this direction by saying that taxpayers who happen to be assessed under Schedule D—the lucky ones from the point of view of expenses—can, if they so choose, receive the benefit of this extra earned income relief by allowing themselves voluntarily to be assessed, for expenses purposes, not under Schedule D but under Schedule E. It is therefore possible for anyone, provided that he is willing to accept the present rigours of the Schedule E rule upon expenses, to receive the benfit of the extra earned income allowance.

This seems to me to be a reasonable and moderate approach to a problem the reality of which cannot be denied by any hon. Member. There is unfairness here, which is leading to a sharp sense of grievance. I do not think we need fear that the institution of a new principle will be specially dangerous. After all, we already have the earned income allowance itself. As I understand it, that allowance was introduced into our taxation law about 45 years ago, not because Chancellors then thought that there was any particular moral difference between earned and unearned income, but because they thought that those with earned incomes were in a less favourable position than those with unearned incomes. They took the view that unless something went wrong those with unearned incomes received them indefinitely, and there was no question of a cessation of income at retirement, or of their having to make provision for the fact that their earning capacities were wearing out.

The earned income allowance is designed to deal in a rough and ready way with an unfairness inherent in two types of income, nad the differential between the earned income allowance of one type of taxpayer under Schedule D and another under Schedule E would be a logical extension of this principle and would go some little way towards making our taxation system more fair that it is at present. I believe that it would also remove a real sense of grievance which exists in the minds of many taxpayers.

Mr. Austen Albu (Edmonton)

I beg to second the Motion.

It is perhaps a little unfortunate that we should be discussing this important principle in a rather empty House, because it deals with the considerable disadvantages suffered by many professional people in salaried occupations—and the number of professional people in salaried occupations is growing every year. These professional people—whether they be lawyers, engineers, or accountants—suffer by comparison with their fellows who are self-employed, as I hope to show very briefly.

We on this side of the Committee make no excuse for advocating measures which are to the advantage of earned incomes as against unearned incomes, and certainly this Clause would be of assistance to those whose incomes are derived mainly from work. To that extent it is in line with the views expressed recently in the Press, and even to some extent accepted by hon. Members on this side of the Committee during the course of the discussions on this Bill, that there is a need for a greater incentive to be given to the professional and technical classes.

If I may give an example of the sort of persons who would benefit by this new Clause, I cannot do better than refer to an Amendment I moved on the last occasion on which it was possible to move Amendments of this sort to this Bill. It related to the position of the professional civil servant who very often finds that he cannot attain his position in the Civil Service unless he is a member of a professional association. Advertisements for engineers, scientists, accountants, and so forth, all ask that applicants shall hold the qualification of a professional association as, for instance, the Institution of Mechanical Engineers.

Once a man becomes a professional civil servant the Treasury is unwilling to say that it is necessarily part of the conditions of his employment that he should continue to be a member. This is a ludicrous situation. It means that the man is unable to obtain relief for his subscriptions to those professional bodies which are now quite high, and equally he is unable to obtain relief for the professional books which he needs in the course of his duty. It cannot be of any advantage to the State for a professional man, a technical man or a scientist, not to continue to be a member of an association established for the purpose of furthering science, or the particular technique of his profession.

But the Treasury makes it more difficult for him to be so. Were he self-employed, he would be fully entitled to claim under Schedule D rules for all the expenses he incurs in maintaining membership of a professional association and in continuing to do those things which he has to do in order to advance his knowledge. The Amendment was negatived on the last occasion when it was moved, and it has been moved on a number of occasions. It must be a great disadvantage that in a period of rapidly changing ideas, particularly technical and scientific ideas, we should not give to the professional man the relief which he should have if he is to maintain his knowledge of his profession and keep up to date with new ideas.

There may well be administrative difficulties—as I am sure was argued from the Treasury Bench on the last occasion when the matter was discussed—about applying this form of relief. There are only two ways to deal with it. One way, as has been said by my hon. Friend, is by accepting the proposal of the majority of the Royal Commission, and giving almost the same reliefs to those who obtain relief under Schedule E as are now obtained by those who get them under Schedule D. The other way is that recommended in the minority report, which is roughly along the lines of the new Clause moved by my hon. Friend.

Hon. Members on this side of the Committee are opposed to widening the whole range of expenses as relief from taxation, for the good reasons which have been advanced during the debates on this Bill. We think that already the tax base is too narrow and, therefore, the burden of taxation on the majority of people falls heavier than otherwise it would do. But there is a very good case for accepting this. After all, it is not a very great change in the law, and at least it would give as much advantage to the professional man in salaried employment as would be required to bring him into something like a position equivalent to that enjoyed at present by those who are self-employed.

9.0 p.m.

In order to make everything fair and to put everybody on an equal basis, we have the third subsection of the Clause, which would enable a person in self-employment, who gets relief under Schedule D, to make the choice for himself which form of relief he wishes to have. It cannot be said, therefore, that we propose to reverse the present disadvantages, placing them on the Schedule D man instead of the Schedule E man. We are giving the Schedule D man an opportunity to have exactly the same conditions as the professional man paying tax under Schedule E and in salaried employment.

The new Clause would undoubtedly give a great deal of pleasure to a large number of very worthy professional persons who are in salaried employment. The present situation, as I said when I last spoke on the subject, is ludicrous. When I was in salaried employment, not in the Civil Service, all that was necessary was for me to get my employer to give me a note saying that for the purpose of my employment it was necessary that I should be a member of the Institution of Mechanical Engineers; and I was given Income Tax relief on the four or five guineas which I paid in subscription, without any question by the Income Tax authorities. If I had been a civil servant, the Treasury would not have given me that statement and I should not have been given the relief. The situation is ludicrous, and the best way to deal with it is that which was so well described by my hon. Friend the Member for Stechford in moving the new Clause.

Captain J. A. L. Duncan (South Angus)

I do not pretend to be an expert on this subject, but the fact that the hon. Member for Stechford (Mr. Roy Jenkins) has moved the new Clause and talked about unfairness gives me the chance to say something about one section of the community with whom I am in fairly close touch. I am a member of the Royal College of Veterinary Surgeons and that body has brought to my notice the fact that there is unfairness in dealing with this matter. I hope the Treasury will look into the whole question with a view to dealing with that unfairness in the next Finance Bill, if they can do nothing about it in this Bill.

The veterinary profession and the dental profession are both looked after by statutory bodies, and members of the profession have to pay a fee every year, before they are allowed to practise, in order to get the necessary letters after their names. That fee, whatever it may be—four, five or six guineas—is not allowed as an expense by the Income Tax authorities, on the ground that it is a condition precedent to practise and not an expense, wholly, necessarily and exclusively incurred in the course of their practice. I believe that the case has been tested in the courts and that the decision of the Income Tax authorities has been upheld by the courts.

It seems to me quite stupid that the Commissioners of Inland Revenue should be allowed to get away with this absurd position. I have referred to veterinary surgeons and dentists, but there are probably many others affected; and the hon. Member for Edmonton (Mr. Albu) has mentioned people in similar categories. In these matters some people get away with it and others do not. It seems to me that something must be done, one way or the other, to put this matter right and to eliminate the unfairness. I am really not qualified to enter into the high financial argument as to whether——

Mr. Albu

I am not sure whether the hon. and gallant Gentleman is referring to the veterinary surgeons whose membership of the Royal College of Veterinary Surgeons is a statutory one, and who cannot practise otherwise. If that is the case, they are entitled.

Captain Duncan

No, they are not entitled, and the reason is, as I have already said, that the Income Tax authorities take the view that their subscription is a condition precedent to practise rather than a part of expenses wholly, necessarily and exclusively incurred in the course of that profession.

I am not prepared to dogmatise as to which is the right way to deal with it. I would only say to the hon. Member for Stechford that although I agree that the tax basis is narrow I do not think that, in order to eliminate an unfairness like this, it would be wrong to narrow it still further. What I think is wrong is that the whole weight of taxation is far too heavy on us all, and the answer that I would give to the hon. Member's new Clause, and the method of dealing with this unfairness, is not to narrow the basis of taxation but to lessen its weight.

Mr. H. Brooke

My hon, and gallant Friend the Member for South Angus (Captain Duncan) has skilfully used this new Clause as an opportunity to express certain views to Parliament about the Schedule E law. That is a matter on which the Royal Commission made certain recommendations. My right hon. Friend the Chancellor did not think fit to bring in proposals arising out of those recommendations, at any rate this year.

I confess that I was somewhat puzzled by the speech of the hon. Member for Edmonton (Mr. Albu). Having first of all criticised the restrictive character of the Schedule E tax relief for expenses, he proceeded to second this new Clause which would apply the Schedule E rules to an increased number of people. But I will seek to address myself to the main point of the Clause, which was moved by the hon. Member for Stechford (Mr. Roy Jenkins).

If I understood him rightly, the hon. Member said that he was moving this new Clause as a demonstration or a gesture rather than tightly binding himself to any of these proposals. That may explain why he was departing from what hitherto has been the general custom in this field, which is that the age relief fraction should move along with the earned income relief. He would certainly be departing from precedent if he succeeded in getting this new Clause on the Statute Book, because it would give the one-quarter relief for earned income instead of two-ninths but would not extend that advantage either to the general age relief for people over 65 or to the small income relief for people with incomes under £300 a year, although, hitherto, it has been thought fit, and I am sure rightly, that the two fractions—or perhaps I should say the three fractions—should go together.

The hon. Gentleman indicated that he was basing this Clause on the idea in the minority report of the Royal Commission, although he was not following it slavishly. The present position is that the earned income relief at the two-ninths rate is the highest figure at which the relief had ever stood. When this earned income relief was introduced 36 years ago following the recommendation of an earlier Royal Commission, the rate was fixed at one-tenth. It was gradually extended beyond that up to the time of the war; there was a cut in 1940, and there have been extensions since the war. It was raised to two-ninths in 1952.

This new Clause proposes that it should be extended to one-quarter for those people who come under Schedule E, and for those people who are chargeable under Case II of Schedule D if they opt for the restrictive Schedule E expenses rule rather than the wider Schedule D expenses rule.

The minority report of the Royal Commission was, of course, in some respects somewhat bolder. It recommended that earned income relief should be available to all Schedule E incomes without any upper limit at all—a most interesting and far-reaching recommendation—and then recommended, somewhat in line with this Clause, that a similar extension of relief should be given to individuals assessed in respect of professional earnings under Case II of Schedule D but who, as the Clause says, opt to be assessed on their profits by reference to the Schedule E expenses rule. It made a further recommendation relating to the case of trading and business profits of individuals and partnerships.

The hon. Member for Stechford has made a selection out of these recommendations, and I think that his main purpose has been to bring before the House the difference between the Schedule D and the Schedule E expenses rules, a matter which might also have come up on a later Clause which, I understand, is not likely to be called. In his speech, there seemed to me to be a hint that the rules for Schedule D are operated as a kind of special relief favourable to the Schedule D taxpayer. That, of course, is not the purpose of them. The purpose of the difference is to seek to reflect the essential feature of the separate cases.

Mr. Roy Jenkins

Does the right hon. Gentleman not consider that it is sometimes more important to have regard to results rather than purposes?

Mr. Brooke

I did not interrupt the hon. Gentleman's speech, and I hope he will allow me to refer here to the purposes.

The essential feature of the two cases is that the Schedule D taxpayer has to incur a variety of expenses in the course of earning his profit and for the purpose of earning his profit, whereas the Schedule E taxpayer is entitled only to deduct the expenses which are necessarily incurred at the behest of an employer in the performance of the duties of his office or employment.

Let me say at once that I recognise the particular position of those people who are taxed under Schedule E but who have not, in the ordinary sense, an employer. The clergy is one example. If anybody wishes to take the point up with the Financial Secretary, let me say at once that when I sat on the other side of the House I myself moved a new Clause designed to give the clergy, who have not in the ordinary sense got an employer, something akin to the Schedule D rather than the Schedule E expenses rule. Certain right hon. Gentlemen opposite explained why that was quite unthinkable, and I remember that we went to a Division about it. I quote that, first, so as to be entirely frank with the House, and, second, to show that I, for one, certainly have not got a closed mind on these subjects.

9.15 p.m.

I must address myself to the proposal in the new Clause. It is a proposal that the law shall be altered in a way that in certain circumstances will give earned income relief at the rate of one-quarter instead of two-ninths. If all the Schedule D people referred to in the Clause decided to take advantage of it and claim relief at one-quarter, while subjecting themselves to the more rigid Schedule E expenses rule—and it seems to me quite a reasonable assumption that they would—the cost to the revenue would be £72 million in a full year.

I must say quite frankly that, from the context of the present Budget, it would be unthinkable for my right hon. Friend the Chancellor to accept an erosion of that magnitude into his Budget surplus.

Mr. Roy Jenkins

I am interested in the means by which the right hon. Gentleman has arrived at the figure of £72 million. He must clearly have made some offsetting assumption for the fact that Schedule D taxpayers who took this option would have to forgo expenses which they might otherwise have claimed and that to that extent their taxable income would be greater, even though they would have a bigger earned income relief to set off against it. Can the right hon. Gentleman take us through his calculations on that point?

Mr. Brooke

I do not think I could give the precise calculation of gains and losses. I think the hon. Member will accept it from me that there is bound to be a certain element of assumption in any such calculations, but so far as we can arrive at a figure this would cause a loss of revenue of about £72 million.

Mr. Jay

Can the right hon. Gentleman say whether, in arriving at that precise figure, he has in principle taken into account the offset by the increase in the size of the taxable income, to which my hon. Friend the Member for Stechford (Mr. Roy Jenkins) has referred?

Mr. Brooke

I am not suggesting that £72 million is a gross figure. I was giving it as a net figure.

When I have given that figure—and it is the best estimate we can make—I rather hope that the hon. Member for Stechford, having made his demonstration and his gesture, will appreciate that his Clause is not one which in present circumstances the Chancellor of the Exchequer could possibly accept.

Mr. Jay

Although the Financial Secretary says that he does not have a closed mind, I am not greatly surprised that he has not accepted the Clause. As I think he realises, what we are really concerned with is not the age relief or the exact size of the earned income relief, or, indeed, the option, of which the right hon. Gentleman made a great deal, for the Schedule D taxpayer to move in certain circumstances on to the Schedule E basis. What we are concerned with, as is the hon. and gallant Member for South Angus (Captain Duncan), is the basic unfairness which exists between the Schedule D and Schedule E methods of treating expenses. If I say a few more words, it is only to try to persuade the Financial Secretary to think very hard about this, if not tonight, at least before the next time the Chancellor deals with these problems.

The difficulty arises from the distinction between the words "wholly and exclusively" under Schedule D and "wholly and exclusively and necessary" under Schedule E. These sacred words go back for over one hundred years and they are very deeply embedded in the Inland Revenue system.

The Financial Secretary gave what he called the purpose of the present distinction—the theory, so to speak, which has been operating for all this time—but we are more concerned with the actual results and the actual practice of granting these reliefs for expenses as they work out. My hon. Friend the Member for Edmonton (Mr. Albu) gave the very familiar example of professional subscriptions, and so on, which the Schedule D taxpayer is able to make, as compared with the refusal of those deductions, for instance, to the civil servant or other worker, such as the clergyman an hon. Gentleman opposite mentioned, working under Schedule E.

It works in even more extraordinary ways. One of the oddest anomalies of all is that in no case, or practically no case, can a trade union subscription be claimed as a deduction, even though it is a condition of employment in practice. My hon. Friend the Member for Edmon- ton said he had been able with some Schedule E activity or other to get a deduction as the result of the employer's signing a piece of paper to that effect. Nevertheless, even where the trade union subscription is a necessary condition of employment, it is not allowed by the Inland Revenue.

Mr. J. T. Price

I agree with my right hon. Friend's argument, but, for the sake of exactitude and the record, perhaps he will allow me to point out there is an exception. It ought to be said that if a trade union administers friendly society benefits, that portion of the subscription which is related to those benefits is allowed for deduction.

Mr. Jay

My hon. Friend is right, and that is why I said in almost every case. In the normal case it is the curious fact that the subscription paid by a firm to a trade association is a deductible expense, while the subscription paid by a worker to a trade union is not.

It happens, quite rightly and naturally, that when we have a General Election the Trades Union Congress, on the one side, puts out political manifestoes supporting one party and the Federation of British Industries, on the other side, puts out manifestos supporting the other party. It is always curious to reflect that the cost of that activity on one side is apparently paid for by the Exchequer while that on the other is paid for by the trade union contributions of the employees. One could give further examples of this curious distinction that exists.

The question before the House is what can be done to remedy that. I think most of us have been really troubled by this when thinking about Income Tax and trying to find some possible solution. I think there are three possible ways out of the difficulty. One is to accept the proposal of the majority of the Royal Commission that we should introduce the latitude of Schedule D into Schedule E. I agree with my hon. Friend the Member for Stechford (Mr. Roy Jenkins) that that would be, as he put it, narrowing the tax base even further. One may put it differently and say that it would be extending some of the present abuses in Schedule D to Schedule E. I do not think that most of us would wish to see that.

Logically, of course, the alternative would be to take exactly the opposite course and propose that the Inland Revenue should apply to Schedule D, to the profit area of taxation, the same rigid limitations and to introduce the word "necessary" applied now to Schedule E. Many of us must have wondered at times whether that would not be the right solution. The difficulty is, I understand, that the Inland Revenue has always held it would, in practice, be impossible to administer a rule of that kind. Suppose it were the duty of the tax collector to say, in the case of a business, what was or was not a necessary expense, in disagreement with the manager of the business. It has always been held that that would be administratively impossible. I am impressed by the fact that even the minority of the Royal Commission, who were very anxious to solve this problem, were not prepared to make that proposal. We read that, in the case of Lady Docker's mink coat, apparently the Inland Revenue was not prepared to say that that was necessary for a particular business. We are glad to see that apparently it is willing to draw the line somewhere, but, nevertheless, there is no great body of opinion which is prepared to argue that that is the general solution.

That being so, it seemed to us worth putting forward an alternative way out of the difficulty. If we cannot bring Schedule D and Schedule E into line with one another in the matter of "wholly, exclusively and necessarily" the next best thing to do is to grant a special concession to Schedule E taxpayer by another method which will counteract the disadvantage which he is suffering under the expenses rule.

I think that the proposal put forward by my hon. Friends is simple. It may not be the completely ideal solution and I can well believe that it may be that the right hon. Gentleman cannot spare that amount of revenue at the moment—but it presents a possible avenue of escape from this difficulty. If my hon. Friends feel able to press this suggestion, I hope that they will do so as a reminder to the Financial Secretary that this problem has not yet been solved and that we believe that if he cannot find another solution himself he should think hard on these lines.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 179, Noes 227.

Messer, Sir F. Proctor, W. T. Thornton, E.
Mikardo, Ian Pryde, D. J. Timmons, J.
Mitchison, G. R. Randall, H. E. Tomney, F.
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Popplewell, E. Swingler, S. T.
Price, J. T. (Westhoughton) Taylor, John (West Lothian) TELLERS FOR THE AYES:
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Ashton, H. Elliot, Rt. Hon. W. E. Keegan, D.
Astor, Hon. J. J. Emmet, Hon. Mrs. Evelyn Kerby, Capt. H. B.
Atkins, H. E. Errington, Sir Eric Kerr, H. W.
Baldock, Lt.-Cmdr. J. M. Fell, A. Kimball, M.
Baldwin, A. E. Fisher, Nigel Kirk, P. M.
Balniel, Lord Fleetwood-Hesketh, R. F. Lagden, G. W.
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Barlow, Sir John Foster, John Lancaster, Col. C. G.
Barter, John Freeth, D. K. Langford-Holt, J. A.
Beamish, Maj. Tufton Galbraith, Hon. T. G. D. Leather, E. H. C.
Bell, Ronald (Bucks, S.) George, J. C. (Pollok) Leavey, J. A.
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Bevins, J. R. (Toxteth) Glover, D. Legge-Bourke, Maj. E. A. H.
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Birch, Rt. Hon. Nigel Gough, C. F. H. Lindsay, Martin (Solihull)
Bishop, F. P. Gower, H. R. Linstead, Sir H. N.
Black, C. W. Graham, Sir Fergus Lloyd-George, Maj. Rt. Hon. G.
Body, R. F. Grant, W. (Woodside) Lucas, Sir Jocelyn (Portsmouth, S.)
Boothby, Sir Robert Grant-Ferris, Wg Cdr. R. (Nantwich) Lucas-Tooth, Sir Hugh
Bossom, Sir Alfred Green, A. Mackeson, Brig. Sir Harry
Boyd-Carpenter, Rt. Hon. J. A. Harris, Frederic (Croydon. N. W.) Mackie, J. H.(Galloway)
Boyle, Sir Edward Harrison, Col. J. H. (Eye) McLaughlin, Mrs. P.
Braine, B. R. Harvey, Ian (Harrow, E.) Maclay, Rt. Hon. John
Bromley-Davenport, Lt.-Col. W. H. Harvey, John (Walthamstow, E.) McLean, Neil (Inverness)
Brooke, Rt. Hon. Henry Hay, John MacLeod, John (Ross & Cromarty)
Browne, J. Nixon (Craigton) Heath, Rt. Hon. E. R. G. Macmillan, Rt. Hn. Harold (Bromley)
Bryan, P. Henderson, John (Cathcart) Maddan, Martin
Buchan-Hepburn, Rt. Hon. P. G. T. Hill, Rt. Hon. Charles (Luton) Maitland, Cdr. J. F. W. (Horncastle)
Bullus, Wing Commander E. E. Hill, Mrs. E. (Wythenshawe) Maitland, Hon. Patrick (Lanark)
Burden, F. F. A. Hill, John (S. Norfolk) Manningham-Buller, Rt. Hn. Sir R.
Butcher, Sir Herbert Hinchingbrooke, Viscount Markham, Major Sir Frank
Campbell, Sir David Hirst, Geoffrey Marlowe, A. A. H.
Channon, H. Holland-Martin, C. J. Marshall, Douglas
Chichester-Clark, R. Hornby, R. P. Mathew, R.
Clarke, Brig. Terence (Portsmth, W.) Hornsby-Smith, Miss M. P. Maude, Angus
Cole, Norman Horsbrugh, Rt. Hon. Dame Florence Mawby, R. L.
Conant, Maj. Sir Roger Howard, Hon. Greville (St. Ives) Maydon, Lt.-Comdr. S. L. C.
Cordeaux, Lt.-Col. J. K. Howard, John (Test) Medlicott, Sir Frank
Corfield, Capt. F. V. Hudson, Sir Austin (Lewisham, N.) Molson, Rt. Hon. Hugh
Craddock, Beresford (Spelthorne) Hughes Hallett, Vice Admiral J. Moore, Sir Thomas
Crouch, R. F. Hughes-Young, M. H. C. Nabarro, G. D. N.
Crowder, Sir John (Finchley) Hulbert, Sir Norman Nairn, D. L. S.
Cunningham, Knox Hurd, A. R. Neave, Airey
Currie, G. B. H. Hutchison, Sir Ian Clark (E'b'gh, W.) Nicholls, Harmar
Dance, J. C. G. Hutchison, Sir James (Sootstoun) Nicholson, Godfrey (Farnham)
Davidson, Viscountess Hyde, Montgomery Nicolson, N. (B'n'm'th, E. & Chr'eh)
D'Avigdor-Goldsmid, Sir Henry Iremonger, T. L. Nield, Basil (Chester)
Deedes, W. F. Irvine, Bryant Godman (Rye) Oakshott, H. D.
Digby, Simon Wingfield Jenkins, Robert (Dulwich) Ormsby-Gore, Hon. W. D.