HC Deb 12 June 1956 vol 554 cc359-414
Mr. Stevens

I beg to move, in page 24, line 21, to leave out "five hundred" and insert "seven hundred and fifty".

By direction of the Chair, this Amendment is to be taken together with the Amendment in line 22, leave out "one-tenth" and insert "fifteen per cent.", with the consequential Amendment in line 25, leave out "five hundred" and insert "seven hundred and fifty", and the Amendment in page 27, line 8, at end insert: (13) The limit of one-tenth prescribed by the first proviso to subsection (1) of this section shall, in the case of an individual who carried on any trade, profession, or vocation, or held any office or employment (other than a pensionable office or employment) at any time between the sixth day of April. one thousand nine hundred and thirty-nine, and the fifth day of April, one thousand nine hundred and fifty-six, be increased by five per cent. in respect of each year of assessment falling within that period during which he carried on or held the same or during which he was engaged in any form of war service preventing him from carrying on or holding the same and but for which he would have carried on or held the same, and the limit of five hundred pounds prescribed by the said proviso shall not apply in the case of such an individual. The last Amendment would deal with late entrants to the scheme, for which Part III of the Bill provides. The first two can be easily discussed together. The third is a rather different subject.

The first Amendment provides for the raising of the maximum contribution admitted as a charge against Income Tax and Surtax from £500 to £750 each year. It is perfectly true that very few self-employed persons, whether they be professional men or traders, are likely to reach at any stage in their careers the relatively high net relevant earnings of £5,000 a year of which one-tenth is £500, the maximum at present allowed by the Clause. Fewer still of those hardworking, courageous and enterprising people will reach those higher salaries or net relevant earnings limits until the last few years of their careers, but if what I have just said is true, that they will not reach those higher earnings until the last few years of their careers, then it is true that in the early years of their careers one-tenth of their net relevant earnings will be very much less than £500. So that over the whole of their careers the average premium which they can pay for their retirement benefit will be substantially below £500.

My Amendment seeks to raise the limit from £500 to £750. In the vast majority of cases, that can arise only in the last few years of a successful professional or business man's career. For that reason there cannot be very much at stake for the Income Tax and the Surtax, but it will be necessary, in my view, to have a maximum, a ceiling, of at least £750 if the retirement annuities of successful business and professional men are to be of the same order as those which at present are paid to retired senior civil servants and retired senior officers of the Royal Navy, the Army and the Royal Air Force. I do not wish to weary the Committee with figures that are self-evident.

The second of the Amendments fits the first. It is the Amendment which provides for the raising of the permitted proportion of the net relevant earnings, one-tenth or 10 per cent., to 15 per cent. of the net relevant earnings. One-tenth is below the notional contribution which any civil servant makes to his own retirement pension. It is true that most Civil Service pensions, though not all, and all retired pay of officers of the three Services are known, generally speaking, as noncontributory, but it is equally certain that the people who go into those Services accept a rather lower rate of remuneration than they would in any other comparable form of employment because they know there is a pension or there is retired pay at the end. It is fair to say that the notional contribution of people in the Civil Service is about 14 per cent. and not 10 per cent.

Some well-earned tributes have been paid today, and I am glad to have this opportunity of adding mine, to the wisdom and hard work of Sir James Millard Tucker, and he and his Committee in their Report recommend not 10 per cent. but, for schemes such as are mentioned in the Bill, a contribution of 12 per cent. Therefore, I ask my right hon. Friend to consider whether 10 per cent., being, as it undoubtedly is, below the proportion of any other similar pension scheme in existence, should in the case of self-employed persons be increased.

9.15 p.m.

Those two points go together, but the third is entirely different. It is the rather longer Amendment which seeks to make provision for the late entrant to the scheme. Many of us have been hoping and working for Part III of the Bill for a long time. It is very galling when it does come to find that we are excluded from its benefits. Speaking for professions as a whole, I thank my right hon. Friend the Chancellor, as I did in my speech on the Budget, for bringing hope to the professional man and to self-employed persons. I believe that these provisions will prevent what has been happening for a long time. Young men have qualified for a profession but as soon as they have got their qualification they have gone out into industry, where jobs with a full pension at the end are available to them. I believe that Part III of the Bill will put an end to this kind of thing, for a man will be able to provide a pension for himself in due course, but not so the "old boy" like myself.

If we are lucky enough to have net relevant earnings of £5,000 or more a year, we may be able for another ten years of working life to set aside a maximum of £500 a year. But £500 a year for ten years would purchase a fairly small pension for a man who has held a responsible position in professional life or as a trader in the industrial and business life of a community. A man who retires at the age of 65 then has, as we heard only a few minutes ago, another 11½ years' expectation of life, at least ten of which may be useful years of life in which he may be able to play a valuable but voluntary part in the community life of the district in which he happens to live. The £500 a year which he is able to set aside for ten years from 1956 would buy him a very small pension with which to maintain the position which his life as a man of substance and authority demands.

I have said that Part III of the Bill is excellent for young people, but there is no provision whatever for the late entrant. The last of the three Amendments seeks to help the late entrant. It seeks to add to the one-tenth, assuming there is no increase in the one-tenth, by 5 per cent.—in other words, one-half of 1 per cent.—for each year during which a person has been in a suitable self-employment since 5th April, 1939. This means that a maximum of 18½ per cent. of his net relevant earnings would be available in the last ten or fifteen years of his useful life.

This last Amendment follows in principle the recommendations of the Tucker Committee, although it varies in detail. Bringing, as it does, some measure of justice to the late entrant, it deserves the earnest consideration of my right hon. Friend. I very much hope that he will see fit to accept it as, I hope, he will accept the other two Amendments which I have introduced coincidentally.

Mr. H. Brooke

If I rise now in the discussion it is not because I intend any discourtesy to the Committee, but because this is another occasion on which it may be helpful to right hon. and hon. Members if I state the views of the Government at an early stage in our debate. My hon. Friend the Member for Lang-stone (Mr. Stevens) has skilfully introduced in one speech three separate Amendments dealing with distinct but related points. I will seek one by one to indicate the view which my right hon. Friend the Chancellor of the Exchequer takes on each of them.

The major Amendment, in terms of money, is the one in page 24, line 22, to leave out "one-tenth" and to insert "fifteen per cent". This is an endeavour to be as generous as possible to the self-employed. I am sure that is the prime consideration in the mind of my hon. Friend. I am sure, too, that he will be the first to appreciate that he is going further, in suggesting 15 per cent., than the Millard Tucker Committee went, except in relation to their recommendations for the late entrants. If my hon. Friend calculates this out, he will find that, in addition to suggesting a higher figure than the Millard Tucker Committee recommended, a maximum limit of 15 per cent. would also enable large numbers of people who entered the scheme early to provide for themselves pensions distinctly greater than their normal earnings, which is not what we are accustomed to in the rest of the pension field.

I am not suggesting that there is any fixed percentage which is right but. generally speaking, in the case of employees' pensions we think of two-thirds of the earnings as being a good figure for the pension, and I know of no contributory or non-contributory scheme which would retire employees on pensions higher than their earnings. So I hope my hon. Friend will realise that I am not just resting on the dictates of the Millard Tucker Committee here. We have examined his suggestion in practical terms and we see that among other practical objections to it—

Mr. Stevens

I was startled when my right hon. Friend said that 15 per cent. would provide a larger pension than the net relevant earnings. He was not assuming, by any chance, an even level of earnings for the whole working life?

Mr. Brooke

My hon. Friend is probably thinking there of the professional man, whereas this Clause concerns not only the professional man but the man who is self-employed in the sense that he is running his own business. If, for instance, a young man takes over his father's grocer's shop at the age of 25, and if it is an established business, he is not one who will be entitled to expect an upward trend of earnings from a low figure. If he is competent, he may improve the profits of the business; but he is in a very different position from that of the professional man who has to be content with quite a small income in his early years while he is building up his reputation.

A simple arithmetical calculation will reveal to the Committee that if we were to accept this Amendment it would put up the cost of what I call the Millard Tucker relief by about 50 per cent. Apart from the other considerations which I have adduced, my right hon. Friend could not contemplate anything of that magnitude.

I next come to the first Amendment, namely, to leave out "five hundred" and to insert "seven hundred and fifty". This does not raise financial problems of the same order of magnitude. Here it is a matter of judgment, and the reason why £500 is in the Bill is because £500 is 10 per cent. of £5,000, and we thought that £5,000 was about the reasonable top level of earnings for which to provide. However, I must tell the Committee frankly that since the Bill was published my right hon. Friend has received very authoritative deputations and representations on these matters making out a case in favour of a higher figure which certainly deserves consideration.

I should like to set out the pros and cons. I think I have already given what was in our mind when we wrote £500 into the Bill. I confess that at that time we were thinking in terms of the person with fairly steady earnings. One point put to us is the one which has just been mentioned by my hon. Friend the Member for Langstone in a slightly different connection, the fact that the professional man has to be content in the early years of his career, unless he is extraordinarily successful, with a relatively low income and may hope, if he is successful and fortunate, to enjoy a high income in the prime of life but for a comparatively short period, and that it may, therefore, be somewhat cruel to him to cut off the amount of the contribution on which he can claim tax relief just at the very period of his life when he would normally expect to be able to provide the most above his current needs by way of provision for the future.

The case has also been put to us of people with fluctuating incomes. I think the Committee must give some attention to this, because one does not come across the fluctuating income in the same way in the case of the employees' pensions schemes. If there is, so to speak, a right figure up to which to provide tax relief for employed salary earners, then the appropriate maximum figure for the self-employed, particularly the self-employed professional man, will be somewhat higher, because with many self-employed people the actual incomes are liable to wide fluctuations from year to year. I can imagine a man in professional practice who might easily earn £2,000 one year. £8,000 the next and then drop to £3,000. It is no discredit to him; it is just a feature of life in some professions. What I am seeking to do is to show that the Government have endeavoured to study this aspect on a practical basis.

The Committee will be aware that in employees' pensions schemes there is normally no maximum limit. Indeed, it might well be argued, theoretically at any rate, that here, where we are seeking to put the self-employed on to a basis akin to that of employed persons, there ought to be no maximum limit. Nevertheless. if there were no maximum, it might well be argued that that was opening the door of tax relief too wide in the case of the self-employed. I do not know; all these things are matters of judgment.

What is extremely important is that, however we fashion Part III of the Bill, we should make our arrangements attractive enough both to persuade people to save for their retirement, and, if we can, to check the drift of professional people out of the professions into salaried employment because of the very much more attractive tax relief arrangements and greater security available there. Some of these people with high earnings might note enviously that there is no maximum limit in the case of the employees.

9.30 p.m.

My right hon. Friend has considered this problem very carefully. It must be a matter of judgment. Nobody can put his hand on his heart and say that £5,000, £6,000, £7,500. or any particular figure is absolutely right. As I have said, we have to commit ourselves to a workable scheme and see how we get on. In view of the strength of the representations which have been received by my right hon. Friend from very authoritative quarters on this matter, he is inclined to recommend to the Committee that the figure of £500 should be increased to £750.

I come now to the third of the matters dealt with in the comprehensive and lucid speech of my hon. Friend the Member for Langstone. That is the point which is raised by the Amendment in page 27, line 8. This is the problem of the older people in self-employment, the "late entrants", if I may use that term from the insurance field here. There are, as I said in an earlier stage in our debates, arguments of principle against a proposal for extra relief in these cases. It may be said to amount to retrospective relief for years that are past. On the other hand, against that argument, it can legitimately be contended in the case of superannuation funds set up by employers that contributions in respect of back service often rank for relief.

There is no exact analogy here, but it has been forcefully represented to my right hon. Friend that the circumstances here are exceptional, indeed, unique. If we do nothing for these people who are now older, so that they would have very little opportunity of acquiring substantial pension rights under the scheme in the Clause, we should never have a later opportunity to put that right, whereas, as I have explained, over almost all the rest of the field, if we do not have it right this time, we can have another shot in subsequent Finance Bills.

It therefore seems to us different from the normal case where a new tax relief is introduced, or an existing relief increased, and where the rule against retrospection applies. As I explained in the Second Reading debate, the Millard Tucker Committee's scheme is administratively impracticable. I could not, I am afraid, recommend the Committee to accept the Amendment in page 27, line 8, as it stands.

To look back at the circumstances of individual cases over periods going back for 17 years, for many of which years no records may be available, when a good deal of money might depend on what actually happened in one year, seems to us the wrong way to approach the problem. At the same time, my right hon. Friend is extremely anxious to put before the Committee a plan of some practicable kind which will help those who are now too old to acquire substantial pension rights under Part III.

What he authorises me to tell the Committee, therefore, is that he has in mind to bring forward, on Report, a much simpler scheme than the Millard Tucker proposal—a scheme under which there will be increases both in the percentage limit and the maximum limit for people born before 1916. These are people who are now over 40 years old. I very much hope that what I am now about to say will make good that which, in the minds of many of us, was the part of the scheme most deservedly open to criticism.

Under the Amendment which my right hon. Friend has in mind, people born after 1915 would receive the existing rights under the Bill, whatever they may be, but the percentage will increase with increasing age, up to a maximum of 15 per cent. for those born before 1908. [Interruption.] I notice that hon. Members opposite see opportunities of benefiting from this proposal. I hope that this fact will lubricate the passage of the Bill on Report. There would be intermediate rates between 10 per cent. and 15 per cent. for those born in the intervening years, and for each percentage rate there would be a corresponding appropriate figure for the maximum limit.

These increases would apply irrespective of what the taxpayer was doing in past years, subject to certain limiting conditions. We are not going to probe into the past and seek to determine whether a person was self-employed or working for an employer in 1940 or 1946, or anything like that. Some of the older men who are now in self-employment will already be receiving pensions for past service. Others will have an existing right to enjoy pensions from some future date. The special increases in the benefits designed for those who were always in self-employment ought not to apply in cases like that.

I have endeavoured to give the Committee a rough outline of what the Chancellor has in mind. I suggest that on these matters the Committee might be disposed to suspend further comment until my right hon. Friend's Amendment has been put down, because it is necessarily somewhat complex and difficult to explain. I hope that I have given the Committee and the public outside, many of whom will be interested, a rough outline of my right hon. Friend's proposal. and I sense that it will give a great deal of contentment to many people.

That is the answer which my right hon. Friend has authorised me to give upon each of the three matters which we have been discussing. We are not prepared to meet my hon. Friend or to make any concession about the main rate of 10 per cent., but in view of the authoritative representations we have received and the further examination we have made of what this proposal will mean in practice for self-employed people, especially those in professional occupations, we are prepared to recommend the Committee to raise the limit from £500 to £750. I hope that, on Report, we may be able to examine further the suggestion of my hon. Friend the Member for Langstone relating to later entrants.

Mr. Gordon Walker

The Amendments we are discussing fall into two quite different classes. The last one deals with retrospective action, and although what the Financial Secretary is saying now is not in the least compatible with what he was saying on Clause 15 about retrospective legislation, none the less, in general principle, we are not against carrying this back to cope with the period during which prices have been rising really pretty fast, though we need to look at the details on paper, and it sounded to me to be likely to result in a good many anomalies, which we will have to look at.

I should like to ask the right hon. Gentleman what it will cost. Broadly speaking, what is going to pay for this concession to be given under the last Amendment we are discussing? Cannot the right hon. Gentleman give an indication of any kind?

Mr. H. Brooke

I would not like to give any indication about late entrants at this stage. We shall certainly be able to give a figure when the Clause appears on the Notice Paper and is debated, but at this point I have been giving the Committee only an outline scheme.

Mr. Gordon Walker

Can the right hon. Gentleman say whether the cost would be more or less than the cost of giving extra tobacco tokens to the old-age pensioners'? This is a very important matter. The right hon. Gentleman has been talking in this part of the discussion about authoritative representations. Would he tell us if he has received any authoritative representations on behalf of old-age pensioners' tobacco tokens? He has a very special idea of what authoritative representations are, and it really is significant that things are given away shortly after the by-election at Tonbridge, as in this kind of concession, as against the complete hard-headedness shown towards the case for giving the concession to the old-age pensioners.

Of course, it is true that the Government are getting worried and upset about the Tonbridge by-election, and no doubt we are to get all sorts of concessions to people who can make what the right hon. Gentleman calls authoritative representations, but everybody else who makes representations for ordinary concessions to ordinary people will not be held to be authoritative.

Mr. Brooke

When I used the phrase "authoritative representations", I used it because the representative bodies of the great professions of this country, certainly including members of all political parties, are well qualified to be described as "authoritative". As to the tobacco tokens, I see no connection whatever between these two issues. Indeed, it will be within the memory of the Committee, if not of the right hon. Gentleman, when I say that in my speech on the tobacco tokens issue I made it perfectly clear that it was not on the grounds of money that I was resisting the Opposition Amendment, but because it would increase and aggravate the difficulties in an already unfair scheme.

Mr. Gordon Walker

The fact remains that for a very small sum a concession could have been made for which everybody on this side of the Committee has asked, and which numbers of people who are extremely authoritative outside the House have wanted. The connection between what we are now talking about and the tobacco tokens is, of course, that that concession could have been afforded for a very small part of the cost of this concession. The right hon. Gentleman says that he will make this concession, to which we ourselves do not object, but he does not know what it will cost. He had a lot of knowledge about all the details and gave us a lot of information, but it really is most extraordinary and suggests that it was a very hurried decision, made perhaps, as I have suggested, since the Tonbridge by-election, to make a change of this sort without the Committee being given the slightest information or even a hint of what it would cost. That must mean that the right hon. Gentleman does not know the cost, and that he has not had time to work it out, and, therefore, it must have been a very hurried decision indeed.

9.45 p.m.

Now I come to the main Amendment on which the right hon. Gentleman and the Chancellor are giving way, namely the one to leave out £500 and to insert £750. We feel very strongly about this. We are strongly against raising the level in this way. One reason why, until now, we have, broadly speaking, supported the proposals of the Chancellor in this part of the Bill was that there was this limit of one-tenth or £500; because, directly we begin to raise this limit, the disadvantages, from our point of view, in the Millard Tucker proposals begin to mount—the inclusion of controlling directors and various sorts of self-employed people and things of that sort.

The argument against that becomes more and more powerful the more money they are allowed to put in. The reason why we were not pushing, or taking very seriously, the objections which could be made on principle to the general proposals of the Millard Tucker Report was because the Chancellor put in this limit. The limit stops many of the inequities which would arise on the principle, because it cuts them off at the level of £5,000 a year. The Millard Tucker Committee, as the right hon. Gentleman will have noticed, itself felt so bad about including controlling directors that it said that controlling directors with more than £5,000 a year should have special provisions made for them to limit their interest and their share in the benefits of these annuities.

Now the right hon. Gentleman is proposing to include controlling directors with more than £5,000 a year. I ask because he is doing that, is he going to operate the other part of the Report which said that controlling directors with over £5,000 a year should be allowed to have a small percentage, and not the full percentage of their income, for the reasons we discussed during our debate on the earlier Amendment? It is a clear recommendation of the Millard Tucker Report that controlling directors with more than £5,000 a year should not have the full benefits open to everyone else. I must tell the right hon. Gentleman that if he gives way on this to these strong and authoritative representations, he must expect radical opposition from hon. Members on this side of the Committee to the general proposals which, up to now, we have accepted. We have criticised them on certain points, but generally we thought that they were reasonable and equitable, with the limits that were there before.

If the right hon. Gentleman desires sharp party fighting over this, he is asking for it, if he takes that course of action. We shall fight it strongly and bitterly on the Report stage, and outside the House, and provisions in the Budget and the Finance Bill which have not been the subject of party issue will become the subject of party issue. It may be that right hon. and hon. Gentlemen opposite want that. And we shall reserve the right to do the things we think ought to be done when we return to office.

I think it much better that these things should be done with party agreement; that these considerable changes should be done with the good will of both parties. Until this moment the right hon. Gentleman had the agreement of both sides of the Committee. But if he goes forward with the intentions that he has been suggesting, he will lose that party agreement on this very important change in the whole of our tax structure, and that, I suggest to him, will be a great pity. If he wishes to have a party fight and strong argument, and a refusal to agree from hon. Members on this side of the Committee, the right hon. Gentleman knows how to create that situation. If he desires party agreement, not on every little point, but on the general run of these matters, similar to the sort of agreement we have had so far—with no divisions on the great issues and on the question of Clauses standing part of the Bill and the rest of it—let him stick to this part of the Finance Bill in its present form.

I asked the right hon. Gentleman to ponder this matter seriously, and to weigh against the authority of the representations made to him the solid views of hon. Members on this side of the Committee that will greet any concession he makes to these anonymous, authoritative representations to which he has referred.

Mr.Sir P. Spens

I was rather sorry to hear the tone of the speech to which we have just listened, because to date I believe the whole Committee was working together to try to produce a scheme which would be fair to all self-employed people.

The right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker) started by complaining that my right hon. Friend had no idea what the cost would be. The whole of this scheme is a scheme to induce savings. As it stands at present, without the last Amendment, nobody who is more than 40 will go into the scheme at all. The people who want the scheme above all others—

Mr. Gordon Walker

I was not objecting to the Amendment in the name of the right hon. and learned Member for Kensington, South (Sir P. Spens). The bringing in of the late entrants is not a bad thing. It is the first Amendment to which we are bitterly opposed.

Sir P. Spens

I am very much obliged to the right hon. Member for saying that, but it is important to realise that as the scheme stood, although it was extremely attractive to young men—young men starting a self-employed business, and so forth—the vast number of people who are crying out for a scheme similar to those which can be obtained in industry were self-employed people who went back to business after the last war. They were the people who had to start late in their professions, or late in shop-keeping, or whatever it was, and they were not in a position to make provision for their old age in the same way.

Whereas no doubt there have been dozens of young men who have already been talking about coming into this scheme, there have been literally thousands of middle-aged men who have been complaining that as the scheme stood there was nothing in it for them. They were the people above all others who, in my view, wanted assistance. Therefore, I say on behalf of the whole of that class—I am far too old to come into it—that we are very grateful indeed for the promise which has been made by my right hon. Friend to deal with the third Amendment.

Now I turn to the Amendment which deals with the raising of the £500 to £750. The argument for that is that self-employed persons do not get to a position in which they can afford £750 as a premium until late in life and then for a very few years. Through the whole of the years in which they are making their way in life they can afford only a very small premium. I look round the Committee and see a number of hon. Members on both sides who are in my profession. I wonder how many of us could have thought of contributing £750 for a premium for our old age until we were—I was going to say, in my case, for the very few years when I was making something of an income at the Bar.

The £750 premium is one which really applies only in the case of the self-employed person in the years when he is at the top of his profession and when he has a chance to add to the provision he is making for his old age. Even now, if what I hear of the self-employed professions is true, I wonder how many will ever be able to afford that amount at all. I do not think that the right hon. Member for Smethwick should pretend that this is a sort of encouragement to the rich man to come in in order to get something. It is, indeed, a chance for self-employed people who have had a desperately hard time, in the face of high taxation since the war, if they happen to be successful, to make a little extra provision for their old age.

I therefore hope that there will not be any prejudice brought into this Clause at all. I believe that the change is right and will be welcomed very much by most self-employed people, and I hope that the Committee will thank my right hon. Friend for having introduced it. This is the last Clause on the Millard Tucker proposals which we have to consider, and, without being out of order, I should like to add my thanks to Sir James Tucker for the work which he has done and to my right hon. Friends the Chancellor of the Exchequer and the Financial Secretary for the way in which they have at any rate tried to do something for self-employed persons of all classes.

Mr. Roy Jenkins

The attitude of the right hon. and learned Member for Kensington, South (Sir P. Spens) to the concession to raise the limit from £500 to £750 seems very dichotomous. In the first place, he asks us to regard it as a most valuable concession, and in the second place he asks us to regard it as a most innocuous concession, since he could think of hardly anyone to whom it would be of any use. That is a point of view which it is difficult to accept.

I want to return to what seems to me to be one of the major points—the extraordinary carelessness, which I think is not too strong a word to use, in the attitude of the Treasury Bench in accepting these two concessions without giving the Committee any idea at all what is the cost involved. In my comparatively short experience of Finance Bills, I find it impossible to think of a precedent in which this has occurred. I can remember no occasion on which a Financial Secretary or a Chancellor of the Exchequer has announced that he would accept a concession without being able to tell the Committee approximately what the concession would cost.

Mr. H. Brooke

The Committee knows that I never want to be discourteous. I was asked a question about the cost of the proposed relief in respect of late entrants. That concerns an Amendment which is not before us. We shall discuss it on Report. Frankly, I thought it was perfectly reasonable to suggest that everything in connection with that Amendment, including the cost, should be discussed when we had the Amendment before us on Report. The Committee is not invited to reach a decision upon it today; we could not do so.

As for the other changes, to alter the figure of 10 per cent. to 15 per cent. would cost between £15 million and £25 million a year. That is one of the grounds on which we have resisted it, although I said there were also other practical objections to it. The change from £500 to £750, which I am recommending the Committee to accept, would cost a little over £1 million a year. It would cost virtually nothing in the current year, but it would cost a bit over £1 million in a full year.

The hon. Member for Stechford (Mr. Roy Jenkins) will realise the margin of safety which we must claim with all these estimates of the financial cost of the Millard Tucker proposal. We have no idea how many people will take advantage of it. My estimate is that in a full year the cost will be something over £1 million and certainly less than £1½ million.

Mr. Harold Wilson (Huyton)

If my hon. Friend the Member for Stechford (Mr. Roy Jenkins) will permit me to intervene for a moment, I should like to put a question to the Financial Secretary. We on this side of the Committee are very clear about the iniquity of what the Government have announced, but we are not clear where we stand as a Committee in relation to these Amendments. Do we understand from the right hon. Gentleman that we shall not be asked to take a decision on the Amendments tonight and that he will recommend his hon. Friend to withdraw the Amendment? Do we understand that no decision will be called for until we reach Report, when we shall have Government Amendments before us? Or is he suggesting that we shall be asked to accept one Amendment, at any rate, tonight and that on the other we shall have to wait for Report?

Mr. Brooke

I am advising the Committee to accept the first and third of these Amendments tonight, substituting £750 for £500; to reject the second, substituting 15 per cent. for one-tenth; and on the fifth Amendment to Clause 19, in page 27, line 8, I will request my hon. Friend the Member for Langstone (Mr. Stevens) to withdraw the Amendment, with a pledge that a Government Amendment dealing with that matter will be put down on Report.

10.0 p.m.

Mr. Roy Jenkins

We are now beginning to get a little more information about the Government's attitude to the Amendments, and the cost involved. We are grateful to the Financial Secretary for the estimate he has given. We fully appreciate that he should not be tied to some absolutely exact figure with regard to the cost of the £750 proposal, but I think that one must press a little further as to the cost of the last Amendment. What were the right hon. Gentleman's words in his last intervention? He is asking for the Amendment to be withdrawn, not on a vague offer to reconsider it, but on a pledge that the Government will introduce an Amendment to cover the point on Report.

After all, the point of view of the Government must be considered by the Committee as a whole and not merely by the mover of the Amendment. If the Committee is to accept that position, surely we are entitled to some rough estimate of the cost involved in the third Amendment. We do not want to tie the Financial Secretary down to any narrow figure at all, but what figure is he thinking of? Surely he can give some estimate of the sum involved. I think it would be most unsatisfactory if we had to leave this point without a little further information.

There is another point. In the course of the last half hour we have had in this Committee a rather sudden change of sentiment on the part of my right hon. and hon. Friends and myself. I know that the right hon. and learned Member for Kensington, South regrets it, and I am sure that others do also. We respect his point of view, and we hope that he will respect ours. It is particularly unfortunate that when one has in the Committee a perfectly reasonable but sudden change of attitude that, as has been so often the case on this Finance Bill, the Chancellor is not here to appreciate what is going on.

Surely the purpose of having Amendments brought forward in Committee—and perhaps not reaching a final decision on them now, but dealing with them subsequently on Report—is that the Chancellor should be fully aware of the reactions of all sides of the Committee. I doubt if there could ever have been a Chancellor who could have been so little aware of what was going on during the Committee stage of the Finance Bill as is this Chancellor. I am sure that the Financial Secretary will do his best to convey to his right hon. Friend some idea of what has been happening, but that is really not in any way the same thing as the Chancellor being here himself, particularly on a matter of this sort where there has been, for very good reasons, a rather sudden change of sentiment.

From several points of view, I think that we are being asked by the Government to proceed at present under most difficult and unsatisfactory conditions. I cannot but believe that if the Government are to continue in this way, giving no exact estimates of the cost of their concessions but asking us continually to proceed without the Chancellor being here listening to what is happening, the Government will find themselves impeding the course of business.

Dame Irene Ward (Tynemouth)

I am delighted to find by right hon. Friend the Financial Secretary in such a conciliatory frame of mind. In fact, he has been so helpful, so conciliatory that it fairly takes away my breath. I hope that it is the forerunner of things to come in other directions. However, as one of the authoritative representers—and I am delighted to find myself in that category—I want to thank my right hon. Friend for the manner in which he has received the representations which have been made.

I am particularly glad about the late entrants. I think that all sides of the Committee will agree that we are at present—and since the war have been—going through most difficult times economically, and the people who will really benefit by this new decision of my right hon. Friend are those very people who are, to a large extent, bearing the heat and burden of the day. Therefore, I am more than grateful for and appreciative of the fact that my right hon. Friend has taken special action with regard to the late entrants.

I am very glad to find myself able to say how pleased I am, and I join in paying tribute to Sir James Millard Tucker. I have taken a great interest in all the proposals which have been made and all the work which has been done over a period of years. When any Government of whatever political complexion appoints an authoritative, representative and knowledgeable Committee to go into the most complicated aspects of providing for professional and self-employed people it is incumbent on the Government in power to do what they can to meet the recommendations of a Committee of that calibre. On that score alone I am delighted that my right hon. Friend has found himself able to move in harmony with the general desire and wish of the Millard Tucker Committee.

Mr. Houghton

May I make a suggestion to the right hon. Gentleman? He has just indicated that he would be willing to accept the first and third of the Amendments. He rejects the second and gives a pledge that on the fourth his right hon. Friend will consider submitting a different Amendment which will be more satisfactory from his point of view. Would it not be better if all the Amendments were withdrawn to give the Committee time for further reflection?

The right hon. Gentleman has sprung a surprise on the Committee. I do not know whether his hon. Friends were in the secret, and I do not ask them, but he certainly has sprung a surprise on hon. Members on this side of the Committee. All these matters hang together. They substantially change the framework of the scheme. It is unfair to ask the Committee to accept, off the cuff, so to speak, two Amendments which will lift the maximum amount, to reject one which proposes to increase the percentage, and to reserve decision on one which deals with the later entrants.

Would it not be better if all the Amendments were withdrawn, so that fresh proposals from the Chancellor could be put down later? That would enable the House then to look at the new structure which is involved. These are not so much differences in principle but in scope, and scope matters in making a first step of this kind. I should not feel prepared to say definitely one way or the other at this moment whether the proposed increase from £500 to £750 is right or wrong.

There are arguments non both sides, not only from the point of view of those who may get the benefit of these concessions but of the effect on the public mind of these proposed extensions of the scheme in a Finance Bill which is giving statutory effect to a Budget which was intended to contain certain messages to the people.

Those messages were that we could not give tax concessions at a time when we were trying to curb the investment boom and urging people to save and to spend less. This was, to some extent, to be an austerity Budget. It was to be a warning that the country had overstepped itself in expansion, especially of consumer goods. That side of this matter must be borne in mind. We must not give concessions to a particular section of the community if that is going to give the wrong kind of message to the people or is going to destroy the message that the Bill and the Budget has already given. I am very concerned about that. I am always concerned about the effect on the trade union mind of what is contained in proposals of this kind.

I fully realise that under the proposals as they stand the maximum pension which is obtainable by a person aged 40 coming under the scheme is £1.900 a year. That may seem a rather big pension to a great many people, but it is less than half-pay to a man on £5.000 a year. A civil servant on £5,000, or a member of a nationalised industry on £5,000, or many in industrial pension schemes on £5,000, would receive a pension of more than £1.900 a year. We have to look at these things in relation to those who are now in pension schemes.

The intention of these proposals in the Finance Bill is to give those who are not in pension schemes an opportunity of providing for themselves on a scale comparable with those in the professions, in salaried employment on the same salary and in a relative position. We have to bear in mind that these pensions are not provided by the State. They have to be paid for by those who will enjoy them. We are concerned with the tax relief on the alienation of income which it is necessary for those who come under the scheme to embark upon in order to pay the premiums. We must keep this matter in proper proportion.

I therefore put two sides of the considerations which are in my mind at the moment. If I may say so, I am not given to too hasty judgment on these matters. I have just emerged from discussions with the Treasury on the application of the Priestley recommendations affecting higher civil servants. I have seen substantial increases given to the higher Civil Service, as a result of the Priestley Report, which will carry with them on a non-contributory basis very substantially increased pensions and gratuities, which we regard as proper and fair in the public service and which have been the subject of the independent judgment of an authoritative Royal Commission. I think that the Government did right to accept the recommendations of the Priestley Committee even though, from many points of view, they came at a very inconvenient moment.

That is one side of the matter. I have no doubt that many other vocational pension schemes on a non-contributory or, as is mostly the case, on a contributory basis for executive and managerial staffs will be made. I want to be fair in dealing with professional workers in private practice or occupations which carry no pension scheme. I think that the aim of the provisions in the Bill is to enable them to do something for themselves which nobody else is doing at the moment for them. There are, of course, different arguments to be used in connection with those self-employed persons who are in business and who have or may have substantial capital assets. There was a distinction drawn in the minority Report of the Millard Tucker Committee between those two sets of self-employed persons.

10.15 p.m.

However, I do not wish to pursue the general argument further. I think it is necessary to disclose my mind to the Committee so that it may understand my point of view. I think it would be better to enable both sides of the Committee to reflect on the new scope of the proposals which the right hon. Gentleman has outlined and to enable us to examine what the effect of the new proposals might be, especially on late entrants and on the provision which will be possible if the maximum amount were increased from £500 to £750 a year.

There is an interesting article on this subject, from which I have taken the figure I have quoted, in The Banker of this month, and that gives the possible pension provision that can be made under the limits at present prescribed in the Bill. I think these new proposals need to be examined in the light of those possibilities.

That is my feeling about the matter, and I hope that hon. Members opposite will try to meet the Committee in this unexpected situation. I hope that the Financial Secretary will encourage them to do so. but whether he does so or not I hope they will. I think it would be better to do so than to allow us to go on in a spirit of hostility to or criticism of what the Government propose to do. I offer that as a personal suggestion which may help the Committee to proceed with the consideration of the Bill without getting into a state of misunderstanding and difficulty.

Sir Ian Fraser (Morecambe and Lonsdale)

I do not see why there should be hostility or misunderstanding. All the proposals and concessions which the Government have made do not alter the character of the measure which was commended to us in the Budget speech, or outlined on Second Reading of the Bill.

It is not possible for a private Member to estimate the total cost of the scheme or the difference made by all the Amendments taken together. Indeed, the Government themselves told us this was a new experiment and that it was very difficult in the absence of some years of experience to judge what it would cost in remissions of taxation, but, when all is said and done, the Amendments which have been made for a limited number of older people, and the arrangement whereby persons who already have some small contractual insurance or superannuation scheme will not be wholly excluded but may now take up the full quota allowable to others—all these arrangements together do not alter the character of the proposals.

On Second Reading we approve principles. In Committee we amend them and alter them a little this way and a little that. While I think that these are most wise proposals, and most generous to the limited classes affected, I do not think that they alter the character or the general financial implications of the proposals. They must be well within the limits which any Chancellor reserves to himself in the consideration of concessions during the Committee on any Finance Bill.

I believe that the Committee would be most ill-advised to reject the proposals, so to speak, as the hon. Member for Sowerby (Mr. Houghton) has suggested, and to invite the Government to bring them forward again for new inspection and new consideration. If hon. Members opposite feel that they cannot admit that there are any persons in this country who deserve to earn a few thousand pounds a year or deserve pensions comparable with earnings of such amount, they have only to think of the many examples in the trade union movement and among those most worthy and able heads of the trade union movement who have taken high and important and well-deserved jobs in the national industries.

I cannot imagine anything more detrimental to the earning power of the country than that it should go forward from the position that if they were in power, they would do nothing for this most deserving class in the community.

Mr. H. Wilson

We never said it.

Sir I. Fraser

If that is not what the Opposition were saying. I am glad to have drawn it from the right hon. Gentleman. That is what I hoped he would say.

It appears, therefore, that there is general agreement in the Committee, as there was on Second Reading, that these proposals are in principle good and that the Amendments which it is proposed to make do not alter the principle in any way, but merely meet the thoughtful and wise suggestions which hon. Friends of mine on this side have put before the Chancellor.

In those circumstances, I would have thought we could rejoice that the proposals brought forward by my right hon. Friend the Chancellor of the Exchequer from the Millard Tucker Report have got as far as they have and have been so much improved in Committee. I earnestly hope that we shall, therefore, without a Division and without differences of opinion, accept these proposals and thank the Government for being very wise in making them.

Mr. Eric Fletcher (Islington, East)

It is obvious from the speech of the hon. Member for Morecambe and Lonsdale (Sir I. Fraser) that he has not understood the attitude expressed from these benches. [HON. MEMBERS: "He has not long been here."] He may not have heard all the speeches which have been made.

The hon. Member began by saying that he did not understand the hostility which had been expressed on this side. It is not so much a matter of hostility, but of complaint at the way it has been brought forward. Both the Chancellor of the Exchequer, in his Budget speech, and the Financial Secretary to the Treasury, in opening the Second Reading debate, went out of their way to stress the fact that the limit in the Clause was £500 and one-tenth of the earnings.

It might have been very different had the Chancellor, in his Budget speech, initially proposed that the maximum should be £750 and had he said that the proportion should be different from one-tenth or had he said he was prepared to consider some retrospective operation. None of those things, however, was said, and the Budget and the Finance Bill have to be considered as a whole. The complaint that is made on these benches, as my hon. Friend the Member for Sowerby (Mr. Houghton) said, is at the way in which this matter has been handled.

My experience is that when a major concession of this kind is made in Committee, it is made by the Chancellor of the Exchequer. I agree with my hon. Friend the Member for Stechford (Mr. Roy Jenkins) that it is unfortunate, and, I think, almost unprecedented, that we have not had the benefit of the presence of the Chancellor on this occasion. It is surprising that a major concession of this nature should be announced almost casually by the Financial Secretary.

I am not commenting on the merits of the proposals. I am disposed to think, with my hon. Friend the Member for Sowerby, that there is a good deal to be said for them. One must, however, consider the effect of major concessions of this kind upon the country. This concession has been made on a Clause on which no Amendments have been put down by the Opposition, but on which there have been Amendments from the other side. What made matters worse was the Financial Secretary's unfortunate statement that in making the announcement he was influenced by authoritative representations which had been made. I 'should have thought that here, in this Committee, was the place for authoritative representations to be made.

The Financial Secretary has not told us what other representations he has received and why he has listened to them. This is the place where the merits of the major proposal in the Bill should be discussed. The Chancellor has treated the Committee with considerable discourtesy in not having been here himself to announce his intentions. It places the Committee in an unfortunate position if we have no idea of the cost of the concession of the increase to £750, apart from the estimate which the Financial Secretary has given us—

Mr. H. Brooke

I want to make it perfectly clear that I gave the figure as soon as I was asked for it. At an earlier stage of the debate, I was asked for a different figure relating to an Amendment on the Notice Paper and I said that I could not give it. However, I did not withhold the other figure, of something over £1 million, the moment I was asked for it.

Mr. Fletcher

I am not complaining about that. It is true that the Financial Secretary gave the figure to us when we asked for it. The odd thing was that the right hon. Gentleman did not give it when he said that he could not make the concession. Presumably he went into this question when the outside representations were made to him. If I may say so, for the benefit of the hon. Member for Morecambe and Lonsdale and others, we will reserve our comments for the moment, but we want to make a strong protest about the way in which the Committee has been treated.

Mr. W. R. Rees-Davies (Isle of Thanet)

I want to raise one or two points which have arisen out of what the Financial Secretary said in the course of his observations about the late entrants. I want to pay my tribute likewise not only to the work of Sir James Millard Tucker, but to the imagination shown by my right hon. Friend the Chancellor of the Exchequer, and also by the Financial Secretary in his observations tonight.

I believe that for the late entrants the only satisfactory way in which this problem can be dealt with is by age groups. I have always felt that, and I know that this view was shared by certain hon. Gentlemen opposite who made a great contribution in representations of this matter. I believe it is right that there should be an age group of 40 and of 50 and of 60, but the specific point I want to put, and my reason for rising immediately to this matter with regard to the proposals which the Chancellor will lay on the Report stage, is as follows.

I do not believe that we can lay down a purely arbitrary age limit and say that, for example, when 30th June, 1956, the time of the Report stage or any other stage is past, a person shall then be 30, or 40, or 50, or 60. That would be unfair. I must declare an interest here. It would be unfair to myself, for I am 39 now and will be 40 in a few months' time. I think the same applies to the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), who is exactly the same age. Therefore, we would be excluded altogether by this scheme, and would only be able to have the 10 per cent. net relevant earnings. Whereas, if one happened to be 40 on 30th June one could have 15 per cent. of the net relevant earnings.

That cannot be right. What clearly is right, is simple, and is a very small variant of the broad proposals which the Chancellor will put forward on the Report stage, is the following. Up to the age of 40, one would be able to have one-tenth of one's net relevant earnings for the figure, between the age of 40 and 50 that could go up to 15 per cent. and then increase, if the Chancellor thought fit, to 20 per cent. at 60 years of age or over. In that way the entrant at the age of 60 into the scheme would have a higher rate than the entrant at 50 or 40, so there would be a differential on net relevant earnings according to age. If that were so, then I believe that we would have a position which would be fair to the late entrants and fair to the professions.

I do not really believe that there is any hostility amongst those hon. Gentlemen opposite who have given careful thought to this matter, if they have. I am very sorry in the debate on this Clause not to see present in this Chamber the right hon. and learned Gentleman the Member for St. Helens (Sir H. Shawcross). I want to pay my tribute to the very great work which he did when he led a deputation on this very matter some time ago. He had a very considerable knowledge of the question of the Millard Tucker Report—and not only he, but Sir Frank Soskice when he was a Member of this House was also deeply concerned on this matter. I go no further than saying that I do not believe that either of those gentlemen would for one moment oppose the second proposal in this scheme if they gave it their careful consideration. With regard to the amount, therefore, I say that it seems to me that one needs to have a different percentage of net relevant earnings according to the age upon which one enters the scheme.

10.30 p.m.

In conclusion, with regard to the other point, the raising of the limit from £500 to £750, I would only say this, and leave it to the judgment of hon. Gentlemen as to whether it is right or wrong on the pure facts. The fact of the matter is that from the figures which I saw of the earnings of the profession of the Bar, the first five years showed an income of from about £250 to £750, from five to 15 years, from £750 up to under £2,000, and from 15 years to 25, less than 10 per cent. of that profession of 2,000 members—that is to say, altogether a matter of a mere 200—were earning really into the Surtax limit, and of those less than 5 per cent. are earning the figure of £5,000 a year and above.

Those who enter that profession do so in the hope that one day, 20 to 25 years later, they might perhaps achieve a position when they have perhaps two or three years as a junior and, at most, up to four or five years as a Silk, having been a Queen's Counsel, in which they may achieve possible earnings of over £5,000 a year for those very few years. Is it really to be said that it is wrong that they should be deprived of the opportunity in those very few years of catching up with a man who can earn a far higher income at an earlier age, and who therefore could put in up to £500 a year for the first ten years, earlier than a barrister can do? I do not believe that, when one thinks of it, there can be any hostility to this.

Mr. Gordon Walker

Why not?

Mr. Rees-Davies

Unless the right hon. Gentleman does not understand it.

Mr. Gordon Walker

Of course I understand it.

Mr. Rees-Davies

I do not believe the right hon. Gentleman does, if he will bear with me for a moment.

Hon. Members


Mr. Gordon Walker

The hon. Gentleman should read the Report.

Mr. Rees-Davies

It is all very well for hon. Members to shout "Order" at me. The right hon. Gentleman certainly shouted observations at me without rising, and I naturally replied. If he had had the courtesy to rise I would have given way. I am merely saying it really must be understood that anybody going into I.C.I. or one of these big concerns, earning £5,000 a year from the age of 35 to 55, which one can easily get for a person who is a successful barrister—

Mr. William Ross (Kilmarnock)


Mr. Rees-Davies

Certainly. He can leave the Bar and get £5,00 a year at 35 years of age. They do, and are doing it every day. If they earn that income, and can earn it, they would be able to apply £500 to the scheme for 15 years. All I say is that I know of very few men at the Bar who will be able to put up £500, let alone £750, except for at the most three or four years. I am quite sure that the hon. Member for Islington, East (Mr. E. Fletcher), who is nodding his head, and the hon. and learned Member for Kettering (Mr. Mitchison) will support me in this matter.

Mr. J. T. Price

The hon. Gentleman is proceeding on this argument entirely on the assumption that this remarkable concession we have been told of tonight applies primarily to members—and downtrodden members at that—of the Bar. This applies to all self-employed persons and businessmen, except the small categories of excluded people dealt with in a previous Clause. My hon. Friends and I are concerned about not only the psychological ill-effect of the announcement on more deserving sections of the population but the fact that taxation is progressive. In the case of a man with £7,500 a year, the proposal to raise the limit to £750 a year, which is taken chiefly from income liable to Surtax, is a much more valuable concession than the lower limit in the case of smaller-earning members of the community. The hon. Gentleman is entirely evading that argument.

Mr. Rees-Davies

The hon. Gentleman intervened not to ask a question but to make a speech. Nevertheless, I will reply to that speech. [Interruption.] I wish the hon. Member for Cardiff, South-East (Mr. Callaghan) would keep quiet.

Mr. James Callaghan (Cardiff, South-East)


Mr. Rees-Davies

I shall not give way to the hon. Gentleman. He makes rude and irrelevant interruptions. I have not the slightest intention of giving way. I have already given way to a long intervention. I hope the hon. Member for Cardiff. South-East will keep quiet.

The hon. Member for Westhoughton (Mr. J. T. Price) made the valid point that I was taking one example. I was taking the example of one profession, but I could take others. What I was saying would apply equally to the surgeon or physician of great skill and to others.

The reason for the Millard Tucker recommendation was to meet the case of the professional man as against the industrialist. The professional man has a far shorter period than the industrialist in which to make money and provide for later years. For that reason, the Chancellor has rightly had to raise the amount to £750 to enable those few people to save in a matter of three or four years what they would not otherwise be able to save. The Chancellor is not trying to draw any distinction. We must give this opportunity. I support the Amendment and regard the proposals as imaginative and forceful.

Mrs. White

I am sorry that we have reached this stage of the Bill with a feeling of very definite dissatisfaction on this side of the Committee.

I cannot understand how the hon. Member for Morecambe and Lonsdale (Sir I. Fraser) can suggest that the most valuable section of the community is that earning between £5,000 and £7,500 per annum. Many of us imagine that there are other extremely valuable members of the community who never hope to reach such income figures. A major concession is being made. It is a very large proportion indeed. It is not just a minor matter to raise the maximum limit of relief on an income of £7,500 per annum—

Sir I. Fraser

I said "this most valuable section". I did not say "the most valuable section" in the sense that they are more valuable than any other.

Mr. Ross

The hon. Gentleman said, not "valuable" but "deserving".

Mrs. White

That is even more incongruous. The adverse psychological effect of this upon the people whom my hon. Friends and I largely represent would entirely outweigh the benefits to those earning more than £5,000 a year, which, on the admission of hon. Gentlemen opposite, is a very small percentage of the professions concerned.

Is it worth accepting this proposal for the sake of the effect it may have upon a few persons when it will have an extremely upsetting effect upon a large number of others? I submit that the proposal is not in proportion. These people who are capable of earning so much are not precluded from making other provision for themselves by taking out ordinary life insurance or endowment policies. If we agree to this concession, we shall be allowing these people to make this extra provision for themselves at the taxpayers' expense, or very largely so. That is the whole object of the exercise.

I am surprised that the hon. Member for Isle of Thanet (Mr. Rees-Davies) did not carry his argument to its logical conclusion. He talked about the necessary age categories for the late entrants. I thought he was going rather wide there, but at least I could follow the logic of his remarks. If we are going to have any concession, would it not be at least as logical to limit it to those of 50 years of age or more? The whole trend of the argument has been in favour of these poor professional folk who have these few miserable years in which they can make themselves large sums of money. It is for their benefit that we are asked to make a general extension.

There is nothing in the Amendment to prevent a person aged 21—if he is in a suitable business—from taking advantage of this concession. Any such person of insurable age can provide for himself at the rate of premium of £750. If the whole gravamen of the argument is that there are certain professions in which it is only late in life that a person reaches eminence, it would surely be logical to limit the concession to the precise class of person which it is primarily intended to benefit.

Therefore, before asking the Committee to accept the Amendment, it should be taken back and reconsidered. Most hon. Members on this side of the Committee do not feel a great deal of sympathy with it, but at least we should feel that it was logical if it provided that those who had reached the age of, say, 50, and were able to afford to pay a premium of £750 a year, might be allowed to do so. We should not be satisfied with it even then, but there would be something to be said for it.

I suggest that, rather than lose the good will of the Committee, which we have maintained so far on this part of the Bill, hon. Members opposite should consider the proposal which I have made. I hope that it will be acceptable to the right hon. and learned Member for Kensington, South (Sir P. Spens) and also to the other hon. Members opposite who support the Amendment.

Mr. H. Brooke

Perhaps it would be helpful if I rose now and dealt with the points which have been raised in this debate. First. I ask the Committee to accept my word that the Chancellor had reached his decision upon what he would recommend to the Committee before the Tonbridge by-election, so I hope we shall hear no more of that sort of allegation. Second, the suggestion has been made that my right hon. Friend would be singling out one class of person for special treatment and handing out largesse to them if he accepted the proposal in connection with the £750 premium. But all those people, if employed persons receiving the benefit of the ordinary contributory pensions schemes which so many firms run, would be fully entitled to tax relief.

10.45 p.m.

There must be large numbers of people who are getting tax relief in such schemes up to an amount of £750 per annum. So if there is this strong objection taken to the proposal, it must be on the ground that the self-employed should be treated worse than some other persons. That we are not disposed to accept. Moreover, it is not a largesse. The whole purpose of Part III of the Bill is to encourage saving and to seek to do justice between one category of persons and another. These are the people who, up to now, have been hardest hit by taxation, because they have not had the benefit which people with similar incomes in employment have enjoyed of providing for their old age, with the benefit of tax relief.

These people have been denied tax relief. They have had the least chance of accumulating capital with which to meet their pension commitments, and on these grounds it seems to me quite impossible to establish a case, as some hon. Members have sought to do, that the Government are seeking to give some kind of specially favourable tax gift to these persons. I wish to tell the Committee, quite frankly, that when we examined this problem we went carefully into the possibility of dealing with it by some system of averaging. As I indicated earlier, one of the features of the financial position of these people is that their incomes are liable to fluctuate.

As was said by my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies), not only do many of these professional men have to put up with low incomes while establishing their reputations and only touch high figures for a short period in the prime of life, but also, not only in the professions, but outside, the incomes of many of these self-employed persons fluctuate very markedly; and any limit is liable to cut off from them the advantage of their good years.

We examined this matter of people who sometimes have an income of over £5,000, and in other years an income of well below £5,000, to see whether any machinery could be used to apply a principle of averaging, and we found it quite impracticable to do anything of that kind. That was one of the reasons why, in order to seek to do justice to these people whose incomes do fluctuate, we decided that this was the right thing to do.

Mr. J. T. Price

It is so unlike the right hon. Gentleman even to appear to mislead the Committee that I must draw his attention to a misleading statement which he made, perhaps unconsciously. A moment ago he suggested that this is an attempt to put self-employed people in a position at least as favourable as that of people provided for under existing private schemes. If that is the proposition, there is a very serious flaw in it.

In existing schemes, which are approved by the Commissioners of Inland Revenue under Section 32 of the Finance Act, 1921, and as administered by the officials of the right hon. Gentleman's own Department, when these approvals are sought there is always the request that the pension provided under the private scheme should not exceed £2,000 per annum. Serious objection has been taken to that request, which is not covered by the Statute. By allowing this increase in the limit to £750, he is bringing into the concession a class of person who will be able to provide a pension capital value far in excess of £750, if contributions have been paid for a sufficient number of years. That, as I see it, is the position under the present administration, and I should like an explanation from the right hon. Gentleman.

Mr. Brooke

If I have, by any slip of the tongue, misled the Committee, I would apologise unreservedly. As the hon. Gentleman knows, there are many different kinds of pension schemes. and I think that if he examines them he will find that my words were fully justified.

I wanted to satisfy my hon. Friend the Member for Thanet and, possibly, other hon. Members on this side of the Committee who fear that they may miss by a six weeks chance of their birthday the benefit of a good, round 5 per cent. It is not suggested that we should move on one day from 10 per cent. to 15 per cent. The plan is rather that there should be intermediate percentage rates for the intermediate years. However, I must say that the birthday of my hon. Friend the Member for Thanet makes me think that he may be one of the losers.

Finally, we have heard the doctrine expounded—and frankly it is new to me—that during the Committee stage of the Finance Bill the Government must never accept an Amendment because it may be a surprise to one side or the other of the Committee. If they feel disposed to accept the Amendment, they must put off doing so until the Report stage. This morning I was going through the new Clauses, to which I trust we shall come next week, and I saw one in the name of an hon. Member opposite which I was thinking of advising my right hon. Friend the Chancellor to accept. But if, when that occurs, the arguments that nothing must be accepted on Committee stage are valid, I shall have to reconsider my recommendation to him.

Mr. H. Wilson

The right hon. Gentleman knows perfectly well that this particular concession must affect the attitude of the whole of the Committee to the whole of Part III of the Bill. Would the right hon. Gentleman just revert to the question of surprising the Committee, and give a straight answer to this question: at what stage did the hon. Members on his side of the Committee know about this concession?

Mr. Brooke

I will give a straight answer to that. The great majority of my hon. Friends knew nothing about it until I announced it.

Mr. J. T. Price

What about the minority?

Mr. Brooke

It is perfectly true that I told one or two people, as I am sure the right hon. Gentleman himself did on occasions when he was in a responsible position—that he was thinking of recommending the Committee to accept some Amendment or other—but in so far as the vast majority of hon. Members here representing the Conservative Party are concerned, they knew nothing whatever about it until I spoke.

Mr. Wilson

This really is a most alarming admission by the right hon. Gentleman. To make a change at the Committee stage of the Finance Bill is an important matter in relation to taxation, as must be obvious to the whole Committee. Surely, the right hon. Gentleman has just admitted to the Committee that there has been a leakage equivalent to a leakage of a Budget secret—that he has told hon. Members on his side of the Committee, even if they are only a minority, of a forthcoming concession in a matter which will affect not only Stock Exchange values. A concession has been "leaked" to some hon. Members. In these circumstances, Sir Norman, I should like to know whether you will accept a Motion, "That the Chairman do report progress and ask leave to sit again," in order that the Chancellor of the Exchequer can consider the implications of the right hon. Gentleman's admission and make a statement to the House tomorrow.

The Temporary Chairman (Sir Norman Hulbert)

I cannot accept such a Motion.

Mr. Ross

We have had quite a lengthy debate, and no fewer than three efforts have been made by the Financial Secretary to persuade us on the course he is pursuing. We had a belated entry to the Committee of the Chancellor himself. He has probably returned from some geographical search for the plateau he is seeking. What we have here is a major change in his Bill. I think it is a matter of importance to the Committee that he should have participated in this debate to let us know the reasons for this decision to accept the Amendment and to make certain changes.

We certainly did not have them in the original statement of the Financial Secretary. In fact, we did not get from the Financial Secretary the actual decision whether the Government were going to accept that Amendment. I have an advantage which many hon. Members opposite did not have, in that I heard the speech of the Financial Secretary. He said that the Government were inclined to the view that they might accept the Amendment. I think that was the position on the first Amendment. The second he could not accept and, on the third, he said that on Report the Government would put down an Amendment which would do something or other but it was far too complicated to talk about it now. In the circumstances, I think that the suggestion made by my hon. Friend the Member for Sowerby (Mr. Houghton) was utterly unnecessary. I feel that the Government, in view of the fact that they were to make very considerable changes in the whole of this section of the Bill, decided they would do it on Report.

The Bill we are discussing was printed on 25th April, and we had the benefit of the remarks of the Chancellor during the debate on the Budget. There was no indication then that he was going to move from the sum of one-tenth or £500. Since that time the Treasury people have been going over it Clause by Clause, and we have on the Notice Paper Amendments in the name of the Chancellor of the Exchequer. On Clause 31, there is an Amendment in the name of the Chancellor. The Government have had their second thoughts on what should be done, but the Financial Secretary told us that he was "authorised by the Chancellor to say". Frankly, I am not convinced by what we have hitherto been told by the Financial Secretary. When did the Government come to that conclusion? If it was before the by-election we have heard so much about, what was to prevent the Chancellor putting his name to the Amendment and at the same time giving us his carefully-thought-out Amendment with regard to other points raised by the right hon. and learned Member for Kensington, South (Sir P. Spens)? In not doing that, the Chancellor surely ought to have said that they were looking at the whole of this concession and extending it and that their proposals would come on the Report stage.

It is not as if this were a minor matter. The original figure was £500, or one-tenth. It is a very considerable jump from that to £750; it is a full 50 per cent. It is all very well for hon. Members opposite who greeted this with a considerable amount of applause. It may be all very well from the point of view of the people who are to benefit and be worthy of acclamation by them, but we also have to look at it from the point of view of the taxpayer. Eventually we got—and we had to drag it from the right hon. Gentleman—what it is going to cost. It is going to cost £1 million. That, of course, means that the Chancellor has to look for a saving of £101 million—

Mr. H. Brooke

I said it would cost nothing at all this year.

11.0 p.m.

Mr. Ross

Nothing at all this year. Then it will be an additional search for another £1 million in another year. The actual fact is that in a full year this will cost £1 million to the taxpayer.

Who is to get the benefit of that £1 million? I have to look at this from the point of view of my constituents. The right hon. and learned Gentleman the Member for Kensington, South said that this concession would apply to very few people. Here we are in a position that very few people are to get the advantages of a concession that will cost in a full year £1 million It will be very difficult for me to put that across as something which is fair and just to the carpet and pottery workers in Kilmarnock who are working short time—and in Moscow also, because my people in Moscow will be equally concerned about this. Let me say here that this Moscow is a small village to the north of my constituency. From the point of view of the taxpayer, the practical proposition is that a very small number of people are to get a tax concession of £1 million.

An hon. Member spoke about authoritative representation, and so did the hon. Lady the Member for Tyne-mouth (Dame Irene Ward). She was very glad to know that her authoritative representation had, on this occasion, been successful. She has often been authoritative in her representation but has not always been successful.

Dame Irene Ward

No, but I am getting on.

Mr. Ross

Sir Norman, that is a very unfortunate phrase. Certainly, in the part of Scotland from which I come, for a lady to admit that she is getting on is entirely unusual.

It is not so long since other authoritative representations went to the Financial Secretary, and to the Chancellor, and to the Minister of Education. These representations also were related to questions quite akin to that which we are now considering—matters of superannuation. They were not only authoritative representations from the professional bodies themselves but from hon. Members. It may be that in that case the hon. Lady once again took part in those representations, but there was absolutely no response from the Financial Secretary.

We even made representations in regard to late entry, but we got no reply. We made representations about late entry into the teaching profession, of buying in a certain amount of superannuation—in all respects we were not met by the Chancellor. I cannot see how this can properly be justified in the light of the other decisions we have taken on this Finance Bill. I sincerely hope that we have not heard the last word from the Government on this matter.

We must return to this subject, whether the hon. Member for Kidderminster (Mr. Nabarro) likes it or not. The Government are pledged to make an Amendment on Report, and though it may be that he does not know it, the fact is that, whatever may happen to other Amendments, Government Amendments must then be called. We will, therefore, be returning to this subject, and I sincerely hope that the Government will not tonight take part of a decision but will rather suggest to the Committee that we should wait to see the full picture as they propose to change it with their Amendment relating to the late entrants.

I am very sorry indeed that the sense of justice of the Committee should be such that it is prepared to accept with acclamation an Amendment which, at the taxpayers' expense, gives a beneficial concession of £1 million to very few people, when only the other day it refused to give to so many thousands of old-age pensioners an extra fourpenny coupon to cover their dire needs in regard to the change in the Tobacco Duty.

Mr. Austen Albu (Edmonton)

The Chancellor of the Exchequer who, as my hon. Friends on the Front Bench may not realise, has been in the Chamber during the last three or four speeches, must by now be aware of what has happened to the atmosphere of the Committee as a result of this sudden concession. I hope he has heard enough of the debate to realise that the attitude of this side of the Committee towards these two Clauses is now changed. When we have the further Amendment on Report to which the Financial Secretary has referred and the full effect of the changes can be measured, and when we have the full measure of the cost to the other taxpayers in the community, the Chancellor will see the strength of the Opposition.

A significant thing about this debate has been that the pressure for these changes and the support for the increase from £500 to £750 has come entirely from members of the Bar. It is clear now, especially from what the hon. Member for the Isle of Thanet (Mr. Rees-Davies) said,—

Mr. G. Stevens

May I inform the hon. Member and the Committee that I have never been to that kind of bar?

Mr. Albu

It is clear from what was said by the hon. Member for Thanet that the weighty representations, the authoritative representations, which the Chancellor received came almost entirely from members of the Bar. The Chancellor is here, and I happen to have the privilege of being able to see him. I realise that the Opposition Front Bench cannot do so. There is one peculiar thing about members of the Bar in regard to taxation. One of my hon. Friends asks me whether the position of the Chancellor at the end of the Front Bench means that he is no longer able to take his usual position on that bench because he is no longer Chancellor.

I was referring to the special position of members of the Bar, and especially of very successful ones. We understand that it is only to the very successful members to whom the concession applies. They have a peculiar tax position. I think it is well known that when they cease practising, or are appointed to the Bench, they do not pay tax on their last year's earnings.

Sir P. Spens

If any of their earnings are paid before they retire, they pay the full tax. It is only on such earnings as the solicitors pay late that they do not pay tax.

Mr. Albu

I have heard that explanation, which I accept; but I think hon. Members realised that, in effect, it comes to the same thing. It may be that I have been misled. They can arrange affairs in such a way that a large part of their earnings for the last year are free of tax. Does the Chancellor of the Exchequer wish to intervene? No, he does not. It would be extraordinary if he intervened on this Finance Bill. This is a serious argument which I am addressing to the Committee. I believe that this relief of taxation might well amount to considerable sums—to five, six, seven, or eight thousand pounds for those earning the sort of figures about which the hon. and learned Gentleman was talking. If that is so, they are equivalent to the reliefs being given by this concession for a large number of years.

It does not seem to me that this class of the community in these circumstances needs this concession. At any rate, the concession is one to which we ought to give very serious consideration. Although I realise that the hon. Member for Langstone (Mr. Stevens) brought one or two other professions in as well, including his own, nevertheless we can say that pressure for this concession has come from the Bar.

I want to ask the Financial Secretary a question about the other concession. I realise that on this retrospective concession his mind has not yet been fully made up, and it may be that the form of the Amendment to be put on the Order Paper for the Report stage has not yet been worked out. I think the right hon. Gentleman will agree that there may be people who, over a fairly long life, have passed in and out of self-employment, people who for part of the time have been employed and for part of the time have been self-employed. Until very recent years, at any rate in industrial occupations, these superannuation and pension schemes did not exist. They have come into being on a large scale only in the last few years. There would be a considerable injustice if somebody who was not in any sort of pensionable employment—or in it for a very short period—and who was also for a large part of the time in fact self-employed were not entitled to benefit from this concession.

I should like to know how that position will be dealt with. I should like to have an answer from the Chancellor, but I very much doubt whether he is fully aware what has been taking place in the discussion. He may not even know what his right hon. Friend the Financial Secretary has said on this matter. It was not very clear to me. I am sure the Chancellor knows little about it, and I am not sure that it is very clear to the Financial Secretary. This is an important and substantial point, and I should like to hear from the Financial Secretary how the Government propose to deal with it.

Mr. Mitchison

This seems to me to be rather a squalid affair. The object of the exercise is to levy on the taxpayers—because that is what it comes to—rather over £1 million for the benefit of people whose net relevant earnings are between £5,000 and £7,000. That appears to be the object of the excursion. The right hon. Gentleman the Financial Secretary defended this. Butter would not have melted in his mouth. Morals oozed out of every word he said. Never have I seen such a pious picture of Philip drunk rebuking Philip sober.

It could have been an excellent speech. All he said would have been well on the point if only quite a short time before he and the rest of the Government had not been explaining very carefully that the right figure was £500 or, in this case, an income of £5,000. Their enthusiasm for the small man, the small self-employed man, led them to make this concession. If an income of £5,000 was the right limit, how is it that it has suddenly become right—not only right but obviously patently right; the only just course, we understood—to substitute for it £7,500?

No ordinary person listening to the right hon. Gentleman or considering the merits of the matter would find it easy to appreciate how this had happened. but, once again, the cat came out of the bag: there had been authoritative representations. Presumably, they must have been made at some stage since the £500, or the £5,000, had been decided upon, or the right hon. Gentleman and his hon. Friends would hardly have committed themselves with so much eloquence and conviction to the former figures. Very authoritative representations are made, apparently, on behalf of those whose incomes in this case reach this figure. That is one possibility. Perhaps a very large number of them are in South Kensington. I do not know.

11.15 p.m.

Then it is said they are made on behalf of the Bar. I, too, am a member of the Bar, and I am and always have been proud to be. The hon. Member for the Isle of Thanet (Mr. Rees-Davies) attributed to me and quite a number of other people views about which he seemed to have some secret and interior knowledge, but if he was as wrong about them as he was about my own, they were, no doubt, equally not the views of the other people to whom he attributed them. If it is intended to make a limited concession for people who cannot earn an income that will enable them to pay premiums at all during a comparatively short time, this Amendment is not the way to do it.

This is a general Amendment. What it does is to let high income people into this scheme, and to let them in at the expense of the general taxpayer.

Were I asked what the very authoritative quarters were, I could make three suggestions to the right hon. Gentleman, since he has not thought fit to tell us. The first. I think, and the most obvious one, is that of the gentleman of means who contribute to the funds of the party opposite, because presumably those in the lower income groups make comparatively negligible contributions; and at whatever date this change of mind took place it may have been connected with the need to tighten up the party organisation and to spend a little more money in its work, the results of which the Tonbridge by-election have since then emphasised. That is one authoritative quarter.

I can suggest another. I can suggest the 1922 Committee. It does some very remarkable things. Its doings are dark and devious. The effects of its representations seem to be very wide. Is it possible that the 1922 Committee has very nearly come out into the open as governing the country and as convincing the right hon. Gentleman that what he thought right a few days ago is wholly indefensible and wrong now?

May I make yet a third suggestion? What about the insurance companies? They are pretty well off. Have they said, "We shall be better off still if you let in some of the higher income groups and let the taxpayer pay"? Because that is what does happen in all these Income Tax concessions: the taxpayers pay for them.

How on earth even the Tory Party can reconcile with elementary morality this concession for the benefit of that group when day after day it has been cutting housing, denying tobacco concessions to old-age pensioners, and doing every single thing it could to refuse money on the ground of national need to those who stand sorely in need of it at the moment, I do not know. I should have thought that to have admitted a concession of this sort would have been a little barefaced even at this hour of the night.

Mr. Stevens

At the direction of the Chair, I moved four different Amendments simultaneously and had three different answers. However, I think my course is clear.

The Temporary Chairman

The hon. Member did not move four Amendments together. He moved one. I said four could be discussed together.

Mr. Stevens

I beg your pardon, Sir Norman.

Mr. Gordon Walker

We are very glad that the Chancellor, although he is sitting very coyly at the wrong end of the Bench, has come back. He was good enough to tell us he would have to be away until 10 o'clock or so. He missed the earlier part of this debate, but I think he has heard enough since he has been back here to realise that there is a new mood in the Committee. This is a real change which has been made in the Bill. The hon. Gentleman the Member for Morecambe and Lonsdale (Sir I. Fraser) tried to dismiss it as a minor thing, but it really does, from our point of view, gravely alter the whole balance of these proposals. The limit of £5,000 a year, which was previously the limit, played a considerable part in our attitude to Part III of the Bill. We on this side of the Committee naturally considered the Millard Tucker proposals very carefully and were gravely influenced by the minority report of the Royal Commission on Taxation, which, of course, made very serious criticism of the Millard Tucker Report.

It also made recommendations in the matter of self-employed people, excluding all except those taxed under Case II of Schedule "D" classification, and also excluding controlling directors, and made other limitations. When the Finance Bill was produced, we came to the conclusion that, because of the £5,000 limit, the objections of the minority report of the Royal Commission were not really so powerful, although we considered them to be extremely valid. Nevertheless, if the benefits were cut off at £5,000 a year, the disadvantages were not very great, and solely because of the limit of £5,000, we came to the conclusion that it was right, broadly, to support the proposals in Part III of the Bill.

Now that limit no longer applies. The new limit of £7,500 makes a very great difference to the whole merits of Part III. This is well above the Millard Tucker proposals, which, in paragraph 386, recommend that there should be two types for benefit. The Report refers to those as A and B types, and what the Government in effect have adopted is type B, and now we are going above and beyond the Millard Tucker proposals.

There is another very important point to which I would draw the Chancellor's attention, because he was not. I believe, with us when we were talking about what are known as controlling directors. In paragraph 392 of the Report it is stated that where a controlling director receives more than £5,000 a year, he should not be able to get even the original 10 per cent. Up to £5,000, there should be the same benefits, but above that there should not be the same benefits as for other people, because these persons were in a different position from other people. Now, however, they will get the full benefits up to £7,500 a year. The Chancellor is going right beyond the limits even of the Millard Tucker Report and the suggestion originally made by the Royal Commission, which makes my case all the stronger, because the Royal Commission was critical of the Millard Tucker Report as it stood.

The Financial Secretary has spoken of "authoritative representations"; but who, really, was interested in this matter? Here we have £1 million to £1½ million being taken away from the general body of the taxpayers and given to a very small number of people; for, by common consent. everybody agrees that this does concern only a very small number of people. They are the people who are earning between £5,000 and £7,500 a year. Nobody who is earning less than £5,000 a year can gain a penny from this new concession.

This relatively small number of people who are earning between £5,000 a year—incidentally, it is net relevant earnings. which means that their actual incomes are bigger still—and £7,500 a year will share between them £1 to £1½million a year at the expense of the general body of taxpayers. I suppose the Financial Secretary knows, roughly speaking, how many people will be involved, because he has worked out a sum that comes to £1—£1½ million a year, and presumably, in working out that sum, he had in mind a figure of the number of people who will benefit. Would it be possible for the right hon. Gentleman to give me that figure, or does he not have it in his possession? If that is the case, we will press for it on Report. The right hon. Gentleman must know the figure, because he cannot work out the £1—£1½ million without the number of people involved

The only way that one can reach a sum of £1—£1½ million is by making an assumption about a certain number of people at certain levels of income. I had hoped the figure would be in the right hon. Gentleman's brief. If he cannot oblige us tonight with this figure from his official brief. I give him notice that we will ask him for this figure on Report.

This small number of people, starting with those on £5,000 a year—nobody below that level gets a penny out of ir—is being given £1—£l½ million at the time when the Chancellor, in the same set of actions, is, for instance, abolishing the subsidy on bread. One thing must be set against another. This tiny number of fairly-well-off people will get this concession against the other kind of thing that the Chancellor is doing—the milk subsidy, the bread subsidy and the tobacco tokens and all the other things on which there have been authoritative representations, which have been pushed aside. Here, we get these authoritative representations on behalf of a very small number of our fellow citizens which is at once bowed down to. Indeed, the Financial Secretary was so keen on arguing for the Amendment that he made a powerful case against the Bill in its original form. I could not think why he had committed so great a crime as to produce it and defend it in its original form on Second Reading. It was he who did all these things in the first place and who excluded these people.

I warn the Chancellor that if he pushes this proposal, our whole attitude on Part III, which we were supporting, will be changed. After considerable doubts and arguments among ourselves, we thought it was right and proper, if pos- sible, to get party agreement on so big a change, and one which certainly was remedying many injustices which had been created. We were giving the Chancellor broad and fairly close detailed support and we were certainly not dividing on principles.

Now, our attitude is different. The Chancellor must make up his mind whether he wants to carry both sides of the Committee on this important part of the Bill or whether he wants to carry it against strong, angry and bitter opposition, which we will take into the country and develop in every way we can and on which we must consider our whole future attitude. The Chancellor will, naturally, bear these things in mind and weigh them one with another. On the one hand, he has his authoritative representations and the events which have happened. On the other hand, he must consider that we will have a radically different attitude to this proposal. We shall have to consider our future attitude, because this is a new thing suddenly thrust upon us. We had no knowledge that this great change was going to come. We had thought that, broadly speaking, the Millard Tucker proposals as modified in the Finance Bill would be carried through.

11.30 p.m.

I hope that the Chancellor will think again about this, because we do not want to fight on this. We would far sooner agree. This is a matter on which we do not want to fight as a party if we can avoid it. There are plenty of other things to divide us. We would sooner agree on this, but, of course, if the Chancellor does go at it, stick at it, push it through, well then, the unity of the Committee will disappear and we shall fight this on Report and at every stage that we can, and will take our fight outside in all the ways that are open to a party. We feel very seriously indeed about this change, which is a change to benefit a minute number of rich people at a time when many more deserving people have, perhaps rightly in the economic circumstances, been turned down by the Chancellor. This really is something we cannot accept. We protest against it and will fight against it.

Mr. Roy Jenkins

I hope the Chancellor will be able to clear up one point which has been worrying hon. Members on this side of the Committee since the first intervention of the right hon. Gentleman the Financial Secretary. The Financial Secretary was quite unable to give us any idea of the cost of the Amendment which the Government undertook to put down in a slightly new form on the Report stage, which was to provide for late entry. He told us, in doing that, that he was authorised by the Chancellor to announce that the concession would be made on the Report stage. Although unusual, it was clearly possible that the Financial Secretary in such circumstances should not himself have been informed of the cost which would be involved in the proposal; but it is clearly out of the question that the Chancellor himself should have authorised the Financial Secretary to make such a statement committing the Government without himself knowing what the cost was and to what extent this would interfere with his general Budget plans.

I therefore hope that the Chancellor, having come into the Committee, will enable us to make progress by telling the Committee of some figure—we do not want to press him in any great detail—of approximately the cost involved in the Amendment, the principle of which the Government are accepting with a view to putting down an Amendment at the Report stage. I hope the Chancellor, whom we have heard from, will be able to answer this question, which, I am sure my hon. and right hon. Friends will agree, has been worrying us all through the consideration, and fairly long consideration, of this important Amendment.

Mr. H. Brooke

The hon. Member for Stechford (Mr. Roy Jenkins) has just asked a question. I have already given the answer to it. I have said that when we have a proposition before Parliament full information will be available. He knows as well as I do that at the moment there is not a proposition, nor can we come to a decision on an Amendment which is not before the Committee.

The hon. Member for Edmonton (Mr. Albu) asked me whether I could clarify the situation as regards people who might not be able to receive the benefit from the wider limits of the late entrants. I do not think I can say any more than I said at an earlier stage. All I wanted to do was to safeguard myself against misleading anybody into thinking that he might be able to gain additional advantage when, in fact, he already was enjoying a pension, or had pension rights. That Amendment will be on the Order Paper in good time, and the hon. Gentleman will be able to satisfy himself before we debate it.

Finally, I heard it said by several right hon. and hon. Gentlemen opposite that the Government were, as it were, giving away a million pounds or more of the taxpayers' money. None of this money will go at all unless people do what the Chancellor is aiming in his Budget to induce them to do which is to save money and take out policies. None of this tax exemption operates unless people take advantage of the new facilities granted to them.

That is the point which I am trying to bring home to right hon. and hon. Gentlemen opposite, and they will be deluding the country if they attempt to suggest that the purse strings of the Exchequer are being opened for the benefit of people who are doing nothing for themselves and deserve nothing. As I have explained, the object is to induce people to save and to endeavour to be as fair to those people who are characterised as self-employed as the tax law already is to those with similar incomes who are in employment.

Mr. H. Wilson

I am sorry to interrupt the right hon. Gentleman and delay the Committee further, but we recognise that he has been batting a long time, is getting tired and is no longer at his best in presenting the case. That is why we hoped that the Chancellor, who has arrived among us comparatively fresh, might be prepared to take up the burden.

Surely the right hon. Gentleman is, unwittingly I am sure, misleading the Committee in what he has just said, that there will be no cost to the Exchequer unless there is an increase in real saving. Rich men who are already saving can take advantage of the Clause. Consequently, there will be no net increase in saving but a cost to the Exchequer.

Secondly, the main consequence of acceptance of the Amendment might be a situation in which rich men are living out of capital and getting tax concessions in respect of it. I know they can get it only if it is one-tenth of their income, but rich men who are already living right up to their income and out of capital get tax exemption, and this would cost the Exchequer a lot and would result in no new saving and no benefit to the nation at all. It would, in fact, be a dis-saving out of capital which might at the same time involve a loss to the Exchequer. I am sorry that the right hon. Gentleman has not seen that point. I hope that by the Report stage he will have given his mind to it and realised what a serious implication there is in what he is doing.

Mr. Jay

Is the Chancellor not going to answer the question addressed to him by my hon. Friend the Member for Stechford (Mr. Roy Jenkins)? Is it not merely adding gross discourtesy to the casual, contemptuous attitude which he has shown towards the Committee all day? May we invite the Chancellor now to answer that definite and specific question?

Amendment agreed to.

Further Amendment made: In page 24, line 25, leave out "five hundred" and insert "seven hundred and fifty."—[Dame Irene Ward.]

Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.

Mr. H. Wilson

I beg to move, That the Chairman do report Progress and ask leave to sit again.

I want to make it quite clear that there are two reasons why I am making this proposal. First, it is quite usual at this time of night to ask the Government their intentions with regard to the future progress, if any, of a sitting. We have been going on for a very long time and it is normal at this time of night to ask the the Government if they can say how far they intend to get. Secondly, hon Members on both sides of the Committee will feel that it is really time that we heard the voice of the Chancellor of the Exchequer. Many of my hon. Friends cannot even see his face. We hope that he will not go on being shy but will move to a point where we can all see him.

We have heard very little from the Chancellor all day. We know that he is extremely busy and has many responsibilities, and he had the courtesy to mention that he would be absent for a few hours this evening, but he has been back here for an hour and a half now. While he was out some very serious decisions were announced by the Financial Secretary, and we do not even know whether the Chancellor is in agreement with his right hon. Friend in those announcements. He is sitting at some distance from the Financial Secretary—rather pointedly, it seems—and it would appear to some of us that the Financial Secretary may have taken advantage of the Chancellor's absence to make these concessions, perhaps unknown to the Chancellor.

I should be out of order if I went into the question in detail, but we are already aware that at a similar time last Thursday night it became clear that the Chancellor had to make a big concession upon another Clause, due to the fact that he had not realised the effect of the Bill when originally introduced. Only when the consequences were drawn to his attention did he make the concession.

Tonight, we have had a concession from the Financial Secretary which makes a considerable difference to our attitude to the Bill. We have indicated informally to the Patronage Secretary our willing agreement to go on sitting if it is felt desirable in order that further progress can be made, and I hope that when the Chancellor replies he will be willing to admit, as he must admit, that we have been extremely helpful, as an Opposition, in securing the passage of the Bill. Already, in the eight hours we have been discussing the Bill today, we have disposed of seven or eight Clauses.

I understand that the Government have it in mind to cover several more tonight, some of which are relatively non-controversial—unless major changes are to be announced from that Box between now and the time of the Adjournment of the House. Nevertheless, if one studies the progress of past Finance Bills, not merely the one in the autumn, of which hon. Members opposite will have vidid memories, but most previous ones, one will find that most of them have been subject to far more ruthless and thorough probing by Amendments than we have subjected this Bill to.

If we are to go on further tonight, to the point which I understand right hon. Gentlemen opposite want, we shall have made more progress on the Finance Bill in one day than in the whole history of financial legislation in this country since William Ewart Gladstone first introduced the package Finance Bill in order to get the paper duties through in, I believe, 1862. I am willing to be corrected by the Patronage Secretary on that point, if he is able to mention another instance, but I do not think that the Chancellor can complain about the co-operation we have shown in getting the Bill to the stage it has already reached

11.45 p.m.

The Committee will have noticed that we have put down only about 40 Amendments to the 36 Clauses—of course, there is plenty of time to put down more—whereas hon. Members opposite have put down far more. Again, I doubt whether there is any precedent for that, until one gets back to the days when William Ewart Gladstone was Chancellor of the Exchequer. A great deal of the time of the Committee in the last three or four days has been taken up by hon. Gentlemen opposite and by the debates which have reasonably followed on their moving of Amendments. I will not draw the attention of the Committee to the fact—it is aware of the fact already—that hon. Gentlemen opposite have been more successful with their Amendments than we have been. As my right hon. Friend pointed out, it is very serious that Amendments of the kind. just accepted by the Government have been accepted, whereas Amendments, costing little, if any, more, moved from this side of the Committee have been bitterly opposed by right hon. Gentlemen opposite.

I am perfectly willing to withdraw my Motion if we can have from the Chancellor a reasonable statement of the Government's intentions and what they desire to achieve in the remainder of this sitting. I must warn the Chancellor that the acceptance by the Financial Secretary of these Amendments which we have just been debating must make some difference to our attitude to Part III of the Bill—not to mention, as I am reminded, that there has been a rather serious leakage of the Government's intentions with regard to this concession. We have been told by the Financial Secretary that this decision was taken at least a week ago, at any rate, before the events which took place at Tonbridge last week.

We suspected that this was the reaction of the Government to the leaders which have appeared in almost every Conservative newspaper saying that the Government must make some concession to their own supporters. But we are told by the Parliamentary Secretary, and we accept it from his lips, that this decision was taken several days before. In that case we cannot understand why the Chancellor—if the right hon. Gentleman was told about the decision—did not put his name to the Amendments, or, at any rate, we cannot understand why he did not put the Amendments on the Notice Paper, so that the Committee would know where it stood in this matter.

My right hon. Friend has made clear that it was not easy for us to accept the principle of the Millard Tucker Report. I will be frank with the Committee and say that we expected to see this in the Budget. This has a lot to do with the Motion I am moving, because it may be, finding that our attitude to Part III of the Bill has been affected by recent events, that the Chancellor may decide to make a different reply to the questions I have been putting to him. My right hon. and hon. Friends were actually meeting to discuss the Millard Tucker Report several days before we knew what would be in the Budget, and we thought that the principle of the minority report might be accepted if it was a fair Budget. We did not get a fair Budget, but we got the Report, and after some discussion though it was not easy after the changes in the treatment of the old-age pensioners, we felt we could support the principle of Part III of the Bill.

Then tonight, without warning, and clearly after a decision was taken several days ago and communicated to some Conservative back benchers, I do not know how long ago—some hours ago at any rate—the whole position has been changed and the emphasis and balance of the Finance Bill has been completely altered by the decision of the right hon. Gentleman. In those circumstances, I hope that the Chancellor will tell us what are the intentions of the Government, not only with regard to the rest of tonight's sitting, but what they intend to do about Part III of the Bill in the light of the statement from the Financial Secretary; and particularly what they intend to do in relation to the Report stage.

Mr. H. Macmillan

The right hon. Gentleman has been such an agreeable colleague in the debate on this Bill up to now that I shall certainly say nothing, I hope, to create any ill feeling in the Committee. There are one or two observations I might have made in reply to some which he has thought fit to make, which would give me some pleasure but which I do not think would accelerate our proceedings. I was asked whether I would emulate the traditional Mr. Gladstone, but as far as I know he never made a speech of less than about five hours. I thought perhaps I would best accelerate the proceedings on this Bill by not talking too much and, certainly, not talking too long.

I am grateful to the right hon. Gentleman and to the Opposition for the cooperation they have given, in accordance with our long-established traditions, that we should try to work together to make our life agreeable and to carry out our business in a way that puts the least possible burden on hon. Members. We have had now three days on the Committee stage of the Finance Bill. In each of those days we have got away at a reasonable time, and I think it was more or less understood that on this fourth day we should make sufficient progress perhaps to finish the main body of the Bill on the fifth day. Therefore, I hope we will be able to proceed now.

We have had a little trouble about the Government accepting an Amendment. I shall take note of that. I have always been reproved for the stony, hard-hearted way in which we refused to accept any Amendments. However, I shall take note that for the Government to accept an Amendment is a very bad thing to do.

There are some notable absentees from the Opposition Benches—many hon. Members who could have contributed to our debate from the Opposition side. I should have liked to see the right hon. and learned Gentleman the Member for St. Helens (Sir H. Shawcross), who might have contributed something.

However, I would suggest that we just carry on and make what progress we can, and it might well be possible—I would not have referred to it except that the right hon. Gentleman has very graciously referred to it—under the more or less informal understanding to reach a situation in which by the fifth day we should be able to enter on the Clause which gives so much interest to the world. So I hope we will go on a bit now and see whether we can make progress. We will, of course, try to resist the temptation to accept any Amendments before we end tonight.

Mr. H. Wilson

The Chancellor will realise that it is not anything in this Bill but it is the Bank Rate which gives so much interest to the world, at the cost of about £150 million a year to our balance of payments. The right hon. Gentleman has suggested that we continue further this evening. Before we do so, I would like to put this to him, because I do not want him to misunderstand anything that has been said, and I am sure he will not do so when he puts his mind to the problem.

We have criticised the right hon. Gentleman for being hard-hearted in his refusal to accept a whole number of important Amendments, ranging from the tobacco concession to old-age pensioners to the problems arising from the plight of the cotton industry. But while we have complained tonight that the right hon. Gentleman has accepted an Amendment from his own side of the Committee, he must not take that as meaning that we are opposed to the acceptance of all Amendments. He must be more discriminating. We know how difficult it is for him to be selective in anything, whether building licensing, import controls or anything else. But we shall make more progress in the Committee if he will accept our Amendments and be more stony-hearted about some of the wrecking Amendments proposed from his own side. We shall make more progress, and we shall serve the national interest more fully.

Mr. H. Macmillan

I can accept that. I do see the bitterness of the idea of a Government accepting an Amendment from its own side, because that must be very hostile to the whole of the traditions of the Socialist Party.

Question put and negatived.

Clause, as amended, ordered to stand part of the Bill.