§ (1) The profits tax chargeable on the profits arising in any chargeable accounting period beginning after the thirty-first day of March, nineteen hundred and fifty-seven, and ending after the passing of this Act from the business of a building society shall be computed after allowing the deduction of any dividends or interest payable by that society in respect of shares in or deposits with or loans to that society and after allowing the deduction of any income tax payable by that society in respect of those dividends or that interest by virtue of arrangements entered into under section four hundred and forty-five of the Income Tax Act, 1952.
§ (2) In the last foregoing subsection the expression "building society" means a society regulated by any of the Acts regulating building societies, or a society registered under the Industrial and Provident Societies Acts, 1893 to 1954, which carries on a business of such a nature that it could have been established under any of the Acts regulating building societies, and no other business.
§ (3) This section shall be construed as one with the enactments relating to the profits tax.
§ (4) Nothing in this section shall affect section forty-two of the Finance Act, 1947 (which limits the amount of the profits tax payable by a building society), or any enactment relating to income tax.—[Mr. H. Wilson.]
§ Broucht up, and read the First time.
1042Mr. H. WilsonI beg to move, That the Clause be read a Second time.
The House will remember the very interesting debate we had in Committee on a new Clause sponsored by the hon. Member for Huddersfield, West (Mr. Wade). On that occasion, it became clear that not only the whole of the Liberal Party but the Labour Party and a substantial number of Conversatives opposite, were in favour of the principles enunciated by the hon. Member in support of the complete exemption from Profits Tax of building societies.
On that occasion, there was a very strong expression of opinion by hon. Members opposite. It was obvious that they were quite dissatisfied with the answer then given by the Financial Secretary, so much so that the debate continued for some time, as the Financial Secretary will remember—I do not think it was his happiest moment during these Finance Bill debates—and during that time one hon. Member after another on the benches opposite made it quite clear that the considered view of the Committee as a whole was in favour of the acceptance of the new Clause of the hon. Member for Huddersfield, West.
At that point, the Chancellor had to be sent for. With great speed, he seized himself of the feeling in the Committee and said that this matter would be further considered before the Report stage, which is where we find ourselves tonight. We had hoped that the Chancellor would have put down a new Clause as a result of that consideration, but fearing that it was just possible that he would not do so, both the hon. Member for Huddersfield, West and my hon. and right hon. Friends and myself put down separate new Clauses dealing with the question of the taxation of building societies.
Neither the new Clause of the hon. Member for Huddersfield, West—"Relief from profits tax for building societies"—nor our own Clause goes anything like as far as the hon. Member for Huddersfield, West proposed in Committee. No complete exemption is here proposed. We took account of the difficulties mentioned by the Chancellor in Committee, and particularly his references to the Royal Commission.
The reason given by the Financial Secretary for not accepting the new Clause during the Committee stage was 1043 that the Treasury was currently considering all the recommendations in the Royal Commission's Final Report about the Profits Tax, which is a long and complicated subject, and that until that was done it was impossible to treat one small part of it, namely, that part relating to the Profits Tax on building societies.
As a number of us pointed out in Committee, however, the relevant paragraphs —paragraphs 576 and 577—of the Royal Commission Report made it clear that the Commission did not think that this all hung together with the consideration of the rest of the Profits Tax. The Royal Commission's main recommendations in the Majority Report on Profits Tax were in terms of merging the distributed and the undistributed Profits Tax rate into a sort of corporation Profits Tax or a single merged Profits Tax rate.
The Royal Commission made it clear in paragraph 577—it is right for me to quote it again—that it recommended
that only the retained profit should be taxed: at the flat rate if our proposals are accepted, or at the undistributed rate if profits tax continues in its present form.Therefore, in the minds of the Royal Commission, it was quite unnecessary to take any particular line about the Profits Tax. The Commission still had a clear and definite recommendation in respect of building societies. That disposes of the argument, put forward on that occasion by the Financial Secretary, that this matter could not be dealt with out of turn.Other arguments were put forward. I remember suggesting to the Committee that the Government had certainly taken out of their turn all the recommendations relating to Profits Tax on overseas trade corporations. Indeed, they have gone beyond the Royal Commission in relation to Profits Tax on such corporations. The Government have prejudiced their whole consideration of Profits Tax in that respect in their haste to introduce this, to our mind, risky and suspect change in our tax law on overseas trade.
Therefore, when it suits the Government to do so, they do not mind taking something out of its turn, even to the extent of going against the Royal Commission. When it does not suit them to do so, however, they say that they cannot possibly consider the recommenda- 1044 tions of the Royal Commission because they have to consider the Profits Tax recommendations as a whole.
On that occasion in Committee, we were prepared to accept that the Chancellor was in some difficulty about the matter and could not accept the whole hog proposals of the hon. Member for Huddersfield, West. We were quite prepared that night to vote for the new Clause moved by the hon. Member, and I am sure he was prepared to vote for it too, and the whole of his party with him. Nevertheless, we accepted the assurance of the Chancellor that he would look at this matter again. He made it clear that he was not giving any pledge that legislation would be introduced on Report and that he was facing difficulties. We still had hopes that, pressed as he was by the arguments used on that occasion, he would be able to produce something new. He has not done so.
I can speak only for my right hon. and hon. Friends and myself. I cannot speak for the Liberal Party, but their thinking is probably similar to ours. In those circumstances, we were faced with two choices. One would have been to re-table the new Clause that the hon. Member had put down. We decided not to do so. What we ask for in our new Clause is much less thorough-going than was asked for by the hon. Member for Huddersfield, West. We are, in fact, embodying in the Clause the exact proposals of the Royal Commission on Profits Tax and Income Tax. The Royal Commission advised against exempting the whole lot from Profits Tax and said:
we recommend that only the retained profit should be taxed.My hon. and learned Friend the Member for Kettering (Mr. Mitchison), who has had a great deal to do with the Clause, has gone to endless trouble to ensure not only that the Royal Commission's recommendations are fulfilled in our new Clause, but that all the complicated Income Tax arrangements which operate in the case of building societies were taken into account in the drafting of the Clause. I need not speak in detail on its effects. The Chancellor will, I am sure, agree that although he might have drafted it better himself, if he had had the will to do so, it fulfils the recommendation of the Royal Commission.1045 Having said that, I do not propose to repeat all the arguments that were deployed in Committee. On that occasion, in a fairly lengthy speech, the hon. Member for Huddersfield, West put the argument why building societies were justified in claiming special treatment. The gaps in his argument, in so far as there were any, were filled by the hon. Member for Wimbledon (Mr. Black), who dealt particularly with the point about the reserves, which we all felt was an important one.
I put other considerations of a rather broader and more philosophical character, particularly those relating to the fact that building society shares cannot be traded on the Stock Exchange, cannot be the subject of movement up and down in value, and cannot be the subject of capital gains. Therefore, by those very facts, not only do they represent a superior form of economic organisation, but also they do not involve all the very ticklish problems to which attention is drawn in the Royal Commission's Report on the subject of undistributed profits and the possibility of increases in the notional value of those profits.
It is not necessary to rehearse all these arguments tonight. We on this side of the House have shown a great moderation in not pressing once again the new Clause which we supported and would have been prepared to vote on in Committee. We have put the much more moderate proposal of this new Clause, which strictly represents the views of the Royal Commission. And since the Commission itself did not say that this was dependent on reconsideration of the whole Profits Tax problem, I do not see how in heaven's name the Financial Secretary or the Chancellor of the Exchequer can wriggle out of it on that argument.
We are disappointed that the right hon. Gentleman has not put an Amendment of his own on the Order Paper. It means either that he does not intend to do anything about this matter or that when he looked at our new Clause he decided that, however hard he worked on it, he could not produce a better draft to do what the whole House demands should be done. If the Chancellor accepts the new Clause and we all join in paying tribute to my hon. and learned Friend the Member for Kettering, the House will be satisfied, but I warn the right hon. Gentleman that our forbearance in Committee 1046 is not likely to be repeated in the House tonight.
§ Mr. Nigel Fisher (Surbiton)In supporting the new Clause, I do not, like the right hon. Member for Huyton (Mr. H. Wilson), think it is necessary to argue the merits of the matter again, because I do not think that they are seriously contested even by the Treasury. I think that we are all on common ground on the merits of the argument. Building societies are not trade organisations, not profit-making organisations and, we think, should not be subject to Profits Tax at all. But if there is to be a Profits Tax it should be at least on the so-called profits and not on gross earnings, because money is the commodity in which a building society deals.
It is not goods. Its raw material is its money and without the money it derives from investors it could not advance money for house purchase, and it would have to close down its business altogether. That being so, I think that we are entitled to argue that no other company has to pay Profits Tax on its earnings without first being allowed to deduct the cost of its raw materials. Some hon. Members may think that building societies, because they have a special economic and social value to the nation, should have special treatment. I do not think that anybody would deny that, at least, they should receive equal treatment. That is all that we are asking for, and all that the right hon. Member for Huyton and the hon. Member for Huddersfield, West (Mr. Wade) have asked for in the new Clause.
In Committee, the Financial Secretary quoted paragraph 562 of the Royal Commission's Report and said that Profits Tax should apply to all profits without distinction between corporations. That may be very well. If so, that should be applied in the same way to all corporations, building societies included, and the cost of the raw materials in which they trade should be allowed as a deductable cost before Profits Tax is applied. In paragraph 577 of the Royal Commission's Report only the retained profits are recommended for taxation, and I should have thought that it only has to be stated to be accepted. The Commission goes on to say that it can find no principle to account for or to justify the basis of the tax as it now stands.
1047 8.15 p.m.
Even the Financial Secretary said that the Government do not reject the recommendation of the Royal Commission in this respect. If he does not reject it, why does he not accept it? It seems to me that we are only playing with words. It does not seem to me a serious argument at all, if we accept that this change would not be inflationary. If it would have that effect, in view of the Chancellor's speeches in recent days I should be the last to press for the change, but no money will be distributed through accepting the Clause. There will be no increases in dividends and no rises in the capital value of shares. The only result will be increases in reserves, and those reserves will be invested in the gilt-edged market, which seriously needs support at present.
This Profits Tax on building societies is unjust, inappropriate and totally irrelevant to the circumstances of the societies. In Committee, I said that I would like something much more valid by way of argument than we had from the Financial Secretary on that occasion. I said that unless we heard that this matter would be dealt with seriously, if not this year, then definitely next year, I could not go into the Lobby in support of my right hon. Friend. That is still my position.
The Chancellor has not proposed a Government Clause, which we find very disappointing. We cannot leave it quite like that. We ought to have an assurance. That is the very minimum for which we could ask. We ought to have an assurance that my right hon. Friend is prepared to meet our arguments next year. If we are given that assurance, I am prepared to accept it, because I have a trusting disposition. I am not a rebel. I am a loyal supporter of my right hon. Friend and of the Government. I think that my right hon. Friend is a very good Chancellor, but there are limits.
I seriously ask that we should be given this assurance—and I am speaking of my hon. Friends. If we show loyalty and restraint on this occasion, which I have indicated and I am anxious to show if possible, we should have an assurance that we shall be rewarded next year by being given the substance of the demand that we make on this occasion. That is the only basis on which I can give my right hon. Friend the support that I owe to him and which I am anxious to give 1048 to him personally and to the Financial Secretary.
§ Mr. Donald Wade (Huddersfield, West)I dealt with this subject at some length in Committee on 2nd July and I do not propose to go over the ground again. It occurred to me that in asking permission to withdraw the Clause that I moved in Committee, I might have quoted at my own expense a line of Tennyson's in "The Revenge":
You fly them for a moment to fight with them again.But I hoped that after some days of reflection on the part of the Chancellor we should reach the Report stage and find that there was no necessity to fight at all, because the right hon. Gentleman had accepted the contention put forward on all sides in Committee.As the right hon. Member for Huyton (Mr. H. Wilson) pointed out, we are not asking for the full extent of the relief that was asked for in Committee. Hon. Members who are supporting the new Clause are asking for an alteration of the incidence of Profits Tax on building societies on the lines recommended by the Royal Commission. But I ought to put on record the fact that the building societies still consider that they are not appropriate bodies to be called upon to suffer Profits Tax at all. The reasons for that were fully explained in the debate in Committee.
When he was discussing the Clause which I moved in Committee, the Financial Secretary stated that, building societies were engaged in the business of lending money on mortgage. He appeared to me to put some emphasis on the word "business". That may have been somewhat misleading, although I feel sure that the Financial Secretary did not intend to create any misunderstanding. There is, of course, not a precise definition of the word "business". In its widest sense it can include any activity. One might properly refer to the business of selling Premium Bonds. Whether that is a successful business is a matter on which the opinion of hon. Members may differ, but no one has suggested that the promoters of Premium Bonds should be subjected to Profits Tax.
There are many different methods of encouraging savings, and building societies do so in two ways. First, they encourage people to save by putting their 1049 money on deposit or on share account with a building society and, secondly, they facilitate home ownership by enabling the purchase price to be paid by instalments. The advantage of this latter form of investment to the economy was mentioned on more than one occasion by the present Prime Minister when he was Minister of Housing and Local Government.
I will make one quotation. On 7th May, 1954, in an address to the Building Societies Association, and after paying tribute to the societies, the right hon. Gentleman said:
The economists tell us that there are very sound reasons for encouraging and helping a man to own his own house because it is an excellent form of saving and induces a habit of thrift which is of the greatest value to the communityTo dismiss this form of saving as a mere business is really not very helpful.I also think it fair to point out that a building society is not really a profit making institution. Furthermore—and I hope that the Chancellor will bear this in mind—the building society is debarred from trading by the Building Societies Acts and, therefore, it does not come into quite the same category as some of those other special classes of corporations referred to by the Royal Commission.
However, I will not pursue that point further tonight. The practical question which we have to face today is how to check the inroad on reserves and the fall in the ratio of reserves to total assets which is, in a large measure, the consequence of the imposition of Profits Tax. This is a matter of urgency since, so I am informed, the building societies have put off taking the very unpleasant step of throwing the burden of this tax on to the borrowers and, as I understand, they cannot defer that indefinitely.
If the Government will not now relieve the building societies altogether from Profits Tax, it would certainly be an advance in the right direction if the method of assessment were altered on the lines of the Royal Commission recommendation. The case for that has been made out so overwhelmingly that it is not necessary for me to repeat it.
Before I sit down, may I draw the attention of the Chancellor to one or two points of substance which should be considered when deciding how this change should be brought about? First, I suggest that the date on which the new method 1050 of assessment takes effect is a matter of some importance. Building societies terminate their financial year at different times. The chargeable accounting period, therefore, varies and to achieve justice as between one building society and another I suggest that the best method to adopt would be to fix a date, such as the date when this Act comes into force, after which the new method of assessment would apply. In making the change-over it would not create any great administrative difficulties to provide that there should be one chargeable accounting period up to the date of the Act coming into force and another for the period from that date up to the end of the building societies' financial year.
My second suggestion is that some consideration must be paid to the fact that there may be a few building societies which have not entered into an arrangement under Section 445 of the Income Tax Act, 1952. That point was taken into account in the wording of the proposed new Schedule in my name in page 2515 of the Notice Paper, dealing with the computation of Profits Tax payable by building societies, which, I think, will not be called, but to which I believe I may refer.
Thirdly, and this is most important in arriving at the net surplus, or what the Royal Commission called the "retained profit", there must be deducted not only the interest paid to the investors but also the tax on that interest which the building societies account for to the Inland Revenue. That point, I am glad to say, is covered both in this Clause and in my proposed Schedule.
To turn to the general principles, as I see them, in considering whether this reform should be introduced, and introduced without delay, there are really only two simple questions which one must ask. First, is the imposition of Profits Tax on building societies in its present form just, and secondly, would the removal of this tax have any inflationary effect? The answer to both those questions is, in my view, no.
There is only one other point which should be put. The building societies are not asking for any discrimination in their favour. They are only asking for the removal of a tax which is admitted on all sides to be discriminatory against them. Therefore, I hope that the 1051 Chancellor will either accept this Clause or give a clear and definite assurance that the relief asked for will be granted at an early date.
§ Mr. StevensI have listened with the closest possible attention to the speeches of the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), my hon. Friend the Member for Surbiton (Mr. Fisher), and the hon. Gentleman the Member for Huddersfield, West (Mr. Wade). I could not find fault with anything they said, but while they spoke as it seemed to me the truth and nothing but the truth, I do not think the House has had the whole truth.
I have enormous sympathy with what they said. Most of us would agree that Profits Tax is a shocking tax. I do not think it is quite as bad a tax as Purchase Tax, which is the worst tax that man ever conceived, but Profits Tax has had an unhappy history. It started as the National Defence Contribution, and the late Neville Chamberlain had to go into reverse quickly and produce another form of national defence contribution, which subsequently became the Profits Tax. We have not heard half enough tonight about the evils of Profits Tax; we have only heard one aspect.
8.30 p.m.
We have heard about the evils of the two differential rates of Profits Tax, but nothing about the Sword of Damocles in the shape of non-distribution. [HON, MEMBERS: "It was out of order."] I should be out of order if I developed that theme, but I do not think I am out of order in drawing the attention of the House, when considering this one small point, to the fact that we shall be losing our sense of justice and perspective if we do not bear in mind the much wider scope of the tax as a whole.
Profits Tax is a thoroughly bad tax, and there is not the slightest doubt that it affects building societies adversely, but building societies are not alone, and I am puzzled why they should be singled out in this fashion. [An HON. MEMBER: "They do not make a profit."] Neither do nationalised industries, but they have not been singled out. I thought the right hon. Gentleman the Member for Huyton, who has no doubt read the Final Report of the Royal Commission on the Taxation 1052 of Profits and Income, might challenge me on that and say that the Royal Commission recommended that public utility undertakings should be left as they were. However, what the right hon. Gentleman did not say, and what my right hon. Friend has not said, is that the Royal Commission recommended that industrial and provident societies should be treated exactly the same as building societies.
In paragraph 573 of its Final Report, the Commission said:
Our conclusion is that it would be right to treat the so-called dividend"—that is, of industrial and provident societies, not building societies—as interest and we recommend that if our proposal for a flat-rate tax is implemented only the retained balance of profit should be taxed.
§ Mr. ChapmanThe hon. Member must not finish at that point. The paragraph ends by saying:
… but the existing special treatment of co-operative societies is not, so far as we know, a current subject of controversy and we think that the best practical course would be to leave their situation unaltered …
§ Mr. StevensI notice that the right hon. Gentleman the Member for Huyton was very careful to refrain from mentioning Co-operative societies. There was probably some special reason for that omission.
Mr. H. WilsonThe special reason was that it would have been out of order to talk about Co-operative societies on a Clause limited to building societies.
§ Mr. Deputy-Speaker (Major Sir William Anstruther-Gray)We must keep discussion of the Clause as strictly as may be to the subject of building societies.
§ Mr. StevensI naturally accept your Ruling, Mr. Deputy-Speaker, but I was merely asking why building societies should be singled out for the special treatment, with which I entirely agree. I was suggesting that there are other organisations worthy of similar consideration.
Profits Tax is a thoroughly bad tax. My hon. Friend the Member for Surbiton was asking for more than he knew when, in the most menacing fashion, he looked at the Chancellor and said that as my right hon. Friend did not reject the advice of the Royal Commission he ought to accept it. In its three Reports, the Royal 1053 Commission made about 200 or more recommendations, and if my right hon. Friend were to accept all that he did not reject, we should spend many weeks or months dealing with them. Interested though my hon. Friend is in these difficult and technical problems of administration and finance, he is asking too much of the House when he suggests that we should consider that kind of argument.
I entirely agree with the special pleading, but I suggest that it would be entirely wrong to take it out of its context as applied to the objections to Profits Tax as a whole. I go much further than did my hon. Friend the Member for Surbiton. He required an assurance from the Chancellor that something would be done about building societies and Profits Tax next year. I look for far more than that next year. I look for a recasting of Profits Tax as a whole, and I hope that we shall have some indication in that direction tonight, but I see no reason why that assurance should be limited to building societies.
§ Mr. Cyril W. Black (Wimbledon)Is it my hon. Friend's case that the House should never seek to rectify any injustice unless at the same time it can rectify every other injustice?
§ Mr. StevensThat is not my case. My case is that if by rectifying one injustice we raise many more, then we are an unwise House of Commons.
§ The Chancellor of the Exchequer (Mr. Peter Thorneycroft)At least upon the narrower issue of the Clause I detect a good deal of unanimity in the House. To start with, I would say that no one can criticise the drafting of the Clause; indeed, it has met with very favourable comment wherever it has been studied. The second thing I would say about it is that it is much narrower than the proposal which we were discussing in Committee, which was really for all-out exemption. I do not think that that could be accepted at any time, or in any foreseeable circumstances.
This is a narrower proposal, based upon one of the many recommendations of the Royal Commission. My hon. Friend the Member for Langstone (Mr. Stevens) is quite right in saying that there were many proposals of the Royal Commission dealing with Profits Tax. 1054 Since the Committee stage, I have again studied not only the recommendations of the Royal Commission but the somewhat tangled history, which other hon. Members have described, of the imposition of Profits Tax and the way in which it came to be levied upon building societies.
I say at once that I have some sympathy with the case put forward. There is some force in it. But it does not stand alone in the recommendations concerning Profits Tax. I am not saying that we must do everything at once; we cannot deal with all the forms of Profits Tax at once; but this proposal is undoubtedly linked up with many others. Let us leave aside for a moment the major recommendation of the Commission about assimilating the two rates of tax so that that question will not be introduced into our controversy. It raises major issues with which we are not concerned now.
Nevertheless, there are many other recommendations about Profits Tax. There are proposals dealing with the way in which profits should be computed in the case of Co-operative societies or nationalised industries, and I certainly think that those cases should be considered at the same time as that of building societies. Whether or not they are linked with the wider question of the assimilation of the two rates of tax does not seem to me particularly to matter for this purpose. If we are laying down in a Finance Bill the way in which we should deal with profits of building societies, I think that we should also lay down the way in which we should deal with the profits of Co-operative societies and nationalised industries, upon which certain recommendations were also made.
Nevertheless, as I say, I have some sympathy with the point of view put forward. I have read the speeches made in Committee and I have listened to many arguments—mainly upon the same theme. What I would say to my hon. Friend the Member for Surbiton (Mr. Fisher) is that I shall certainly study the various proposals, covering a rather wider section than merely building societies, during the coming year. I shall study them with the intention of trying to produce comprehensive proposals for dealing with various bodies which are facing this kind of problem. I think that that will be a 1055 fairer and more convenient way of dealing with the problem than simply by taking the building societies, however good their case may be, out of their context, and not dealing with the organisations with which they are linked.
§ Mr. Glenvil Hall (Colne Valley)I have listened with the utmost care to what the Chancellor has said. I am not surprised at what he said; it was the sort of reply that I expected to receive from him. But the House should let him know that it is deeply shocked and disappointed at the tone that he has taken and the arguments that he has used. When the matter was discussed in Committee there was an overwhelming expression of opinion on the part of hon. Members on both sides that the Chancellor should do something in respect of the Profits Tax levied on building societies.
We were told, either by the Economic Secretary or the Financial Secretary, that the Chancellor would examine the arguments put forward in the debate, and the arguments that have been put forward by hon. Members on both sides were absolutely overwhelming in favour of something being done this year. Yet all that has rolled off the Chancellor as though nothing had ever been said, and as though the Financial Secretary or the Economic Secretary, whichever was the mouthpiece of the Chancellor, did not give an undertaking that he would examine the matter with an open mind, and also consider all the arguments that have been used.
The gilt-edged market is in a very peculiar position. A large number of organisations, including building societies, are extremely worried. One of the things troubling the building societies is that they must invest their surplus funds in trustee securities which, to a large extent, means that they have to put them into gilt-edged securities, and the margin is not enough. In addition to the fact that their reserves cannot be built up, they have the absolute knowledge that those reserves are sinking in value owing to the action of the Government. Yet, the Government having done that to the building societies, the Chancellor, after promising to look at this matter in a proper way, has given us this answer tonight.
I hope that my hon. Friends will carry this matter to a Division. We gave way 1056 last time because we hoped that something would be done. I hope that we shall not make the same mistake tonight.
§ Mr. ChapmanI am surprised at the "scuttle" of hon. Members opposite. During the Committee stage the Financial Secretary said precisely what the Chancellor has said tonight. On that occasion hon. Members opposite made most vitriolic speeches in which they stated why they could not accept what the Financial Secretary had said. Then the Financial Secretary said that it was not possible to deal with this matter outside a general adjustment of Profits Tax and hon. Members opposite got up one after another to protest.
We on this side of the House felt that we had some allies in righteousness among them. Now, after all that, and after listening to precisely the same case from the Chancellor, they are, I understand, prepared to troop meekly into the Lobby to support the Government.
Do we recall what was said by the hon. Member for Surbiton (Mr. Fisher) on 2nd July? He has run away tonight faster than all the rest—
§ Mr. Ellis SmithDo not upset him.
§ Mr. ChapmanBut we could see this coming. I bow to the superior knowledge of my hon. Friend about the procedure in this House, but we could see this thing coming a long way off.
On 2nd July, the hon. Member for Surbiton said:
I was very disappointed with that reply"—that is, the reply the replica of which he has listened to tonight—because I thought that the argument he used was frivolous and almost an insult to the intelligence of hon. Members …I do not think that I have ever heard from my hon. Friend, whose power in debate and whose high intellectual calibre I much respect, a weaker case in answer to a serious debate …"—[OFFICIAL REPORT, 2nd July, 1957; Vol. 572, c. 968.]
§ Mr. FisherI have taken the precaution of noting the words I said on that occasion. I said that unless we could be given some indication—I chose my words with care, naturally—that this matter would be taken seriously, if not this year, definitely next year, I could not go into the Lobby with the Government. That is what I said. We have been given that assurance tonight, that my right hon. Friend will 1057 look at the matter seriously next year. I know perfectly well that my right hon. Friend is a man of honour and integrity in these matters, as, indeed, were his predecessors. When we have had such assurances in the past, about Entertainments Duty and Profits Tax, and so on, they have always been implemented. The least one can do is to support one's right hon. Friends when one knows that they are men of honour and integrity.
§ Mr. ChapmanBut that is not an answer to what the hon. Gentleman said in the earlier part of his speech on 2nd July, when commenting on precisely the same sort of speech as he has heard tonight. It may be that in the last half-dozen or so words, towards the end of what he was saying, he began to be afraid of his party Whips and his reputation with his party and decided to climb down a bit. But his first thoughts were good thoughts. He ran away towards the end of his speech on that occasion and he has run away again tonight. It is a most deplorable performance. We thought that we had some allies on the other side of the House—
§ Mr. ChapmanYes, as my right hon. Friend says, it was only a fortnight ago. I have lost a great amount of the respect that I had for the hon. Gentleman—
§ Mr. S. SilvermanMay I ask my hon. Friend a question? I understood the hon. Member for Surbiton (Mr. Fisher) to say —he said it before and he has said it again now—that he would be satisfied with a definite assurance that the Chancellor would put this matter right next year, and, therefore, he is satisfied tonight because he thinks that the Chancellor has given him that assurance. I do not think he did. I would like my hon. Friend to say whether he heard the Chancellor give a definite assurance.
§ 8.45 p.m.
§ Mr. ChapmanI am sure that my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) is right. All that the Chancellor said is what he said in Committee, that he would look at the Profits Tax as a whole. He said he had sympathy, but he said that earlier. This was still the speech at which Government supporters had protested. It is now most disappointing to find them running away.
1058 What was also really shocking was the speech made by the Financial Secretary to the Treasury in Committee. I would read what he said. In the light of what we had been talking about earlier it is most disappointing. He quoted with evident approval paragraph 562 of the Royal Commission's Report and he used this sentence:
The main principle that we wish to see adopted is that a tax on the profits of corporations should apply to all profits without distinction between corporations …It is of the nature of equity in the imposition of taxation that these profits, this surplus, should be treated as liable to Profits Tax, like any other profits or surplus thrown up in the course of business.—[OFFICIAL REPORT, 2nd July, 1957; Vol. 572, c. 960.]This was after the Financial Secretary had spent days justifying a departure from that very principle in respect of overseas trading corporations. He told us that there was great merit in departing from the universality of Profits Tax for those corporations because of the good that they were doing abroad for Britain. When it came to building societies he turned tail, made a complete volte face and started enunciating the the principle that he had spent days denying.Is it not a fact that, in the battle against inflation on the home front, building societies are doing, by their encouragement of small savings, as good a job for Britain as overseas trading corporations are doing abroad? I think that the hon. Member for Hastings (Mr. Cooper-Key) said, "Stuff and nonsense."
§ Mr. ChapmanIt sounded like it, but I beg the hon. Gentleman's pardon if I am wrong.
§ Mr. Cooper-KeyIt was "drivel".
§ Mr. ChapmanThen the hon. Member for Hastings had better ask his hon. Friend the Financial Secretary whether the encouragement of small savings is a matter of drivel in the present inflationary situation. One of the best things we can have in this country is a further surge in private saving. The Chancellor knows it well, and I hope that he will now turn on his hon. Friend the Member for Hastings and tell him that he is talking drivel if he says the opposite.
The Financial Secretary is convicted from day to day of absolute inconsistency 1059 in his arguments and in the principles he has put forward. His hon. Friends the Members for Surbiton and Holland with Boston (Sir H. Butcher) have now begun to run away, but I would remind them that it is as important to encourage small private savings as it is to encourage over-sea trading corporations.
Mr. H. WilsonI hope that my hon. Friend the Member for Northfield (Mr. Chapman) will not misrepresent the Chancellor on this question of saving. Surely the whole point made by the Chancellor on television was that the Government had no responsibility at all for savings and that it was all a matter for the private citizen.
§ Mr. ChapmanMy right hon. Friend is quite right. The performance which the Chancellor put up on television, in the manner of washing his hands of the whole situation, is very different from what he says in the House of Commons. Government Members are anxious to get away from responsibility at the moment, but I should think that the Chancellor would reach out gratefully for any straw which would help him to increase private savings.
§ Mr. Ellis SmithOn television, he was affected by the company he was in.
§ Mr. ChapmanMy hon. Friend has the advantage of me; I do not know whose company he was in, but I will leave it at that.
We are due for an explanation from the Financial Secretary. He is a man who values his reputation in serious argument, and it is a shocking thing that he should have spent days leading us up the garden about overseas trade corporations and using the opposite argument with building societies. After what we have heard tonight, especially from hon. Members opposite, who have made tonight friendly speeches about the Chancellor, saying that he is a nice man, a man of integrity, and that all will come right next year, the building societies will be able to draw their own conclusions.
Hon. Members opposite had fire in their bellies only two weeks ago. Now, after the Chief Whip has been telling them about the situation of their own party in the country and the danger of 1060 further splits, they are now running away from all that they said then. It is a shocking thing, and something of which they ought to be thoroughly ashamed.
§ Sir Herbert Butcher (Holland with Boston)We have seen the hon. Member for Northfield (Mr. Chapman) lashing himself into excitement and smacking the bench in front of him with his Order Paper, but it would have been worth while, before he devoted too much energy to the party line, to examine the position.
My right hon. Friend the Chancellor came to the House during the Committee stage of the Clause which had been put down by the hon. Member for Huddersfield, West (Mr. Wade), and gave a pledge that between Committe stage and Report he would most carefully examine it. He went out of his way to make it quite clear that there was no undertaking at all that he would do any more than examine it between Committee stage and Report stage. I must say that I was slightly disappointed with that reply. I had hoped that before Report, my right hon. Friend would have found himself able to table a Clause, but what has he done this evening? It is worth while realising how far the Chancellor has moved.
As I understand it, and I speak subject to correction if I am wrong, the Chancellor has suggested that, before he submits the next Budget, he will examine the Profits Tax position as a whole, without pledging himself to do anything. He has said he would specially examine the Profits Tax in relation to these special institutions, such as the nationalised industries, Cooperative and provident societies, municipal trading and building societies, with the intention of moving in the direction recommended by the Royal Commission. I say at once that I would have preferred him to have done it at this Report stage, but I am not prepared for the sake of twelve months between this Budget and the next to be found in the same Lobby as hon. Gentlemen opposite. It would be a poor—
§ Mr. ChapmanThe hon. Gentleman was saying the opposite of that in Cornmittee. Has he not read his own words? He said:
It is not good enough for my hon. Friend to say that he is not prepared to deal with this small and minor point of the building 1061 societies' liability to Profits Tax because the Chancellor is not in a position to deal with Profits Tax as a whole."—[OFFICIAL REPORT, 2nd July, 1957; Vol. 572, c. 964.]He is now turning round like all his hon. Friends and running away.
§ Sir H. ButcherThe hon. Gentleman is not chronologically accurate, because the intervention of the Financial Secretary had preceded the promise given by the Chancellor. I have already made it clear that I would have preferred to see the position of the building societies corrected in the 1957 Budget, but if it comes to a choice between the alternatives of joining hon. Members opposite in the Lobby tonight and waiting a year to secure the concession, the position of hon. Members on this side is transparently clear.
§ Mr. WadeDid the hon. Member for Holland with Boston (Sir H. Butcher) understand the Chancellor to give a definite assurance that it would be dealt with next year? That seemed to be the implication of the remarks of the hon. Member. It would be enlightening if he would say that he understood the assurance to be a definite one to deal with it next year.
§ Sir H. ButcherI should prefer the Chancellor to repeat the words he used because I have a feeling they were selected with care. My feeling is that the whole question of Profits Tax is to be examined, and, if it is not felt that the whole question of Profits Tax is to be reformed, there will be a special intention to deal with the various bodies which I enumerated earlier.
§ Mr. Glenvil HallWhat we really want is an assurance from the Chancellor that next year he will deal with this matter.
Mr. H. WilsonI cannot make a second speech, of course, without the leave of the House, but perhaps I might have that leave for long enough to indicate the position of the Opposition in
§ regard to the withdrawal or otherwise of the Clause.
§ We cannot regard the reply of the Chancellor as in any way justifying the withdrawal of the Clause tonight. We have had his assurance as far as it goes. Frankly, it is not good enough, because the arguments have been fully deployed, and since they have been fully deployed and accepted by hon. Members in all parts of the House, we cannot regard the Chancellor's assurance as in any way satisfactory. No one in this House, with the possible exception of the hon. Member for Langstone (Mr. Stevens), accepts the argument of the Chancellor about the need to relate this to the whole of the Profits Tax. It may be of some help, of some comfort, to building societies to know that if the present Chancellor is still here—
§ Mr. S. SilvermanWhich is doubtful.
Mr. Wilson—which is extremely doubtful—he may feel moved to introduce some kind of relief. He has not even said he will accept this kind of relief, which in any case is only a halfway house, as we made plain.
We found last year when we pressed the previous Chancellor on a rather different matter that there was nothing more helpful in pushing him along in the direction in which he had half made a commitment than giving him the encouragement of having been made to vote in the Division Lobby. Therefore, we have no intention of withdrawing the proposed new Clause. We hope that enough hon. Members opposite will vote in accordance with their beliefs and their consciences in order to ensure that what they want to see will become the law of the land this year.
§ Question put, That the Clause be read a Second time:—
§ The House divided: Ayes 197, Noes 250.
1065| Division No. 166.] | AYES | [8.58 p.m. |
| Ainsley, J. W. | Blackburn, F. | Brockway, A. F. |
| Albu, A. H. | Blyton, W. R. | Brown, Rt. Hon. George (Belper) |
| Allaun, Frank (Salford, E.) | Boardman, H. | Brown, Thomas (Ince) |
| Allen, Scholefield (Crewe) | Bottomley, Rt. Hon. A. G. | Burke, W. A. |
| Awbery, S. S. | Bowden, H. W. (Leicester, S.W.) | Butler, Herbert (Hackney, C.) |
| Bacon, Miss Alice | Bowen, E. R. (Cardigan) | Butler, Mrs. Joyce (Wood Green) |
| Balfour, A. | Bowles, F. G. | Callaghan, L. J. |
| Benson, G. | Boyd, T. C. | Carmichael, J. |
| Beswick, Frank | Braddock, Mrs. Elizabeth | Castle, Mrs. B. A. |
| Champion, A. J. | Hynd, H. (Accrington) | Randall, H. E. |
| Chapman, W. D. | Irvine, A. J. (Edge Hill) | Rankin, John |
| Chetwynd, G. R. | Jay, Rt. Hon. D. P. T. | Redhead, E. C. |
| Coldrick, W. | Jeger, George (Goole) | Reeves, J. |
| Collick, P. H. (Birkenhead) | Jeger, Mrs. Lena (Holbn & St.Pncs,S.) | Rhodes, H. |
| Craddock, George (Bradford, S.) | Johnson, James (Rugby) | Robens, Rt. Hon. A. |
| Cullen, Mrs. A. | Jones, David (The Hartlepools) | Roberts, Albert (Normanton) |
| Dalton, Rt. Hon. H. | Jones, Elwyn (W. Ham, S.) | Roberts, Goronwy (Caernarvon) |
| Darling, George (Hillsborough) | Jones, Jack (Rotherham) | Robinson, Kenneth (St. Pancras, N.) |
| Davies, Ernest (Enfield, E.) | Jones, J. Idwal (Wrexham) | Ross, William |
| Davies, Stephen (Merthyr) | Jones, T. W. (Merioneth) | Royle, C. |
| Deer, G. | Kenyon, C. | Short, E. W. |
| de Freitas, Geoffrey | Key, Rt. Hon. C. W. | Silverman, Sydney (Nelson) |
| Delargy, H. J. | King, Dr. H. M. | Skeffington, A. M. |
| Donnelly, D. L. | Lawson, G. M. | Slater, Mrs. H. (Stoke, N.) |
| Ede, Rt. Hon. J. C. | Lee, Frederick (Newton) | Slater, J. (Sedgefield) |
| Edelman, M. | Lee, Miss Jennie (Cannock) | Smith, Ellis (Stoke, S.) |
| Edwards, Rt. Hon. John (Brighouse) | Lever, Harold (Cheetham) | Sorensen, R. W. |
| Edwards, Rt. Hon. Ness (Caerphilly) | Lewis, Arthur | Soskice, Rt. Hon. Sir Frank |
| Edwards, Robert (Bilston) | Lipton, Marcus | Sparks, J. A. |
| Edwards, W. J. (Stepney) | Logan, D. G. | Steele, T. |
| Fernyhough, E. | Mabon, Dr. J. Dickson | Stewart, Michael (Fulham) |
| Fienburgh, W. | MacColl, J. E. | Stonehouse, John |
| Finch, H. J. | MacDermot, Niall | Stones, W. (Consett) |
| Forman, J. C. | McInnes, J. | Strachey, Rt. Hon. J. |
| Fraser, Thomas (Hamilton) | McKay, John (Wallsend) | Summerskill, Rt. Hon. E. |
| Gaitskell, Rt. Hon. H. T. N. | MacPherson, Malcolm (Stirling) | Sylvester, G. O. |
| George, Lady Megan Lloyd (Car'then) | Mallalieu, E. L. (Brigg) | Taylor, Bernard (Mansfield) |
| Gibson, C. W. | Mann, Mrs. Jean | Taylor, John (West Lothian) |
| Greenwood, Anthony | Mason, Roy | Thomas, Iorwerth (Rhondda, W.) |
| Grenfell, Rt. Hon. D. R. | Mellish, R. J. | Thornton, E. |
| Grey, C. F. | Messer, Sir F. | Tomney, F. |
| Griffiths, David (Rother Valley) | Mitchison, G. R. | Ungoed-Thomas, Sir Lynn |
| Griffiths, Rt. Hon, James (Llanelly) | Monslow, W. | Usborne, H. C. |
| Griffiths, William (Exchange) | Moody, A. S. | Viant, S. P. |
| Grimond, J. | Morris, Percy (Swansea, W.) | Wade, D. W. |
| Hale, Leslie | Mort, D. L. | Watkins, T. E. |
| Hall, Rt. Hn. Glenvil (Colne Valley) | Moyle, A. | Wells, Percy (Faversham) |
| Hamilton, W. W. | Mulley, F. W. | Wells, William (Waisall, N.) |
| Hannan, W. | Noel-Baker, Rt. Hon. P. (Derby, S.) | West, D. G. |
| Harrison, J. (Nottingham, N.) | Oliver, G. H. | Wheeldon, W. E. |
| Hayman, F. H. | Orbach, M. | White, Mrs. Eirene (E. Flint) |
| Healey, Denis | Oswald, T. | White, Henry (Derbyshire, N.E.) |
| Henderson, Rt. Hn. A. (Rwly Regis) | Owen, W. J. | Wilkins, W. A. |
| Herbison, Miss M. | Padley, W. E. | Willey, Frederick |
| Hobson, C. R. (Keighley) | Paling, Rt. Hon. W. (Dearne Valley) | Williams, David (Neath) |
| Paling, Will T. (Dewsbury) | Williams, Rev. Llywelyn (Ab'tillery) | |
| Holman, P. | Palmer, A, M. F. | Williams, Rt. Hon. T. (Don Valley) |
| Holmes, Horace | Pannell, Charles (Leeds, W.) | WilHams, W. R. (Openshaw) |
| Holt, A. F. | Pargiter, G. A. | Willis, Eustace (Edinburgh, E.) |
| Houghton, Douglas | Paton, John | Wilson, Rt. Hon. Harold (Huyton) |
| Howell, Charles (Perry Barr) | Pentland, N. | Woodburn, Rt. Hon. A. |
| Hoy, J. H. | Plummer, Sir Leslie | Woof, R. E. |
| Hubbard, T. F. | Popplewell, E. | Yates, V. (Ladywood) |
| Hughes, Cledwyn (Anglesey) | Prentice, R. E. | Zilliacus, K. |
| Hughes, Emrys (S. Ayrshire) | Price, J. T. (Westhoughton) | |
| Hughes, Hector (Aberdeen, N.) | Probert, A. R. | TELLERS FOR THE AYES: |
| Hunter, A. E. | Proctor, W. T. | Mr. Pearson and Mr. Simmons. |
| NOES | ||
| Agnew, Sir Peter | Bishop, F. P. | Craddock, Beresford (Spelthorne) |
| Amery, Julian (Preston, N.) | Body, R. F. | Crosthwaite-Eyre, Col. O. E. |
| Arbuthnot, John | Boothby, Sir Robert | Crowder, Petre (Ruislip—Northwood) |
| Armstrong, C. W. | Bossom, Sir Alfred | Cunningham, Knox |
| Ashton, H. | Braine, B. R. | Currie, G. B. H. |
| Atkins, H. E. | Braithwaite, Sir Albert (Harrow, W.) | Dance, J. C. G. |
| Baldock, Lt.-Cmdr. J. M. | Brooman-White, R. C. | Davidson, Viscountess |
| Baldwin, A. E. | Browne, J. Nixon (Craigton) | D'Avigdor-Goldsmid, Sir Henry |
| Balniel, Lord | Bullus, Wing Commander E. E. | Deedes, W. F. |
| Barber, Anthony | Butcher, Sir Herbert | Digby, Simon Wingfield |
| Barlow, Sir John | Butler, Rt.Hn. R.A.(Saffron Walden) | Donaldson, Cmdr. C. E. MoA. |
| Baxter, Sir Beverley | Carr, Robert | Doughty, C. J. A. |
| Beamish, Maj. Tufton | Cary, Sir Robert | du Cann, E. D. L. |
| Bell, Philip (Bolton, E.) | Chichester-Clark, R. | Dugdale, Rt. Hn. Sir T. (Richmond) |
| Bell, Ronald (Bucks, S.) | Clarke, Brig. Terence (Portsmth, W.) | Duncan, Capt. J. A. L. |
| Bennett, F. M. (Torquay) | Conant, Maj. Sir Roger | Duthie, W. S. |
| Bennett, Dr. Reginald | Cooke, Robert | Eden, J. B. (Bournemouth, West) |
| Bevins, J. R. (Toxteth) | Cooper, A. E. | Elliot, Rt. Hon. W. E. (Kelvingrove) |
| Bidgood, J. C. | Cooper-Key, E. M. | Elliott,R.W.(N'castle upon Tyne, N.) |
| Biggs-Davison, J. A. | Cordeaux, Lt.-Col. J. K. | Emmet, Hon. Mrs. Eve'yn |
| Birch, Rt. Hon. Nigel | Corfield, Capt. F. V. | Errington, Sir Eric |
| Erroll, F. J. | Jones, Rt. Hon. Aubrey (Hall Green) | Pitt, Miss E. M. |
| Fell, A. | Joseph, Sir Keith | Pott, H. P. |
| Fisher, Nigel | Keegan, D. | Powell, J. Enoch |
| Fletcher-Cooke, C. | Kerr, H. W. | Price, David (Eastleigh) |
| Fort, R. | Kershaw, J. A. | Price, Henry (Lewisham, W.) |
| Fraser, Sir Ian(M'cmbe & Lonsdale) | Kimball, M. | Prior-Palmer, Brig. O. L. |
| Freeth, Denzil | Kirk, P. M. | Raikes, Sir Victor |
| Gammans, Lady | Lagden, G. W. | Ramsden, J. E. |
| Garner-Evans, E. H. | Lambert, Hon. G. | Rawlinson, Peter |
| George, J. C. (Pollok) | Lambton, Viscount | Redmayne, M. |
| Glover, D. | Lancaster, Col. C. G. | Remnant, Hon. P. |
| Glyn, Col. R. | Leather, E. H. C. | Renton, D. L. M. |
| Godber, J. B. | Leavey, J. A. | Rldsdale, J. E. |
| Gomme-Duncan, Col. Sir Alan | Leburn, W. G. | Robertson, Sir David |
| Goodhart, Philip | Legge-Bourke, Maj. E. A. H. | Robinson, Sir Roland (Blackpool, S.) |
| Gower, H. R. | Legh, Hon. Peter (Petersfield) | Rodgers, John (Sevenoaks) |
| Graham, Sir Fergus | Lindsay, Hon. James (Devon, N.) | Roper, Sir Harold |
| Grant, W. (Woodside) | Lindsay, Martin (Solihull) | Ropner, Col. Sir Leonard |
| Grant-Ferris, Wg Cdr. R. (Nantwich) | Linstead, Sir H. N. | Russell, R. S. |
| Green, A. | Lloyd, Maj. Sir Guy (Renfrew, E.) | Schofield, Lt.-Col. W. |
| Gresham Cooke, R. | Longden, Gilbert | Scott-Miller, Cmdr. R. |
| Grimston, Sir Robert (Westbury) | Lucas, Sir Jocelyn (Portsmouth, S.) | Sharples, R. C. |
| Gurden, Harold | Lucas, P. B. (Brentford & Chiswick) | Simon, J. E. S. (Middlesbrough, W.) |
| Hall, John (Wyoombe) | Lucas-Tooth, Sir Hugh | Smithers, Peter (Winchester) |
| Harris, Reader (Heston) | McAdden, S. J. | Smyth, Brig. Sir John (Norwood) |
| Harrison, Col. J. H. (Eye) | Macdonald, Sir Peter | Soames, Christopher |
| Harvey, Sir Arthur (Macclesfield) | Mackie, J. H, (Galloway) | Spearman, Sir Alexander |
| Head, Rt. Hon. A. H. | McLaughlin, Mrs. P. | Speir, R. M. |
| Heald, Rt. Hon. Sir Lionel | Maclay, Rt. Hon. John | Spens, Rt. Hn. Sir P. (Kens'gt'n, S.) |
| Heath, Rt. Hon. E. R. G. | Maclean, Fitzroy (Lancaster) | Stanley, Capt. Hon. Richard |
| Henderson, John (Cathcart) | McLean, Neil (Inverness) | Stevens, Geoffrey |
| Henderson-Stewart, Sir James | MacLeod, John (Ross & Cromarty) | Steward, Harold (Stockport, S.) |
| Hesketh, R. F. | Macpherson, Niall (Dumfries) | Steward, Sir William (Woolwich, W.) |
| Hicks-Beach, Maj. W. W. | Maddan, Martin | Stoddart-Scott, Col. M. |
| Hill, Mrs. E. (Wythenshawe) | Maitland, Cdr. J. F. W. (Horncastle) | Storey, S. |
| Hill, John (S. Norfolk) | Maitland, Hon. Patrick (Lanark) | Studholme, Sir Henry |
| Hinchingbrooke, Viscount | Markham, Major Sir Frank | Taylor, Sir Charles (Eastbourne) |
| Hirst, Geoffrey | Marshall, Douglas | Taylor, William (Bradford, N.) |
| Mathew, R. | Temple, John M. | |
| Hobson, John (Warwick & Leam'gt'n) | Maude, Angus | Thomas, Leslie (Canterbury) |
| Holland-Martin, C. J. | Maudling, Rt. Hon. R. | Thomas, P. J. M. (Conway) |
| Hope, Lord John | Mawby, R. L. | Thompson, Kenneth (Walton) |
| Hornby, R. P. | Maydon, Lt.-Comdr. S. L. C. | Thompson, Lt.-Cdr.R.(Croydon, S.) |
| Hornsby-Smith, Miss M. P. | Milligan, Rt. Hon. W. R. | Thorneycroft, Rt. Hon. P. |
| Horobin, Sir Ian | Morrison, John (Salisbury) | Thornton-Kemsley, C. N. |
| Horsbrugh, Rt. Hon. Dame Florence | Mott-Radolyffe, Sir Charles | Tilney, John (Wavertree) |
| Howard, John (Test) | Nabarro, G. D. N. | Turner, H. F. L. |
| Hudson, W. R. A. (Hull, N.) | Nicholls, Harmar | Turton, Rt. Hon. R. H. |
| Hughes Hallett, Vice-Admiral J. | Nicholson, Godfrey (Farnham) | Vickers, Miss Joan |
| Hughes-Young, M. H. C. | Nicolson, N. (B'n'm'th, E. & Chr'ch) | Wakefield, Edward (Derbyshire, W.) |
| Hulbert, Sir Norman | Noble, Comdr. Rt. Hon. Allan | Wakefield, Sir Wavell (St, M'lebone) |
| Hurd, A. R. | Nugent, G. R. H. | Walker-Smith, Rt. Hon. Derek |
| Hutchison, Michael Clark (E'b'gh,S.) | Oakshott, H. D. | Wall, Major Patrick |
| Hutchison, Sir Ian Clark (E'b'gh, W.) | O'Neill, Hn. Phelim(Co. Antrim, N.) | Ward, Rt. Hon- G. R. (Worcester) |
| Hutchison, Sir James (Sootstoun) | Orr, Capt. L. P. S. | Ward, Dame Irene (Tynemouth) |
| Hyde, Montgomery | Orr-Ewing, Charles Ian (Hendon, N.) | Whitelaw, W. S.I. |
| Hylton-Foster, Rt. Hon. Sir Harry | Osborne, C. | Williams, R. Dudley (Exeter) |
| Iremonger, T. L. | Page, R. G. | Wills, G. (Bridgwater) |
| Irvine, Bryant Godman (Rye) | Pannell, N. A. (Kirkdale) | Woollam, John Victor |
| Jenkins, Robert (Dulwich) | Partridge, E. | Yates, William (The Wrekin) |
| Jennings, J. C. (Burton) | Peyton, J. W. W. | |
| Jennings, Sir Roland (Hallam) | Pickthorn, K. W. M. | TELLERS FOR THE NOES: |
| Johnson, Dr. Donald (Carlisle) | Pilkington, Capt. R. A. | Mr. Bryan and Mr. Finlay. |
| Johnson, Eric (Blackley) | Pitman, I. J. |