HC Deb 01 July 1958 vol 590 cc1232-48
Major W. Hicks Beach (Cheltenham)

I beg to move, in page 17, line 30, at the end to insert: and for the purposes of estate duty that sum shall be deemed to have been a gift inter vivos made at the date of such purchase by the deceased to the vendor of that other interest". I suggest that we also discuss the Amendments in my name in page 17, to leave out lines 31 to 43; in page 18, line 1, to leave out subsection (2), in page 18, line 11, to leave out subsection (3); and in page 18, line 25, to leave out subsection (4).

The Clause is extremely important, because it makes a very radical change in the law. Its purpose briefly is to bring within the ambit of the five-year rule transactions in circumstances where the life tenant seeks to buy out the interest of the reversioner. I do not propose to deal with the general principles because it is difficult to argue against the logic of that position when we find that as the law stands the five-year rule does not apply where there is a reversion to the life tenant.

My Amendment is an administrative one. Its object is to provide that in the event of a purchase by a life tenant under a settlement of the reversioner's interest and the life tenant dies within five years, the accounting party for duty shall be the reversioner under the settlement who received his purchase money and not the trustee of the settlement as would be the case under the Clause as now drawn.

I should disclose that I am a practising solicitor and deal with a great number of settlements. The Amendment is put forward because I feel that, from a practical point of view, unless it is adopted there will be a considerable amount of hardship in cases where interested parties want to bring their settlements to an end. There is very good precedent for this proposal being adopted because, where there is a gift inter vivos from, say, A to B, and A dies within the five years, the accounting party is B. I cannot see why that principle cannot be applied where property is tied up.

11.15 p.m.

If the position is left as the Clause is now drawn, I anticipate that, from a practical point of view, there will be considerable difficulty in certain cases; and I qualify what I am saying by emphasising "in certain cases", but there will be difficulty and hardship in financing a transaction where a life tenant buys out a purchaser. In some cases, the practical effect will be that it will not be possible to bring a settlement to an end owing to the difficulties of arranging the necessary finance.

I have worked out an example, which is an extreme case, with the highest possible rate of Estate Duty, and where a life tenant has no means of providing security apart from his or her interest under the settlement. I take this extreme case because I think that the whole Committee will agree that such an example is as worthy of consideration as is a normal transaction; and between the figure which I am going to quote, and the lower level, there is a sliding scale where hardship will occur.

The example I give is this. If we take a person aged 75, who has a life interest in two funds—two trust funds—one for £10,000, and another, a very large one which he or she cannot deal with because the life interest is a protected one—and lawyers will be well acquainted with this—then this person may decide to bring the £10,000 settlement to an end by buying out the reversioner. The five-years rule will then apply. The rate of Estate Duty as estimated on this person's death is 80 per cent., that is, the death of the life tenant. I repeat that this is an extreme case, but on an actuarial basis he would have to buy out the reversioner for a figure representing 80 per cent. of the fund, that is, £8,000.

We all know that those who deal with this case will make an application under Section 44 of the Finance Act, 1950, for a certificate in favour of the trustees as to what sum they should retain for five years for a possible claim for duty in the event of the tenant dying under the five years' rule. There is some difference in legal circles about the interpretation of this Clause as to what would be paid, but some say that the trustees could retain the £8,000 or—and this is the view which I take—they would be entitled to retain 80 per cent. of the purchase consideration of £8,000, that is, £6,400. What is the position now, when the parties want to carry out this transaction?

Mr. Mitchison

I am very sorry to interrupt the hon. Gentleman, but I am trying to follow this complicated but most interesting matter. He has arrived at £8,000. He has not told us what is the amount of the capital of the trust fund.

Major Hicks Beach

I did say £10,000. At this late hour, I may not be making myself clear, and if that is the case, I will go more slowly. What I indicated was that this party wants to deal with a small trust which is £10,000 and, if my calculations are correct—and as the hon. and learned Gentleman and I went to the same school I hope that they are correct—80 per cent. of that is £8,000.

Mr. Mitchison

I must apologise to the hon. Gentleman. I did not know, perhaps because I had not followed him, to which of the trusts he was referring.

Major Hicks Beach

I said, I thought fairly clearly, that I could not deal with the large one because there was a protected life interest. We are now dealing with the smaller fund and this life tenant has to arrange to purchase a reversion to the tune of £8,000.

Under the Estate Duty Law, he cannot offer any security, because that would give rise to a claim under another Clause. Therefore, he has to go to a bank and explain that he wants to borrow £8,000 and when the transaction is completed, the trustees of the £10,000 will have to retain securities to the figure of £6,400. After the sale, he will receive only £3,600 net worth of securities. He is, therefore, not in a position where he can get from any bank the funds to finance the transaction.

If my proposal is accepted, the transaction could go through and I should have thought that there was common agreement between both sides of the Committee that people should be at liberty to deal with their property within settlements, provided the Estate Duty laws are safeguarded. The position will be that the life tenant will be able to buy out the reversioner for £8,000 and if, by unhappy chance, the life tenant dies within five years, the person liable for the duty will be the reversioner, and, in fact, the whole transaction will be completed in a simple way.

I should have thought that that was a perfectly fair and original way of dealing with the matter and I see no reason why persons who enter into gifts inter vivos should be in a better position than those people who seek to deal with their settlements in a similar way, but who will be penalised by this Clause as it now stands, as I have tried to show. I hope that the Government will give careful consideration to the Amendment.

Mr. Charles Fletcher-Cooke (Darwen)

I support the Amendment. Like my hon. and gallant Friend the Member for Cheltenham (Major Hicks Beach), I think that the Government are absolutely right to correct this anomaly by which if someone buys a reversion Estate Duty is escaped if he dies within five years, whereas the other way round Estate Duty is not escaped. We have no quarrel on the general principle. My hon. Friend's argument is that once it has been completed, the transaction should be treated as if it were a gift inter vivos and the exceptional and unnecessary security upon which the Revenue insists and by which the trust is virtually kept in existence against the will of all those beneficiaries interested merely for the purpose of protecting the Revenue should not be allowed to apply.

Subsection (4) is the subsection which meets that end and is exactly similar to the terms of the appropriate provisions of the Finance Act, 1950. Many of my right hon. and hon. Friends objected to those provisions when they sat on this side of the Committee. Referring to the process of keeping trusts alive merely for the benefit of the Revenue—I am putting it broadly and inaccurately, but that is what it comes to—my right hon. and learned Friend the Attorney-General said: Why should the Revenue have this additional security in cases where there is a settlement? Why should they be able to recover from the trustees, even after the trust is determined, when they have already got the same security as they would have had had it been a free transfer of free money from a father to a son? That echoes the point made by my hon. and gallant Friend. He wishes it to be treated as if it were a transaction inter vivos, a free gift. I think that a very heavy burden is cast upon the right hon. and learned Gentleman in seeking to justify the inclusion of this Clause in the Bill. I ask him what possible justification is there for making the trustee also personally liable in the case where the money is the subject of the settlement."—[OFFICIAL REPORT, 19th June, 1950; Vol. 476, c. 968–9.] Of course, ex hypothesi it is no longer the subject of the settlement because this transaction winds up the settlement. Much the same thing was said by my right hon. Friend the present Minister of Pensions and also by Sir David Maxwell Fyfe, as he then was, and we divided against it.

I think that a heavy onus is cast upon us to show why, now that we have power and are quite rightly putting this business into shape, we cannot follow that advice and treat this for the purpose of revenue collection, which, I understand, is the purpose of the Amendment, as if it were a gift inter vivos and not impose on such trustees, many of whom are voluntary and many of whom have sufficient responsibilities as it is, this business of keeping enough money in the "kitty" for five years, long after the trust has been wound up, merely for the benefit of the ease of collection. The Revenue ought to go after the person who has the money and not after the trustees who do not want to keep the money but wish to be relieved of their task.

I hope that my right hon. and learned Friend will reconsider this matter, because I do not think it is in keeping with the thought that he and I, and my hon. and gallant Friend, have in common.

The Solicitor-General (Sir Harry Hylton-Foster)

I was greatly rejoiced to hear my hon. and gallant Friend the Member for Cheltenham (Major Hicks Beach) say that the rest of his Amendments to this Clause are consequential. That has no doubt saved us from a great deal of discussion, because he would have mutilated the Clause by omitting one subsection after another and I should have had to explain why they had to be there.

Three points arise from my hon. and gallant Friend's speech, and I will seek to answer them all. One is: why do we not treat this transaction for Estate Duty purposes as though it were a gift inter vivos? The second is: why do we maintain accountability in the trustees after the trust has been brought to an end? The third is the question of hardship, because in the view of my hon. and gallant Friend it will not be possible to finance the transaction under these provisions.

We are not prepared to treat the matter as though the transaction were a gift because, as I feel sure my hon. and gallant Friend will agree when he thinks about it, it is not a gift. It does not bear the characteristics of a gift. When there is a gift, the donee receives what he receives gratis. He is the person who, throughout, profits by the transaction; he is the person who gets the benefit, if any, of the avoidance of duty which is involved in the transaction. The donor, on the other hand, has parted with the gift altogether and his estate is reduced by parting with it, and it is only natural in the circumstances of a gift to place the duty upon the recipient of the gift; and that has been done.

But a purchase is different because the purchaser receives as a result of the consideration which he pays out a valuable asset, in this context the interest of the remaindermen which he buys. He is no worse off than he was before. He acquires the fund in respect of which the avoidance of duty occurs and it is his estate which gains from what is vulgarly called Estate Duty profit, meaning the avoidance of the Estate Duty which occurs. That is why it seems right to place the charge of the duty upon him or rather upon the trustees who, in the circumstances, will be responsible to him, and not upon the recipient of the purchase money, because the recipient of the purchase money has received a price which takes into account the fact that his interest is one which always involved duty being paid on the settled fund before he received it.

That is all that he possesses as an interest, and the price which he receives ought to be one which takes into account that factor. So, clearly, the principal gainer from the transaction is the purchaser. It seems to us right, just and natural, to mark the contrast between a gift, on the one hand, and this case on the other, and to place the duty where it seems naturally to go, namely, on the person who profits from the transaction and who receives what I am calling the Estate Duty profit.

11.30 p.m.

On the question of why keep the accountability of the trustees, I confess that I do not altogether sympathise with the view that the Revenue is not entitled to protect the Revenue claim unless there is something unreasonable about it. Is there, on examination, anything unreasonable about keeping the trustees accountable? Throughout the history of Estate Duty trustees always have been made accountable, in the first instance, for duty in respect of the settled funds, and the duty that is avoided by this transaction is duty in respect of the settled funds.

The Section of the 1950 Act to which my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) referred was not incorporating any new idea. It was merely giving formal effect to what was the established practice. Trustees had always been maintained in the position of being accountable for duty on a settlement fund. That is all that it was doing, and since the words uttered by my right hon. Friend on the occasion in 1950, to which he has referred, we have had some experience of the working of the Section. For my part, I do not know that it has worked otherwise than satisfactorily. One is entitled to look at that experience at this moment and to say let it be.

The Clause is in line with that Section. It seems right to put this transaction, where the purchase is by the life tenant of the reversionary interest, into line with the position when the transaction is carried out the reverse way round and the reversioner acquires the life tenant's interest. The duty, being duty on the settled property, ought to come out of the settled property. It is a duty for which, if the transaction never took place, the trustees would be accountable. In those circumstances, it does not seem to us to be in any way unreasonable to maintain the accountability of the trustees just for all that this Clause is going to make them accountable for, that is, for the prospective rate of duty upon the purchase price paid—for the reversionary interest.

Now about finance. We have looked with very great care at the examples which my hon. and gallant Friend very kindly gave us and I have been listening with the maximum attention of which I am capable to the case that he was just laying before the Committee. I confess that we have not been able to find any case in which we believe that, as a result of this Clause, there will be any material difficulty about financing the transaction that my hon. and gallant Friend has in mind.

I speak with great diffidence about these matters in the presence of my hon. and gallant Friend who has business with them and is dealing with them all the time. I do not wish to appear to be at all scornful about what he is saying, and, therefore, I am puzzled about the difference between us. The case which my hon. and gallant Friend is putting is that of this elderly life tenant, aged 75. I hope that I am not being discourteous to any hon. Member who is being kept up to this late hour by treating 85 as elderly.

This person was apparently advised by somebody to pay £8,000 for a reversionary interest in that case. That seems to ordinary mortals—and I am not certain whether I should include actuaries in that category without being discourteous—something that even somebody 75 could not be persuaded to do, on the facts given by my hon. and gallant Friend.

Major Hicks Beach

That happened to be the actuarial valuation. I am prepared to give my right hon. and learned Friend the figures certified by the actuary.

The Solicitor-General

I am obliged to my hon. and gallant Friend, because that confirms my view of what must be the difference between us, and I will try to explain where I think it lies.

The interest of the remainderman—what he has to sell in the open market to a stranger—is this: it is to receive the capital of the settled fund when the life tenant dies, but to receive it after it has paid Estate Duty. To take the case that my hon. and gallant Friend was putting, the £10,000 fund less the rate of duty of 80 per cent., in the circumstances that he was quoting, would be reduced to £2,000; discounted in respect of the interest of the life tenants who are surviving—that would be by one-fifth on my hon. and gallant Friend's figures—it would be £1,600. That is the open market value.

Of course, when parties get together like this, they can split what I am calling the Estate Duty profit between them, and one can add whatever the parties thought was a fair slice of the Estate Duty avoided to the remainderman and add it on to the £1,600, but not by the slightest imagining can one get the figure up to £8,000 on that basis. Of course, one cannot finance the transaction if one offers to pay for the interest one is buying, something that is fantastically beyond common sense.

The only explanation is this. My hon. and gallant Friend's advisers, the actuaries apparently, in this instance, were advising on the basis that one should not take into account the fact that the interest that the remainderman will get is only in the settled fund after it has paid duty. Of course, we find it very difficult to believe that actuaries ever do value on that basis. It would be quite strange, and I am rather confirmed in my puzzlement about it because my hon. and gallant Friend was good enough to submit to us a case—I do not wish to mention names—if I call it the "O" case he will recognise it—in which highly creditable actuaries were employed in advising him, and I noticed the way that they did it; it is the way that the Revenue people think that actuaries value in these cases.

I can only take advice in this case, because I do not know. In that case of my hon. and gallant Friend's, the actuaries valued in this way. They took the whole value of the fund and they first of all valued on an actuarial basis the value of the life tenant's interest—a certain percentage of the whole. Then they valued the remainderman's interest, setting it out as a percentage of the whole, but the two added together did not make up the 100 per cent., because in valuing the remainderman's interest they took into account the fact that that is a case in which he can only acquire the interest after duty had been paid on the death of the life tenant. The balance of the percentage remaining they regarded as the Estate Duty profit, and it was not for the actuaries to decide how that was divided between the parties. That was up to them. That was the way they valued it, and to a mere amateur like myself, it appears to be the only sensible way of conducting the valuation.

I have been applying my mind to see what price the elderly life tenant referred to by my hon. and gallant Friend could have paid for this interest, an interest worth, I suggest, £1,600 to a stranger; that is all. She could have paid, I think, £4,000 for it to the remainderman. I work it out in this way. If she paid £4,000, the trustees would have to keep 80 per cent. of the £4,000, that is, £3,200. The fund that the life tenant acquires by the transaction is £10,000. So, if the trustees keep £3,200, the life tenant gets down £6,800, and out of the £6,800 has to pay the remainderman £4,000. I suspect that there are many bankers, not unduly suspicious, who would not mind financing that. In the circumstances, I could not advise the Committee to accept the Amendment.

Sir Toby Low (Blackpool, North)

To those of us not well versed in the law, it did seem—speaking for myself, at any rate—that my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) made a valid point. In the debate which took place in Committee on 19th June, 1950, some of my right hon. Friends, including the present Lord Chancellor, took a completely different view about the provisions of the Clause. I have just been looking at the Division list. I find that this was the main point upon which the Committee was dividing. I see my name there. I find there the names of my right hon. and learned Friend, my night hon. Friend the Paymaster-General, and my right hon. Friend the Chancellor of the Exchequer.

It is really very perplexing, particularly at this late hour of the night, for those of us who do not understand the intricate problems of the law, to find that, in the course of eight years, we seem altogether to have changed our minds. I beseech my right hon. and learned Friend to think about this important point once again, between now and the Report stage. I am bound to say that, although I followed his argument, which was, as always, lucid and clearly expressed, I was not persuaded that the Amendment was so bad as he sought to persuade us that it was.

Amendment negatived.

The Solicitor-General

I beg to move, in page 17, line 31, to leave out "subsection (2)" and to insert "subsections (2) and (3)".

This is merely to make the proviso read rather better. The proviso to subsection (1) requires both these subsections to make it work properly in all cases.

Amendment agreed to.

The Solicitor-General

I beg to move, in page 18, line 24, at the end to insert: (4) In determining under this section the duty chargeable by reason of the purchase of an interest in settled property, any consideration for the purchase consisting of another interest under the settlement shall be disregarded, unless there has been a prior purchase of that other interest, being a purchase in respect of which duty would be chargeable on the death under this section apart from the proviso to subsection (1) and apart from this subsection; and if there has been such a prior purchase, the consideration for it shall be treated for the purposes of this section (except for the purpose of determining its value) as given not for that purchase but, in place of the said other interest, for the first-mentioned purchase. To make the Amendment intelligible, I should be compelled to use my best endeavours in delivering an abominably long lecture to the Committee, and I do not feel that that is required of me at this hour. The reason that the new subsection has to be put into the Clause is this. It is designed to deal with the not extraordinary case where the life tenant and the reversioner divide the totality of the settled fund in specie, as it were. Unless this provision is added, that transaction would have the result of attracting to itself two separate varieties of anti-avoidance legislation, namely, this Clause and the provisions of Section 43 of the Finance Act, 1940, dealing with the disposing of life interests and the like. The result would be an overcharge.

The words in the proposed subsection down to "disregarded" lay down the general principle of its operation, which is to disregard, in computing the duty, any consideration for the purchase which consists of another interest under the settlement.

It is necessary to qualify the general rule there provided to deal with the case where there are successive purchases of interests within the five years and what is bought in the first instance is used as consideration for the second purchase. That is the explanation of the need for the subsection. If I have to elaborate it, I would have to be longer, but I am at the disposition of the Committee if hon. Members so desire.

11.45 p.m.

Major Hicks Beach

I fully appreciate the complicated nature of the subsection, which my right hon. and learned Friend has explained well. Am I not correct, however, in saying that it is necessary because the Clause as drawn would have meant that in certain cases people would have had to pay more duty than the money they would receive? This illustrates the extreme importance of reviewing the Clause to consider some of the great anomalies which arise.

I sent representations on the matter to the Inland Revenue and I am appreciative that the point has been taken. This shows, however, the need for careful consideration of the Clause. We accept that the Government have now put the matter right, but what would have happened if it had not been spotted?

Amendment agreed to.

The Solicitor-General

I beg to move, in page 18, line 29, to leave out "or other dealing with".

This Amendment does not alter the effect of the Clause. It only makes it more easy to read.

Amendment agreed to.

Mr. Fletcher-Cooke

I beg to move, in page 20, line 7, at the end, to insert: (e) where the purchased interest was immediately before the purchase vested in a charity, the period of one year shall be substituted for the period of five years mentioned in subsection (1) of this section. Shortly, the object of the Amendment is to ensure that charities which have a concession concerning the five-year period under the existing law do not lose that concession when the law is amended. At present, if a life tenant disposes of his life interest to a charity, interest in reversion, whether voluntarily or for value, to the trust fund escapes duty after one year; but under the Bill as drawn, if the life tenant purchased the charity's reversion, the purchase money and the trust fund might well remain liable to duty for five years.

Since it is the object of the Government, which we all support, to harmonise the law relating to these two methods of achieving the same object, I am sure that the Government would like to harmonise it completely in the case of charities.

The Solicitor-General

My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) has put the point so neatly that I need not develop it. It looks as though the Clause would seldom be in point in the kind of case that my hon. and learned Friend has in mind, because if property is left to Mr. A for life, and then to a charity, it would be the charity that would suffer duty on Mr. A's death and the odds are that the charity would be the person anxious to bring the settlement to an end and that the transaction would be done the other way round by the charity buying the life tenant's interest.

Obviously, however, there might be cases where, because the life tenant desired to retain certain assets in the fund, the transaction was done the other way round. My hon. and learned Friend's Amendment is right in principle and I am obliged to him for raising and stating the point so neatly. The Amendment, however, is not quite right, because it would give this benefit only to charities and the parallel case to which my hon. and learned Friend referred deals with public or charitable purposes, a rather wider category of matters. It would seem that it ought to run parallel in both cases.

If, having raised the point, my hon. and learned Friend were minded to withdraw his Amendment, I have authority to say we would undertake to put down an appropriate Amendment to meet the point on Report.

Mr. Fletcher-Cooke

I am very grateful to my right hon. and learned Friend for that assurance and concession, and I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Major Hicks Beach

I beg to move, in page 20, line 20, at the end to add: except that it shall not have any effect in relation to any purchase in respect of which the Commissioners of Inland Revenue had before the fifteenth day of April, nineteen hundred and fifty-eight, given to the trustees of the settlement an assurance in writing exonerating them in the event of the purchase being completed from liability for estate duty on the death of the deceased in respect of the settled property in which subsisted the interest purchased". The object of this Amendment is to clarify the position which may arise, and has arisen, I have no doubt, in a number of cases, where it has been agreed between the parties to bring the settlement to an end and on terms agreed application has been made by the parties to the Revenue under Section 44 of the Finance Act, 1950, for what is called a clearance certificate given by the Revenue conditionally on the terms being carried out.

In certain cases it is probable—and I believe it to be so, although I am not personally concerned in many such cases—that a formal assignment of the reversioner's interest to the life tenant has not physically been carried out. If this Amendment were accepted the position would be made clear that where there has been agreement between the parties before 15th April, 1958, the agreement would be regarded as final.

I do not know what the view of the Treasury may be, but my own view is that where we have an agreement of that nature the mere completion of the formal assignment would not be necessary. We have a very good example in an ordinary purchase of house property. Once the contract is signed there is an agreement between the parties, which is enforceable, and there is no necessity to have a formal conveyance.

I move the Amendment to make the position clear. If that is the view of the Revenue, if the position I have stated is legally correct, then the Amendment should be made to the Clause, because it is not the view of the Revenue which makes law, but decisions of the courts. I therefore very much hope that the Government will accept the Amendment.

The Solicitor-General

I think that it is necessary just to see what my hon. and gallant Friend's Amendment would do. As the Clause now stands, by virtue of the provision in subsection (11) it will not impose a charge to duty in any case unless the purchase of the interest bought took place after Budget day. My hon. and gallant Friend's Amendment would also exclude purchases made after Budget day from this charge in cases where the trustees had obtained an assurance that if the purchase were made they would be exonerated from duty in respect of it.

I think that there are two situations to be looked at. I think that I can give my hon. and gallant Friend quite firmly the basic assurance which he wants without accepting his Amendment, which goes further than my right hon. Friend could accept in the context. There are two categories of people to be considered. Trustees usually do not get this assurance until the arrangements for the transaction are fairly far advanced. Once they get the assurance the transaction is usually completed fairly quickly, and the more so as one gets near to Budget day, because people in this field know that Budget day is likely to be important.

In those cases where the parties, before Budget day, have committed themselves in respect of the assurance given—that is to say, have entered into a binding legal obligation to purchase—those cases, for the purpose of this Clause, are quite safe.

The test is not, has the transaction been formally completed before Budget day, but, from the Revenue angle, was there a binding obligation to purchase before Budget day? If there was, there would be no charge of duty. People are well aware of this, because after Budget day they were writing to inquire whether their particular purchase would be held to have occurred before Budget day. In a number of cases it has been decided that this is so.

In cases where the parties have not entered into a binding commitment before Budget day, it does not seem right to include them, whether they had an assurance or no, because they were free to withdraw when they heard what the Chancellor said. It would be difficult to draw a line between them and anyone else contemplating a transaction and in a position to withdraw after Budget day.

I hope that I have given my hon. and gallant Friend the precise assurance which he desired and explained why we could not go so far as to accept the Amendment.

Major Hicks Beach

That has not gone quite far enough. I want to get clear whether the case is covered where an application for a clearance certificate has been applied for, and the Revenue has said, as it always does, that it is only prepared to allow it if the parties are agreed.

The Solicitor-General

I cannot do better than state the test as I believe it to be. Was there a binding commitment between the parties to buy and sell before Budget day? That is the test.

Mr. Mitchison

Am I right in assuming that the meaning the Solicitor-General is giving to purchase is a binding agreement completed?

The Solicitor-General


Amendment negatived.

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

Mr. Glenvil Hall

I do not think that we can let this Clause pass without someone voicing the perturbation which many hon. Members feel at the number of Amendments which have been made to this Clause. I know that it is a technical matter and not easy to understand or to draft. The Chancellor himself has moved two or three Amendments, and the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) has moved an Amendment, the subject of which had obviously been overlooked by the Treasury. I should like an assurance from the Solicitor-General that the Clause is now as water-tight as it can be and is designed to, and will, operate the functions which it is intended to perform.

12 midnight.

The Solicitor-General

Devoutly I hope that that is so, but I should not like the right hon. Gentleman or any hon. Member to gain the impression that if someone has a good idea, which we think is one, we shall hesitate from any amour propre to insert it in the Clause. I do not mind getting a thing as good as we can possibly get it at any stage, and it is a brave man, with respect to the right hon. Gentleman, who thinks that, in a field so abominably technical and difficult as this, one can get it right at first blush without all the assistance that one can find.

Mr. Mitchison

The general intention of the Clause is perfectly clear and so is the type of avoidance with which it is intended to deal. We understand the Solicitor-General to say that he devoutly hopes that it has done its job. We understand him at least to hint that if it has not, the job will be completed. He would complete the picture if he were to say that the job would be completed retrospectively, if necessary.

Question put and agreed to.

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