HC Deb 01 July 1958 vol 590 cc1251-60
Mr. Stevens

I beg to move, in page 21, line 3, at the end to insert: where the earlier death occurred within three months, by seventy-five per cent. I readily agree that Clause 24 does, in fact, implement the undertaking given by the Financial Secretary when he gave the Government's view during the debate which took place on the Double Death Duties Bill which was introduced by my hon. Friend the Member for Brighton, Pavilion (Mr. Teeling), to whom I offer my congratulations on his choice of Bill and his success with it. I say on his behalf, as he was unable to catch your eye a moment ago, Mr. Storey, how much we all appreciate what has happened and the Government's action.

Clause 24 has dealt with the matter, I agree, but in a very narrow fashion and has applied only to circumstances where the deaths are simultaneous, circumstances rendering it uncertain which of them survived the other or others. Unhappily, I imagine that most of us have had experiences of a man and wife being involved in a motor car accident, aeroplane crash, railway disaster, or something of that sort, where both have been killed as a result of that accident. However, it may be that one has survived the other by a few minutes, by an hour, or by a day or so.

Clause 24 does not cater for that eventuality. It deals with the precise legal point of simultaneous death and it does not deal with the spirit of my hon. Friend's Bill, the payment of two death duties on the assumption that a woman, for example, having survived her husband by an hour or by a day, has enjoyed an income from the estate bequeathed to her for that short space of time.

I gave a good deal of consideration on how to deal with that point, and here I give a very warm welcome to Clause 25, which extends to personal property the right of succession relief which has applied for many years to real property. However, it does not go far enough. By enlarging it by the Amendment, we can make Clause 25 deal with the contingency with which the Committee as a whole would like to deal, where two deaths occur from the same catastrophe, the same accident, the same disaster, but not simultaneously.

It seems logical, reasonable, and the desire of the Committee that we should extend the Clause in the manner suggested in the Amendment and that where the earlier death occurs within three months, which embraces a whole series of disasters which I have in mind, the duty should be reduced by 75 per cent. That does not go the whole way, but it goes a very long way and I commend the Amendment to the Committee.

The Temporary Chairman

It might be for the convenience of hon. Members if, with this Amendment, we take the Amendment in page 21, line 5, to leave out from "by" to end of subsection and to insert "twenty-five per cent."

Mr. Diamond

I am grateful to you, Mr. Storey, for allowing discussion of this very similar Amendment, although in somewhat the opposite direction to that moved by the hon. Member for Langstone (Mr. Stevens). I shall not discuss it at length, for we members of the Labour Party discuss matters at length only, as has been made absolutely clear, when we feel that they demand lengthy and detailed discussion. Although Clause 24 is a Clause with which we can all agree, and for which we can have immediate sympathy, Clause 25 goes much too far in giving relaxation in circumstances where such relaxation is not necessary. The hon. Member for Langstone referred to husband and wife, but there is nothing in the Clause to say that it will apply only to husband and wife. It also refers to property which might be left to complete strangers. I agree that one must deal with cases which are not completely simultaneous. The hon. Member mentioned the period of three months and in certain circumstances cases within one year might require consideration, because of the time needed to clear up assets and to take any action desired, and so on, and in which there was no time to do those things.

12.15 a.m.

One ought to have some sympathy where death occurs within one year, and the sympathy proposed in the Amendment is a 25 per cent. reduction. It is difficult to see why we should go beyond one year, especially in cases which are not necessarily of husband and wife but possibly of complete strangers. My hon. Friends and I who have put our names to the Amendment feel that it would be adequate to deal with the case of two deaths affecting the same property within one year by giving a 25 per cent. relief and no more. The purpose of the Amendment is to make the point quite clear and to seek a full explanation why we should go much further and why, because of the proper case covered by Clause 24, we should then proceed in Clause 25 to cover five years from the date of death, which is a very long time during which many things may happen. The Financial Secretary will have to satisfy us that in every possible case covered by the Clause there is some hardship even at the end of five years which entitles the second owner of the property to some special relief.

Mr. Simon

If my hon. Friend the Member for Langstone (Mr. Stevens) or any other hon. Member would be good enough to re-read the speech which I made on Second Reading he would agree that the changes made in Clauses 24 and 25 meet not only the letter of the undertaking which I gave but also the spirit of it. I said that there were three methods of dealing with the problem. The first I need not trouble the Committee with. The second is the method embodied in Clause 24 and the third is the method embodied in Clause 25. I said that my right hon. Friend had not decided whether to adopt one or the other or even some quite different method. In point of fact, my right hon. Friend has dealt with it by two of the methods, thus giving extensive relief.

Having said that, I come to the point raised by the hon. Member for Gloucester (Mr. Diamond). His Amendment restricts a relief which has stood since 1914. Since 1914, for agricultural land and family businesses, there has been a similar scale to that set out in Clause 25. In other words, when the earlier death occurs within one year, there is a 50 per cent. abatement, and so on, down through a five-year scale to the point at the end of five years where there is a 10 per cent. abatement. It seems unnecessarily harsh now to restrict any relief to 25 per cent. and to terminate it at the end of a year.

When this matter was debated, the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) went in the direction indicated by my hon. Friend the Member for Langstone. He said that what should be considered is that when a person dies within a shorter period than twelve months there should be a greater increase than 50 per cent. in the concession. He wanted to see a general extension of the concession and of the sliding scale established under the 1914 Act. He wanted it extended in the direction for which my hon. Friend has argued. I can see no argument for restricting a concession which has stood for some time.

Mr. Mitchison

Could the hon. and learned Gentleman tell me whether the 1914 Act made this concession to agricultural property in the same way that agricultural property gets the benefit of a lower rate of Estate Duty, or was it a wider concession?

Mr. Simon

I rather think that the general Estate Duty concession of 45 per cent. was later than 1914. What the 1914 Act said was that the sliding scale should apply to quick successions in the case of agricultural land and family businesses. That has since been extended in certain respects.

Mr. Diamond

To members of the same family?

Mr. Simon

It was not restricted. It was absolutely general, and it seems to me that it would be quite wrong and almost impossible administratively to cut it down to members of the same family.

The only question is whether we should extend it in the direction for which my hon. Friend the Member for Langstone has argued today and as the hon. and learned Member for Leicester, North-East asked last January. The original justification for the relief under the 1914 Act was the difficulty of raising two lots of duty out of property like agricultural land or family businesses without selling such property.

Now that the sliding scale has been made general, that argument has, I think, gone; but side by side with that argument there has always been the feeling that Estate Duty ought not to strike more than once in a generation, and that, generally speaking, it is unfair to levy the full duty twice in quick succession.

It is a matter of judgment as to where one starts the scale and where one starts the relief, but the concession for which my hon. Friend asks, and for which the hon. and learned Member for Leicester, North-East argued on the previous occasion, would cost £50,000 this year and £100,000 in a full year. I think my hon. Friend is right in saying that it would go some way to meet the very hard case where the deaths do not occur simultaneously in a common disaster, but where one of the parties in the disaster survives the other for a short time.

Considering that matter and considering the hardship that can be caused in cases of that sort, my right hon. Friend is prepared to accept the Amendment.

Mr. Glenvil Hall

Surely no question of hardship arises in the case of two people not dying simultaneously—say, a wife, with her husband—but of one of them, the wife, dying perhaps a month or two afterwards. She would still come under the first leg because the death would occur within one year. Therefore, it seems to me that she would be entirely covered except that relief would only be up to 50 per cent. instead of the 75 per cent. for which the hon. Member for Langstone (Mr. Stevens) asks.

I listened with great care to what the Financial Secretary said. I am inclined to accept what he said as reasonable, although I can imagine cases where instead of hardship being inflicted on the individual, as in many cases in the past, the hardship will be inflicted on the Exchequer because of the five-year rule applying in cases where money or an estate passes not between relatives or close business associates, but to people whom one might describe as complete strangers.

We all want to see the concession extended to relatives and close business associates and others connected in that way, but I hope that the hon. and learned Gentleman will resist the suggestion of the hon. Member for Langstone, which goes too far.

Mr. Stevens

As I understand my hon. and learned Friend, so far from suggesting that he would resist the Amendment, he said that he would urge his right hon. Friend to accept it, and I should like to express my sincere thanks to him.

Mr. Mitchison

It seems to me that there are two distinct matters here. The first is the question of the death of the deceased by disaster, and to hear the hon. Member for Langstone one would think that he and all his hon. Friends invariably died from motor car accidents. I hope that some of them will perish more peaceably in their beds.

If we are to consider this matter solely from that point of view, I agree that it is a question of judgment, and I am not at all convinced that the proposal that he has made does not go much too far. But if an Amendment is to be introduced by the Government at a later stage—I am sure I shall be corrected if I am wrong—I would rather look at it when it comes.

Mr. Simon

I do not think I can have made it clear—and it is only right that I should make it clear to the Committee—that I am advising the Committee to accept my hon. Friend's Amendment for the reasons that I gave.

Mr. Mitchison

I regret that that has been done without further consideration. I feel myself that this will cover the case of the accident and of the two people being injured and dying in a short interval, but it will also cover a number of other cases in which the coincidence of the two deaths is a matter of no accident at all but purely in the ordinary course of life.

When one comes to the Amendment moved by my hon. Friend, I am bound to say that I found the hon. and learned Gentleman's answer somewhat unconvincing. He said that this is an attempt to upset an arrangement which has been in force for a considerable time. But later on he gave, quite correctly I believe, the reason why that arrangement was introduced and why it has been in force for a considerable time. The reason simply is that in both the cases—agricultural property and family businesses—the incidence of two sets of Estate Duty, the one shortly after the other, imposes an exceptional difficulty due to the character of the property, and I may add, a difficulty, too, very often from the point of view of the Revenue of collecting the duty in such cases.

It has been because of the exceptional character of the property, and for no other reason, that that exceptional treatment has persisted for that kind of property only for a number of years. We are now asked to make a similar concession not merely for that kind of property but for every other kind of property, too. We are asked to extend it to cases where two people die at an interval of three or four years and the only property consists, let us say, of a substantial holding of what I believe are commonly known as "Daltons." That is a very different matter indeed from the previous case and raises quite different considerations.

It seems to me that my hon. Friend's Amendment raises quite different considerations from those which were suggested in respect of the accident cases. The trouble about the Amendment relating to accidents is that it is not limited to accidents. I should have thought in general that as a venture, as it were, the Government proposals went too far. They cost £1¾ million, we were told, in the first year and £3½ million in the second year. I cannot but remember that a number of personal reliefs have been refused which would certainly have cost about the same comparable amount. I think that it would have been better to have made rather more concessions in the personal relief part of the Bill and to have been more critical of these concessions on the lines suggested by my hon. Friend.

There it is. We may have to consider other action in connection with this Clause at a later stage of the proceedings. For the moment, I can only say that it makes me somewhat uneasy, partly because of the reasons which the Government have adduced about it, which I thought were more than usually unconvincing, and partly because I do not feel that, if the Government are unable to make concessions over other matters, particularly personal reliefs, they should be quite so ready to go quite so far on this type of proposal.

Amendment agreed to.

Mr. Simon

I beg to move, in page 21, line 23, at the end to add: (5) If the enactments relating to estate duty in force in Northern Ireland make provision corresponding to this section, and include provision for giving relief by reference to duty paid under the law in force in Great Britain, then for the purpose of determining the relief (if any) to be given under this section on any death, account shall be taken of the operation of the said enactments on that or any earlier death in relation to property on which estate duty is not payable under the law of Great Britain, so that the like relief shall be given under this section as if in the case of any such property duty payable and relief allowable under the said enactments were payable or allowable under the law of Great Britain; and for this purpose any reference in the Eighth Schedule to this Act to any provision of the law of Great Britain shall include a reference to any corresponding provision of the law of Northern Ireland. The object of the Amendment is to enable the quick succession relief to be given in cases where the property liable to duty on the second death bore duty on the first death in Northern Ireland, but not in Great Britain. Northern Ireland is following this country in introducing the new quick succession relief and is making reciprocal provisions. The Amendment ensures, also, that the two countries between them do not give more relief than is laid down in the scales. I am prepared to spell that out at greater length if the Committee wishes it.

Mr. Mitchison

I have but one question to put. Has the hon. and learned Gentleman any statistics available about simultaneous deaths in motor accidents on the Ulster border?

Amendment agreed to.

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

12.30 a.m.

Mr. Teeling

I am glad to have this opportunity, on this Clause, of saying what I should like to have said on Clause 24. Both the Chancellor of the Exchequer and the Financial Secretary have referred several times to my Double Death Duties Bill, which has passed its Second Reading and is still awaiting further consideration. In view of the fact that not only has the Chancellor carried out the promise which the Financial Secretary made, more or less, on his behalf, but has gone a good deal further than I even expected, I am deeply grateful to him, and so, I know, are many hon. Members of the Committee and many members of the legal profession. I intend now to withdraw the Bill.

Mr. Diamond

I hope that the Financial Secretary will say more than he did in explanation of what is embodied in the Clause, namely, the extension of the quick succession relief to all kinds of property. The hon. and learned Gentleman made it clear that there were two precedents, but they are quite special, and this is an extension of the principle to all kinds of property. He did not really say one ward in justification of the extension. I will remain on my feet while he is refreshing his memory on the points he wanted to make then, I am sure, but had no opportunity of making.

After all, this is an expensive change, as my hon. and learned Friend the Member for Kettering (Mr. Mitchison) said. It is not a negligible Amendment; it is to cost £3 million in a full year, and it is a matter of some substance compared with other concessions. If there is really no justification for the change, other action will be called for later.

Mr. Simon

I need only say that it has now become completely anomalous that the concession in the quick succession relief in the 1914 Act should be limited to agricultural land and family businesses. It has been to some extent extended since then over the years, but it is still subject to limitations which cannot really be justified in modern conditions.

It was the general view throughout the House in the debate on the Bill introduced by my hon. Friend the Member for Brighton, Pavilion (Mr. Teeing) that it should be extended to property generally. The hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas), who has great experience in this type of case, gave his view to that effect; I read a passage from his speech. It was the view of my hon. and gallant Friend the Member for Cheltenham (Major Hicks Beach) and of a great many other hon. Members who have considerable experience. It seems to me that there is every argument in logic in extending to property generally the quick succession sliding scale.

Mr. Mitchison

I think that we on this side would be much more sympathetic to the accident cases, if I may so call them, than to the considerably more comprehensive provisions that occur in the Clause proposed by the Government. These provisions are not accident cases. They are cases for lowering the death duty in a manner that was originally designed to meet a special case and is now being extended at a considerable cost to meet other cases too. So far as they go beyond a comparatively short period, they are not accident cases at all.

Our comment is—I repeat it—that if this amount of money can be spared by way of a concession, we are inclined to believe that it would have been better spared on some of the personal relief matters in which the Chancellor so far has, in our view, been rather close. There is, however, an opportunity for repentance, for there will be new Clauses, too, which will give him an opportunity.

Question put and agreed to.

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