§ Mr. Mitchison
I beg to move, in page 22, line 14, after "chargeable", to insert:in relation to any conveyance or transfer on sale of any estate or interest in lands, tenements, hereditaments or heritages and so chargeable.This Clause does two things. It deals with a reduction of Stamp Duty and it recodifies, and in minor respects maintains, the provisions of the Stamp Act. It is in relation to the former of those 1271 two matters that this Amendment has been put down.
Perhaps it would be convenient if I referred almost in one sentence to the remaining Amendments standing in the same names, which are as follow: In page 22, line 39, to leave out subsection (3) and to insert:(3) Subsection (1) of this section shall not affect the duty chargeable on or any provisions concerning any instrument, conveyance or transfer on sale not being such a conveyance or transfer on sale as is mentioned in that subsection.In page 23, line 6, to leave out from "disregarded" to "and" in line 17.
In line 22, to leave out from beginning to "made" in line 45 and to insert:(5) Where any such conveyance or transfer on sale as is mentioned in subsection (1) of this section is.and in page 24, line 1, to leave out "or by reference to."
Those, however, are Amendments simply relating to the recodification, and as it is beyond the powers of this side of the Committee to adapt the recodification to the Amendments proposed, we have, in effect, left out the recodification by those Amendments. That is not to say that there is any impossibility of doing so, but it is a matter of extreme difficulty and complication. We take off our hats in these matters to the Parliamentary draftsmen and would never seek to emulate them on a venture of this sort.
What I am putting before the Committee tonight is, in substance, the first of these Amendments. Its object is to limit the reductions made by subsection (1) to conveyances or transfers on sale relating, in effect, to land and houses. When the Chancellor referred to this matter in his Budget speech on 15th April he referred entirely to houses. He proposed, he said, in a modest way to help people who wished to buy their houses. He then mentioned the figures referring to conveyances of land and buildings, and in a comparatively short passage he did not make any reference to any other subject matter at all.
Of course, the conveyance or transfer on sale does cover in the Stamp Act conveyances or transfers on sale of everything but marketable securities. It covers a whole variety of things which are not land or houses and which were 1272 not, therefore, referred to by the right hon. Gentleman in his Budget speech and as regards which his benevolence might not be so appropriate and would certainly be more indiscriminatory.
It is, in effect, the residual part of the conveyances or transfers on sale that we are discussing and that we see no particular reason to include. If I may, I will give a couple of examples. Suppose that a shop and a business are sold. The conveyance or transfer on sale may relate—and probably will in most cases—not merely to the value of the property itself, the land and the building, but also in some form or another to the business. I think that the stock in trade is otherwise provided for in the Stamp Act and certainly the item of goodwill is.
The effect of the reduction as put forward here is to cover not merely the shop, the physical thing, but also such an item as goodwill, and that is only one case. "Marketable security" means a security that is marketable on a Stock Exchange in accordance with its ordinary use and practice, not necessarily regularly or frequently marketable. I can only leave hon. Members to imagine for themselves the variety of things that will fall between, on the one hand, marketable securities, with which we are not concerned, and, on the other, the land and houses that, so far as this Amendment goes, we all agree should receive the benefit of a reduction.
The case put forward by the Chancellor was simply that in a modest way he proposed to help people who wished to buy their houses. So does the Labour Party. Although I am not going into the party's proposals for doing so, it has, in fact, made considerable and detailed proposals with a view to helping people to buy their houses. They are not in a position to deal with Stamp Duty. I do not think that it is mentioned in those proposals, but we are glad to see that in this matter we have, at any rate, the concurrence of the right hon. Gentleman in the end, although the means are, no doubt, somewhat different and he might perhaps disapprove of our proposals. We do not disapprove of his proposals so far as land and houses are concerned. On the contrary, we welcome them.
1273 However, when it comes to dealing with the vast possibilities of other things which may be covered by conveyances or transfers of sale, and, in one case, of goodwill—one could think of many others—I see no real reason why the reduction should be made and no particular reason for the proposed concession. That is really the point.
It is getting very late, and I do not think that if I talked for a great deal longer I should say much more that was of any value to the Committee. I hope I have made my point clear. It is a very real point, and I hope that, though put shortly, it will be at least taken seriously and at most accepted.
§ Mr. Maudling
The hon. and learned Gentleman the Member for Kettering (Mr. Mitchison) is quite right. Clause 28 is intended to help home ownership, but it affects transfers of certain other items of property such as, in particular, goodwill or copyright or book debts, to which he referred. It is true that my right hon. Friend did not refer to those specifically in his Budget speech. The reason is simple. These items have always, in practice, moved with the abatements or special provisions of duty in the case of small properties.
From 1891 onwards, when they were included under the same head in the Stamp Act with transfers of land, they have always been treated on the same basis. I will not go through all the examples. There was a case in the 1910 Finance Act, where there was a special provision for transfers not exceeding £500; again in 1920, in 1952 and 1956.
The precedent which will, I hope, weigh with the hon. and learned Gentleman the Member for Kettering is that in the Finance Act of 1947, where his own Government doubled the rates of Stamp Duty. Of course, Stock Exchange transactions and transactions in marketable securities have always been treated differently, but they not only continued the small transactions relief in respect of conveyances and transfers up to £500 but extended it to conveyances and transfers up to £1,500. In that case, they did what we are doing now, which has always been done: they included with the transfers of land these other items such as goodwill and copyright, which have, ever since the Stamp Act, 1891, been charged under the same head.
1274 The simple argument is the argument of precedent. It has always been done in this way by both parties, and, although it may not be altogether logical, I think it is a good precedent. I see no strong reason for departing from it at this late stage in the life of the Stamp Act or at this late hour of the night.
§ Mr. Mitchison
We may have to refer to this matter again later. The only comment I make now could be applied to the last Amendment we were discussing. I rather wish that the Government would see their way to giving more help to museums and public galleries and not so much to the vendors of goodwill or copyright.
The particular reasons for giving people help in buying their own houses do not really apply in those other cases, and precedents can occasionally be varied even by a Tory Government. This is quite an expensive concession, involving, we were told, the best part of £3¾ million this year and the best part of £6 million in a full year. In the circumstances, I suppose that we shall have to let the Amendment be defeated for the moment, reserving the right to refer to it again.
§ Amendment negatived.
§ Mr. Maudling
I beg to move, in page 24, line 15, at the end to insert:(8) In exemption (11) in the heading "Receipt" in the same Schedule (which exempts certain receipts endorsed or otherwise written upon or contained in an instrument liable to stamp duty and duly stamped), the reference to an instrument liable to stamp duty and duly stamped shall be taken to extend to any instrument wholly relieved of duty by the provisions of this section relating to instruments certified at three thousand five hundred pounds.Receipts are normally subject to the 2d. Stamp Duty, but they are exempt from the Duty by exemption (11) of the First Schedule to the Stamp Act, 1891, if they are contained in documents which are themselves liable to Stamp Duty and duly stamped. The Bill is exempting from Stamp Duty conveyances of property where the consideration is not more than £3,500. In consequence, exemption (11) to which I referred will no longer cover receipts for money contained in conveyances for £3,500 or less. Failure to put a 2d. stamp on such conveyances might well render them ineffective as being documents not duly stamped. This was not in contemplation at the time the 1275 Clause was drafted, and it is only common sense that the Amendment should be made.
§ Mr. Mitchison
I am glad to hear that the Government take the view that it is only common sense to throw some twopences down the drain.
§ Amendment agreed to.
§ Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.
Mr. H. Wilson
I do not wish unduly to detain the Committee at this late hour, although there is a very important point involved here, as the Financial Secretary knows, because we have had an exchange about it at Question Time and in correspondence. Perhaps I should do no more than give notice that we hope to raise the matter on the Report stage of the Bill. Whether it will be called is not something on which anyone can make a forecast at this stage.
This change in Stamp Duty announced by the Chancellor has effect only as from the beginning of August. It was not possible by a simple Amendment to deal with the point; at least, we have not so far found it possible, because of the very serious complications mentioned to us by the Financial Secretary when we first raised the matter at Question Time. He explained—I think this is right—that the Stamp Duty is not covered by the Provisional Collection of Taxes Act, and, therefore, a change in Stamp Duty cannot have any statutory effect until the Finance Bill itself becomes law. I hope that one result of this will be that, even between now and Report, the Chancellor will take steps to ensure that the Stamp Duty should be covered by the Provisional Collection of Taxes Act, so that the point will not be in doubt on a subsequent occasion. I think that has happened before.
The Committee cannot be in any doubt about the serious difficulty that this has presented in connection with the sale of houses and other property over the past few months. Anyone who knows that there is to be a substantial reduction in Stamp Duty will inevitably be tempted to postpone the transaction. My information is—I have had letters about this; I expect other hon. Members have, too—that there has been chaos and confusion 1276 in the house purchase market because of the failure—I do not use the word in a critical sense—or, at least, inability of the Government to give immediate effect to this as soon as the Chancellor announced it.
To save the time of the Committee, as the hour is very late, I put it to the Chancellor that this is a point that should be cleared up, if possible, on this Bill. If that is not possible, at least there should be legislative provision to ensure that this trouble does not recur. We hope, therefore, to discuss the matter on Report by means of a suitable Amendment. Even if we find that the Amendment does not meet all the problems that were described to us by the Financial Secretary, we hope at least to have an Amendment on which it will be possible to hang some sort of discussion.
§ Mr. Maudling
As my hon. and learned Friend the Financial Secretary undertook, since the right hon. Member for Huyton (Mr. Wilson) asked his Question on 24th April, we have made a further examination of the suggestion and the possibilities of retrospective legislation. Despite the examination, we still feel, however, that the practical difficulties of doing it are insuperable.
I do not want to invite the right hon. Gentleman into a long speech on the subject. We have had one or two in the last hour or so, although this is a far more important point than the one on which we have just spent 40 minutes. Is the problem simply that of the Provisional Collection of Taxes Act? Are we in some way precluded from making this retrospective now in the Bill because of that, or did the omission of this provision from that Act merely explain why the Chancellor could not do it at the time? In other words, would there not be a case, for example for taking powers in this Bill, when it becomes law, to make this provision retrospective, for instance, tonight?
I can understand the difficulties of putting in the Bill something which would go right back to Budget day, 15th April. There would then need to be an enormously complicated machine for refunding tax paid and all the rest. Is there, however, anything to prevent the Chancellor announcing today, or, at latest, on Report, that this will be done 1277 retrospectively to the date of the announcement and that the Bill should validate that by the time that it receives the Royal Assent?
I am sure that this is a form of retrospective legislation to which no hon. Member opposite would object. It would be covered by an appropriate Ministerial warning or, in this case, promise. There could be no argument about it. In any case, it would be to the benefit of the tax-payer and the detriment of the revenue, instead of the other way round, as was the case we debated a week or two ago. We have already had this done or promised in relation to initial allowances, for which the Chancellor is getting in effect a piece of retrospective legislation. I wonder whether the Treasury would look at this matter again and see whether something could be done on Report to give effect to that proposal, at least if we cannot go back to Budget day.
§ Mr. Maudling
The difficulty concerning retrospection is not legal, but practical. The right hon. Gentleman may be right in saying that by Report it might be less impractical, but it would also have less practical effect, because between Report and the coming into effect of the Bill there would be such a small gap that I doubt whether much inconvenience would be caused to people dealing in property. The difficulty is one in practice of making repayments and is not a difficulty of law.
I understand that, but I want to put this to the Paymaster-General. Would the right hon. Gentleman consider the time of the year we have reached? If it were possible to give effect to this—shall we say?—next week or from the date of Report, whenever that may be, it would perhaps enable to go forward a number of transactions which, I think he will agree, have been held up pending the coming into effect of the lower rate of Stamp Duty. It would enable a number of families to move into their new homes in July or at the latest the August Bank Holiday weekend.
I know of families who are waiting to move. It seems a little hard, after this concession has been announced, that they should have to be faced with this choice, that they must either pay the higher rate of duty now or delay their move until September, or some such much later date. 1278 Perhaps the right hon. Gentleman will consider this, or consider an Amendment on Report, or propose one himself then.
§ 1.30 a.m.
§ Mr. Graham Page (Crosby)
I appreciate the argument of the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), but I think that he has missed the point, that if a conveyance were completed now it could be held for Stamp Duty for 28 days without anyone running into penalty. So there would be little point in passing a provision such as he has suggested. If necessary, a conveyance can be completed next week and dated next week and can be held for stamping until the beginning of August.
I was proposing giving longer in view of the announcement which has been made and because this is a critical time of year.
§ Question put and agreed to.
§ Clause, as amended, ordered to stand part of the Bill.