§ As respects chargeable accounting periods ending after the thirty-first day of March, nineteen hundred and fifty-eight, paragraph 11 of the Fourth Schedule to the Finance Act, 1937 (as amended by section thirty-four of the Finance Act, 1952), shall be amended by omitting from sub-paragraph (1) the reference to two thousand five hundred pounds and substituting a reference to two thousand five hundred pounds for each such director, by omitting sub-paragraph (2) and by omitting from sub-paragraph (1) and sub-paragraph (3) the reference to fifteen thousand pounds and substituting a reference to thirty thousand pounds.—[Mr. Arbuthnot.]
§ Brought up, and read the First time.
§ Mr. John Arbuthnot (Dover)
I beg to move, That the Clause be read a Second time.
At the time when distributed Profits Tax was at the highest rate, it was understandable that allowances for directors' remuneration had to be fixed at a low level, but with the conversion of Profits Tax into a straight corporation tax of 10 per cent., the danger of loss of revenue by the temptation to draw salaries which were unreasonably large in relation to services rendered has diminished. I therefore hope my right hon. Friend will be able to give favourable consideration to this new Clause.
§ Mr. Maudling
I do not think my right hon. Friend would quarrel with many of the arguments that underlie this proposal, and it is true that some time has passed since the limits were fixed in the Budget of 1952, but I am not sure that I would accept entirely the argument used by my hon. Friend the Member for Dover (Mr. Arbuthnot). The reason why my right hon. Friend cannot accept it is because the cost would be £4 million, and he does not feel that he could accept a proposal costing that amount this year. But I would point out that he does not for that reason close his mind to considering proposals on these lines on a subsequent occasion. 1513 This year, however, the cost would be prohibitive.
§ 12.45 a.m.
§ Mr. Arbuthnot
I am grateful for the statement from my hon. Friend that our right hon. Friend's mind is not closed to this matter, and I hope he will be producing a fruitful result in the future. In view of this, I beg leave to ask leave to withdraw the Motion.
§ Motion and Clause, by leave withdrawn.