§ From and after the commencement of this Act no stamp duty shall be chargeable upon a receipt (as defined in subsection (1) of section one hundred and one of the Stamp Act, 1891) and subsection (2) of the said section and sections one hundred and two and one hundred 1506 and three of the said Act shall be repealed and any stamp duty chargeable under the heading "Receipt" in the First Schedule to the said Act shall be nil:
§ Provided that if any person upon the request of a payee refuses to give a receipt in respect of any money, bill of exchange or promissory note or the settlement, satisfaction or discharge of a debt or demand as defined in subsection (1) of section one hundred and one of the said Act he shall incur a fine of ten pounds.—[Mr. Page.]
§ Brought up, and read the First time.
§ Mr. Graham Page (Crosby)
I beg to move, That the Clause be read a Second time.
I cannot accept the offer of either Front Bench. When one has the opportunity to move a Clause from the back benches, even at this hour, one takes that opportunity, and does it briefly.
The intention of this Clause is to abolish the 2d. stamp on receipts. I have endeavoured to estimate how much the Chancellor is obtaining from this source of Revenue at present. For the year 1956–57, the revenue from 2d. receipt stamps amounted to a little over £5 million. That was an estimate of the amount, because that is the sum which the Post Office paid to the Inland Revenue Department as representing the 2d. stamps on receipts In October, 1957, the Cheques Act took effect. It did not change the law concerning receipts, but it drew attention to the fact that a paid cheque was evidence of receipt. Hon. Members know the practice which has been adopted since then of not giving receipts for payments made by cheque unless those receipts are requested.
I have no figure for the revenue from 2d. receipt stamps subsequent to October, 1957, but it can be estimated fairly accurately. The revenue from the 2d, stamps on the receipts printed on the backs of cheques has almost entirely gone. It was estimated that of the 800 million cheques drawn each year about one in every five had the printed receipt on the back. Therefore, I calculate that the Chancellor has already lost Ell million of his £5 million by the abolition of the receipt on the backs of cheques. Therefore, he is down to £3⅔ million from that cause.
Of the remaining cheques, some 650 million of them, it is reasonable to assume that half were paid in circumstances in which a receipt was formerly 1507 given and is now no longer given. These receipts brought in revenue of £2¾ million, the loss of which brings the Chancellor's present revenue from 2d. receipt stamps, as I estimate it, to £975,822, or less than £1 million.
When I say that the Chancellor has lost over £4 million, he has not lost it all, because the 2d. receipt stamp was a deductible expense for tax purposes. Although one hopes that now that it is not a necessary expense its equivalent has gone to reduce the price of commodities, no doubt part of it has gone to swell profits and to that extent the Chancellor gets a certain amount of it back in tax.
There has, however, been more saving out of this than the mere 2d. stamp. There has been immense saving in the expenses of making out receipts. It has been fairly reliably calculated that the clerical work, the printing, posting, and so on, costs 3d. or 4d. and, with the postage stamp and the receipt stamp, every receipt probably costs about 8d. Totalling that up for the number of receipts which were being given before the Cheques Act came into operation, one calculates that there has been a saving to commerce, industry and the professions of something like £13½ million. Although, again, one hopes that much of that has gone to reduce the price of commodities, undoubtedly a considerable proportion of it has gone to swell taxable profits and the Chancellor has got back in that respect more than he has lost in the reduced use of the 2d. receipt stamp.
It would be most ungrateful of the Chancellor not to abolish the 2d. receipt stamp and give up this comparatively small sum of less than £1 million in return for the considerable amount which he is gaining from another source. The story of the Chancellor's gains as a result of the Cheques Act does not end there. There have been economies in the Government Departments by the abolition of endorsements, and similar economies in other offices. So it does seem that there would be a net gain to the Revenue out of it, even if the 2d. receipt stamp were now abolished.
Of course, one must still retain the obligation to provide a receipt when it is asked for. A receipt is still necessary for payment by cash, and a receipt is still 1508 necessary for some payments by cheque, for example, for payments of rent, in respect of which a receipt has certain legal results. That, however, is no reason for retaining the 2d. stamp on the receipt. Here there is a dwindling revenue. The Chancellor is fighting a rearguard action against this loss of the 2d. receipt stamp. The continued requirement of it is now involving quite unproductive time, out of proportion to the return. I hope that the Chancellor can see his way to abolishing it altogether and relieving commerce, industry and the professions of this pettifogging tax.
§ Mr. Simon
I do not propose to follow my hon. Friend the Member for Crosby (Mr. Page) into the economic and fiscal effects of the Cheques Act, although I certainly must not be taken as accepting his figures and estimates. It is sufficient for me to answer his question what this new Clause would cost. The loss of revenue cannot be precisely estimated, but so far as we can judge it would be between £2 million and £3 million. It is certainly worth the cost of collection. There are other defects in the new Clause, but in view of the fact that my right hon. Friend is not prepared to forgo such a large sum by way of revenue and certainly would not put this in the highest priority if the sum were available, I do not think it is necessary for me to go further into the matter, but merely say that I could not advise the Committee to accept the new Clause.
§ Mr. Edward du Cann (Taunton)
In view of the fact that there are a number of other arguments which could well be put forward on this matter, would my hon. and learned Friend be so kind as to preserve an open mind on the question?
§ Question put and negatived.