Clause 45.—(PENALTY FOR FRAUDULENTLY MAKING INCORRECT RETURNS, ETC.) (Hansard, 6 July 1960)

§ The Solicitor-General
I beg to move, in page 43, line 16, at the end to insert: "or negligently".
This Amendment goes with Amendments 67, 68, 69, 70, 71, 72, 91, 92, 93, 637 and 94, and, with your permission, Mr. Speaker, I propose to discuss them together.
This series of Amendments arise from a point made by my hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens) during the Committee stage. He then raised the question of a taxpayer who made a return which contained both an error due to fraud and one which had an error due to negligence, suggesting that such a taxpayer might be liable to both the penalty of £50 plus twice the amount of the underpaid tax under the fraud provisions and a separate penalty of £50 plus once the amount of the underpaid tax under Clause 46 of the Bill, and my right hon. and learned Friend the Attorney-General promised to consider the matter.
I now tell the House that my right hon. and learned Friend has considered it together with the Chancellor, and I do not think it can be said that we can altogether dismiss the possibility which my hon. Friend the Member for Lang-stone suggested. The Amendments now before the House are designed, therefore, to obviate any possibility of such a construction being urged because it would obviously not be what the committee intended. The Amendments look much more extensive than they are. What has been done is in substance to run together the two Clauses relating to fraud and negligence.
The Clause will read like this: (1) Where a person fraudulently or negligently—

(a) delivers any incorrect return …or

(b) makes an incorrect return … or

(c) submits to the surveyor or any Commissioners any incorrect accounts … he shall be liable to a penalty not exceeding the aggregate of—

(i) fifty pounds; and

(ii) the amount or, in the case of fraud, twice the amount of the difference specified in subsection (1) of section forty-seven of this Act.

(2) Where a person fraudulently or negligently furnishes, gives, produces or makes any incorrect information, certificate, document … he shall be liable to a penalty not exceeding two hundred and fifty pounds. Then subsection (3) will read: Where any such return, statement … and so on as appears in Clause 46 (3).
638 Those Amendments, as I say, obviate any doubt on the point that my hon. Friend raised, and I think that from the point of view of drafting it makes a distinct improvement in the Bill.

§ Mr. Powell
I am obliged to my hon. and learned Friend for having met the anxiety which my hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens) expressed in Committee. It is a cautioning thought to remember that when my hon. Friend mentioned his fears and doubts in Committee the Attorney-General replied: I do not see the least likelihood …" of this thing happening, and I do not think there is the slightest possibility … of the things which my hon. Friend apprehended. This illustrates the benefit of a locus penitentiae between the Committee and Report stages. However, I would like also to add that I feel sure that the attention to my hon. Friend's point has also resulted in much superior, neater and more convenient drafting of the whole part of this Bill.

§ Mr. Houghton
I am sorry that the hon. Member for Portsmouth, Langstone (Mr. Stevens) is not here to celebrate his several victories. I read in the newspaper this morning that when the Division bells rang last night he was found wandering in the precincts in his pyjamas. I do not know in what condition he would be if the Division bells rang now. [HON. MEMBERS: "Try it."]
I quarrel more strongly with the Solicitor-General over this Amendment than the previous one because I think this is a lot of rubbish. The hon. Member for Wolverhampton, South-West (Mr. Powell) has just referred to what the Attorney-General said in reply to the hon. Member for Langstone when he raised this matter earlier on 31st May. The Attorney-General said: I certainly do not think that the consequences which he"— that is, the hon. Member for Langstone— suggests could arise. First, the offence under Clause 44 is of delivering fraudulently an incorrect return. A person does not become liable to a separate penalty for each incorrect entry in the return. He went on a little later to say: I should have thought that it would be very remarkable to find fraud accompanied by negligence in the same return. 639 Then, as the hon. Member for Wolverhampton, South-West has quoted, he said: Again, it is a maximum penalty. I do not see the least likelihood of proceedings for negligence and fraud in relation to the same return, and consequently, I do not think that there is the slightest possibility of these penalty provisions being cumulative in respect of the same returns. I will certainly consider the point between now and the Report stage, but I think that there is no ground for my hon. Friend's fears."—[OFFICIAL. REPORT, 31st May, 1960; Vol. 624, c. 1244–5.] 12.30 a.m.
The promise to consider the matter before the Report stage is common form, especially between Ministers and their hon. Friends. It is usually a device to bring the discussion to an end and get on with other business, with which I do not quarrel in the least. Some of the promises are, perhaps, more seriously intended than others.
What I think is to be criticised is that in meeting this very remote possibility, according to the Attorney-General, the Chancellor has now altered, in my view, the rhythm of the structure of this part of the Bill. Certainly, he has put all the commentaries on the penalty Clauses of the Bill awry because all of them have referred to the convenience of the grouping—failure, fraudulently, negligently, and then aiding and abetting. In the Bill as it was drafted, Clause 44 dealt with failure, Clause 45 dealt with fraudulently, and Clause 46 dealt with negligently, and, although there was necessarily much repetition between Clauses 45 and 46, it set matters out separately and clearly, defining each offence in its own grouping. I thought that that was very convenient, and I am sure that the Chancellor and the original draftsman thought the same.
Now, we are asked to telescope Clauses 45 and 46, to combine fraudulently and negligently, and to provide for the alternative penalties for both within the same Clause. Under the Amendments proposed, the main part of the Clause is scrapped altogether. I think this is a pity. It was certainly more convenient and clear before, and, had it been necessary to guard against this remote possibility—this possibility of which there was so little likelihood—surely it could have been done by a proviso to that effect. I do not view with favour this part of the proposals 640 which the hon. and learned Gentleman has put before us. It is much too late at night to be vindictive about these matters and call upon my hon. Friends to show their displeasure in the usual way, but I hope that he has noted the strong comments I have felt it necessary to make.