§ Mr. Powell
I beg to move, in page 68, line 14, after "tax", to insert "(including surtax, if any)".
This paragraph of the Schedule provides that relief shall be allowed in respect of Income Tax. In many contexts, if not in most, Income Tax includes Surtax, which is indeed Income Tax charged at a higher rate. Here the context is such as at least to create a doubt that Surtax is included. Here the reference is not to Income Tax simply but to Income Tax chargeable under Clause 35. If we look back to Clause 35, we find that the reference is to Income Tax charged under Schedule E. That does not include Surtax and, therefore, it might be argued that this Schedule does not give relief in respect of Surtax. I apprehend that cannot be the intention, and for that reason we have put down this Amendment.
§ Sir E. Boyle
My hon. Friend is quite correct about the intention of the Bill, and I think he is correct in saying that, in this instance, when one has regard to the way in which the Schedule is drafted there may be a doubt in this case whether Income Tax includes Surtax.
There is a difficulty about the actual wording of the Amendment. Usually 773 Parliamentary draftsmen have a certain uneasiness about putting an Amendment in exactly this form because it could well throw doubt in some other parts of the Bill whether Income Tax includes Surtax or not. I therefore ask my hon. Friend to let us look again at the drafting of any Amendment which is required. We have his point and certainly on Report stage will make plain what is the intention of the Bill.
§ Mr. Powell
I appreciate that my hon. Friend has taken the point and beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
|Relief by reduction of sums chargeable|
|5||3. In computing the charge to tax in respect of a payment chargeable to tax under section thirty-five of this Act, not being a payment of compensation for loss of office, there shall be deducted from the payment a sum equal to the amount (if any) by which the standard capital superannuation benefit for the office or employment in respect of which the payment is made exceeds five thousand pounds.|
|4. In this Schedule "the standard capital superannuation benefit" in relation to an office or employment, means a sum arrived at as follows, that is to say—|
|10||(a) there shall be ascertained the average for one year of the holder's emoluments of the office or employment for the last three years of his service before the relevant date (or for the whole period of his service if less than three years);|
|(b) one-twentieth of the amount ascertained at (a) shall be multiplied by the whole number of complete years of the service of the holder in the office or employment; and|
|15||(c) there shall be deducted from the product at (b) an amount equal to the value at the relevant date of any lump sum (not chargeable to tax) receivable by the holder in respect of the office or employment in pursuance of any such Scheme or fund as is referred to in paragraph (d) of subsection (1) of section thirty-six of this Act:|
|20||Provided that no account shall be taken for the purpose of this paragraph of the service of any person as an officer or employee of a body corporate at any time while he was a controlling director (as defined by section three hundred and ninety of the Act of 1952) of that body.|
|25||5. Where tax is chargeable under section thirty-five of this Act in respect of two or more payments to which paragraph 3 of this Schedule applies, being payments made to or in respect of the same person in respect of the same office or employment or in respect of different offices or employments held under the same employer or under associated employers, then —|
|30||(a) the said paragraph 3 shall apply as if those payments were a single payment of an amount equal to their aggregate amount and, where they are made in respect of different offices or employments, as if the standard capital superannuation benefit were an amount equal to the sum of the standard capital superannuation benefits for those offices or employments;|
|35||(b) where the payments are treated as income of different years of assessment, the relief to be granted under that paragraph in respect of a payment chargeable for any year of assessment shall be the amount by which the relief computed in accordance with the foregoing provision in respect of that payment and any payments chargeable for previous years of assessment exceeds the relief in respect of the last-mentioned payments;|
|40||and where the standard capital superannuation benefit for an office or employment in respect of which two or more of the payments are made is not the same in relation to each of those payments, it shall be treated for the purposes of this paragraph as equal to the higher or highest of those benefits.|
|45||6. In computing the charge to tax in respect of a payment chargeable to tax under section thirty-five of this Act, being a payment made in respect of an office or employment in which the service of the holder includes foreign service and not being a payment of compensation for loss of office, there shall be deducted from the payment (in addition to any deduction allowed under the foregoing provisions of this Schedule) a sum which bears to the amount which would be chargeable to tax apart from this paragraph the same proportion as the length of the foreign service bears to the length of the service before the relevant date; and in this paragraph "foreign service", in relation to an office|
§ Sir E. Boyle
I beg to move, in page 68, line 15, to leave out from "made" to end of line 17 and insert:in accordance with subsection (4) of section thirty-six of this Act".This Amendment is only a drafting Amendment to the first paragraph of the Schedule.
§ Amendment agreed to.
§ Sir E. Boyle
I beg to move, in page 68, line 25, to leave out from beginning to end of line 41 on page 71 and to insert:
|or employment, means service such that tax was not chargeable in respect of the emoluments of the office or employment—|
|55||(a) in the case of the year 1956–57 or any subsequent year, under Case I of Schedule E; or|
|(b) in the case of any preceding year of assessment, under Schedule E.|
|120||12. In this Schedule "payment of compensation for loss of office" means a payment made in pursuance of an order of a court in proceedings for wrongful dismissal or otherwise for breach of a contract of employment, or by way of settlement of such proceedings, or made by way of compensation for the extinguishment of any right the infringement of which would be actionable in such proceedings; and any question whether, and to what extent, a payment is or is not a payment of compensation for loss of office shall be determined according to all the circumstances and not (or not exclusively) by reference to the terms on which it is expressed to be made.|
|125||13. Any reference in this Schedule to the emoluments of an office or employment is a reference to those emoluments exclusive of any payment chargeable to tax under section thirty-five of this Act; and in calculating for any purpose of this Schedule the amount of such emoluments —|
|130||(a) there shall be included any balancing charge to which the holder of the office or employment is liable under section two hundred and ninety-two of the Act of 1952;|
|(b) there shall be deducted any allowances under Chapter II of Part X of that Act, and any allowances for expenses under paragraph 7 of the Ninth Schedule to that Act, to which he is entitled;|
|135||and any such charges or allowances as aforesaid for a year of assessment shall, for the purpose of ascertaining the amount of the emoluments for any year of service, be treated as accruing from day to day, and shall be apportioned in respect of time accordingly.|
§ I think that my present function had better be confined to moving this Amendment briefly and then we can consider one or two of the Amendments to it and after that take the usual examination paper from the hon. Members opposite.
§ This Amendment substitutes new paragraphs 3 to 13 for the existing paragraphs. The reason is that there are a number of defects in the paragraphs of the Fourth Schedule as originally drafted. In case anyone wishes to ask the question, may I say that I have read the original Schedule carefully and the new words to be substituted. Some of these drafting Amendments are important and others are comparatively unimportant. The defects do not involve any important matter of principle. They are concerned mainly with the complications arising from the interaction of various reliefs in cases where two or more payments are made to the same employee by the same employer or persons to be treated for the purposes of the provision as the same employer.
§ The Amendment takes the form of a revised version of paragraphs 3 to 13 in order to avoid a large number of separate Amendments to the Schedule which would have been difficult to follow, and my right hon. Friend the Chancellor thought it would be convenient that we should have a completely new version. In addition to the Amendments which are mainly drafting Amendments to cure defects and obscurities there has been some change in the order of paragraphs. Those which deal with the reliefs operating to reduce the amount 778 chargeable in voluntary payment cases have been brought forward because it is more logical to deal with that before the top slicing reliefs.
§ Mr. Millan rose—
§ Mr. Millan
This Amendment includes the substance of the Fourth Schedule and it seems to me that all the discussion on the Schedule that we need could come under this Amendment, which takes more than three-quarters of what was the Schedule. There are a number of points of considerable interest in the Schedule and, therefore, in the Amendment. This Amendment considerably alters the picture given under Clauses 35 and 36.
This is, perhaps, the most appropriate point at which to repeat the complaint which has been made at various times about the difficulty of following these extremely complex provisions. It would be for the convenience of everyone, and not least for the Government Front Bench, if we had a memorandum, or some sort of explanation, laying down in simple terms what these provisions mean. They are extremely difficult to follow. There are several parts of this Amendment which are almost completely unintelligible. It would save a considerable amount of time and a considerable number of questions in Committee if we had some idea of what 779 the Government were trying to do. The problem is that it is extremely difficult to find what the Government are trying to do under the terms of the Amendment.
There are several points of detail I want to make. It seems that the provisions of the Fourth Schedule as a whole make a considerable difference to the provisions of Clauses 35 and 36. When we consider the provisions of the Schedule, the original intention, or basic intention, to catch the lump sum payment—to catch the "golden handshake —becomes considerably modified in actual practice. I am not necessarily objecting to a great deal of the modification which takes place because, obviously, if we bring considerable sums of money into taxation in one year's assessment we could get what amounted to rather unfair results. Therefore, we need some modifications, but the modifications seem to err on the generous side.
First, there is the concept of the standard superannuation capital benefit—a notional figure to be calculated on the years of service of the employee concerned. In a previous debate today, the Chancellor mentioned that for the purpose of approved superannuation schemes it was possible to give a lump sum payment on retiral equivalent to three-eightieths of the annual salary of the person retiring for each year of that person's service. In this Amendment quite material concessions have been made and in the cases we are dealing with I notice that the standard capital superannuation benefit under this Schedule is arrived at, not on the basis of three-eightieths, but of one-twentieth of the actual salary, which is four-eightieths. If three-eightieths is the relevant figure for approved superannuation schemes, I cannot see why it should not also be the relevant figure in the Fourth Schedule.
This standard capital superannuation benefit might work out at appreciably higher than £5,000. This is a point I made earlier when discussing the justice of the £5,000 figure. The Chancellor of the Exchequer did not answer one of the main points, which was that that is a minimum figure, which applies where the standard capital superannuation benefit is less than that. It is not a maximum figure, but in many cases it can be considerably exceeded. I think that the 780 method by which the standard benefit figure is calculated is unduly generous when we consider that one-twentieth is used rather than three-eightieths in the case of approved superannuation schemes. It is true that under paragraph 4 it is said, in line 15 and onwards, that any lump sum which is payable under an approved superannuation scheme—
The Temporary Chairman
Order. I am trying to follow what the hon. Member is saying, but, as I see the position, he came in when I was about to put the Question "That the words proposed to be left out stand part of the Clause". The second Question "That the proposed words be there added", had not been proposed. Therefore, these remarks of the hon. Member can come after that Question has been proposed. I do not think he is on the right Question at present.
§ Mr. Mitchison
On a point of order, Mr. Arbuthnot.Is not this what happened? The Financial Secretary moved an Amendment and you rose to put the Question. I think you failed to notice that my hon. Friend the Member for Glasgow, Craigton (Mr. Milian) had risen. Therefore, is he not speaking on the Amendment proposed by the Financial Secretary, and not on the Question, which was only half put by inadvertence?
§ 8.15 p.m.
§ Sir E. Boyle
Further to that point. I am trying to be helpful. Is not the most convenient procedure that the Question, "That the words proposed to be left out stand part of the Clause" should be defeated and then we should have the Amendments to the new Schedule, if I may so call it, or the new paragraphs? After that, we should have the Question, "That the proposed words be there added". Then the points which the hon. Member for Glasgow, Craigton (Mr. Millan), or anyone else, wishes to put could be taken on approval of the new paragraphs as a whole. I cannot help feeling that that is the most convenient procedure. It is rather analogous to that when a new Clause is introduced and one moves, "That the Clause be read a Second time" and then the Amendments are considered afterwards.
§ Mr. Mitchison
I am sure that the Financial Secretary is genuinely trying to help, but what was moved was,in page 68, line 25, to leave out from the beginning to the end of line 41 on page 71 and to insert—the words which follow on the Notice Paper. The normal procedure on an Amendment of that kind is to speak to the Amendment and not to parts of it, because the parts will not have been put at the time the debate takes place. I hope that it will remain open to us to compare what has been left out with what has been put in. There might be difficulty in doing that if we were speaking to the Question "That the words proposed to be left out stand part of the Clause", or the Question "That the proposed words be there added."
Let us hope that we shall not get into the position which happened on a famous Friday, when a number of words were left out and, owing to a change in the composition of the House, nothing was put in their place. It is better to take what substantially is one Amendment in its complete form.
The Temporary Chairman
I thought that it might be for the convenience of the Committee to take it the other way.
§ Mr. Millan
I do not pretend to follow these exchanges, but I take it that the result of them is that I can continue the point that I was making. I wanted to raise a point about the wording from line 15 onwards in the Amendment where we are deducting from the standard superannuation capital benefit as calculated any lump sum payable under an approved superannuation scheme. There is a slight difficulty in the wording, and perhaps the Financial Secretary will look at this point. There may be an approved superannuation scheme where there is not a lump sum payable until retirement at a particular age, say 65, but we might be dealing with a compensation payment which has taken place simply through a change in the emoluments of the employment and the change might take place only a year, or perhaps even less, before the normal retiring age of 65.
There is the question of whether or not any lump sum payment under an approved superannuation scheme should be deducted in a case like that in calculating the standard benefit. It seems that 782 one ought to anticipate the fact that a lump sum will be paid, perhaps in a short period of time, and make a deduction. I think that, in effect, that is what the paragraph says because it speaks of the "value at the relevant date", which is the date of the change in circumstances for which the compensation is being made. If that is anticipating, and presumably discounting, as it were, the lump sum payment, we are absolutely right, but I should like the Financial Secretary to confirm that that is a correct reading of the paragraph.
There is another point about the deduction of the lump sum payment in an approved superannuation scheme which I think is absolutely vital. One also ought to take account of the fact that, apart from any lump sum payment, there may be a right to an annual or periodical payment. If it is an approved superannuation scheme there will definitely be a right to an annual or periodical payment on retirement. I wonder whether we should not deduct from the standard benefit, not only the lump sum, but the capitalised value of the annual payment which has been or will be given to the individual concerned.
In this whole question of compensation we are by implication dealing with people who are getting payments in lieu of some standard or regular payment which would accrue to them, or something out of the ordinary course of their employment. In those circumstances we are entitled to deduct not just a lump sum but also any capital value of an expectation of pension which will arise to them, and thus put them on a proper footing with other people who retire at normal retiring age. I hope that the Financial Secretary will also look into that point.
Paragraph 7 deals with relief by reduction of tax. There is one small drafting point which I should like to see looked into. In sub-paragraph (a), there is a reference tothe amount of tax which would be chargeable apart from this paragraph …We ought to be perfectly clear that that is the amount of tax after relief under paragraph 3 of the Schedule. It may or may not be that. In line 68, sub-para-graph (c, i) we readthe appropriate fraction only of the payment",783 and in brackets there is a noteafter deducting any relief applicable thereto under the foregoing provisions of this Schedule".I think that something like that ought also to apply to line 61, in sub-para-graph (a) in dealing with the question of tax.
That is not wholly a technical matter because we are dealing with relief which may be applied for, as I understand it, up to six years after the end of the year under which the original payment has been taxed, and we are not necessarily making all the calculations of tax and relief at the same time. There may have been tax payments made and relief claimed only subsequently under the terms of the Schedule.
That is a technical point and it might be useful to raise one other technical point at the same time. I direct attention to lines 95 to 105 in paragraph 9. I have not put this down in money terms and worked out the arithmetic, but those lines are almost completely unintelligible, and I wonder whether the Financial Secretary will tell us exactly what they mean. I think I know what they are trying to do but I am not convinced that they are doing it.
These are technical points, but there is another point which is of considerable substance. In working out the tax liability, which is to be assessed in one year but based on the assumption that the payment has been received over a period of six or more years, it is provided in line 72, in paragraph (c, ii), that liability shall be worked outdisregarding, in each case, any other emoluments of the office or employment.This is based on the assumption that the person being compensated for loss of office or termination of employment will not get alternative employment at all. That does not seem to me to be necessarily a correct assumption. Certainly it is not a correct assumption in all cases with which we shall deal under Clauses 35 and 36.
I recognise that there is considerable difficulty here in finding a form of words which would deal justly with the different circumstances which may arise. If a man's employment is terminated late in life, it may be that the disregard here is perfectly justifiable. But if compensation payment is being made to a com- 784 paratively young man, it is more reasonable to assume that he will get some sort of alternative employment which will probably approach in remuneration what he has been receiving from the employment under which the compensation payment is being made. I wonder whether the disregarding of theemoluments of the office or employmentcould be restricted to those cases in which the person is retiring from work altogether and not applied when he is likely to take on, and perhaps has, taken on other employment.
There are thus three main points which I should like the Financial Secretary to consider in principle. They are points of substance. The first is that of disregarding theemoluments of the office or employmentfrom the point of view of calculating the tax liability. The second is the question whether the one-twentieth in calculating the relief for the standard capital superannuation benefit is correct. The third is whether we should not from the standard capital superannuation benefit deduct not only a lump sum payment under an approved superannuation scheme but also the capitalised value of any periodical payments which may be coming to the holder of the office or employment under that scheme.
§ Sir H. d'Avigdor-Goldsmid
I do not want to trouble the Committee unduly, but when the Financial Secretary introduced the Amendment he said that whereas it differed from the previous Schedule in shape and form it did not differ very materially in sense. There is one aspect to which I want to draw attention, and that is the treatment of relief in respect of overseas service, which is covered by paragraph 10 of the old draft and paragraph 6 of the new draft.
If I am fortunate enough to catch you eye later, Mr. Arbuthnot, I propose to raise this subject again, but while we have a chance of comparing the original with the revised draft, I want to establish the point that there is a considerable difference of treatment in respect of this relief. In the old draft the original sum was first reduced by a proportionate sum in respect of the years of overseas service. After that reduction it was further reduced by the standard capital superannuation benefit.
785 I suspect that under the original draft most payments coming under the Clause with a substantial element of overseas service in them would have escaped taxation altogether, but in the new draft the position has been reversed. The sum is first reduced by the standard capital superannuation benefit and then the balance remaining is further reduced by the proportion in respect of the amount of overseas service to which it refers. Therefore, in the second case there is bound to be some amount caught by taxation. I hope to have the opportunity to argue later whether the provision is adequate. My object in rising at the moment is to draw the Committee's attention to this very major change in sense between the first draft and the second.
§ 8.30 p.m.
§ Mr. Mitchison
Having consulted my right hon. and hon. Friends, I wish to protest very strongly about the way in which this Schedule, because it is virtually a Schedule, has been introduced by Amendment at a very late stage. I think that it was introduced just before the weekend. No doubt the Financial Secretary will correct me if I am wrong. Moreover, it has been introduced with no explanation, written or printed. When the Financial Secretary rose to present it, he made a very summary statement indeed of the effect of what he proposed and the difference involved in substituting this Schedule for the Schedule which appears in the Bill.
It is too much to expect the Committee to accept this kind of change and a Schedule of this complication without some explanation from the Government of what it is all about. It is hard enough for my hon. Friend the Member for Glasgow, Craigton (Mr. Millan). It is even worse for the rest of us. It is extremely difficult. I shall point out one or two things in the Schedule by way of illustration of my protest, and for no other reason. I earnestly hope that before we leave the Schedule as it is proposed to be amended, we shall have from a member of the Government a clear explanation of what the whole of it means.
I will now direct attention to something about which I shall say more later. There is a proviso at line 95 which reads:Provided that where the appropriate fraction and appropriate multiple are not the same 786 for each of the payments, the calculations of relief under the said paragraph 7 shall be made separately in relation to each payment or payments having a different appropriate fraction and multiple, and in any such calculation—(a) any payment for which the appropriate multiple is lower.Lower than what? I do not know. The proviso continues:shall be left out of account for all the purposes of the said paragraph 7 and(b) in ascertaining the difference at (c) of that paragraph it shall be assumed that the appropriate fraction only of any payment for which the appropriate multiple is higher had been made;and the relief to be allowed shall be the sum of the reliefs so calculated in respect of the payments respectively.I defy any hon. Member reading that for the first time to make out what it is all about, unless he sits down with a wet towel round his head for half an hour. The miserable taxpayer has to deduce from this form of language what his rights are. We are all supposed to know the law, but no one is supposed to be able to interpret this kind of choctaw without a previous explanation from the Government of what it is all about. It is just too bad for it to he introduced at this stage in this way, if it had been in the Bill, we might have had a better understanding of it. It is brought in at very short notice by way of an Amendment and we have to wade about and discover what it is all about.
The words I have quoted raise some very curious questions. It is a proviso. It all relates to paragraph 9, which deals with the circumstances in which successive payments shall be treated as a single payment. The appropriate fraction and the appropriate multiple are to be found in the previous paragraph. They are defined as follows:
We shall, therefore, get both a fraction and a multiple. We are told in the proviso:
- "(a) where the payment is not a payment of compensation for loss of office, one-sixth and six;
- (b) where the payment is a payment of compensation for loss of office, one divided by the relevant number of years of unexpired service, and that number of years".The calculations of relief under the said paragraph 7 shall he made separately in relation to each payment or payments having a different appropriate fraction and appropriate multiple …787 I understand that so far. I do not think that there was a word of this in the original draft of the Schedule. It continues:and in any such calculation—(a) any payment for which the appropriate multiple is lower shall be left out of account for all the purposes of the said paragraph 7I should like the Financial Secretary to explain why that is done.
Then we come to this:… in ascertaining the difference at (c) of that paragraph"—and (c) is a passage in paragraph 7 referring to the difference between the respective amounts of tax that would be so chargeable on certain assumptions:it shall be assumed that the appropriate fraction only of any payment for which the appropriate multiple is higher had been made"…I do not know how one make a fraction. I suppose that what it means is that all that had been paid was the appropriate fraction only. What is the appropriate fraction in these circumstances? Perhaps the hon. Gentleman would be good enough to explain that, because I find it far from clear.
Lastly, I notice that there are certain cases in which one neglects the payment altogether—that is where the appropriate multiple is lower. What I should like to know is, lower than what? And there are certain other cases in which one makes assumptions about payments. The Schedule continues:… and the relief to be allowed shall be the sum of the reliefs so calculated in respect of the payments respectively".I think that I understand the payments, but what I do not understand is the relief at that point. I suppose that it is the different calculations of relief made separately in relation to each payment or payments, but what bothers me is this reference to fractions and multiples. Suppose the result is unity, is that an appropriate fraction or not? In the same way, if the appropriate multiple is unity, is that to be taken account of, and with what result? In short, I ask the hon. Gentleman to explain in tolerably clear English what this excessively complicated proviso is about.
I said that I did not think that there was anything of the sort in the previous provision—
§ Sir E. Boyle
The word "claimant" does not appear, otherwise paragraph 9, which I was trying to explain, is identical with the old paragraph 5.
§ Mr. Mitchison
If the hon. Gentleman will explain it, that is all to the good. He will realise that this is no mere academic exercise because the treatment to be given to cases in which a number of these payments are to be regarded as one for the purpose of the Clause is rather important.
I had one or two other points, but I would again ask the Financial Secretary if, instead of putting it on us to go through this point by point and paragraph by paragraph, he would explain the purport of the whole of the Amendment now being introduced, and not leave us to pick our way through what is an excessively complicated provision. I am sure that he will do so—I see that he nods, so, for the moment, let us hear what he has to say.
§ Sir E. Boyle
First, I must tell the hon and learned Member for Kettering (Mr. Mitchison) that I am extremely sorry that this Amendment was only tabled, I think, last Friday, but I must say that I think that a new version of the Fourth Schedule is probably more convenient to the Committee than a whole lot of detailed Amendments would have been. In substance, the changes are very small. As I have said, there has been a rearrangement, but very little change in substance indeed.
The only reason I did not say more earlier was that I thought that it would be more convenient—as one does on the Question "That the Clause stand part of the Bill"—to hear points raised in all parts of the Committee and then to try to answer as many of them as possible—
§ Mr. Mitchison
I am most grateful to the hon. Gentleman for that attitude, but he would have saved us all quite a deal of trouble had he followed the suggestion of my hon. Friend the Member for Glasgow, Craigton (Mr. Milian) and, if necessary, had got someone to ask him a question as to whether he would give an explanation, and had then put copies 789 in the Library, or some other convenient place. Had he been able to convey to the Committee that there was really not much difference between the two versions, that in itself would have helped us.
§ Sir E. Boyle
I can assure the hon. and learned Gentleman that we shall consider that point for another year. It is a difficulty which often arises.
In general, if I may take first the hon. and learned Gentleman's question about what the Schedule does, there are three points. First, there is what has been called top slicing relief, which is paragraphs 3 to 6. I think it is accepted by the Committee that it would be too harsh to tax the whole payment, which may well be for several years' service, at the rates of Income Tax and Surtax which would apply if it were treated as the income of a single year. The taxpayer may, therefore, claim relief by top slicing. That is the first supplementary point in the Schedule to the exemptions and reliefs given by Clause 36.
Secondly, in paragraphs 7 to 9—I will deal with the obscure passage in paragraph 9 to which the hon. and learned Gentleman referred—there are provisions dealing with relief for standard capital superannuation benefit, and this applies to payments other than payments of compensation.
Thirdly, paragraph 10 deals with relief in respect of past service overseas where the payment is not a payment of compensation. In that connection, I shall in a few minutes answer the point raised by my hon. Friend the Member for Walsall, South (Sir H. d'AvigdorGoldsmid)
§ Mr. Millan
The paragraphs to which the hon. Gentleman is referring are not the paragraphs in the Amendment but in the original Schedule. I take it that he will explain the paragraphs in the Amendment.
§ Sir E. Boyle
I am sorry. At any rate, those are the three topics dealt with in the Schedule. As the hon. Gentleman quite rightly points out, the order has been altered in the new version.
§ Mr. Mitchison
I am sorry to interrupt again, but we are anxious to find out what this is all about. There are also three paragraphs called "Supplemental". I am not sure that I am right, 790 but it seems to me that those introduce most of the actual changes.
§ Sir E. Boyle
I will deal with the supplemental paragraphs. Supplemental paragraph 12 defines what is meant by a payment of compensation for loss of office. Supplemental paragraph 13 defines what is meant by emoluments. Supplemental paragraph 14 defines references in the Schedule to the relevant date.
§ Sir E. Boyle
I think I was right about paragraphs 12 and 13. When we go beyond them, of course, the words in the original Schedule come in as well.
I come now to the point made by the hon. Member for Craigton on the subject of the fraction. He asked why we had a fraction of three-eightieths in the Clause and a fraction of one-twentieth in the Schedule. The answer is that three-eightieths is not an exact fraction. The law says merely that the proportion of the total benefit which can be paid in lump sum form by approved schemes must be similar to that applicable in statutory schemes. In some circumstances, the fraction might be slightly more than three-eightieths. Since it is necessary for the purposes of the Schedule to have a simple fraction, one-twentieth has been chosen as a sort of rounded-up figure. I agree with the hon. Gentleman; this is a rough way of doing it, but for these purposes we must, I think, use a rounded-up figure of some kind, and it is for that reason that one-twentieth has been chosen.
§ Sir E. Boyle
It is not as much as that, because three-eightieths, as I explained, is not an exact fraction, and in some circumstances the fraction might very well be bigger than three-eightieths.
The hon. Member for Craigton raised one point on paragraph 7 of the Amendment—I think I have it right this time—and, referring to the drafting, questioned whether the wordsdisregarding, in each case, any other emoluments of the office or employmentwere too wide. I will look at that point before the next stage of the Bill.
791 8.45 p.m.
The hon. Member asked whether we should deduct the standard capital superannuation benefit from the capital value of any pension which is to be paid. The pension will be taxable, and therefore what has to be deducted is merely the tax-free lump sum due under an approved scheme. I think that the hon. Member's suggestion would work out too harshly.
My hon. Friend the Member for Walsall, South asked me whether we had made some change in paragraph 6. The Amendment to paragraph 6 was necessary because the original wording related the relief to the gross payment instead of to the payment as reduced by the £5,000 or the standard capital superannuation benefit. We shall be debating this perhaps on a forthcoming Amendment. I believe that this change will be to the advantage, and not to the disadvantage, of the taxpayer.
I now come to paragraph 9 of the Amendment which was regarded as obscure by the hon. Member for Glasgow, Craigton and the hon. and learned Member for Kettering. I will try to explain the paragraph as clearly as I can. We are here dealing with the problem of the top slicing of more than one payment for the same year, because it is possible that top slicing relief may have to be given for more than one payment regarded as income for the same year. This could happen if an employee were given payments first for what is technically called "stepping down"and then for retirement in the same Income Tax year, or if the director of several companies in the same group retires from them all at the same time and receives a payment from each member of the group. If all of the payments are to be top sliced by reference to the same period, there will not be any difficulty. The paragraph provides that they shall be treated as a single aggregate payment—for example, if all the payments are voluntary payments their total will be top sliced by reference to six years. The next paragraph makes it plain that that will be so even if they are from different jobs.
Difficulty arises—and here we come to lines 95 to 105—if there are two or more payments for one year to be top sliced by reference to different periods. It is here that we must have special 792 provision to quantify the precise relief that shall be given, and it is this special quantification contained in the proviso. Let me try to summarise the effect of this proviso. Certainly I can undertake to ensure between now and a later stage that the words give effect to the intention of this proviso.
The proviso is that relief is given separately for each payment or group of payments to be top sliced by reference to the same period starting with the payment for which the period is the longest. In this way the payment to be top sliced for the longest period is taxed at the rate which would apply to what is called the appropriate fraction of it if it were the top slice of an income which consisted of that appropriate fraction together with all the other income. [Laughter.] I well remember from my youth that the conjuror's explanation of how the trick was done was considerably more perplexing than the trick itself, but, try as I will, I cannot find words which will put the matter more simply than those which I have used.
To complete the picture, the payment to be top sliced for the next longest period is taxed at the rate which would apply to the appropriate fraction of it if it were the highest part of an income which consisted of that appropriate fraction together with the appropriate fraction of the payment top sliced for the longest period and all the other income. I am sure that I have not made the point with the same gusto that we heard from the hon. Member for Sowerby (Mr. Houghton).
I have been asked whether in this context the appropriate fraction could ever be unity. I do not believe that it could, but I will look into the point.
Those were some of the points asked by hon. Members on the Schedule. We are dealing here with three quite definite points. We are dealing with top slicing and the other points which I mentioned earlier. In a sense, the Schedule is partly supplemental to Clause 36. It partly dovetails with the Clause. I have listened with great interest to the examination that we have had from hon. Members and I hope that even if I have not come through it with an honours degree, the Committee may feel that I have come through with a pass degree and that we may now get on with the Amendments to the Schedule.
§ Mr. Mitchison
I suppose that my brain power is getting more limited as I grow older, but I find this uncommonly hard to follow. We may have to return to it on Report. I wonder whether the Financial Secretary could make available to hon. Members, before the Report stage, not only the golden words which he has uttered, but any other golden words that would help us to understand what all this was about. Then, if we have to come back to it on Report, having put wet towels round our heads and having read all that we should, we may be able to do so with a clearer understanding of what it is all about. I speak only for myself. Some of my hon. Friends understand much more about it than I do.
§ Sir E. Boyle
I will certainly consider, with my right hon. Friend, whether something may be possible.
§ Mr. Diamond
I trust that you do not have a headache, Sir William. If you do not, I suspect that you are the only person in the Committee who does not have one. Certainly, I have found everything extremely difficult. Notwithstanding that, I want to come back to one of the points raised by my hon. Friend the Member for Glasgow, Craigton (Mr. Millan), because the reply given by the Financial Secretary seemed to indicate quite clearly that he had not understood the point. It was an important one and should be pressed again so that the hon. Gentleman can look into it between now and Report.
I refer to paragraph 4 (c) and the method by which we arrive at the amount of the compensation which will be regarded as free of tax. I will put it in its simplest possible way of trying to achieve justice as between taxpayers. Let us assume that there are two people whose circumstances are identical, identical in their length of employment with the firm, their age, their salary and the annuity which is to come to them from the firm. The annuity is identical in all respects and provides that they can have either the whole amount as annual payments or, as is often the case, that they can get, say, one-quarter of it as a capital sum and the rest as reduced annual payments. This is within an approved scheme, approved in the normal sense of the term by the Treasury under the provisions of the Finance Act.
794 Case 1 gets compensation and starts the method of calculation by which one arrives at the amount of the compensation which is free of tax. In arriving at the amount of the compensation which is free of tax, the lump sum is deducted and, therefore, the amount of compensation which bears tax is greater by having been reduced by the lump sum.
The circumstances of Case 2 are identical in all respects. He gets the same compensation, but he says, "I shall not elect to take any part of my annuity as a lump sum and shall get it all by way of annuity". Therefore, in arriving at the amount of compensation which is free of tax, nothing is deducted in respect of a lump sum because no lump sum is paid.
The two cases are identical in all respects. One pays more tax than the other because in one case a lump sum is deducted. In the other case, a lump sum is not deducted. I cannot see how that can be right, but it follows from the provisions of the Schedule. I do not think that it is intended. We cannot put it right other than by taking into account not only the first factor of the lump sum, but the second or complementary factor of the annual payments under the superannuation scheme. Therefore, we have to ask not only what the man received as a lump sum, but what he would have received as a lump sum if he had taken the whole of his annual payments notionally as a lump sum, irrespective of whether he elected in one case to make the choice and have a lump sum and the rest in annual payments or did not do so.
To achieve justice as between two identical taxpayers we must consider not only the lump sum, but the whole of the annual payments. As my hon. Friend rightly said, the way to do that is to take a notional account of the amount of the whole of the annual payments. I hope that I have spoken with the same clarity that the Financial Secretary used in explaining the rest of the Schedule and made the point which my hon. Friend quite rightly put before the Committee.
I think that the answer, if I may be so discourteous as to say so, which the Financial Secretary gave indicated that he was on the wrong point. He said that the lump sum is free of tax, and we were only concerned with a payment which is 795 free of tax because we were only concerned with seeing that the amount of taxability is the same in both cases. But this calculation is not one of reality. It is the calculation of a notional sum and the reply of the Financial Secretary that one part happens to be tax free is utterly irrelevant, because we are really doing a sum of arithmetic. I ask the Financial Secretary to give consideration to this matter, because I think that it is a fundamental flaw in the calculation of the tax on that part of the compensation which is free of tax.
§ Sir E. Boyle
I will certainly undertake to look at that point again. There is a difference between us here as to whether we should only deduct the tax-free lump sum or whether, in addition, we should deduct from the standard capital superannuation benefit the notional capital value of any pension which is to be paid. I pointed out that the pension would be taxable. I understand the point and, while I adhere to my view, I will consider it.
§ Mr. Millan
I would like the Financial Secretary to look again at the point in line 72 about disregarding "emoluments of the office or employment". This is not a point of drafting, but a point of substance. There may be a difficulty in getting a suitable form of drafting but the new form of drafting would not have the same effect as this, if my point were met.
§ Question, That the words proposed to be left out stand part of the Schedule, put and negatived.
§ The Deputy-Chairman (Sir William Anstruther-Gray)
I now propose, but do not put, the Question, "That the proposed words be there inserted", to allow the Amendment to Amendment 177 in the name of the hon. Member for Wolverhampton, South-West (Mr. Powell) to be moved.
Sir H. d'A vigdor-Goldsmid
I beg to move, as an Amendment to the proposed Amendment, in line 56, at the end to insert:Provided that no tax shall be chargeable in any case if at least three-quarters of the service, or the last ten years thereof, or one-half the total and any ten of the last twenty years thereof, were foreign service.We have spent a good deal of time this afternoon on what I would describe 796 as the ghostly battle of the categories: I should like to put a little flesh and blood into the discussion, and it is for that reason that I move this Amendment.
The Amendment deals with the rewards which those who have been employed in foreign service on behalf of employers in Britain may hope to receive on their return to these shores. It may not be out of place to put on record that at this moment these are people to whom we in this country owe an immense debt. They are people who have spent the best part of their lifetime, at any rate their business life, abroad, and they are facing now conditions which, when they entered the service, they would never have dreamt of.
I had the pleasure of visiting India last winter, and I must say I was tremendously impressed by two things, the very high opinion which the British commercial community have earned for themselves in India, and the difficulties with which they are faced in the daily conduct of their business. When these people as young men went out to India they did not expect to find that at the end of their days they would be paying in India a rate of taxation substantially higher than that to which they would have been liable if they had been working in Britain. They also probably felt when going to India twenty-five or thirty or forty years ago that they were going as the governing race and would enjoy privileges and pleasures which they would not normally have been able to expect in Britain.
These conditions are changed; they are changed completely. I do not think that we regret it, but I think that we must bear in mind the effect that that has had on these people who are serving their time there and who, under an entirely different Government in India, have made the commercial position of Britain in that country better and have a better standing today than any time in the last twenty years. They have very great adaptability, but they are in very difficult circumstances and at the same time are not in a position to benefit themselves from the services which they are rendering.
I make that point because the British community is subject to all the taxes of the Indian taxation system which has in 797 it many elements which would attract the attention of the hon. Member for Gloucester (Mr. Diamond) who, I am sorry to say, is not with us at this moment, because I think here we have an example of how little can be left in the taxpayer's pocket while at the same time producing no substantial revenue for the exchequer.
There is another element for people on overseas service, and that is the climate with which they have to contend, and which very often leads to premature retirement. There is a third element, which is that people retiring from overseas services now and in the near future wil be faced in their middle years with the expense of establishing a home in England and, as we all know, anything which one buys today is a great deal more expensive than it would have been if one had bought it twenty or thirty or forty years ago, or if one had inherited it at that time.
For all these reasons, I think that these people deserve special attention from us and have a special claim on our respect. My hon. Friend the Financial Secretary, in moving his Amendment, said that he did not think he would get an honours degree but a pass degree. If I were examining him in logic I would not be able to give him a pass degree.
§ Sir H. d'Avigdor-Goldsmid
I note the hon. Member's comments from a reclining position. He is not particularly interested in the problems of our Commonwealth and the problems of the people who, by their work in the Commonwealth, are doing something to support the exports from this country on which we depend.
Mr. H. Wilson
The hon. Gentleman must not misrepresent this side of the Committee. We are very interested in those working in the Commonwealth. What we are very worried about is the scandalous way the Government are treating them in not providing a decent continuing overseas service. If the hon. Gentleman does not know what I mean he might have a look at the Economist of the last week or two. I shall not pursue that because it is a little wide of the Schedule, but the hon. Gentleman must not assume that we are not con- 798 cerned with that just because we have some doubts about an Amendment.
§ Sir H. d'Avigdor-Goldsmid
I am grateful for that intervention. I have no doubt that those who read the debate will put what interpretation they think necessary upon it.
The meat of the Amendment is simple. In the original proposal those who were receiving an element of relief in respect of overseas service were likely to escape taxation on the sums which they received, for the reason I have already mentioned, that that sum was first subject to a deduction of a proportion in respect of overseas service and the net after deduction of that proportion was subject to deduction of standard capital superannuation benefit. My hon. Friend the Financial Secretary suggested, in moving his Amendment, that when the standard capital superannuation benefit is deducted first, which means that eventually there must be a sum to be caught for taxation, the taxpayer would be better off. It should be interesting to see him prove that, for I should have thought that a taxpayer would be butter off if no such sum were caught for taxation.
My Amendment is simple, and perhaps too simple to be popular with the Committee. I draw attention to its wording. Foreign service these days is hard work in uncomfortable surroundings and in the face of great difficulties of a kind absolutely unexpected when the people in question took their employment. If we are to maintain our export business it will be very largely through the efforts of people who, working abroad, still look forward to retirement in the home country. We should do less than justice to ourselves and to the sentiments which the right hon. Member for Huyton (Mr. H. Wilson) was good enough to utter if we did not consider very seriously whether by our action in this Committee we may be in danger of doing something which would materially reduce that prospect of comfort at home to which they are so well entitled to look forward.
§ Sir E. Boyle
I think that I can occupy the time of the Committee a good deal more shortly on this Amendment than I did on the previous Amendment. As my hon. Friend the Member for 799 Walsall, South (Sir H. d'AvigdorGoldsmid) explained, this Amendment to the proposed Government Amendment seeks to extend the relief which is given on a voluntary payment in cases where part of the employee's service has been outside the United Kingdom. This Amendment seeks to widen the relief, with total exemption in three types of cases—where three-quarters of the service was foreign, where the last ten years was foreign, and when one-half of the total was foreign and any ten of the last twenty years was foreign.
I understand the force of my hon. Friend's argument. There is a good deal to be said for his Amendment, and certainly in principle the Government are quite prepared to accept it. It is not quite satisfactory in its present form, but I assure my hon. Friend that if he agrees to withdraw it we will introduce one more suitably worded on Report. In so doing I am fully prepared to accept the point that service overseas is a matter of strong concern to all parts of the Committee. I hope therefore that in that situation my hon. Friend will withdraw the Amendment.
§ Sir H. d'Avigdor-Goldsmid
In view of that categoric assurance given by my hon. Friend the Financial Secretary, I beg to ask leave to withdraw the Amendment.
§ Amendment to the proposed Amendment, by leave, withdrawn.
§ The Deputy-Chairman
The next Amendment selected is in page 71, line 18, after "proceedings" to insert:or of a claim in respect of which such proceedings could have been brought.
§ Mr. Powell
On a point of order. Might I confirm, Sir William, that it is not your intention to call the following Amendments to the Chancellor of the Exchequer's proposed Amendment—in line 88, to leave out "one year" and to insert:a number of complete years.and in line 89, to leave out "one year" and to insert:that number of complete years.
§ Mr.Denzil Freeth
I beg to move, as an Amendment to the proposed Amendment, in line 120, after "proceedings" to insert:or of a claim in respect of which such proceedings could have been brought.The Amendment to paragraph 12 of the proposed new Schedule, so to speak, is also an Amendment to the words which that new Schedule takes from paragraph 11 of the original Schedule. This deals with the various definitions of cases where loss of office occurs, and it mentions three I think out of four which I suggest to my hon. Friend the Financial Secretary should be covered.
The paragraph covers the case where loss of office occurs as a result of a court judgment. It covers the case where an action is settled before judgment but after proceedings have been initiated. Thirdly, it covers the case of a dismissal before any breach of contract has occurred. It does not cover the position where after the breach of contract has occurred, but before any proceedings are brought, the amount to be paid is settled between the former employee and employer without any writ being issued.
If I am right in my interpretation of this paragraph, I suggest to my hon. Friend, as indeed I wrote to him on 19th May just after I put down the Amendment, that it would be nonsense to produce a different result in the Bill according to whether or not a writ had in fact been issued, and one would not wish to cause people to go to the expense and delay of issuing a writ purely to remain within the wording of the new paragraph to which we are devoting a few minutes.
§ Sir E. Boyle
The Amendment raises a relatively narrow point. The only effect of the Amendment will be to include in the definition of the wordspayment of compensation for loss of officethe case where a director or employee makes a claim for damages for wrongful dismissal for which there is no legal definition and the employer pays it to avoid trouble. It could be argued that such a payment should be dealt with as a voluntary payment rather than as compensation, but if the employee had secured the actual issue of the writ and then received a payment by way of settlement out of court the payment 801 would be within the definition of a compensation payment as the matter stands at present.
The Committee may feel, in those circumstances, that it seems rather pointless to try to exclude the case where no writ has been issued. It would, I think, improve the consistency of the definition if the Committee were to accept the Amendment. I was not certain until a few moments ago whether the Amendment was to be called. It raises a narrow point, but I think that, in all the circumstances, I can advise the Committee to accept it.
§ Mr. Diamond
I hope that my right hon. and hon. Friends will resist the Amendment very strongly, because this is opening up the whole thing; it is opening up loopholes. This provides for creating a compensation which is not based on any rights but on people getting together round the corner. The Financial Secretary is quite right to say that the difference between this and issuing a writ is small. All such a person will have to do is to tell a solicitor to issue a writ, to pay his fees, and he will then have gone through the machinery of the Clause. But that does not mean that the Amendment should be accepted There should be another Amendment to alter the machinery to make it more formidable than is now proposed.
I hope that my hon. Friends will support me in voting against acceptance of the Amendment, which would have most unsatisfactory results.
§ 9.15 p.m.
§ Mr. Denzil Freeth
I hope that hon. Members opposite will reconsider their view, if it is as has been expressed by the hon. Member for Gloucester (Mr. Diamond). I am grateful to my hon. Friend the Financial Secretary for what he said. It need not necessarily be assumed that in order to reach a figure which may reasonably be regarded as compensation for loss of office it should be necessary to go to all the trouble of getting a writ and going to the trouble of going through the courts. If it is definitely established to the satisfaction of the Revenue that a loss of office has occurred and that it is a loss which justifies compensation, it should not be necessary for the employee to go to the trouble of getting a writ, or even taking proceedings as far as that.
§ Mr. Houghton
The Amendment would put the Inland Revenue in the position of having to decide whether a certain payment would be likely to have been made as a result of proceedings which could have been brought. That seems to us to be stretching the matter a little far and we will not assent to the Amendment.
§ Question put, That those words be there inserted in the proposed Amendment:—
§ The Committee divided: Ayes 166, Noes 88.803
|Division No. 97.]||AYES||[9.18 p.m.|
|Agnew, Sir Peter||Channon, H. P. G.||Fisher, Nigel|
|Aitken, W. T.||Chataway, Christopher||Fletcher-Cooke, Charles|
|Allason, James||Chichester-Clark, R.||Fraser, Ian (Plymouth, Sutton)|
|Alport, C. J. M.||Clark, William (Nottingham, S.)||Freeth, Denzil|
|Amory, Rt. Hn. D. Heathcoat (Tiv'tn)||Cleaver, Leonard||Gammans, Lady|
|Atkins, Humphrey||Collard, Richard||Gardner, Edward|
|Balniel, Lord||Cooke, Robert||Glyn, Sir Richard (Dorset, N.)|
|Barber, Anthony||Cooper-Key, Sir Neill||Goodhart, Philip|
|Barlow, Sir John||Cordeaux, Lt.-Col. J. K.||Goodhew, Victor|
|Barter, John||Corfield, F. V.||Grant, Rt. Hon. William (Woodside)|
|Beamish, Col. Tufton||Courtney, Cdr, Anthony||Grant-Ferris, Wg Cdr. R. (Nantwich)|
|Bell, Philip (Bolton, E.)||Critchley, Julian||Green, Alan|
|Bell, Ronald (S. Bucks.)||Crosthwaite-Eyre, Col. O. E.||Gresham Cooke, R.|
|Bennett, F. M. (Torquay)||Crowder, F. P.||Grimond, J.|
|Biggs-Davison, John||Cunningham, Knox||Grosvenor, Lt.-Col. R. G.|
|Bingham, R. M.||Curran, Charles||Hamilton, Michael (Wellingborough)|
|Bishop, F. P.||Currie, G. B. H.||Harris, Frederic (Croydon, N. W.)|
|Black, Sir Cyril||Dalkeith, Earl of||Harris, Reader (Heston)|
|Bourne-Arton, A.||d'Avigdor-Goldsmid, Sir Henry||Harrison, Col. J. H. (Eye)|
|Bowen, Roderic (Cardigan)||Deedes, W. P.||Harvey, John (walthamstow, E.)|
|Bon, Donald||Doughty, Charles||Heald, Rt. Hon. Sir Lionel|
|Boyle, Sir Edward||Drayson, G. B.||Hendry, Forbes|
|Braine, Bernard||Duncan, Sir James||Hiley, Joseph|
|Bromley-Davenport, Lt.-Col. W. H.||Duthie, Sir William||Hill, J. E. B. (S. Norfolk)|
|Burden, F. A.||Errington, Sir Erie||Holland, Philip|
|Butler, Rt. Hn. R. A. (Saffron Walden)||Farr, John||Hopkins, Alan|
|Carr, Compton (Barons Court)||Finlay, Graem||Hornby, R. P|
|Howard, Gerald (Cambridgeshire)||Matthews, Gordon (Meriden)||Sumner, Donald (Orpington)|
|Howard, Hon. G. R. (St. Ives)||Maydon, Lt.-Cmdr. S. L. C.||Temple, John M.|
|Hughes-Young, Michael||Mott-Radclyffe, Sir Charles||Thatcher, Mrs. Margaret|
|Hutchison, Michael Clark||Nabarro, Gerald||Thomas, Peter (Conway)|
|Iremonger, T. L.||Neave, Airey||Thorneycroft, Rt. Hon. Peter|
|Irvine, Bryant Godman (Rye)||Noble, Michael||Thornton-Kemsley, Sir Colin|
|James, David||Osborn, John (Hallam)||Tilney, John (Wavertree)|
|Johnson, Dr. Donald (Carlisle)||Pannell, Norman (Kirkdale)||Turner, Colin|
|Johnson, Eric (Blackley)||Pearson, Frank (Clitheroe)||Turton, Rt. Hon. R. H.|
|Kerans, Cdr. J. S.||Peel, John||van Straubenzee, W. R.|
|Kershaw, Anthony||Pickthorn, Sir Kenneth||Vaughan-Morgan, Sir John|
|Kimball, Marcus||Pitt, Miss Edith||Vickers, Miss Joan|
|Kitson, Timothy||Powell, J. Enoch||Wade, Donald|
|Lambton, Viscount||Prior-Palmer, Brig. Sir Otho||Wakefield, Edward (Derbyshire, W.)|
|Legh, Hon. Peter (Petersfield)||Proudfoot, Wilfred||Ward, Dame Irene (Tynemouth)|
|Lewis, Kenneth (Rutland)||Redmayne, Rt. Hon. Martin||Webster, David|
|Lilley, F. J. P.||Rees, Hugh||Wells, John (Maidstone)|
|Linstead, Sir Hugh||Ridley, Hon. Nicholas||Whitelaw, William|
|Litchfield, Capt. John||Ridsdale, Julian||Wilson, Geoffrey (Truro)|
|Loveys, Walter H.||Roots, William||Wise, A. R.|
|Lucas-Tooth, Sir Hugh||Russell, Ronald||Wolridge-Cordon, Patrick|
|McAdden, Stephen||Scott-Hopkins, James||Woodnutt, Mark|
|MacArthur, Ian||Shaw, M.||Woollam, John|
|McLaren, Martin||Simon, Sir Jocelyn||Worsley, Marcus|
|Maclean, Sir Fitzroy (Bute & N. Ayrs.)||Skeet, T. H. H.||Yates, William (The Wrekin)|
|Maddan, Martin||Smith, Dudley (Br'ntf'rd & Chiswick)|
|Manningham-Buller, Rt. Hn. Sir R.||Smithers, Peter||TELLERS FOR THE AYES:|
|Marshall, Douglas||Spearman, Sir Alexander||Mr. Brooman-While and|
|Marten, Neil||Speir, Rupert||Mr. Gibson-Watt.|
|Mathew, Robert (Honiton)||Studholme, Sir Henry|
|Ainsley, William||Hamilton, William (West Fife)||Plummer, Sir Leslie|
|Albu, Austen||Hannan, William||Proctor, W. T.|
|Allen, Scholefield (Crewe)||Hayman, F. H.||Redhead, E. C.|
|Bernn, Hn. A. Wedgwood (Brist'l, S. E.)||Holman, Percy||Reynolds, G. W.|
|Benson, Sir George||Houghton, Douglas||Rogers, G. H. R. (Kensington N.)|
|Blackburn, F.||Hughes, Emrys (S. Ayrshire)||Ross, William|
|Blyton, William||Hunter, A. E.||Silverman, Julius (Aston)|
|Brockway, A. Fenner||Hynd, H. (Accrington)||Skeffington, Arthur|
|Broughton, Dr. A. D. D.||Hynd, John (Attercliffe)||Smith, Ellis (Stoke, S.)|
|Butler, Herbert (Hackney, C.)||Irving, Sydney (Dartford)||Snow, Julian|
|Castle, Mrs. Barbara||Johnston, Douglas (Paisley)||Steele, Thomas|
|Corbet, Mrs. Freda||Jones, Dan (Burnley)||Stones, William|
|Crosland, Anthony||Key, Rt. Hon. C. W.||Summerskill, Dr. Rt. Hon. Edith|
|Grossman, R. H. S.||King, Dr. Horace||Taylor, John (West Lothian)|
|Deer, George||Lawson, George||Thompson, Dr. Alan (Dunfermline)|
|Dempsey, James||Mabon, Dr. J. Dickson||Thomson, G. M. (Dundee, E.)|
|Diamond, John||McInnes, James||Thornton, Ernest|
|Dodds, Norman||McKay, John (Wallsend)||Warbey, William|
|Dugdale, Rt. Hon. John||McLeavy, Frank||Weitzman, David|
|Ede, Rt. Hon. Chuter||Marquand, Rt. Hon. H. A.||Wells, William (Walsall, N.)|
|Evans, Albert||Millan, Bruce||Wheeldon, W. E.|
|Fitch, Alan||Mitchison, G. R.||White, Mrs. Eirene|
|Fletcher, Eric||Morris, John||Wilkins, W. A.|
|Foot, Dingle||Noel-Baker, Rt. Hn. Philip (Derby, S.)||Williams, W. R. (Openshaw)|
|Forman, J. C.||Oram, A. E.||Willis, E. C. (Edinburgh, E.)|
|Fraser, Thomas (Hamilton)||Owen, Will||Wilson, Rt. Hon. Harold (Huyton)|
|Ginsburg, David||Padley, W. E.||Woof, Robert|
|Cordon Walker, Rt. Hon. P. C.||Pargiter, G. A.|
|Greenwood, Anthony||Paton, John||TELLERS FOR THE NOES:|
|Griffiths, Rt. Hon. James (Llanelly)||Pavitt, Laurence||Mr. Cronin and Mr. Probert|
|Hale, Leslie (Oldham, W.)||Peart, Frederick|
§ Proposed words, as amended, there inserted.
§ Schedule, as amended, agreed to.