§ Motion made, and Question proposed, That the Clause stand part of the Bill.
§ Mr. Mitchison
On the Second Reading of the Bill, the right hon. and learned Gentleman the Chancellor of the Exchequer said:Clause 29 deals with Stamp Duty on bills of exchange. I think that this is a useful Clause, embodying a change to which, perhaps, sufficient attention has not yet been paid.Encouraged by those remarks, I paid a little more attention to the Clause. The Chancellor pointed out that the cost of the proposed concessionis not inconsiderable—it is £1½ million in a full year…That, as the Committee will remember, is just three times the burden imposed on the building societies by the addition to Profits Tax. I agree that it is not inconsiderable, but, if I may use the 552 phrase, it is a wizard bit of financing anyhow, because apparently the cost of remitting the duty in question appears to be more than the yield of the duty, and I have never before met a duty like that or a concession of such a remarkable character. I think there must be something wrong somewhere.
Turning to the 103rd Report of the Commissioners of Inland Revenue, on page 131 the yield of stamps on bills of exchange and promissory notes is given as rather over £1 million for inland ones and rather under £400,000 for foreign ones. The next item, bankers' bills and notes, refers to something different; it only relates to Scotland and I think refers to the banknotes which are current in Scotland.
The result appears to be that the cost of the concession is rather more than the yield of the duty. That is Treasury arithmetic in excelsis.
I come now to the reasons for the concession. The Chancellor told us thatIt has not been the weight of this duty that has caused the trouble".I can quite see that. The duty seems to yield about £1½ million, and the annual turnover of bills of exchange in the London market, according to the Radcliffe Commission, is about £1,000 million. It does not seem to be an excessive charge. Moreover, with whom are we dealing? These are the very tycoons of finance. I should not think that they would mind a little thing like this.
The Chancellor went on to say:…it has rather been the practical difficulty for traders of keeping a supply of bills stamped with the right amount of duty, or a supply of the special adhesive stamps applying to foreign bills, and of ensuring that the right kinds of stamps are used on the different kinds of bill."—[OFFICIAL REPORT, 4th May, 1961; Vol. 639, c. 1628–9.]That is the only reason for giving these tycoons of finance £1½ million by way of remission of duty.
I have heard many odd arguments for making tax concessions and many even odder ones for refusing, but I have never yet known a Government give a concession of £1½ million solely on the ground that high grade discount merchants could not keep a supply of bills stamped with the right amount of duty or a supply of the special adhesive stamps applying to foreign bills and could not 553 ensure that the right kind of stamp was used on the different kinds of bill. These are the people who are supposed to make London the financial centre of the world. They are not philatelists, but I should have thought that they could manage to keep the right kind of stamps available, and could have managed to give a lick to the right kind of stamp and stick it on a bill. I should have expected their intelligence to be such that they might even know what was the right stamp to use on the different kinds of bill.
If they are such extraordinarily careless idiots, as they appear to be from what the right hon. and learned Gentleman said, is that a sufficient reason for giving them £1½ million out of the pocket of the taxpayer? I should like to hear a defence of this remarkable Clause.
§ Sir E. Boyle
I quite agree with what the hon. and learned Member for Kettering (Mr. Mitchison) says in so far as there is, of course, a range of stamps available at the Inland Revenue Stamp Office, but, none the less, we were assured by industry—I have no reason to think that it was not true—that the present complicated system and present duty did act as an impediment to business efficiency and, as bills of exchange are used extensively for foreign trade, it was very likely that difficulties were most acutely felt there.
There have been many accusations from this side of the Committee, and especially from hon. and right hon. Members opposite, that the Budget does nothing directly to affect our balance of payments. Here, in making this quite simple change—I agree that it costs £1½ million in a full year—we had no doubt that we should be giving some direct assistance to exporters. All I can say is that, bearing in mind the first part of the reasoned Amendment which right hon. and hon. Members opposite moved to the Motion for the Second Reading of the Finance Bill, they would be quite remarkably inconsistent with their own declared utterances if they voted against this Clause.
§ Mr. Eric Fletcher (Islington, East)
I have never heard such rubbish. The Financial Secretary says that he was assured of this, that and the other. The Stamp Act has been in operation for seventy years. It was passed in 1891. Why has it suddenly been found that the 554 whole commercial community, which has never before complained that it had the slightest difficulty in putting the appropriate stamps on bills of exchange, cannot manage to obtain or keep the right range of stamps to put on? It is nonsense for the hon. Gentleman to advance such reasons as justification for giving away £1½ million of public revenue which, if the Chancellor had wanted to make concessions, could have been put to far more deserving causes.
There is not the slightest justification for that at all. The hon. Gentleman's speech was not only brief, but it was a miserable attempt to justify a completely unjustifiable concession. Anyone who has had the slightest experience of these matters knows that there is not the slightest difficulty in having the necessary pieces of paper or adhesive stamps so that, as has been the case for seventy years, bills of exchange can be properly stamped.
After all, bills of exchange are a matter of great convenience to the commercial community. They facilitate operations, and it is idle to say that because they cannot get the right stamps to put on the right pieces of paper at the right time, that interferes with our export trade. It astonishes me that the Minister could lend himself to such utter rubbish, and it is grotesque to pretend that our export trade will suffer because exporters have difficulty in getting the right stamps to put on the right pieces of paper at a particular moment. If he descends to that, the hon. Gentleman does not deserve the confidence of this Committee, and I hope that, on reflection, he will accept the view that if the Chancellor has a concession of the order of £1½ million to make there are far more worthy causes which should benefit.
Mr. Bruce Milan (Glasgow, Craigton)
Like my hon. Friends, I think that we have been given a very inadequate explanation of this Clause.
I am particularly interested in what my hon. and learned Friend the Member for Kettering (Mr. Mitchison) quoted from the Chancellor's Second Reading speech on the Finance Bill, namely, the reasons given then by the right hon. and learned Gentleman for introducing this Clause—the difficulty of getting the different denominations of stamps and seeing that 555 they were stuck on the right pieces of paper, and so on. If we look at the Chancellor's Budget speech, we find that the reason given in his speech on the Second Reading of the Bill was quite different from the reason originally given in the Budget speech.
In his Budget speech, the Chancellor said:It has been represented to me that the complications in calculating this duty are an obstacle to trade, particularly the export trade."—[OFFICIAL REPORT, 17th April, 1961; Vol. 638, c. 813.]There is no mention there of the difficulty of getting the different denominations of stamps or anything like that; it was purely a question of the complications of calculating the duty.
The duty on a bill of exchange, apart from the exceptional case of one payable on demand, is calculated as 1s. per £100 and, like my hon. Friend, I simply cannot believe that the people concerned with the calculation cannot do it perfectly easily. Certainly, there is not sufficient difficulty to justify giving £1½ million in tax remission.
There must be a better reason than that, and I give the Government credit for that. Although we have not heard it yet, either in the speeches made here, by the Chancellor in his Budget statement or in his Second Reading speech on the Bill, it seems to me that, from what we have heard from the Financial Secretary tonight, there must be a better reason. We are entitled to ask, before we pass this Clause, that we should know what this better reason actually is.
It may be that it is because it is an unpopular duty, as all stamp duties tend to be, and that there has been a tendency on the part of people drawing these bills of exchange to neglect to stamp them. After all, bills of exchange are perfectly valid even if not stamped, and the fact that they are not stamped does not invalidate them if it comes to a question, for example, of founding a legal action on them. It is a question of paying the penalty and ensuring that they are properly stamped.
§ 9.45 p.m.
§ My information is that many people who use these bills of exchange neglect to stamp them. They take a chance that they will not have to fight an action and they do not bother. There may be difficulties when they have to go to the bank to get them negotiated or have to present them, for instance, to the Export Credits Guarantee Department to get proper cover from that Department. But if it is a fact that many people are using these bills and are not stamping them in accordance with the Act, and if the Government take the view that, because many people are in default of the Act, it would be a good argument for getting rid of the duty altogether—that may be the real reason why this Clause is in the Bill—I consider it to be an intolerable argument.
§ As has been said, many very good cases have been put to the Government. A very good case was put to them this afternoon concerning building societies, which involved only £500,000. Here, £1½ million is involved. We have had reasons from the Chancellor of the Exchequer and from the Financial Secretary which have differed. None of them has been sufficiently cogent to justify the introduction of this Clause, and, unless we get something much better from the Financial Secretary, the Committee ought to oppose the Clause.
§ Mr. Mitchison
The Financial Secretary did not deny that this concession was of such a character that it exceeded the yield of the whole tax. He never suggested that these apparently half-witted tycoons may be supplied either with newer and simpler stamps if they cannot find the old ones, or with some mechanical assistance in working out the sum of 1s. per £100. In those circumstances, we have no alternative but to divide the Committee on this Clause.
§ Question put, That the Clause stand part of the Bill:—
§ The Committee divided: Ayes 226, Noes 151.559
|Division No. 202.]||AYES||[9.47 p.m.|
|Aitken, W. T.||Atkins, Humphrey||Batsford, Brian|
|Allan, Robert (Paddington, S.)||Barber, Anthony||Baxter, Sir Beverley (Southgate)|
|Allason, James||Barlow, Sir John||Bell, Ronald|
|Arbuthnot, John||Barter, John||Bennett, F. M. (Torquay)|
|Bennett, Dr. Reginald (Gos & Fhm)||Harvie Anderson, Miss||Price, David (Eastleigh)|
|Berkeley, Humphry||Hastings, Stephen||Prior, J. M. L.|
|Biggs-Davison, John||Hay, John||Prior-Palmer, Brig. Sir Otho|
|Bingham, R. M.||Heald, Rt. Hon. Sir Lionel||Proudfoot, Wilfred|
|Birch, Rt. Hon. Nigel||Hendry, Forbes||Pym, Francis|
|Bishop, F. P.||Hiley, Joseph||Quennell, Miss J. M.|
|Bossom, Clive||Hill, Mrs. Eveline (Wythenshawe)||Ramsden, James|
|Bourne-Arton, A.||Hirst, Geoffrey||Rawlinson, Peter|
|Bowen, Roderic (Cardigan)||Hocking, Philip N.||Redmayne, Rt. Hon. Martin|
|Boyle, Sir Edward||Hollingworth, John||Rees, Hugh|
|Brewis, John||Holt, Arthur||Renton, David|
|Bromley-Davenport. Lt.-Col. Sir Walter||Hornby, R. P.||Ridley, Hon. Nicholas|
|Brooke, Rt. Hon. Henry||Howard, Hon. G. R. (St. Ives)||Ridsdale, Julian|
|Brown, Alan (Tottenham)||Hughes-Young, Michael||Roberts, Sir Peter (Heeley)|
|Browne, Percy (Torrington)||Hutchison, Michael Clark||Robinson, Sir Roland (Blackpool, S.)|
|Bryan, Paul||Iremonger, T. L.||Roots, William|
|Buck, Antony||Irvine, Bryant Godman (Rye)||Ropner, Col. Sir Leonard|
|Bullard, Denys||James, David||Russell, Ronald|
|Bullus, Wing Commander Eric||Johnson, Dr. Donald (Carlisle)||Scott-Hopkins, James|
|Burden, F. A.||Johnson, Eric (Blackley)||Shaw, M.|
|Campbell, Gordon (Moray & Nairn)||Joseph, Sir Keith||Shepherd, William|
|Carr, Compton (Barons Court)||Kerans, Cdr. J. S.||Simon, Rt. Hon. Sir Jocelyn|
|Carr, Robert (Mitcham)||Kerby, Capt. Henry||Skeet, T. H. H.|
|Cary, Sir Robert||Kershaw, Anthony||Smith, Dudley (Br'ntfrd & Chiswick)|
|Channon, H. P. G.||Leather, E. H. C.||Smithers, Peter|
|Chataway, Christopher||Leavey, J. A.||Spearman, Sir Alexander|
|Clark, Henry (Antrim, N.)||Leburn, Gilmour||Stevens, Geoffrey|
|Clark, William (Nottingham, S.)||Legge-Bourke, Sir Harry||Steward, Harold (Stockport, S.)|
|Cleaver, Leonard||Lewis, Kenneth (Rutland)||Stodart, J. A.|
|Cooke, Robert||Lilley, F. J. P.||Stoddart-Scott, Col. Sir Malcolm|
|Cooper-Key, Sir Neill||Linstead, Sir Hugh||Storey, Sir Samuel|
|Cordeaux, Lt.-Col. J. K.||Litchfield, Capt. John||Studholme, Sir Henry|
|Corfield, F. V.||Longbottom, Charles||Sumner, Donald (Orpington)|
|Costain, A. P.||Longden, Gilbert||Talbot, John E.|
|Coulson, J. M.||Lucas-Tooth, Sir Hugh||Tapsell, Peter|
|Courtney, Cdr. Anthony||MacArthur, Ian||Taylor, Edwin (Bolton, E.)|
|Craddock, Sir Beresford||McLaren, Martin||Thatcher, Mrs. Margaret|
|Critchley, Julian||McLaughlin, Mrs. Patricia||Thompson, Kenneth (Walton)|
|Cunningham, Knox||McMaster, Stanley R.||Thornton-Kemsley, Sir Colin|
|Curran, Charles||Macmillan, Rt. Hn. Harold (Bromley)||Tiley, Arthur (Bradford, W.)|
|Dalkeith, Earl of||Maddan, Martin||Turner, Colin|
|Deedes, W. F.||Markham, Major Sir Frank||Turton, Rt. Hon. R. H.|
|Doughty, Charles||Marples, Rt. Hon. Ernest||Tweedsmuir, Lady|
|du Cann, Edward||Marten, Neil||van Straubenzee, W. R.|
|Duncan, Sir James||Mathew, Robert (Honiton)||Vane, W. M. F.|
|Duthie, Sir William||Maudling, Rt. Hon. Reginald||Vaughan-Morgan, Rt. Hon. Sir John|
|Eden, John||Mawby, Ray||Vickers, Miss Joan|
|Elliot, Capt. Walter (Carshalton)||Maxwell-Hyslop, R. J.||Vosper, Rt. Hon. Dennis|
|Elliott, R. W. (Nwcstle-upon-Tyne, N.)||Mills, Stratton||Wade, Donald|
|Emery, Peter||Montgomery, Fergus||Wakefield, Edward (Derbyshire, W.)|
|Emmet, Hon. Mrs. Evelyn||Morgan, William||Wakefield, Sir Wavell (St. M'lebone)|
|Finlay, Graeme||Nabarro, Gerald||Walder, David|
|Fisher, Nigel||Nicholls, Sir Harmar||Walker, Peter|
|Foster, John||Nicholson, Sir Godfrey||Walker-Smith, Rt. Hon. Sir Derek|
|Fraser, Hn. Hugh (Stafford & Stone)||Noble, Michael||Wall, Patrick|
|Fraser, Ian (Plymouth, Sutton)||Nugent, Sir Richard||Ward, Dame Irene|
|Freeth, Denzil||Oakshott, Sir Hendrie||Whitelaw, William|
|Gammans, Lady||Orr-Ewing, C. Ian||Williams, Dudley (Exeter)|
|Gibson-Watt, David||Osborn, John (Hallam)||Williams, Paul (Sunderland, S.)|
|Glover, Sir Douglas||Osborne, Sir Cyril (Louth)||Wills, Sir Gerald (Bridgwater)|
|Gower, Raymond||Page, John (Harrow, West)||Wilson, Geoffrey (Truro)|
|Grant, Rt. Hon. William||Page, Graham (Crosby)||Wise, A. R.|
|Grant-Ferris, Wg Cdr. R.||Pannell, Norman (Kirkdale)||Wolrige-Gordon, Patrick|
|Green, Alan||Partridge, E.||Wood, Rt. Hon. Richard|
|Gresham Cooke, R.||Pearson, Frank (Clitheroe)||Woodhouse, C. M.|
|Grimond, J.||Percival, Ian||Woodnutt, Mark|
|Grosvenor, Lt.-Col. R. G.||Peyton, John||Woollam, John|
|Gurden, Harold||Pickthorn, Sir Kenneth||Worsley, Marcus|
|Hall, John (Wycombe)||Pilkington, Sir Richard||Yates, William (The Wrekin)|
|Hamilton, Michael (Wellingborough)||Pitman, Sir James|
|Harris, Reader (Heston)||Pitt, Miss Edith||TELLERS FOR THE AYES:|
|Harvey, John (Walthamstow, E.)||Pott, Percivall||Mr. Chichester-Clark and Mr. Peel.|
|Abse, Leo||Brockway, A. Fenner||Deer, George|
|Ainsley, William||Broughton, Dr. A. D. D.||Diamond, John|
|Albu, Austen||Castle, Mrs. Barbara||Ede, Rt. Hon. C.|
|Allaun, Frank (Salford, E.)||Corbet, Mrs. Freda||Edelman, Maurice|
|Allen, Scholefield (Crewe)||Craddock, George (Bradford, S.)||Edwards, Rt. Hon. Ness (Caerphilly)|
|Awbery, Stan||Crosland, Anthony||Edwards, Robert (Bilston)|
|Bacon, Miss Alice||Crossman, R. H. S.||Evans, Albert|
|Benson, Sir George||Cullen, Mrs. Alice||Fernyhough, E.|
|Blyton, William||Davies, G. Elfed (Rhondda, E.)||Finch, Harold|
|Bowden, Herbert W. (Leics, S.W.)||Davies, Harold (Leek)||Fitch, Alan|
|Boyden, James||Davies, Ifor (Gower)||Fletcher, Eric|
|Foot, Dingle (Ipswich)||Mabon, Dr. J. Dickson||Roberts, Goronwy (Caernarvon)|
|Forman, J. C.||McInnes, James||Ross, William|
|Gaitskell, Rt. Hon. Hugh||McKay, John (Wallsend)||Short, Edward|
|Galpern, Sir Myer||Mackie, John (Enfield, East)||Silverman, Sydney (Nelson)|
|George, Lady Megan Lloyd (Crmrthn)||McLeavy, Frank||Skeffington, Arthur|
|Ginsburg, David||MacMillan, Malcolm (Western Isles)||Slater, Mrs. Harriet (Stoke, N.)|
|Gourlay, Harry||MacPherson, Malcolm (Stirling)||Slater, Joseph (Sedgefield)|
|Greenwood, Anthony||Mahon, Simon||Sorensen, R. W.|
|Grey, Charles||Mallalieu, E. L. (Brigg)||Soskice, Rt. Hon. Sir Frank|
|Griffiths, David (Rother Valley)||Manuel, A. C.||Spriggs, Leslie|
|Gunter, Ray||Mapp, Charles||Steele, Thomas|
|Hale, Leslie (Oldham, W.)||Marsh, Richard||Stewart, Michael (Fulham)|
|Hamilton, William (West Fife)||Mason, Roy||Stonehouse, John|
|Hayman, F. H.||Mellish, R. J.||Stones, William|
|Healey, Denis||Mendelson, J. J.||Swingler, Stephon|
|Henderson, Rt. Hn. Arthur (Rwly Regis)||Millan, Bruce||Sylvester, George|
|Herbison, Miss Margaret||Milne, Edward J.||Symonds, J. B.|
|Hill, J. (Midlothian)||Mitchison, G. R.||Taylor, Bernard (Mansfield)|
|Holman, Percy||Monslow, Walter||Taylor, John (West Lothian)|
|Houghton, Douglas||Moody, A. S.||Thomas, Iorwerth (Rhondda, W.)|
|Howell, Denis (Small Heath)||Moyle, Arthur||Thompson, Dr. Alan (Dunfermline)|
|Hoy, James H.||Neal, Harold||Thomson, G. M. (Dundee, E.)|
|Hughes, Cledwyn (Anglesey)||Noel-Baker, Francis (Swindon)||Thornton, Ernest|
|Hughes, Emrys (S. Ayrshire)||Noel-Baker, Rt. Hn. Philip (Derby, S.)||Ungoed-Thomas, Sir Lynn|
|Hunter, A. E.||Oliver, G. H.||Wainwright, Edwin|
|Hynd, John (Attercliffe)||Oram, A. E.||Warbey, William|
|Irvine, A. J. (Edge Hill)||Oswald, Thomas||Watkins, Tudor|
|Jay, Rt. Hon. Douglas||Owen, Will||Weitzman, David|
|Johnson, Carol (Lewisham, S.)||Padley, W. E.||Whitlock, William|
|Jones, Rt. Hn. A. Creech (Wakefield)||Paget, R. T.||Wilcook, Group Capt. C. A. B.|
|Jones, Dan (Burnley)||Pannell, Charles (Leeds, W.)||Williams, D. J. (Neath)|
|Jones, J. Idwal (Wrexham)||Parkin, B. T.||Williams, Ll. (Abertillery)|
|Jones, T. W. (Merioneth)||Pearson, Arthur (Pontypridd)||Williams, W. R. (Openshaw)|
|Kelley, Richard||Prentice, R. E.||Willis, E. G. (Edinburgh, E.)|
|Kenyon, Clifford||Price, J. T. (Westhoughton)||Winterbottom, R. E.|
|Key, Rt. Hon. C. W.||Probert, Arthur||Woof, Robert|
|King, Dr. Horace||Proctor, W. T.|
|Lawson, George||Pursey, Cmdr. Harry||TELLERS FOR THE NOES:|
|Lee, Miss Jennie (Cannock)||Rankin, John||Mr. Charles A. Howell and|
|Logan, David||Redhead, E. C.||Mr. McCann.|
|Loughlin, Charles||Rhodes, H.|
§ Clauses 30 and 31 ordered to stand part of the Bill.