New Clause.—(POWER TO DIRECT INTEREST ON NORTHERN IRELAND SECURITIES TO BE PAYABLE WITHOUT DEDUCTION OF TAX.) (Hansard, 2 July 1962)

§ Mr. Barber
I beg to move, That the Clause be read a Second time.
The purpose of the Clause is to permit, subject to the authority of the Treasury, interest on certain securities issued by the Government of Northern Ireland to be paid without deduction of Income Tax. The principle involved here will be familiar to hon. Members because, by virtue of Section 196 of our own Income Tax Act, 1952, the Treasury may direct that any of the various Government securities listed in that Section shall be issued, or shall be deemed to have been issued, subject to the condition that the interest shall be paid without the deduction of Income Tax.
I need not delay the Committee by going into this matter at great length, because the general principle involved has been discussed during the passage of almost every Finance Bill. However, the Section concerned has a restrictive application in that securities issued by the Government of Northern Ireland are not within its ambit.
1.30 a.m.
The Northern Ireland Government have now requested that the general enabling authority of Section 196 should apply to securities which are issued by them. I am sure that the House will agree that this is reasonable. The provision will operate in the same way as Section 196 now operates for United Kingdom securities, and a specific Treasury direction would be required in each case.

§ Mr. Callaghan
Why is the Clause being introduced now at this stage of the Bill? Secondly, is there any provision for checking on taxpayers that they are declaring the interest received without tax deduction from Northern Ireland?

§ Mr. Barber
The Clause is being introduced now because it has been requested by the Government of Northern Ireland. It seemed to my right hon. and learned Friend that the request was reasonable and that consequently we should accede to it. I am sure that the House would agree that it would be quite wrong for me to anticipate any action under the Clause by the Government of Northern Ireland. That must be a matter for them, although they could not take advantage of the Section without the consent of the Treasury.
As to the hon. Member's second point, I can only tell him that I think I am right in saying that so far as those securities which are issued by the United Kingdom Government are concerned, the Inland Revenue can obtain information about the amounts which are paid to holders of the securities without deduction of tax. I must be frank with the hon. Member. I do not know offhand, without making further inquiries, whether similar arrangements will be applied with regard to any securities issued by the Government of Northern Ireland. I will bear the point in mind and draw it to the attention of the Commissioners of Inland Revenue. This may well be a matter of machinery of which they will have to take note to ensure that they have the relevant information. But we have the safeguard that advantage of Section 196 cannot be taken without the consent of the Treasury.

§ Mr. Callaghan
Clearly, the great majority of taxpayers would declare their interest and pay tax on it, but there is obviously a loophole here for those who are evilly disposed if there are to be no reciprocal arrangements between the Ministry of Finance in Northern Ireland and the Commissioners of Inland Revenue, as in this country. I hope that the hon. Gentleman follows this up positively. May I ask whether this request was received after the Finance Bill was prepared? If it was not, it seems a little strange that we 240 should have reached this point between May and now when we have to tuck this provision into the Bill on Report.

§ Mr. Barber
My recollection is that the request has been made by the Government of Northern Ireland since the earlier proceedings in Committee. As to the hon. Member's first point, I am informed that the Commissioners of Inland Revenue can request information from the banks which make the payments.

§ Mr. George Lawson (Motherwell)
Can the hon. Gentleman tell us why it is that if this matter is of such importance that it must be brought up now, at twenty-five minutes to two o'clock in the morning, there are no hon. Members from Northern Ireland present to put the case for their part of the country?

§ Mr. Selwyn Lloyd
For reasons which I shall not specify, I beg to move, That further consideration of the Bill, as amended, be now adjourned.

§ Mr. Callaghan
I draw attention to the fact that we have had 25 separate debates today, 20 of them being on Government Amendments or new Clauses, only five at the most being on Amendments or new Clauses introduced by the Opposition or hon. Members opposite. It so happened that they all came from the Opposition. I think that the Government have pressed us too hard and too far today. This is something which the House should note and the Government should watch carefully. Having got to this stage of the Bill, they have set aside two days of which they have themselves taken almost one whole day. Since 7.20 p.m., we have done nothing but discuss Government Amendments and new Clauses.
Some of those Amendments and new Clauses have been introduced because of the way the Bill was drafted in the first place. Some of them are the result of new matter being introduced on Report. This is why I asked the Economic Secretary the question about Northern Ireland. We have had a new Clause 241 relating to the taxation of the gas industry. So far as I know, there was no reason to introduce it on Report. It could have been, and should have been, put into the Finance Bill. There was the new Clause about Government annuities. Why it had to be tucked in at this stage I do not know.
I do not wish to be unduly critical, but I do not see why we should have brought into the Finance Bill at this very late stage matters which are not included at the time it is printed.

§ Mr. Mitchison
And which require a special Ways and Means Resolution.

§ Mr. Callaghan
One of which, the one relating to the Gas Council, called for a special Ways and Means Resolution, as my hon. and learned Friend says. These matters should have been in the Bill earlier. I can understand the Government wanting to cram as much as they can, but the House is entitled to say that, if they set aside two days for Re-committal and Report, they should not take the time up with their own new Clauses which the House has not seen earlier. Yet this is what they have to some extent done today.
Naturally, I agree with the Motion, but it seems to me that we shall have to go very late again tomorrow. I can see us going on for most of the night, because we shall tomorrow reach Amendments put down by back benchers on bath sides, the Government having taken practically all of one of the two days. I register this complaint not just on behalf of the Opposition but, I believe, on behalf of back benchers everywhere and because, as a result of the way in which the matter has been handled, we are likely to be forced to sit very late on two nights.