New Clause.—(TAXATION OF GAS COUNCIL AND AREA BOARDS.)

HC Deb 02 July 1962 vol 662 cc179-221

(1) Subject to the provisions of this section, for the purposes of income tax and for the purposes of the profits tax the Gas Council shall be treated as carrying on a trade or business from the beginning of April, nineteen hundred and sixty-two, and from the beginning of that month—

1. (a) any trade or business carried on by an Area Board within the meaning of the Gas Act, 1948, shall be treated as part of the trade or business carried on by the Gas Council;
2. (b) subject to paragraph (c) below, any property, rights or liabilities of any such Board shall be treated as property, rights or liabilities of the Gas Council, and anything done by or to any such Board shall be deemed to have been done by or to the Gas Council;
3. (c) any rights, liabilities or things done—
1. (i) of, by or to the Gas Council against, to or by any such Board; or
2. (ii) of, by or to any such Board against, to or by the Gas Council or any other such Board shall be left out of account;

and income tax and the profits tax shall be charged accordingly.

(2) Subsection (1) above shall not affect income tax for any year of assessment earlier than the year 1962–63 or the profits tax for any chargeable accounting period ending with or before the end of March, nineteen hundred and sixty-two, or the computation of the profits and gains or losses of the trade or business of an Area Board for any such year of assessment or chargeable accounting period; and any such losses may be carried forward and set off against the profits or gains of the trade or business of the Gas Council as if incurred by the Gas Council in carrying on that trade or business.

(3) The trade or business of the Gas Council shall not be treated as a new trade or business set up and commenced at the beginning of April, nineteen hundred and sixty-two; but, subject to subsection (2) above. the Income Tax Acts and the enactments relating to the profits tax shall apply in relation to that trade or business as if before the beginning of that month it had consisted of the trades or businesses of the Area. Boards, and (without prejudice to the generality of the foregoing) allowances and balancing charges shall be made to or on the Gas Council accordingly by reference to the capital expenditure of Area Boards and to the allowances made to Area Boards in respect of that expenditure.

(4) The expenses of the Gas Council to which Area Boards may be required to contribute under subsection (1) of section forty-eight of the Gas Act. 1948, shall be taken to include the satisfaction of any obligations of the Gas Council in respect of income tax or the profits tax.—[Mr. Brooke.]

Brought up, and read the First time.

Mr. Brooke

I beg to move, That the Clause be read a Second time.

The effect of the new Clause is, quite simply, to make the taxation treatment of the gas industry conform, from 1st April this year onwards, with that which already exists for the electricity industry. The Electricity Council, the Central Electricity Generating Board and all the area boards in England and Wales are treated for tax purposes as one entity carrying on one trade. The Committee will probably agree in principle that there should be no discrimination in the tax treatment of these two nationalised industries.

At present, each of the 12 area gas boards is separately liable to tax. The Gas Council, on the other hand, is not regarded as a trading body and is not taxed. That has been a not inappropriate arrangement hitherto, because each Area Gas Board has been primarily responsible for the supply of gas in its own area and for the capital expenditure Which is consequent on that responsibility.

The industry, however, is changing and there are signs of the manufacture and supply of gas becoming more centralised than hitherto. In particular, the Gas Council is now assuming the responsibility for considerable capital expenditure on pipelines and storage in connection with the methane gas project.

Under existing law, the Gas Council would not be entitled to capital allowances, the reason being that it is not a trading body in the eyes of the law. It would, however, be unfair that no capital allowances should accrue in relation to this capital expenditure just because it is to be incurred by the Gas Council and not by any of the area board's. For that reason, my right hon. and learned Friend the Chancellor of the Exchequer came to the conclusion that it was essential to make such changes in the tax treatment of the industry as are proposed in the new Clause.

First, it is essential to treat the Gas Council henceforth as carrying on a trade, because otherwise it would be impossible for it to qualify for capital allowances in respect of this capital investment. That would not be enough, however, because there might be no profits against which those capital allowances could be set if the Gas Council were considered solely by itself for tax purposes. Therefore, the new Clause goes further and enacts that the gas industry as a whole shall in future be treated as one for tax purposes. If the new Clause is accepted by the Committee, the capital allowances can be secured, and properly secured, for the benefit of the industry as a whole against the profits of the industry as a whole.

What the Clause does is in line with what already happens for the electricity industry. The only difference is that, in the case of gas it will operate from April of this year, although subsections (2) and (3) of the new Clause are designed to effect a smooth transition from the old system to the new. Although it is known that the future structure of the gas industry is under consideration—we have, for example, had a Report from the Select Committee on Nationalised Industries making certain recommendations about that—the Clause is in no sense a forward pointer to whatever may happen in that respect. In no way does it anticipate whatever decisions may be reached on that matter.

Hon. Members may ask why the Chancellor decided to bring forward the now Clause at this stage. The answer is that my right hon. and learned Friend had some disposition at first to postpone any tax change until such time as the future structure of the industry might be determined. He finally came to the conclusion, however, that that would be unfair to the industry. It would either involve unfair tax discrimination such as I have described, because it would be impossible for the benefit of capital allowances to accrue to the industry, or, alternatively, it would involve him at some future date in making retrospective provision for these capital allowances back to April of this year.

10.45 p.m.

It seemed on consideration that neither of those was the proper course to follow that it would be better to proceed now, even though the future structure is not yet determined, and then there need be nothing retrospective about these provisions. If at some future date the structure of the industry is modified—I make no prophecy about that—my right hon. and learned Friend would feel that that would be the proper moment to propose to Parliament any further amendments in the tax provisions relating to the gas industry that the new structure might require. The main change is being made in this Clause. It would simply be a matter of shaping the provision in the Clause to the new structure as it may be evolved.

So far as I am aware, there is nothing controversial in the proposal in the new Clause, and I hope that the Committee will agree that this is a commonsense approach. I feel sure that there could be hardly any criticism of the general proposition that the electricity industry and the gas industry should be treated on equal terms so far as taxation is concerned.

Mr. Bruce Millan (Glasgow, Craigton)

The Chief Secretary has given a lucid explanation of the Clause, and I think that the Committee will probably want to accept it. But there is one aspect of the matter with which the right hon. Gentleman has not dealt at all, and it is the most fundamental aspect, and I should like him to say a word about it.

What does the Clause mean in terms of actual tax payable by the gas industry? The Chief Secretary said nothing at all about that. Are any of the area gas boards at the moment paying Income Tax or Profits Tax? Can the Chief Secretary say whether under the. present arrangements any of the area boards would be expected to pay Income Tax or Profits Tax at some time in the near future? Will the result of the Clause be that the time at which the industry pays Income Tax or Profits Tax, or the amounts of tax payable, will be deferred, or does it not? Can the right hon. Gentleman say something about that? That is, after all, the main question, at least from the industry's point of view, and, I should have thought, also from the Government's point of view in terms of revenue.

There is a second point that I should like the right hon. Gentleman to answer. Some of the area gas boards, I imagine, must have considerable taxation losses at the moment, not necessarily financial losses in terms of their accounts, but considerable taxation losses which they are carrying forward. Will these taxation losses now be carried forward in the Gas Council's overall computation? When the Clause is passed, as I read it, it will be possible to carry them forward, as I think would be only fair and equitable. Perhaps the Chief Secretary will say something about that, because it has a very important bearing on my first question about the effect on the tax liability of the industry at the moment and the anticipated effect on it over the next year or two.

Mr. Nabarro

I rise to support the new Clause and ask my right hon. Friend one or two questions concerning the accountancy aspects of the proposed changes.

Surely what my right hon. Friend has told the Committee means that the Gas Council will, upon this Clause being enacted, be in the position of a parent company and the 12 area boards in the position of subsidiary companies? According to the Companies Acts, the publication of accounts, therefore, from next year should take the form of the publication of individual accounts for each of the area boards and one consolidated account in respect of the Gas Council. I should not like to lose the prerogative of challenging from time to time in Parliament, on the appropriate nationalised industry debates and elsewhere, the individual figures which are shown in the accounts of the area boards, and I hope that it is not the intention of the Treasury to require the Minister of Power to end the system of having individual trading accounts for that chargeable accounting period annually which ends on 31st December each year, one trading account for each area board, exactly in the same way as a subsidiary company would publish its accounts, and a consolidated account for the Gas Council as the account for the parent company.

In reply to the hon. Member for Glasgow, Craigton (Mr. Millan) I would say that there are area boards with taxation losses forward, of course. On the other hand, there are many with surpluses— profits—accumulated and carried forward annually. I presume that in future under the proposed enactment the accounts of all 12 area boards will be merged and a balance struck as to the aggregation of profits forward less losses forward, and that that will in future be shown on the consolidated account of the Gas Council annually, the Gas Council attracting not only capital allowances, such as investment and initial allowances for the capital expenditure of each of the area boards, but also its own capital expenditure in the form of such enterprises as investment in methane.

With those few comments and questions, I thoroughly approve of the reform, which is a good deal overdue, and wish it every success.

Mr. Brooke

The hon. Member for Glasgow, Craigton (Mr. Millan) asked which, if any, of the area boards was paying tax at present. The answer is that none of them is paying tax at present. If the boards remained liable as separate entities, the view of the Gas Council is that it would be unlikely that any of them would incur liability for Income Tax or Profits Tax within the next five years or so. The main point, as he will appreciate, is that once the Gas Council embarked on capital expenditure, there would be no chance of charging the capital allowances against profits anywhere unless we were to alter the law, render the Gas Council a trading body and provide for treating the area boards and the Council together as a single entity for the capital allowances to be chargeable against the total profits of the industry.

Secondly, he asked about the transition. I can assure him that accumulated losses or allowances which, so to speak, belong to the area boards will not be lost. The converse of that is that the Gas Council will not be treated as having an initial year for tax purposes but will be treated under this Clause as a continuing body, so that there will be a perfectly natural transition from the old system to the new.

I am grateful to my hon. Friend the Member for Kidderminster (Mr. Nabarro) for his welcome of the Clause. It is true that for tax purposes the Council and all the boards will have to be treated collectively, but certainly I have received no indication that that will lead to any less clear and separate provision of accounts by the bodies concerned, and I think that I can say with confidence that the acceptance of this Clause will in no way reduce the amount of information which will be available to Parliament and the public.

Question put and agreed to.

Clause read a Second time and added to the Bill.

Ninth Schedule.—(MISCELLANEOUS RULES APPLICABLE TO CASE VII OF SCHEDULED.)

Sir E. Boyle

I beg to move, in page 58, lines 13, at the end to insert: (8) Notwithstanding anything in sub-paragraphs (3) to (6) above, where, under arrangements designed to postpone the transfer or delivery of shares disposed of, a person by a single bargain acquires shares for transfer or delivery on a particular date or in a particular period and disposes of them for transfer or delivery on a later date or in a later period, then—

1. (a) the shares disposed of by that bargain shall be identified with the shares thereby acquired; and
2. (b) shares previously disposed of which, but for the operation of paragraph (a) above in relation to acquisitions for transfer or delivery on the earlier date or in the earlier period, would have been identified with the shares acquired by that bargain—
1. (i) shall, subject to sub-paragraph (3) above, be identified with any available shares acquired for such transfer or delivery (that is to say, any shares so acquired other than shares to which paragraph (a) above applies and other than shares with which shares disposed of for such transfer or delivery would be identified apart from this suc paragraph); and
2. (ii) in so far as they cannot be so identified shall be treated as disposed of for transfer or delivery on the later date or in the later period above mentioned.

The object of this Amendment is to remedy an anomaly which arises under the Bill in relation to someone who sells shares on the Stock Exchange and then enters into what are called contango arrangements in respect of that sale. I am sure that we are glad to have the hon. Member for Bosworth (Mr. Wyatt) with us for this important subject, and I shall try to emulate the high moral line of the hon. Member for Sowerby (Mr. Houghton) while I expound it.

Contango arrangements provide for a client of the Stock Exchange to continue his original bargain from one account to another by making one single bargain for purchases and sale at one fixed "making-up" price. If he has sold shares for the first account, he contangoes by buying for that account and simultaneously selling for the next. If he has bought shares, he sells for the original account and buys for the next.

The most lucid explanation that I know of this practice is to be found in the late Sir Oscar Hobson's book on the City. Even those who disagree with his politics will not quarrel with me when I say that his description of this is very clear.

Contango arrangements can be made over a number of accounts beginning from the original sale or the original purchase, but the final effect of the con-tango operations, looked at by themselves, is that the client has sold his shares, or bought them, for an amount equal to the original price. But he will have had to find extra expenses for con-tango arrangements, and in addition he will have had to pay, or may have received, money by way of what is called con-tango interest, that is to say, the rate which normally a buyer is prepared to pay for the con-tango facilities and which a seller will get for affording these facilities.

In the case of a seller of shares who contangoes his sale, paragraph 8 (4) of this Schedule identifies the original sale of shares for the first account with the subsequent purchase for that account, and, if the con-tango continues, the sale for the next account with the subsequent purchase for that account, and so on.

If contango arrangements are made on a falling market, each contango gives rise to a taxable profit arrived at by comparing the sale price with a lower purchase price. This result is fair enough if the original sale was intended as a bear transaction, that is to say, the object was to take a profit at the end of the day by buying in the shares at a lower price than one originally sold for, because in that case the existing rule picks up the overall profit in instalments, but if the client is simply selling shares which he has, the result under the Bill as it stands is to tax him on a quite unreal profit. The Amendment which I have moved adds a new sub-paragraph to put this matter right.

Sub-paragraph (8, a) of the Amendment provides for a special identification rule where a seller of shares enters into con-tango arrangements. The new rule matches the shares bought and sold in the single bargain which I have described. The result is that the con-tango will give rise to profit for Case VII purposes only in respect of the excess of any con-tango interest received over the expenses of the transaction as a whole.

The actual price of the purchase and sale is the same fixed making-up price, but at the same time it was also necessary in this Amendment to provide for the case where the original sale was made in pursuance of a bear transaction.

With the new basis rule for contangoed sales, further provision has to be made to secure that a bear profit will remain taxable. Sub-paragraph (8, b) makes the necessary provisions which have to cover the possibility that a con-tango could be part of a whole set of complicated transactions in the same shares.

There is only one more point to explain about the Amendment. I apologise for dealing with this technical subject, but we cannot legislate for these speculative gains without the problem of contangoes coming in. The rules under sub-paragraph (8) apply not only to shares but equally to assets of a nature that are dealt in without identifying the particular assets—like commodities bought and sold on a futures market. I have been talking of shares, but they are not the only things we are considering under sub-paragraph (8).

I hope that with that explanation the Committee will agree to the Amendment.

11.0 p.m.

Mr. Diamond

I do not think that any of us has ever seen the Financial Secretary read his brief with such assiduity, and keep his eyes so close to the paper, as happened on this occasion—for the obvious reason that the matter is full of complication and that it would be dangerous indeed for anybody, even such an expert as the hon. Member himself, to depart for one second from his brief, lest What he said should be even more complicated than what we have just listened to.

But he said one thing which is quite clear to all of us, namely, that we cannot legislate for a speculative gains tax without going through all this fantastic complication. The essence of the matter is that the Treasury, having spent about a year producing this so-called capital gains tax, having devoted about 30 pages of this Bill, including this Schedule— about half the Bill in all—to these provisions, and having made the matter so complicated that it is obviously beyond any one of us here to understand or follow—including the Leader of the House, who did not seem to be in complete grasp of the situation as he usually is—we now observe that the matter is to be amended already, while we are still considering the Bill, in order to make it tie up in some degree with the existing practice on the Stock Exchange.

Surely this is evidence, if any were needed, that this mouse is a hopelessly complicated, un-intelligible thing, which will cause more difficulty than it will produce revenue, and which certainly is not the sort of thing to which we can give approval. I am talking about the mouse in general, and not merely the Amendment. It can be very complicated, and I should have thought that what we have just listened to was evidence of that complication.

The Amendment denies the whole principle on which the Bill has been framed—the principle of saying that as we cannot see what is in the mind of the taxpayer at the time when he enters into his Stock Exchange transaction and see whether he is intending to speculate, that is, to make a profit, or not to speculate, that is, to invest, we must say that if he sells within six months his motive was to speculate and if he does not his motive was to invest.

In this new sub-paragraph we are dealing with the arrangements designed to postpone the transfer of such a share, but we may go wider than the contango to which the hon. Member has just referred. There is nothing in the provision which specifically excludes anything apart from the contango. We can read it as referring to transactions which would deliberately set out to avoid tax which might otherwise fall on the taxpayer by making it possible for him to exceed the six months' period. The main point I make is the complication which arises exclusively from having this ridiculous time schedule. If we had a straightforward capital gains tax we would have none of this complication and the Committee would be saved a great deal of trouble.

Amendment agreed to.

Sir E. Boyle

I beg to move, in page 59, line 13, at the end to insert: (4) Where under sub-paragraph (8) of paragraph 8 above shares disposed of are identified with shares acquired by the same bargain, sub-paragraph (3) of this paragraph shall apply as if the disposal had preceded the acquisition. (5) Where—

1. (a) under arrangements designed to postpone the acceptance of shares acquired. a person by a single bargain disposes of shares for transfer or delivery on a particular date or in a particular period and acquires them for transfer or delivery on a later date or in a later period; and
2. (b) under paragraph 8 above—
1. (i) the shares disposed of by that bargain are identified with shares previously acquired for transfer or delivery on the earlier date or in the earlier period; and
2. (ii) shares disposed of afterwards, but within six months of the date of that bargain, are identified with the shares acquired by that bargain;

then, subject to sub-paragraph (6) below, subparagraph (3) of this paragraph shall apply as if the disposal by that bargain had preceded the acquisition of the shares so identified with those disposed of. (6) Where an acquisition of shares is more than once continued by such a bargain as is referred to in paragraph (a) of sub-paragraph (5) above, that sub-paragraph shall apply in relation to each bargain continuing the acquisition, but so that in relation to each such bargain sub-paragraph (ii) of paragraph (b) shall have effect as if the references to the date of and to the shares acquired by the bargain were references to the date of and to the shares acquired by the last of the bargains; and for the purposes of this sub-paragraph an acquisition continued by one bargain shall be treated as further continued by a later bargain, in so far as the shares disposed of by the later bargain are identified under paragraph 8 above with the shares acquired by the earlier. This Amendment inserts three new sub-paragraphs in paragraph 9 of the Ninth Schedule designed to prevent certain anomalies which would otherwise arise in relation to contango arrangements on the Stock Exchange.

In reply to the hon. Member for Gloucester (Mr. Diamond), I think that in any scheme for a full scale capital gains tax or a straightforward speculative gains tax this problem would arise. The object here is perfectly simple. We do not on the one hand wish to tax people on profits which are not real profits and to do so unfairly. Equally, we want to ensure that those operations which ought to be subject to tax are in fact subject to tax. That is the principle we have tried to carry out in what, I agree, is a long and complicated Schedule.

Paragraph 9 provides that where a person sells shares at a loss and buys them back in a month no relief will be given for the loss under Case VII except on the subsequent disposal of the shares in question. These provisions are obviously desirable to prevent avoidance by quite deliberate artificial creation of losses. The Committee might agree that this rule ought not to apply where shares are bought back shortly after the sale in pursuance of a bear transaction because this is a transaction standing on its own and any losses here ought to be allowed just as any profit is taxed. Sub-paragraph (3) is designed to provide that where a person acquires shares and shares previously disposed of by him are identified with those shares under paragraph 8 any losses arising from the acquisition and disposal is to be outside the ambit of this paragraph.

The new sub-paragraph (4) deals with the situation which arises where a person contangoes a sale and under the Amendment we have just passed the con-tango purchased for one account is matched with the con-tango sale in the later account. Sub-paragraph (4) in the Amendment provides that sub-paragraph (3) is to apply to the con-tango bargain as if the disposal had preceded the acquisition, that is to say, it ensures that any loss here is outside the ambit of paragraph (9). Sub-paragraph (4) is closely connected with sub-paragraph (3) and one might say that it spells out the intention of the sub-paragraph more precisely.

The new sub-paragraph (5)—the rather complicated looking one—remedies an anomaly where a person contangoes the purchase of shares. I shall try to explain the sort of anomaly we are dealing with under this subsection. A speculator who has bought shares and sold them and finds the market moving against him, hopes to recover. He arranges the con-tango by selling for the first account and buying for the next at the making-up price. I have explained what that means. As the price for the shares has dropped, there will be a loss on the sale, but since he buys the shares back, the loss would not under the rule laid down in paragraph 9 be available to set against Case VII gains generally. It would be available only to set against the gain on the sale of the shares repurchased. If the price recovers in the next account, and he makes a profit of the difference between his purchase price——

Mr. Woodrow Wyatt (Bosworth)

Why does the hon. Gentleman want to make all these elaborate arrangements to protect people who buy and sell things they have not got? That is the sort of thing that leads to the great crash in Professor Galbraith's book. An enormous structure is being built to allow people to sell things they have not got.

Sir E. Boyle

I have read and greatly admired Professor Galbraith's book but, wherever one stands in regard to Professor Galbraith, one should not impose a tax on profits that people have not made. I merely say that when we are dealing with this admittedly difficult question, it is important to try to treat everyone alike in this way, in that we should only tax them on profits that really are profits. We rightly penalise those who manufacture profits for themselves by milking the Revenue—we have discussed that frequently for many years—but what is here proposed is, I think, fair——

Mr. Callaghan

Are we not making tax allowances for losses incurred by those who sell shares they have not got? If this is not a gamblers' charter, I do not know one.

Sir E. Boyle

I do not think that we are making tax allowances here. I believe that we are correcting what would otherwise be a perfectly genuine anomaly in the law——

Mr. Wyatt

Does not the Financial Secretary know that most reputable stockbrokers will not allow their clients to contango; and that by many it is regarded as monstrous for people to sell things they have not got, and buy things they do not wish to own?

Sir E. Boyle

With respect, I do not think the hon. Gentleman is right. For some time I was myself responsible for looking after a small trust in my own family. I never personally carried out this practice, but I have no reason to believe that it is a disreputable one. It is one that is legitimately carried out and, in any case, it is not against the law, and I cannot see a compelling case for an anomaly which will certainly exist unless we alter the law, as we propose to do in sub-paragraph (5).

It is only fair that the Committee, and also the world—those who are interested —should know what is in the Government's mind, so I shall say just one more word on the subject of what sub-paragraph (5) is designed to do. If the price of the shares recovers, and the client or the operator—whichever word hon. Gentlemen prefer—makes a profit on that account, the loss on the con-tango sale can be set against that profit but, as the Bill now stands, he gets no relief for the loss if the shares fail to rise, even though they are sold within the six-month period. As things now stand, that is a genuine anomaly, and the new sub-paragraph accordingly provides that if the shares which had been the subject of the con-tango bargain are sold within six months of the date of the bargain, the con-tango bargain itself is to be taken outside the ambit of paragraph 9.

Finally, the new sub-paragraph (6) applies the rule that I have just described in sub-paragraph (5) to the case where the speculative purchase is the subject of a series of contangos.

That is the object of this Amendment. Perhaps, on another occasion, we could have a discussion on the whole operation of our Stock Exchange system —there is a very great deal to be said on all sides—but, granted the fact that the practice of the con-tango is long established in the City, there were, as the Bill stood, anomalies in the original Schedule, and I commend this Amendment to the Committee.

Mr. Mitchison

I am a child in these matters. Is the result of all these Amendments that people pay more tax or less tax?

Sir E. Boyle

The effect on the Revenue of all the Amendments that we are now considering to the Ninth Schedule is so small as not to be possible to quantify. What we are concerned with in the Amendments is not revenue but fair dealing as between all those who take part in transactions on the Stock Exchange.

11.15 P.M.

Mr. Diamond

I think that the Committee senses by now that in these two Amendments, particularly in the second one, there has been added to complexity the most utter illogicality. We started with a speculative gains tax, which is a tax on speculative transactions and a tax designed, therefore, to discourage speculative transactions by making them less beneficial. We are now carefully inserting Amendments by which we shall encourage speculation, the very thing we started out to tax. This is such absolute nonsense that, although the time is late, I should have thought that my right hon. and hon. Friends would feel disposed to share the views which many of us back benchers have that this is a matter which ought not to be encouraged in this way.

We have now gone right about face. Instead of discouraging speculation, we are deliberately setting out at 11.15 on a Monday night to encourage it by ensuring that every possible fairness is shown to a man who purely speculates, who has not the money with which to buy shares, who has no intention of owning the shares, who merely deals on the end of a telephone, and who is aided in doing this because of the practice of the City. It is well within the practice of the City that this is done. It is right that it should be known generally that this is one of the major activities of the great

City which we are upholding, that people should be there to receive telephone calls so that clients can buy what they are not going to purchase, out of money which they have not got, and we hope they have the credit for the small amount of interest which they will be called upon to pay sooner or later, or perhaps to receive. In this way they go on from month to month.

The Government are concerned with justice and fairness, in the most punctilious way. Let every contangoist, or whatever the noun may be, be assured that he can rely on the Government to see that in no circumstances will any of his speculations which result in a profit bear any greater tax than they would have done if he had been an ordinary individual who had literally bought something, been obliged to sell within six months, made a profit and, as a citizen, been willing to share his profit. There is no distinction to be drawn between the two. I should have thought, therefore, that my right hon. and hon. Friends would share the views which many of us back benchers have expressed or implied, that this is a matter which even at this late hour we should divide against.

Question put, That those words be there inserted:—

The Committee divided: Ayes 165, Noes 82.

Division No. 228.]	AYES	[11.18 p.m.
Agnew, Sir Peter	Cordeaux, Lt.Col. J. K.	Hall, John (Wycombe)
Atkins, Humphrey	Corfleld, F. V.	Hamilton, Michael (Wellingborough)
Balnlel, Lord	Crawley, Aldan	Harris, Reader (Heston)
Barber, Anthony	Critchley, Julian	Harrison, Col. Sir Harwood (Eye)
Barlow, Sir John	Crowder, F. P.	Harvey, Sir Arthur Vere (Macclesf'd)
Barter, John	Curran, Charles	Harvey, John (Walthamstow, E.)
Batsford, Brian	Currie, G. B. H.	Hastings, Stephen
Bidgood, John C.	Dance, James	Heald, Rt. Hon. Sir Lionel
Biffen, John	d'Avigdor-Goldsmid, sir Henry	Hendry, Forbes
Biggs-Davison, John	Deedes, W. F.	Hill, J. E. B. (S. Norfolk)
Birch, Rt. Hon. Nigel	Donaldson, Cmdr. C. E. M.	Hirst, Geoffrey
Bishop, F. P.	Drayson, G. B.	Hobson, Sir John
Black, Sir Cyril	du Cann, Edward	Hocking, Philip N.
Bossom, Clive	Duncan, Sir James	Holland, Philip
Bourne-Arton, A.	Elliot, Capt. Walter (Carehalton)	Hollingworth, John
Bowen, Roderic (Cardigan)	Errington, Sir Eric	Hooson, H. E.
Boyle, Sir Edward	Farr, John	Hopkins, Alan
Brewis, John	Fell, Anthony	Hornby, R. P.
Brooke, Rt. Hon. Henry	Fisher, Nigel	Howard, Hon. G. R. (St. Ives)
Brown, Alan (Tottenham)	Fletcher-Cooke, Charies	Hughes-Young, Michael
Bullard, Denys	Forrest, George	James, David
Carr, Compton (Barons Court)	Fraser, Hn. Hugh (Stafford A Stone)	Johnson, Dr. Donald (Carllsle)
Carr, Robert (Mitcham)	Fraser, Ian (Plymouth, sutton)	Johnson, Eric (Blackley)
Channon, H. P. G.	Gammans, Lady	Kerans, Cdr. J. S.
Chataway, Christopher	Gllmour, Sir John	Kirk, Peter
Chichester-Clark, R.	Glover, sir Douglas	Lancaster, Col. C. G.
Clark, Henry (Antrim, N.)	Goodhart, Philip	Legge-Bourke, Sir Harry
Clark, William (Nottingham, S.)	Cower, Raymond	Lewis, Kenneth (Rutland)
Collard, Richard	Green, Alan	Lilley, F. J. P.
Cooke, Robert	Gurden, Harold	Litchfield, Capt. John
Lloyd, Rt. Hon. Selwyn (Wirral)	Pearson, Frank (Clltheroe)	Talbot, John E.
Longbottom, Charies	Perclval, Ian	Taylor, Edwin (Bolton, E.)
Longden, Gilbert	Peyton, John	Taylor, Frank (M'ch'st'r, Moss Side)
Lubbock, Eric	Pickthorn, Sir Kenneth	Taylor, W. J. (Bradford, N.)
McLaren, Martin	Pitman, Sir James	Teeling, Sir William
Macleod, Rt. Hn. Iain (Enfield, W.)	Pott, Percivall	Thomas, Peter (Conway)
McMaster, Stanley R.	Prior, J. M. L.	Thompson, Richard (Croydon, S.)
Macmillan, Maurice (Halifax)	Proudfoot, Wilfred	Tiley, Arthur (Bradford, W.)
Macpherson, Niall (Dumfries)	Pym, Francis	Turner, Colln
Maginnis, John E.	Redmayne, Rt. Hon. Martin	Turton, Rt. Hon. Sir Gordon
Manningham-Buller, Rt. Hn. Sir R.	Rees, Hugh	van Straubenzee, w. R.
Markham, Major Sir Frank	Rees-Davies, W. H.	Vaughan-Morgan, Rt. Hon. Sir John
Mathew, Robert (Honiton)	Ridley, Hon. Nicholas	Vickers, Miss Joan
Matthews, Gordon (Meriden)	Roberts, Sir Peter (Heeley)	Wall, Patrick
Mawby, Ray	Rodgers, John (Sevenoaks)	Ward, Dame Irene
Maxwell-Hyslop, R. J.	Roots, William	Webster, David
Maydon, Lt.-Cmdr. S. L. C.	Ropner, Col. Sir Leonard	Wells, John (Maidstone)
Mills, Stratton	Royle, Anthony (Richmond, Surrey)	Wilson, Geoffrey (Truro)
More, Jasper (Ludlow)	Seymour, Leslle	Wise, A. R.
Nabarro, Gerald	Shaw, M.	Wolrige-Gordon, Patrick
Neave, Alrey	Shepherd, William	Woodnutt, Mark
Noble, Michael	Smith, Dudley (Br'ntf'd & Chiswick)	Woollam, John
Oakshott, Sir Hendrie	Smithers, Peter	Worsley, Marcus
Osborn, John (Hallam)	Steward, Harold (Stockport, S.)
Page, Graham (Crosby)	Studhoime, Sir Henry	TELLERS FOR THE AYES:
Pannell, Norman (Klrkdale)	Summers, Sir Spencer	Mr. Finlay and Mr. Gordon Campbell.
NOES
Ainley, William	Harper, Joseph	Price, J. T. (Westhoughton)
Awbery, Stan	Hayman, F. H,	Probert, Arthur
Bennett, J. (Glasgow, Bridgeton)	Herblson, Miss Margaret	Redhead, E. c.
Blackburn, F.	Hough ton, Douglas	Rodgers, W. T. (Stockton)
Bowden, Rt. Hn. H. w. (Leics. S.W.)	Howell, Charles A. (Perry Barr)	Ross, William
Braddock, Mrs. E. M.	Howell, Denis (Small Heath)	Short, Edward
Bray, Dr. Jeremy	Hynd, John (Attercliffe)	Slater, Joseph (Sedgefield)
Callaghan, James	Irving, Sydney (Dartford)	Small, William
Castle, Mrs. Barbara	Janner, Sir Barnett	Soskice, Rt. Hon. Sir Frank
Cliffe, Michael	Jones, Dan (Burnley)	Spriggs, Leslie
Cronin, John	Jones, Elwyn (West Ham, S.)	Stewart, Michael (Fulham)
Cullen, Mrs. Alice	King, Dr. Horace	Stonehouse, John
Davies, G. Elfed (Rhonnda, C.)	Lawson, George	Thompson, Dr. Alan (Dunfermline)
Davies, Ifor (Gower)	Ledger, Ron	Thornton, Ernest
Delargy, Hugh	Lever, L. M. (Ardwick)	Watkins, Tudor
Diamond, John	Lewis, Arthur (West Ham, N.)	White, Mrs. Eirene
Dodds, Norman	Loughlin, Charles	Wllkins, W. A.
Dugdale, Rt. Hon. John	Mabon, Dr. J. Dickson	Williams, W. R. (Openshaw)
Edelman, Maurice	MacColl, James	Williams, W. T. (Warrington)
Fitch, Alan	Mallalieu, E. L. (Brigg)	Willis, E. G. (Edinburgh, E.)
Foot, Michael (Ebbw Vale)	Manuel, Archie	Wilson, Rt. Hon. Harold (Huyton)
Fraser, Thomas (Hamilton)	Mason, Roy	Winterbottom, R. E,
Galpern, Sir Myer	Millan, Bruce	Woof, Robert
Ginsburg, David	Mllne, Edward	Wyatt, Woodrow
Gordon Walker, Rt. Hon. P. C.	Mitchison, G. R.	Yates, Victor (Ladywood)

The following Amendment stood upon the Order Paper: In Schedule 9, page 62, line 15, at the end to insert:

5	13.—(1) Where under any arrangement between a company arid the persons holding shares in or debentures of the company or any class of such shares or debentures, being an arrangement entered into for the purposes of or in connection with a scheme of reconstruction or amalgamation, another company issues shares or debentures to those persons in respect of and in proportion to (or as nearly as may be in proportion to) their holdings of the first-mentioned shares or debentures, but the first-mentioned or debentures are either retained by those persons or cancelled, then those persons shall be treated as exchanging the first-mentioned shares or debentures for those held by them in consequence of the arrangement (any shares or debentures retained being for this purpose regarded as if they had been cancelled and replaced by a new issue):
10
	Provided that sub-paragraph (2) of paragraph 12 above shall not apply.
15	(2) Where any scheme of reconstruction or amalgamation involves the transfer of the whole or part of a company's business to another company, and the first-mentioned company receives no part of the consideration for the transfer (otherwise than by the other company taking over the whole or part of the liabilities of the business), then the first-mentioned company shall not be chargeable under Case VII by reference to the transfer in respect of its acquisition and disposal of any assets included in the transfer.

20

(3) In this paragraph "scheme of reconstruction or amalgamation" means a scheme 20 for the reconstruction of any company or companies or the amalgamation of any two or more companies, and references to shares or debentures being retained include their being retained with altered rights or in an altered form, whether as the result of reduction, consolidation, division or otherwise.

Sir E. Boyle

The Committee will see——

Mr. Diamond

On a point of order. Might I, with the greatest respect, ask you to reconsider your decision to call this Amendment, Sir Robert? I feel sure that you will be good enough to allow me to explain my reason for asking this. Although it might seem that I am asking the Chair to reconsider a decision, it is the general rule that an Amendment which is unintelligible or ungrammatical is not normally selected. I would refer you, Sir Robert. to line 6 of the Amendment, which reads: … but the first-mentioned or debentures are either retained by those persons or cancelled … I suggest that if I were to desire to put a Question to the Prime Minister asking what the right hon. Gentleman would prefer to do or go fishing——

The Deputy-Chairman (Sir Robert Grimston)

Order. I would point out that the Amendment has been selected by Mr. Speaker. I think we should hear what the Minister has to say about it.

Mr. Callaghan

I was hoping, Sir Robert, that you would wish to hear what my hon. Friend the Member for Gloucester (Mr. Diamond) has to say. He is saying that the sentence he quoted does not make sense. We are used to receiving unintelligent Amendments from the Government, but in this case it is obvious that one or more words have been omitted. On no account can one read sense into the sentence as it stands. My hon. Friend was saying that, in these circumstances, we should not be asked to discuss an Amendment from which a word or words have been omitted.

The Deputy-Chairman

Order. I think that we must give the Financial Secretary a chance, to see whether he can make sense of it.

11.30 p.m.

Mr. Diamond

I hope that it will not be thought discourteous if I ask to be heard in making the submission which I am making to you, Sir Robert, with the greatest possible deference and to save the Committee from reaching a most unsatisfactory position in which the Government, if not by virtue of the logic of their argument, then certainly by force of numbers, would be able to press through a Division, if necessary, this new Amendment which would introduce into our Statutes a Clause which would be neither intelligible nor grammatical. This would be perfectly obvious if you were to be good enough to read the sentence. It may be that Mr. Speaker selected the Amendment on looking at the matter generally or on looking at a draft which was not worded in precisely the same way as this one is worded on the Order Paper. It is quite clear that this does not read or make sense. I submit, therefore, that you should be good enough to reconsider your decision and should decide that the Amendment Should not be selected.

The Deputy-Chairman

The hon. Member is raising a point of order and I wish to hear what the Financial Secretary has to say on it.

Mr. Callaghan

I understand that you are calling the Amendment, Sir Robert, and that presumably means that the Financial Secretary proposes to move it. We ask, for our guidance and help, whether it is part of your duty in the Chair to ensure that the words put in front of us are grammatical and indeed intelligible. If it is clearly the case that some words are omitted from the Amendment through some mistake or carelessness, is it part of your duty to ask the Government to move such a defective Amendment when it is obvious that it cannot go on the Statute Book in this form?

The Deputy-Chairman

A point of order has been made from one side of the Committee and I should like to hear what the other side has to say.

Sir E. Boyle

On a point of order. It is my intention after moving the Amendment to ask you if you would accept a manuscript Amendment. [HON. MEMBERS: "Oh."] It is perfectly within the practice in the Committee that when a mistake of this kind has been made— which is clearly a printing error for which I take full responsibility and apologise—for the Government to move a manuscript Amendment. I therefore ask whether in due course you will accept a manuscript Amendment to insert the word "shares" after the second "first-mentioned" in line 6.

Mr. Diamond

The Financial Secretary's speech concurs precisely with my own in saying that the Amendment is unintelligible and ungrammatical and therefore ought not to be selected.

The Deputy-Chairman

I am sure that the Committee is obliged to the hon. Member for Gloucester (Mr. Diamond) for having raised the point, but it appears that it is a printing error and in the circumstances I think that it would be best for the Committee to proceed. I would be prepared to accept a manuscript Amendment.

Mr. Callaghan

Further to that point of order. With respect, we have had a series of extremely slipshod explanations today on Clauses which cleanly have not been understood and now we have had another example which certainly would not have been picked up if it had not been for the care exercised by my hon. Friend the Member for Gloucester (Mr. Diamond). It is not his job. It is the Government's job. They have made a gross error. Someone should have checked the Amendment to see that the words were correct. Clearly that has not been done. There is no reason why the Committee should help the Government out. If they do not wish to move the Amendment as it stands they should accept responsibility for their own defects and should move a corrected Amendment tomorrow. I do not see why the Committee should help them tonight when obviously they have made a mistake.

Mr. Loughlin

Did I understand the Financial Secretary to say that he was seeking permission to move the Amendment as it stands and then subsequently to move a manuscript Amendment? The point I put is this. If there is an admission that the Amendment as it stands on the Notice Paper does not make sense, how can the Committee accept the moving of it and then subse- quent action to make it make sense? I submit that, if the Amendment in its present form does not make sense, there can be no subsequent manuscript Amendment.

The Deputy-Chairman

I am obliged to the Gentleman for raising that point. I made a slight mistake. What the Chair does on these occasions—this has been done on both sides—is to ask the hon. Member concerned to move the Amendment in the amended form. That puts it in correct form, and that is what I propose to do on this occasion.

Mr. Callaghan

Is it the intention of the Government to proceed with the Amendment tonight? I shall ask them not to do so because I think that, if they do, it might make our progress a little slower than otherwise it might have been. We are quite ready to move ahead with Clauses and Amendments which are properly drafted and consider them in proper order, but there is no reason at all why the Committee should assist the Government in correcting what they should have discovered earlier and brought to our attention this evening without the Opposition having to do it.

Sir E. Boyle

May I say, Sir Robert, that we have already discussed two Amendments to the Ninth Schedule, and I think that it would be perfectly reasonable that we should discuss this Amendment also this evening. I have explained the matter, and I apologise to the Committee for the fact that a printer's error was made. It should have been picked up, and I apologise very much. Having some personal responsibility for a number of matters relating to the Notice Paper, I make a personal apology to the Committee here. I am sure we are all grateful to the hon. Member for Gloucester (Mr. Diamond) for having drawn the matter to our attention. However, now that the matter has been aired, I suggest, Sir Robert, that I should now proceed to move the Amendment in its amended form, with the manuscript Amendment which you have said you will accept.

Mr. Gordon Walker (Smethwick)

On a point of order, Sir Robert. How can the Amendment appear before us in its amended form? Has it been amended? I do not see how it can be. Until it is before the Committee, how can it come to us in its amended form?

The Deputy-Chairman

It is the practice of the House that an Amendment may be moved in a corrected form. It has been done on both sides.

Mr. Callaghan

Sir Robert, I take it that that is the practice where it is generally agreed that it should be done. Is it the practice of the Committee where there is no agreement about it?

The Deputy-Chairman

It is a matter for the Committee subsequently, if it refuses to accept it. I think that I can charge my memory with a case on this Finance Bill when an Amendment from the Opposition side of the Committee was moved in a corrected form because there had been a printer's error. It is not exceptional. Of course, it is up to the Committee. With respect, I suggest that the hon. Gentleman should move his Amendment in the corrected form, and then, of course, it will he up to the Committee entirely to decide what it does with it.

Mr. J. T. Price

Further to that point of order, Sir Robert. I know that hon. Members think that we are being difficult about this, but it is not the business of the Opposition to pull chestnuts out of the fire for the Government in their present state of mind. I put this to you as a matter of principle. We have been told that it is customary practice for which there are precedents that a manuscript Amendment may be put, and even though the text on the——

The Deputy-Chairman

If I may interrupt, what can be done is to move the Amendment in the corrected form; it is not a question of a manuscript Amendment.

Mr. Price

With respect, Sir Robert, I have not finished my submission to you, which I can make very briefly. First, I think that we ought to have the precedents on which this Ruling rests. If they are valid, we should consider them. Secondly, earlier in the debate today, we had a long discussion on another Clause which is linked with this as a matter of principle. We pressed the Treasury spokesmen to insert into the Bill certain definitions defining the terms which were printed on the Notice Paper, and this they resolutely refused to do. If they are reluctant to insert definitions of ambiguous or vague terms such as those, how are we to expect anyone to construe or interpret legislation which starts off on the wrong foot by being drafted incorrectly, being corrected only by the interpolation of a manuscript Amendment of which no notice has been given to anyone?

If manuscript Amendments can be brought to the Committee in these circumstances, the Order Paper can be left vague and hon. Members can come here not properly briefed on what we are discussing if we are to have the casual admission of drafting Amendments on the spur of the moment because an error has been pointed out. In addition to all that has been said, may I point out that the House of Commons is not entitled to permit Ministers so easily to correct their own mistakes by suggesting that manuscript Amendments should be inserted? At this hour of the night, it is an abuse of the procedure of the Committee. I strongly object of my own behalf and I hope that my hon. Friends will continue to object.

The Deputy-Chairman

Perhaps I can help the Committee by referring to Erskine May, at page 406: Also, on proposing the question, an opportunity may be taken to rectify any irregularities in a motion which has been moved without notice, or any irregularities which, though notice may have been given, have previously been overlooked. If this applies to a Motion, a fortiori it applies to an Amendment.

Mr. Diamond

Will you be good enough to hear me one moment further, Sir Robert? If the merit of the proposed Amendment is considered—its substance as well as what is lacking in its present basis—you might take a different view. I was charged with the responsibility of considering it and trying to understand what it meant and then, if appropriate, addressing the Committee upon it. On one's first reading, it became obvious that it meant nothing.

I do not know for certain to which irregularity you refer, Sir Robert. It is well known that a minor irregularity can be put right by the Chairman proposing the Question in its amended form. For two very good reasons, however, what has happened now cannot be considered an irregularity. First, I can guess, but I do not know—nobody has said—what verbal Amendment should be accepted to make sense of the Amendment. I do not know whether it is an insertion between "first-mentioned" and "or", although I suspect that it is, and I suspect that it is the word "shares". Nobody has said anything about it so far. [Interruption.] If anybody has done, I apologise. I did not hear. Secondly, I cannot make sense of the following words "either retained … or cancelled". It seems to me utter nonsense on the merit of it that the same treatment should apply when shares are either retained or are cancelled, which is precisely the opposite.

Having read the first part of the sentence, one then comes to the second part. I was unable to decide whether there was a further mistake or whether the Government meant what they said and that it was merely unintelligble because these things are by nature unintelligible. For these two reasons, this matter is a long way from the normal practice in the case of a minor inaccuracy, such as the use of the plural where it should be the singular, which the House would not wish to do other that accept in its amended form.

Mr. Callaghan

On a point of order. I have always thought that an irregularity of that sort was, as my hon. Friend the Member for Gloucester (Mr. Diamond) suggests, the question of an omission of a comma or colon or something like that. Are you ruling, Sir Robert, that it has hitherto included the insertion of a word or words into a Clause? We have been reading the Order Paper all day wondering whether we would hear an Amendment moved to this one, but the Government did not know that anything had been left out. They now say that only one word is left out. Like the housemaid's baby, it may be only a little one, but when the Government think about it they may decide that they have left out a whole sentence. As it is, in one sentence they have managed to compress over a hundred words. Are you ruling, Sir Robert, that hitherto in correcting an irregularity we have been able to insert words and that we should proceed from there?

11.45 p.m.

The Deputy-Chairman

I understood from the Minister that this was a printer's error. Where there has been a printer's error, we frequently allow a corrected Amendment or Motion to be moved. I understand that that is all that is the matter here. Therefore, I really would suggest to the hon. Gentleman, with respect, that the Minister should be allowed to move the Amendment in the corrected form, which he says is perfectly simple because it is only a printer's error which has occurred. Perhaps in the course of moving it he can give a little further explanation. That is the position as I understand it. In these circumstances, I think I am quite within my duties in the Chair in allowing the Amendment to be moved in the corrected form.

Mr. Callaghan

I follow that, Sir Robert, but we have 11 pages of the Chancellor's Amendments and new Clauses on the Order Paper. It is a very great number, and all arise out of the speculative gains tax. Although we have been told in passing by the Financial Secretary that it is a printer's error, on the first occasion he did not say that. He started to say it but corrected himself. He said "an error". He has now checked up on it and decided that it is a printer's error. I hope that is right.

But I really think that, in view of the fact that we have considered pages and pages of this sort, we are entitled to ask the Government to withdraw the Amendment tonight, take it away, look at it again, consider it, and bring it back to us having——

The Deputy-Chairman

The hon. Gentleman cannot do that on a point of order.

Mr. Callaghan

In that case, Sir Robert, I beg to move. That the Chairman do report Progress and ask leave to sit again. I do this, Sir Robert, for the reason that I was giving. I do not wish to detain the Committee on this, but it seems to me that the Government owe a duty to us. No one can complain that we have been uncooperative. We have worked through the Bill steadily and given hon. Members reasonably early nights. We have all made our points and gone home. But we have reached a juncture where the Government have made a mistake, and we are entitled to tell the Government that they should withdraw the Amendment and let us get on with the Amendments Which are properly drafted, and when the defective one is brought back to us we will give it the fair consideration that we have given to the Bill so far.

I see no reason why we should allow the Government this Amendment when they have this afternoon and this evening given us a number of explanations of Clauses which those who have been present will agree have not been satisfactory. They have not been satisfactory. I insist on this point for this reason. I have a very great respect for the abilities of the Financial Secretary, but I must say of him this afternoon that he has not betrayed 100 per cent. understanding of all that he has been saying to us. Anyone who has listened to the debates will agree with that. We had a singular illustration of it on the last Amendment that we were discussing. I do not wish to be offensive to the hon. Gentleman at all. If he cannot understand it, I am sure we cannot. I have frequently had to ask him to go more slowly. But when he, clearly, is not under-standing it, how can we be certain that this is merely one imperfection, one word?

We are entitled to ask the Government to take the Amendment away, look at it again and put it on the Order Paper in proper form. If they can explain it then, well and good; it will be a little better than some of the things we have heard this afternoon. I consider that we are entitled to ask the Chairman to report Progress and ask leave to sit again so that we may consider the Clause when it is properly drafted.

Mr. Brooke

I think I appreciate the position. If the Government should accept the Motion, it is only too clear that we should have to sit later tomorrow night. So far as I had understood, there had been a general hope on both sides of the Committee that we should complete the Recommittal and Report stages of the Bill in a workmanlike manner without sitting into the early hours of the morning, which, I think, by common consent, is an unfortunate way to have to treat the important Clauses of an important Bill.

I must confess that I am a little surprised that after my hon. Friend the Financial Secretary has given an unqualified apology for a printer's error, that has not been accepted. You have reminded us, Sir Robert, that at an earlier stage in our proceedings there was a flaw in an Opposition Amendment and yet the Committee raised no objection to considering it after the error had been corrected, and the Committee then proceeded with its business.

I have been a Member for a very long time and so far as I know the normal course is that if an honest and honourable apology is made for what is obviously a printer's error, the Committee, or the House, accepts that and we proceed. But I am in the hands of the Committee and if the Committee would prefer to suspend our proceedings now at this stage, all of us knowing that it will mean sitting later tomorrow night, I do not wish to resist the sense of the Committee. I am in the hands of the Committee and I hope that it is in accordance with the traditions of the House and the Committee that I should reply to this Motion in this sense.

Mr. Callaghan

Would it not be possible for the Government not to move this Amendment and for us to proceed with the remaining Amendments, the Government moving to recommit the Bill again tomorrow in order to deal with this matter? Why do not the Government do that?

Mr. Brooke

I do not claim to be expert on the possible procedures of the Committee. It is clear that the Government wish this Amendment in its correct form to be made to the Bill, but I thought that the hon. Member for Cardiff, South-East (Mr. Callaghan) moved this Motion on the assumption that the proceedings were to be brought to an end. On the other hand, if there is a method by which, without infringing any normal practices and traditions of the House, we can proceed to complete the Committee stage and make rather further progress today and then revert to this matter, we should Clearly be saving time. If the hon. Member would care to withdraw his Motion, we will see whether we can proceed in that way.

Mr. Loughlin

Can you guide the Committee on this issue, Sir Robert? The Chief Secretary has indicated that he might withdraw this Amendment tonight and return to it tomorrow in its corrected form if that could be done. Could we speed up the proceedings by your indicating whether it is possible for that procedure to be adopted, or whether we have to proceed with this Motion? I should like to make some comments about why this Motion should be accepted, but 1 do not want to detain the Committee if it is possible to accept the Chief Secretary's suggestion

The Deputy-Chairman

It is possible to recommit the Bill after Report stage, but I cannot say more than that.

Mr. Callaghan

On that basis, has the Chief Secretary anything to say to the Committee?

Mr. Brooke

I must naturally be guided by what you say, Sir Robert. I would not hold myself up as an expert on the procedure of the House and its Committees. However, in view of what you say, I understand that it would be proper for us—at any rate, that we should not be breaking the traditions and practices of the House of Commons —if we proceeded this evening to omit this questionable Amendment and to complete the Committee stage and then go on, to the Report stage, after which we can still, recommit the Bill.

I do not think that hon. Members wish to sit unnecessarily late tomorrow night. Therefore, on behalf of my right hon. and learned Friend, I am prepared to suggest that we proceed in this way. The Amendment in question will not be moved tonight. We shall seek to insert it in its proper form at a later stage, and perhaps we can now do a bit more work and have a workmanlike day tomorrow. I hope the hon. Gentleman will feel that I have met him fairly.

The Deputy-Chairman

I should like to quote my authority for my Ruling. Erskine May says on page 574: A bill may be recommitted, if desired, to a Committee of the whole House, a standing committee or a select committee, and a motion for this purpose may be made at the beginning or end of the consideration stage, between the consideration and third reading, or on the third reading.

Mr. Callaghan

Sir Robert, we are all indebted to you for your help in this matter. As I said, I have no desire to hold up the business here. I acknowledge the way in which the Chief Secretary has met us. I had no intention of being unfair to the Financial Secretary, who I thought made a full and complete explanation and apology for what had been done. He is a most courteous man; much more courteous than I am on these occasions. None of us has any personal feelings about him, but there is no reason why we should expedite the Government's mistakes. The Government have accepted this, and we can now make progress.

I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

Sir E. Boyle

I beg to move, in page 63, line 42, at the end to insert: 15.—(1) A person shall not be chargeable under Case VII in respect of an acquisition and disposal of land by reference to a disposal to an authority exercising or having compulsory powers, if that person had neither—

1. (a) acquired the land at a time when he knew or might reasonably have known that it was likely to be acquired by the authority; nor
2. (b) taken any steps by advertisement or otherwise to dispose of the land or to make his willingness to dispose of it known to the authority or others.

(2) In this paragraph "authority exercising or having compulsory powers" means, in relation to any disposal of land, a person or body of persons acquiring the land compulsorily or who has or have been, or could be, authorised to acquire it compulsorily for the purposes for which it is acquired, or for whom another person or body of persons has or have been, or could be, authorised so to acquire it. In view of what the hon. Member for Cardiff, South-East (Mr. Callaghan) said, I am sorry that lilt is I who have to start this discussion. As the Committee sees, this is the last Amendment to the Ninth Schedule. It adds a new paragraph to exempt from the charge under Case VII, subject to certain conditions, a disposal of land to an authority exercising or having compulsory powers.

During the earlier stages of the Bill my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) moved an Amendment which, among its other provisions, would have exempted from Case VII a disposal of land which was compulsorily acquired from the vendor, and in reply to the Amendment my hon. Friend the Economic Secretary pointed out that there were difficulties in accepting the Amendment in relation to the compulsory acquisition of land.

Simply to exempt land compulsorily acquired would mean that if an authority wished to acquire land and agreed a mutually satisfactory price with one person, but had to use its compulsory powers in relation to another, the person who had agreed a price would be caught out far Case VII tax, whereas the man who held out so that compulsory powers had to be used would escape.

My hon. Friend said that he would look at this matter again to see whether anything could be done to exclude from the charge what I might call the bona fide case of the disposal of land where there are compulsory powers. The Amendment meets the difficulties which would arise from exempting only cases where compulsory powers were exercised, because this paragraph exempts cases where the acquiring authority could have used compulsory powers to get the land.

I believe that this is a reasonable solution to a difficult question. I have had the help of my right hon. and learned Friend the Attorney-General on this Amendment, and I hope that the Committee will accept it.

12 m.

Mr. Mitchison

What is the purpose of the Amendment? Why should this concession be given to people who sell to a local authority, either because the local authority has powers of compulsory acquisition and exercises them or, having those powers, does not exercise them? There is no question in the Bill covering motive, or anything of that sort. What presumably happens in a case of this sort is that somebody has bought land within the previous three years and it is compulsorily acquired by the local authority. The probability is that the price at which it will he acquired is a good bit higher than the price at which it was bought—and the increase is due, in part, to the needs of the local authority and to matters which are entirely without the volition and choice of the present owner. He has made a lucky purchase.

It appears to he the idea on the benches opposite that compulsory acquisition is a form of persecution. We on this side of the Committee regard it as the discharge of a public duty by a local authority. The Government brought in a Bill with six Clauses and heaven knows how many assumptions to make it clear that on compulsory acquisition market value—which they dispose of in a sentence today—was to be paid. and I cannot see what the difference is between a person who compulsorily receives more than what he paid for land a short time ago and the person who, by way of a bargain made without any reference to compulsory powers, makes a similar profit. The only difference is that without the former person doing anything about it he has received a short-term gain of the kind which it is the object of the Bill to tax.

Why on earth should this kind of short-term gain be exempted from taxation? It is said that the compulsory element makes some difference—or the threat of compulsion. Logically, I do not see that, but if that were the position, what about the man who buys shares over a long period from a bank and is compelled to sell them because the bank will not go on lending him money any longer? He is compelled, just as much. One kind of compulsion is exactly the same as the other kind, for the purposes of the Bill. To suppose that in the mercantile, haggling world people are always free agents seems to me a supposition that is contrary to all good sense.

The whole purpose of the Bill is to provide that if, without any action on their part, people receive a short-term gain which it is reasonable to treat as income in their hands, that gain should be taxed. I do not go into the larger question whether there should be more tax, or whether there should be a proper capital gains tax. I am taking simply what is in the Bill—short-term gains. This is a short-term gain. What on earth has the question whether a local authority exercises or does not exercise its compulsory powers got to do with the fact that a man has made a pretty good profit in a very short time—in this instance out of the obvious needs of the community and the requirements of public service? I cannot see any logic in the Amendment, and I hope that the Committee will turn it down.

The Attorney-General

I am sorry that the hon. and learned Gentleman sees no logic in the Amendment. It would be unfair on the taxpayer if the Amendment were not accepted. I am not questioning the exercise by local authorities and other bodies of their right to acquire compulsorily; that point is not in issue. The question here concerns the liability for tax of the vendor. The hon. and learned Gentleman referred several times to short-term gains. We are referring particularly to short-term gains of a speculative character, and I cannot regard a man who has bought land which he desires to retain and which is compulsorily acquired from him within the three-year period as a person who has received, or could be characterised as receiving, a speculative gain. He may want to hold it for years. If this Amendment is not made, I ask the hon. and learned Member to bear in mind, the delays in compulsory purchase are likely to be considerably prolonged in the hope that the interval of time between acquisition and compulsory sale will exceed three years.

I think that in principle it is right to except the compulsory purchase of land from the scope of Case VII, subject to the two qualifications contained in the proposed Amendment. If we are to except compulsory purchase it follows that we must also except purchase made by a local authority or other body which has compulsory powers but which is not compelled to use them because the vendor agrees to sell. The exception must be qualified by the two exceptions contained in this Amendment. First, the vendor will not be entitled to the exemption of he acquired the land at a time when he knew or might reasonably have known that it was likely to be acquired by the authority. That obviously is desirable because it would stop a person buying land speculatively in the hope of selling it to a local authority and thereby evading tax under Case VII.

The second exception is that if a man is entitled to sell his land and has advertised it or taken other steps to indicate that he is willing to dispose of it and made that known to other people, he is in the category of a willing vendor, not someone who has been compelled to sell against his will. The fact that the local authority is the purchaser should not exempt him frown charge under Case VII. if this Amendment is accepted, that person will not be exempted from change under Case VIT. All that is exempted from a charge under Case VII is a man who has acquired land within the three-year period without any ground for knowing that it might be acquired by the local authority and who is compelled to sell against his will. I do not regard that man as coming within the category of anyone engaging in a speculative transaction.

Mr. Mitchison

Why "against his will"? There is nothing in the Clause about that. All that is necessary is that the local authority purchasing should have power to purchase compulsorily. The man may be well content to sell to the local authority at an agreed price considerably higher than he would otherwise get.

The Attorney-General

It may be that he is able to do so, but for the purpose of my argument I am taking the case of the man who acquired the land and had it taken away from him by the exercise of compulsory power. I am asking the Committee to consider that case. I do not believe that it can be regarded as fair that that man should be treated as obtaining, or seeking to obtain, a speculative gain.

If one accepts that proposition, one has to go a stage further and deal with the sale which takes place where there is power to exercise compulsory acquisition although in fact it is not exercised. That is a frequent occurrence. If we do not cover that also it means that more and more because people will not agree to sell voluntarily to a local authority they will pursue the compulsory purchase procedure to the end in the hope of getting a tax-free price.

I express my view, and I think my hon. Friends agree, that it is unfair to treat the unwilling vendor, the man who is not wanting to sell, as if he were engaging in a speculative transaction. Of course the hon. and learned Member is in favour of a complete capital gains tax. His arguments seem to be addressed to the proposition that anyone who made a profit by selling property of any kind should be liable to tax. That is not what the Bill is intended to do.

I hope that I have made it clear to the Committee that there are these two safeguards in the Bill which we think particularly important. First, the acquisition at the commencement must not have taken place when the buyer of the land who later sells to the local authority knew or might reasonably have known that it was likely to be acquired by the authority. Secondly, if he has put it in the market, or given any indication that he wants to sell it, obviously he should be treated like any other person selling land acquired within three years, as if it were a speculative gain, and it will not alter its character because, having seen it put in the market, the local authority says, "We want it for a public or local purpose".

Mr. Diamond

The right hon. and learned Gentleman bases the whole of his case on the fact that this would be assimilating a transaction of this kind with a speculative gain. Where, in the whole of the Bill, and its Schedule, does he find the phrase "speculative gain"? The distinction is not between speculative gain and non-speculative gain but between long-term gain and short-term gain.

The Attorney-General

The hon. Gentleman must have heard it said many times in the course of the long debates on the Bill that this Case VII charge is intended to be a tax on speculative gains and not a capital gains tax.

Mr. Mitchison

I have also heard it said during the course of the Bill that there was no intention to draft legislation on matters of motive and intention. There is not a word in the Bill about motive or intention, and I prefer to take the Bill as it is drafted when I am considering an Amendment.

We have been told by Treasury Ministers that they have done that deliberately, and I think that they are right to do it. What they intend to tax is short-term gains. It is clear that this is a short-term gain, and the only way of getting out of taxing it is by bringing in a matter which is quite irrelevant to the rest of the Bill, which has been disclaimed as irrelevant more than once, and saying that it is not the man's fault, for he did not intend to sell to the local authority. Who knows whether he intended to do so and whether he was speculating on the probability, in his own mind, that the local authority would be compelled to buy that plot of land for that purpose?

The moment that we start legislating about people's intentions we get into inextricable difficulties, and the moment we start basing an Amendment of this sort on grounds which do not appear in the Bill but which exist only in the right hon. and learned Gentleman's intelligence, we get into difficulty. I hope that the Committee, without taking much longer about it, will reject the Amendment.

Sir Henry d'Avigdor-Goldsmid (Walsall, South)

As I had the fortune to introduce this suggestion to the Government's attention, it is only proper that I should say "Thank you" to them for giving effect to the suggestion. It is interesting to note that the great indignation of the hon. and learned Member for Kettering (Mr. Mitchison) has been reserved for this occasion. When we first talked about the terms of compulsory purchase as affecting not only the great landowners but particularly the small farmers, I did not notice the hon. and learned Gentleman present or the hon. Member for Westhoughton (Mr. J. T. Price).

Mr. J. T. Price

If the hon. Member is referring to me, I would point out that I have been in the Committee all night, since the beginning of the debate, and have taken an active part throughout. I deeply resent that suggestion addressed to me. The hon. Member has not been in these precincts until recently.

Sir H. d'Ayigdor-Goldsmid

I was referring to the Committee stage of the Bill, when this was first introduced. I apologise for having got the constituency wrong; I meant the hon. Member for Gloucester (Mr. Diamond). I apologise for the confusion between the two hon. Members.

12.15 a.m.

It is clear that this is a measure of equity which will appeal to the great majority of people, who are not greatly concerned with motives but who see the situation of the farmer who is dispossessed by reason of a road building programme and who has to build up his life again elsewhere and who should have his capital intact to do so I do not think that there is more to it than that.

Mr. Callaghan

This does not apply to an owner-occupier. He does not pay tax on his capital gain anyhow.

Sir H. d'Avigdor-Goldsmid

I was not speaking about an owner-occupier. I was speaking about a farmer who has to move. I know that this has been a long and tiring day. I am sorry that I have not been here all day. I have been upstairs on other matters, but I have been present during the whole of the debate on this Amendment. I was here in Committee also. I wish to repeat what I said when I rose. I thank the Government for having accepted my suggestion.

Dr. Horace king (Southampton, Itchen)

May I put a point to the Committee which I do not think has been mentioned in this short debate? When an authority acquires a piece of property compulsorily, it pays the district valuer's price. It is a good price. If the Amendment is accepted, everybody who is likely to have dealings with a local authority will be tempted to resist so that compulsory purchase will take place and he will get the tax exemption provided by the Amendment.

Mr. Charles A. Howell (Birmingham, Perry Barr)

I am interested in the Amendment. During the last two or three days I have received a letter from the Ministry of Transport telling me that the extension to the M.1 in the Birmingham area will not take place for about two years. The Ministry has to negotiate for the land. If anyone has bought this land within three years, it is safe to assume that the agent for the Ministry will be unable to arrive at a price. The person just will not sell. He will not agree a price. We all know what will happen. I have known it happen before. The owner of the land —he may be one of the farmers referred to by the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid)—will simply say, off the cuff, off the record, behind the scenes, or whatever it may be, "I will not resist it if you apply for a compulsory purchase order". He has merely to say, "Let us cut out the cackle and stop arguing. You go ahead and get a compulsory purchase order". It will then be the district valuer's figure. Tax will not be paid on it. It would have been much better for the Chancellor of the Exchequer to have left this tax out altogether, because all that we have been doing ever since he put it in is trying to find loopholes. That is all this is. It is a loophole to enable people to avoid paying tax which would normally have to be paid if the land was sold within three years of acquisition.

Mr. A. R. Wise (Rugby)

I want to clear up a point made by the hon. Member for Southampton, Itchen (Dr. King), who has not read far enough in the Schedule. This point is covered where something is sold without a compulsory purchase order, if such an order were likely to have been made had the sale not been agreed to

I want to refer briefly to the argument of the hon. and learned Member for Kettering (Mr. Mitchison). He accused my hon. Friends and I of a lack of logic. There is a distinction between selling something for a profit of one's own free will and having it taken from one when one does not want to sell.

If a failure to recognise the distinction is not the height of illogicality, I was never instructed in the art of false syllogism. There was an occasion during the war when a very good picture was painted on the wall of someone's house. Subsequently, against the will of both the regiment which used the house and of the owner of the house, it was acquired by the local authority, and certain compensation was paid. No one could say that the owner of the house had the least desire to sell the picture; indeed, he would have been very content to have paid quite a large sum to keep it on the wall. But it was taken away, and same compensation was paid.

Does the hon. and learned Gentleman really suggest that in such a case a tax would have been fair? That is the point he put to us. There is a difference——

Mr. Mitchison

The answer is that I do not know under what powers a local authority can compulsorily purchase Rex Whistler's, or anyone else's, pictures.

Mr. Wise

The local authority did it under the Defence of the Realm Act, or under the war-time regulations. It was certainly acquired compulsorily, and now it is in Brighton Pavilion for all of us to see. That was a profit to the owner—indeed, he paid nothing for t— and, if the hon. and learned Gentleman's contention is maintained, under the present arrangement it would have been taxable. I cannot see that that is just; it certainly is not logical, and I trust that we shall be given a chance to reject it in a Division. There must be enough hon. Members opposite to enable a couple of Tellers to be found, unwilling though they were on the last occasion. We shall be delighted to register our suffrages.

Mr. Archie Manuel (Central Ayrshire)

It is abundantly clear that the Government are quite determined to get some provision such as this on the Statute Book in order to avoid the obligations that the three-year period would entail. As members of local authorities, many of us know of occasions when an authority, desirous of acquiring land for housing development, has tried to get the land without applying for compulsory powers because that procedure can mean a long time-lag that can throw a programme out of gear. It therefore does everything possible to arrive at a voluntary agreement with the owner of the land.

This Amendment will merely divest local authorities of a larger sum than necessary. Sub-paragraph (a) states: … acquired the land at a time when he knew or might reasonably have known that it was likely to be acquired by the authority… How will that be proved? Is that not just a form of words without a meaning or, if it has a meaning, how can one prove the intention? I should have thought that when the right hon. and learned Gentleman gave his consent to the provision about short-term gains of this character he would have been logical about it, and certainly would not have had this escape clause put in.

I hope that we shall be quite stubborn about this, and recognise that, as my hon. and learned Friend the Member for Kettering (Mr. Mitchison) has said, this is a short-term gain. I hope that we will stick to our guns, and vote against the Amendment.

Mr. John E. Talbot (Brierley Hill)

I wonder if hon. Gentlemen opposite who are fighting the Amendment so vigorously realise the result their action would have on our housing policy. I have experience of both sides of the fence, as a member of a local authority and as one acting for people forced to sell their premises to local authorities.

In smaller schemes particularly an enormous amount of time and expense would be saved if property acquisitions could be by negotiation. I believe, too, that the element of time-lag which is essential in our present procedure is fair to everyone, although it could be substantially shortened if only we could bring the man who is willing to cooperate on to the same footing as the man who is not. That is just what the Clause seeks to do.

On the point made by the hon. Member for Central Ayrshire (Mr. Archie Manuel) about sub-paragraph (a), it will be perfectly easy to pinpoint the time because any scheme by a local authority for the acquisition of property is always advertised and debated and it might therefore be said that the commencement of the time when a man knew, or might reasonably have known, that it was likely to be acquired by the authority was the moment at which the authority publicly said so.

Mr. Manuel

Surely the hon. Gentleman is aware that leakages often occur before the time of the advertisement. This has been proven time and again.

Mr. Talbot: Oh.

Mr. Manuel

The hon. Gentleman, having experience of both sides of the fence, must be aware that councillors talk to their friends and may drop a hint before the advertisement has appeared.

Mr. Talbot

I would not take as low a view of the standard of public life as the hon. Member for Central Ayrshire. I still say that for the purpose of any judicial proceeding—and taxation is enforced by judicial proceedings—the commencement is the publication date of the authority's intentions.

If a man takes steps as a result of an advertisement, then obviously that is a public act and can be deemed to be the commencing time when the person wanted to dispose of the property. He does not even have to do it by advertisement, for the word "otherwise" would include any form of voluntary attempt to dispose of the property.

Thus the purpose of the Clause is to bring the voluntary sale into line with the compulsory one. Surely that is something we all want to encourage, because if a man is prepared to co-operate —and in my experience a large number

of such people are getting fair compensation from the local authorities—he should not be put in a worse position than the man who sticks out until the last moment for a compulsory acquisition order.

Question put, That those words be there inserted:—

The Committee divided: Ayes 132, Noes 66.

Division No. 229.]	AYES	[12.29 a.m.
Atkins, Humphrey	Gower, Raymond	Osbom, John (Hallam)
Barber, Anthony	Green, Alan	Page, Graham (Crosby)
Barter, John	Gurden, Harold	Pannell, Norman (Kirkdale)
Batsford, Brian	Hamilton, Michael (Wellingborough)	Pearson, Frank (Clitheroe)
Bidgood, John C.	Harris, Reader (Heston)	Peyton, John
Biffen, John	Harrison, Col. Sir Harwood (Eye)	Pickthorn, Sir Kenneth
Bishop, F. P.	Harvey, John (Walthamstow, E.)	Pitman, Sir James
Black, Sir Cyril	Hastings, Stephen	Prior, J. M. L.
Bossom, Clive	Heald, Rt. Hon. Sir Lionel	Pym, Francis
Bourne-Arton, A.	Hendry, Forbes	Redmayne, Rt. Hon. Martin
Bowen, Roderic (Cardigan)	Hill, J. E. B. (S. Norfolk)	Rees, Hugh
Boyle, Sir Edward	Hobson, Sir John	Ridley, Hon. Nicholas
Brewis, John	Hocking, Philip N.	Roberts, Sir Peter (Heeley)
Brooke, Rt. Hon. Henry	Holland, Philip	Rodgers, John (Sevenoaks)
Brown, Alan (Tottenham)	Hornby, R. P.	Roots, William
Bullard, Denys	Hughes-Young, Michael	Ropner, Col. Sir Leonard
Campbell, Gordon (Moray & Nairn)	James, David	Seymour, Leslie
Carr, Compton (Barons Court)	Johnson, Dr. Donald (Carlisle)	Shaw, M.
Channon, H. P. G.	Johnson, Eric (Blackley)	Smith, Dudley (Br'ntf'd & Chiswick
Chataway, Christopher	Kerans, Cdr. J. S.	Smithers, Peter
Chichester-Clark, R.	Kirk, Peter	Studholme, Sir Henry
Clark, Henry (Antrim, N.)	Legge-Bourke, Sir Harry	Summers, Sir Spencer
Clark, William (Nottingham, S.)	Lewis, Kenneth (Rutland)	Talbot, John E.
Collard, Richard	Lilley, F. J. P.	Taylor, Edwin (Bolton, E.)
Cordeaux, Lt.-col. J. K.	Litchfield, Capt. John	Taylor, Frank (M'ch'st'r, Moss Side
Crawley, Aidan	Lloyd, Rt. Hon. Selwyn (Wirral)	Taylor, w. J. (Bradford, N.)
Crowder, F. P.	Longbottom, Charles	Teeling, Sir William
Curran, Charles	Longden, Gilbert	Thomas, peter (Conway)
Currie, G. B. H.	Macleod, Rt. Hn. Iain (Enfield, W.)	Thompson, Richard (Croydon, S.
d'Avigdor-Goldsmid, Sir Henry	McMaster, Stanley R.	Tiley, Arthur (Bradford, W.)
Donaldson, Cmdr. C. E. M.	Macmillan, Maurice (Halifax)	van Straubenzee, W. R.
Drayson, G. B.	Macpherson, Niall (Dumfries)	Vaughan-Morgan, Rt. Hon. Sir John
du Cann, Edward	Maginnis, John E.	Vickers, Miss Joan
Elliot, Capt. waiter (Carshalton)	Manningham-Buller, Rt. Hn. Sir R.	Wall, Patrick
Farr, John	Markham, Major Sir Frank	Ward, Dame Irene
Finlay, Graeme	Mathew, Robert (Honiton)	Wells, John (Maidstone)
Fisher, Nigel	Matthews, Gordon (Meriden)	Wilson, Geoffrey (Truro)
Fletcher-Cooke, Charles	Mawby, Ray	Wise, A. R.
Forrest, George	Maxwell-Hyslop, R. J.	Wolrige-Gordon, Patrick
Fraser, Hn. Hugh (Stafford & Stone)	Maydon, Lt.-Cmdr. S. L. C.	Woodnutt, Mark
Fraser, Ian (Plymouth, Sutton)	Mills, Stratton	Woollam, John
Gammans, Lady	More, Jasper (Ludlow)	Worsley, Marcus
Gilmour, Sir John	Nabarro, Gerald
Glover, Sir Douglas	Neave, Airey	TELLERS FOR THE AYES:
Goodhart, Philip	Oakshott, Sir Hendrie	Mr. Noble and Mr. McLaren.
NOES
Ainsley, William	Fraser, Thomas (Hamilton)	Lewis, Arthur (West Ham, N.)
Bennett, J. (Glasgow, Bridgeton)	Galpern, Sir Myer	Loughlin, Charles
Blackburn, F.	Gordon Walker, Rt. Hon. P. C.	Mabon, Dr. J. Dickson
Bowden, Rt. Hn. H. W. (Leics. S.W.)	Greenwood, Anthony	Mallalieu, E. L. (Brigg)
Braddock, Mrs. E. M.	Hannan, William	Manuel, Archie
Callaglian, James	Harper, Joseph	Mason, Roy
Castle, Mrs. Barbara	Hayman, F. H.	Millan, Bruce
Cliffe, Michael	Herbison, Miss Margaret	Milne, Edward
Cronin, John	Houghton, Douglas	Mitchison, G. R.
Cullen, Mrs. Alice	Howell, Charles A. (Perry Barr)	Noel-Baker, Francis (Swindon)
Davies, G. Elfed (Rhondda, E.)	Howell, Denis (Small Heath)	Pentland, Norman
Davies, Ifor (Gower)	Irving, Sydney (Dartford)	Price, J. T. (Westhoughton)
Delargy, Hugh	Janner, Sir Barnett	Probert, Arthur
Diamond, John	Jones, Elwyn (West Ham, S.)	Redhead, E. C.
Dodds, Norman	King, Dr. Horace	Rodgers, W. T. (Stockton)
Dugdale, Rt. Hon. John	Lawson, George	Ross, William
Fitch, Alan	Ledger, Ron	Short, Edward
Foot, Michael (Ebbw vale)	Lever, L. M. (Ardwick)	Siater, Joseph (Sedgefield)
Small, William	Thompson, Dr. Alan (Dunfermline)	Wilson, Rt. Hon. Harold (Huyton)
Soskice, Rt. Hon. Sir Frank	Thornton, Ernest	Wyatt, Woodrow
Spriggs, Leslie	Watkins, Tudor
Stewart, Michael (Fulham)	Williams, W. R. (Openshaw)	TELLERS FOR THE NOES:
Stonehouse, John	Willis, E. G. (Edinburgh, E.)	Dr. Brougbton and Mr. Grey.

Schedule, as amended, agreed to.

Bill reported, with Amendments; as amended (in Committee and on recommittal), considered.