HC Deb 22 May 1962 vol 660 cc379-96
Mr. Graham Page

I beg to move, in page 18, line 44, to leave out "and notwithstanding that" and to insert "unless."

This Amendment is to the last line of page 18 and is intended to exclude a legatee from being charged under the Clause. May first, refer to Clause 11 (8) in which the legatee is excluded from the tax which we have been discussing? It says: A person acquiring assets as a legatee shall not be chargeable under Case VII in respect of any acquisition and disposal by reference to that acquisition except as provided by section thirteen of this Act.… It is that exception with which my Amendment deals.

I can see no real case for penalising the legatee under Clause 13 when he escapes under earlier Clauses. Let me give an example of how a legatee may be subject to these penal provisions. A person has held shares in a landowning company for many years. He dies and bequeaths those shares to the legatee now mentioned in the Clause. The company acquires some property and the company disposes of the property within the three-year period. Although he did not acquire his shares necessarily within the three years, and his testator might have acquired them many years before, the legatee is caught for tax on those shares on the gain which is made by reason of the company having carried out a chargeable transaction during those three years; but he may dispose of those shares purely for Estate Duty purposes. He may find himself left with a legacy on which he has to pay Estate Duty and on which he has to pay a tax under the Clause.

That seems most unfair. If he is taking those shares in an estate which is paying 75 per cent. Estate Duty and he is also paying a short-term gains tax, he may be paying more than 100 per cent. in respect of a legacy which he might not then think worth receiving. I would have thought that it was right to relieve the legatee of liability under Clause 13 as he is relieved of liability under earlier Clauses.

Sir E. Boyle

We now proceed to Clause 13 which, as the Committee will realise, is designed to prevent persons from taking tax-free what is in substance a profit on land, by acquiring the land through the medium of a company and disposing of shares in that company, outside the six-month period which applies to shares generally. The Amendment of my hon. Friend the Member for Crosby (Mr. Graham Page) would exclude from the scope of the Clause shares acquired as a legatee.

Generally speaking, assets, including shares, acquired as a legatee, are put outside the scope of Case VII by the operation of Clause 11 (8), but Clause 13 is quite deliberately intended to cover disposals of shares acquired as a legatee and also shares acquired before 10th April, this year. That is because if a company is being put to use in connection with land transactions of the type at which this Clause is aimed, the fact that one or more shareholders had inherited shares in that company is not sufficient reason for excluding disposals of such shares from Clause 13.

However, my hon. Friend has drawn attention to what I call a marginal case at which we shall look. I thought, as my hon. Friend put it, that in certain respects he was putting rather a marginal case, but I am mindful of the words of the distinguished Cambridge writer, Lowes Dickinson, that marginal cases may suggest a fundamental fallacy, and while I do not think that there is a fundamental fallacy in the Clause as drafted, there is a point at which maybe we ought to look again.

As I understand my hon. Friend's point, it is that a person can acquire a substantial interest quite inadvertently when his shareholding is increased by a legacy, and that the Clause is unfair on a man who inherits shares in a landowning company which he does not want to keep, and who could find himself taxed by reference to land acquired by the company before the shares came into his possession.

I cannot advise the Committee to accept the Amendment, and I think that it would be wrong to take inherited shares out of Clause 13, but I am certainly prepared, an behalf of my right hon. and learned Friend, to say that between now and the next stage of the Bill we shall consider whether, in computing the charge on inherited shares that were sold, there should be an exclusion of land acquired by the company before the legatee acquired those shares.

I think that that is a point which it would be reasonable for us to look at before the next stage of the Bill. Having said that, I must say to my hon. Friend that the Chancellor could not consider an Amendment which simply excluded shares acquired as legatee from the scope of this Clause.

Mr. Graham Page

I am grateful to my hon. Friend for small concessions, and I am glad that he recognises that there is something in the example I gave. I cannot say that I am satisfied, because I still cannot see why legatees should be brought in at all.

If they are excluded from the earlier Clause, I should have thought that the proper thing to do would be to exclude them from this Clause. There is no possibility of evasion of tax by somebody being left shares in a will. I cannot see how there can be evasion of tax in those cases. However, I hope that when my hon. Friend looks at the particular marginal example that I gave he will be convinced that my argument is correct, and, therefore, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Chairman

In calling the next Amendment, in page 19, line 8, after "land", insert "at market value", in the name of the Chancellor of the Exchequer, I had not intended to call the Amendment to the Amendment in the name of the hon. and learned Member for Kettering (Mr. Mitchison), because it may be discussed in the debate on the Chancellor's Amendment.

Sir E. Boyle

I beg to move, in page 19, line 8, after "land" to insert" at market value".

Taking a simple example of its operation Clause 13, as the Committee realises, imposes a charge in certain circumstances on a person who disposes of shares in a closely controlled landowning company where the disposal takes place outside the ordinary six months' period, however long he may have held the shares.

The chargeable gain under Clause 13 —and I am trying to put it in non-technical language—is, in effect, the lesser of two things, the lesser of either the actual gain on the disposal of the shares, or the appropriate part of the chargeable gains the company would have made if it had, at the time of the sale of the shares, disposed of its land.

Mr. Callaghan

Is that non-technical?

Sir E. Boyle

The hon. Gentleman knows the difficulties that we have on these occasions. At any rate, it is less technical than certain words which could have been used.

The Bill omits to say that the company's gain is to be computed as if the disposal of the land had been for the market value of the land. It may seem that in the context of the Bill the provisions of Clause 13 could only be interpreted as referring to disposal at market value and nothing else. None the less, it is the view of my right hon. and learned Friend that it would be as well to insert these words "at market value" to make the position clear. As the Committee appreciates, this is, practically speaking, a drafting Amendment.

11.0 p.m.

Mr. Mitchison

I regard this as rather more than a drafting Amendment. I am very glad to see the Chief Secretary to the Treasury in his place, because some little time ago the right hon. Gentleman, as the Minister of Housing and Local Government, was responsible for introducing a Town and Country Planning Bill. What that Town and Country Planning Bill was concerned with was the market value of land in connection with compulsory acquisition. The point that was made, and made repeatedly—and there were many weary days in Committee—by the right hon. Gentleman was that one could not possibly arrive at a market value for land without making certain fundamental assumptions about planning permission.

This went on for some time and the point of the whole exercise was that there was no such general phrase as a "market value for land" and that it was insufficient to say that local authorities should be obliged pay for land at its market value. On the contrary, several pages of the Statute and a large number of Sections were required to explain how one arrived at market value.

Finally, we arrived at market value, and here we have market value without any such reference at all put into the Bill by what is called merely a drafting Amendment. What does it mean? If it is as obvious as all that what is market value, why did the Government some time ago trouble the House at some length with an enormous Measure showing how market value was arrived at?

Is the market value in the Town and Country Planning Act the same as the market value in this case and, if it is, why is all this necessary if market value means something easily comprehended? We ought to be told what particular meaning market value has in conjunction with this subsection. I have always felt, and still feel, that the whole of the arrangements that were put into the Town and Country Planning Bill were really intended to obscure the possibility that market value has a quite ordinary and simple meaning.

An hon. Member opposite introduced a Private Member's Bill providing that compensation should be at market value. The Government said, "We cannot have anything like that. That does not take us any further. We do not know what market value is in that connection. You must say what you mean." There we were, with pages and pages and sections and sections, and yet when it suits them the Government stick in disposing of its land at market value as though it were an obvious trifle so clear to everyone that the Economic Secretary can call it nothing more than a drafting Amendment.

I ask the Government to be a little more consistent. If it is all as clear as that—it naturally means that it is something palpably obvious to everyone, and that is what appears to be suggested—what was the former Act about? Are we to have the assumptions about planning permission when we have to consider something rather different—the provisions of this Clause? Really the two things may appear at first sight to be in different fields, but the point is exactly the same.

I am tempted to the conclusion, if this is really something that is perfectly clear, that the whole object of the Town and Country Planning Act was to make local authorities pay rather more than the obvious market value of the land.

Sir E. Boyle

I do not think that we can now debate the 1961 Act all over again, but I am assured by those who are more learned in these things than I am that "market value" means the price of land on the market.

Mr. Mitchison

I wonder whether the Financial Secretary has discussed this matter with the Chief Secretary to the Treasury, who was the responsible Minister at the time who changed with great forethought over many years the apparently simple proposition that the hon. Gentleman is now putting forward?

Amendment agreed to.

Sir E. Boyle

I beg to move, in page 20, line 17, to leave out "share capital of" and to insert "shares in".

This is quite definitely a drafting Amendment. Clause 13 as drafted applies in relation to companies limited by guarantee as well as to companies limited by shares. The reference to share capital in subsection (7) is not, I am told, at all apt in the case of a company limited by guarantee. The Amendment accordingly substitutes the reference to shares, an expression which by virtue of the extended meaning given to it in subsection (8) will suitably cover the point.

Amendment agreed to.

Mr. Peter Walker (Worcester)

I beg to move, in page 20, line 28, at the end to add: (9) Nothing in this section shall be held to apply to a company being a public company whose shares are officially quoted on a stock exchange in the United Kingdom and twenty-five per cent. of which are held by the public. The purpose of this Clause, which is to capture companies which own land and duly make a capital profit by selling the land by means of shares, is something with which I am perfectly in agreement, but I feel that as at present drafted the Clause will create a serious and difficult problem for public companies. I believe that I am right in saying that at present under the Clause there could be a public company with a London Stock Exchange quotation, perhaps a long-established company, with one shareholder who happens to have more than 5 per cent. of the shares and a group of five shareholders who between them have control of the company. The shareholder with 5 per cent. of the shares could discover, when selling some of the shares, that the Revenue could say that during the past three years the company had acquired or developed a property and a portion of the share price he obtained on his shares was, therefore, taxable under this Clause.

That is an impossible position for such shareholders to be in in public companies. There is no way in which they could discover at the time of selling of some shares whether any particular land had been sold in the last few weeks or months. I should like to know how the Revenue can make a computation as to the proportion of the share price in relation to a particular capital gain in the last three years. Is it to ask the company to make an appreciation of that part of its portfolio?

When the Income Tax Act. 1952, was passed provision was made about Surtax on the undistributed income under Sec- tion 256 (1 and 5) and public companies were excluded from this provision. I presume that the reason they were excluded was that such companies with a Stock Exchange quotation of more than 25 per cent. of shares owned by the public would be forced to act in a responsible fashion. If the Revenue found that such a company was not acting in a responsible fashion some provision would have to be made. I can well understand that if a person acquired a shell company, and made a gain, if this Amendment were accepted, there should be a tax.

There is, however, the fact that first, he would have to acquire a shell company, which would cost a considerable sum of money. Secondly, he would have to sell 25 per cent. of the shares to the public, and, thirdly, he would have to get a Stock Exchange quotation. I should have thought that one could stop such a device for avoiding tax by arranging that such provisions would not be given to such a shell company for this purpose. If that is not accepted, surely it is reasonable to say that a public company is not to be charged under this Clause unless control passes or a substantial volume of the shares are sold during any one period. It would be a bureaucratic impossibility if the position were created in which, if a substantial shareholder sold a small proportion of his shares—say, £1,000 or £500 worth—the Revenue had to go through the process of calculating exactly what proportion of the £1,000 or £500 worth of shares was connected with a development or a property acquired during the last three years.

Mr. Dudley Williams (Exeter)

It is even worse that that. If somebody owned 5.1 per cent. and sold 0.2 per cent. of his shareholding, would he be taxed on the 0.2 per cent. which he sold, but not be taxed if he subsequently sold the 4.9 per cent.?

Mr. Walker

I have difficulty in reading the general complications of the Clause, but I should imagine that he could sell the 0.2 per cent. and he taxed and sell the 4.9 per cent. and not be taxed. Then there is the question of related shareholders. A person may have 5 per cent. with a brother, a mother, a sister, a son or a daughter. It must often happen that two or more members of a family hold shares in a company without knowing the holdings of the other person. In any case, how does one know who has a 5 per cent. holding in a public company? People use nominees. It will be very difficult for the Revenue to discover on each share transaction in a property company whether a person has 5 per cent. of the shares. The Revenue will have to trace through all the names of the nominees.

I ask the Government to give careful consideration to the Amendment. Some provision should be made to stop the bureaucratic nonsense which will arise if the Clause goes through unamended. It must be remembered that the majority of public companies act in a perfectly reasonable way and develop their properties or acquire properties in the normal course of their business and are taxed in the normal way.

Mr. Dudley Williams

I support the plea made by my hon. Friend the Member for Worcester (Mr. Walker). It is very difficult to understand how the Clause will be implemented. I am rather surprised that it was not made clear in the White Paper on the Taxation of Short-term Gains, which says that a company is a closely-controlled company within the meaning of subsections (2) and (3), that public companies were to come within the ambit of this control and that it was not to be restricted to private companies.

Everyone in the Committee agrees that this manoeuvre by which people make tax-free profits should be stopped. The profit made by a man who puts up a building, puts it into a company and then sells the shares to the company should be treated as a trading profit. Those of us who have examined the Clause feel strongly that there should not be included within it any reference to public companies, companies which are quoted on the London Stock Exchange or any of the provincial Stock Exchanges.

If this is not done, very serious anomalies will arise. I have written a letter to my hon. Friend the Economic Secretary pointing out some of the difficulties which will arise. I have sent a copy of the letter to my right hon. and learned Friend the Attorney-General to explain the nightmare I had when considering the Clause. I do not propose to read the letter in full. It refers to a gentleman called Fred who was married to a lady called Gwen. They had two sons. On 1st May, 1962, Fred settled 20 per cent. of his property company on his (wife, retaining 30 per cent. for himself. The remaining 50 per cent. of the shares in the property company were owned by private investors, who had purchased them through the London Stock Exchange.

In the spring of 1963, Fred went on a mission to France. There he met a charming lady called Fifi, who became enamoured of him. When he returned, his wife took a poor view of his adventure, and decided to divorce him. She was extremely wealthy in her own right, and decided not to take advantage of the shares settled on her by Fred, but to hand them over to her two sons. This she did. Those two young men did not approve of Fred's affair with Fifi, and decided to stand for Parliament in order to amend the law of matrimony. Having so decided, they sold the shares in their father's company in order to secure the money necessary to achieve their object. Having done that, they got into very serious difficulty, indeed—

11.15 p.m.

Mr. Diamond

Will the hon. Gentleman tell us how much it was necessary to sell them for in order to buy a seat in the way he suggests?

Mr. Williams

That will become more apparent when I say for which party the two gentlemen stood. The father, I might say, was a Conservative, so the hon. Member must be nervous about which party the two sons stood for.

As I say, they sold the shares to get the money necessary to stand for Parliament, but then found that because they owned more than 5 per cent. of the shares in their father's company, and were related to him—that was the sinister point—the sale attracted the tax. Of course, if their mother had not been so honourable and had retained her shares until the marriage was dissolved, she could have sold them without any trouble at all, because in the Ninth Schedule to the Finance Act, with which we are now dealing, there is no reference to a woman being connected with a man if she has been divorced from him; she is only connected with him if related to him by blood, or married to him. Because she had behaved in what I should have thought was a scrupulous manner and had disposed of her shares to her two natural sons, those sons were penalised. Had she hung on to the shares until the divorce was completed, she could have sold them free of tax.

But worse was to follow. The sons sold the shares, but the summer of 1963 was very dry and the father did a very great deal of development. As the date of the General Election drew near, of course, with all its uncertainties— although a considerable number of people felt that almost any Government would be better than one that had produced ideas of this nature—the shares fell by half, but the Revenue held that the development that had taken place in the summer of 1963 repesented half of the value of the shares before the fall, so the sons were left with nothing. There was a sequel to this rather sad story because, as a result of subsequent Surtax and Income Tax demands, the sons went bankrupt. The moral is that if one wants social injustice, one does not necessarily have to vote for the Labour Party. Subsequently to those events, there was a dramatic change in Government. The Liberal Government changed the law, with the result that Fifi, who was by now, of course, a rather charming widow, became a million-airess.

I do not think that my right hon. and learned Friend the Attorney-General would like to see such events take place, and I suggest, with great respect, that although we think that we are all in agreement over this manoeuvre to deal with the man who makes use of a private company to make a tax-free profit, there is a very considerable case for saying that the same manoeuvre, the same restriction, should not be applied to public companies.

Let us now try to see what would happen if someone tried to get round the law to make a tax-free profit by means of a public company. First, one would have to obtain a public company. One would have to obtain 75 per cent. control of one and leave 25 per cent. of the shares in the hands of other shareholders otherwise one would be liable to get one's Stock Exchange quotation stopped.

Naturally, one would have to pay something for the public company in question. Let us say it costs £25,000. One then decides to put up a large building costing, say, £400,000. Being a shrewd developer, when the building is finally erected it is worth £500,000.

Mr. Walker

Has my hon. Friend realised that, having changed the nature of the company, the Stock Exchange would have withdrawn the quotation?

Mr. Williams

I was hoping to get round that. [Laughter.] I was hoping that the secretary or chairmen of the Stock Exchange, in a more explosive moment, would allow the person in question to continue with the quotation of the company. In fact, of course, he would not and it would be suspended. However, assuming that it is kept, one now has a company which originally cost £25,000 to which has been added a building which cost £400,000 to build.

Let us say that it takes eighteen months to construct a building of this nature and that, after eighteen months, one discovers that it can be sold for £½ million—giving a profit of £100,000. Naturally, having paid £25,000 for the shares, the most profit one can get is £75,000. Since one must also allow for 25 per cent. of the shares being in other people's hands, one cannot make more than £50,000.

Mr, Diamond

Might I point out that in the hon. Member's example, for which he has given a number of figures, while his arithmetic might be correct, his assumptions may be miles out?

Mr. Williams

I do not think that they are very far out. To get hold of a public company would not cost much less than the figure I gave. [HON. MEMBERS: "More] If hon. Members think that it would cost more, let us add another £10,000 to the figure and say that it would cost that much more to acquire it. My example still applies. The profit figures I gave apply equally —apart from legal expenses one would incur plus, of course, nursing costs to get over the breakdown or ulcer which all this has caused.

Assuming that £35,000 of the £100,000 is lost because one wants to avoid keeping this building for another eighteen months. If one keeps it for a further eighteen months one's profit, instead of being £65,000 will be £100,000. To sum up, I do not think that any shrewd property man would be willing to go through this difficult manœuvre to give away £35,000 which he could certainly have made tax-free had he hung on to it for eighteen months.

Therefore, I feel that there is no case for the maintenance of this restriction on the activities of public companies. It can only lead to extreme difficulties in the value of shares and the proportion one must pay to dispose of them. I hope that my hon. Friend the Financial Secretary will say that he is at least prepared to give further consideration to this matter before the Report stage.

Sir E. Boyle

I always find the company of my hon. Friend the Member for Exeter (Mr. Dudley Williams) enjoyable and educative. However, I must say that what I said about marginal cases, in reply to an earlier Amendment, could be applied to the story he told. I was rather reminded of an occasion when my father took me to dinner at the Café Royal when I was 15. It was a dark night and as we got out of the taxi he turned to me and, I suspect, forgetting for the moment to whom he was speaking, said, "Pot luck, Edward, on a night like this."

As for the letter mentioned by the hon. Member for Exeter, of which I have a copy, he describes in the third paragraph how, to achieve their aim, the sons needed some cash and disposed of their father's shares. I can tell my hon. Friend that if the sons had sold their father's shares they would have escaped Case VII, but the Attorney-General has some doubt about whether they would have escaped gaol, which is another matter.

The Amendment which was so ably moved by my hon. Friend the Member for Worcester (Mr. Walker) has a serious point and I would like to give a careful reply to it. Clause 13 imposes a charge, in certain circumstances, on sales of shares, however long held, in, first, a closely controlled land-owning company, that is, a land-owning company under the control of not more than five persons; secondly, a closely controlled company which controls a land-owning company; and, thirdly, a company which has a substantial interest—that is, 5 per cent. of the shares—in a landowning company if the seller of the shares, alone or with his associates, controls the company whose shares are being sold. The purpose of the Amendment is to take out of the scope of the Clause a public company if its shares are officially quoted on a Stock Exchange in the United Kingdom and 25 per cent. of the shares are held by the public.

The first point is that I do not believe that there is such a close analogy with the company Surtax provisions as my hon. Friend the Member for Worcester suggested, because the two cases are quite different. The exemption from the Surtax avoidance provisions was given on the basis that if members of the public held 25 per cent. of the equity the company would pay reasonable dividends, so that it would be unnecessary to apply the Surtax anti-avoidance measures to it.

The same argument does not apply to Clause 13, which is aimed at the disposal of land indirectly through the medium of companies. Operators in the property world—and I do not use the expression in any pejorative sense—could realise a profit in respect of land acquired by a company by selling the company's shares if the company is one in which the public has an interest, as well as if it is one in which the public has not.

The taking of a profit on land, or part of a profit on land, through the sale of a company's shares may well be by way of arrangements for selling off shares in a private company to the public. Further sales of shares by the operators could be effected after the first sale to the public, and such further sales would escape the charge if there was an exemption for companies in which the public is substantially interested.

We must try to look at it realistically. The Amendment would apparently let out not only the individual who sells shares in the company, with a 25 per cent. public share holding, but also such a company which itself sells shares in a closely controlled company. I am not certain whether this result is in the minds of my hon. Friends, but one has to bear it in mind and there are difficulties about going as far in this matter as my hon. Friends want to go.

As to the Clause in its present form being as my hon. Friend the Member for Worcester has described it, "bureaucratic nonsense", and on the question of how it will work, I would ask my hon. Friend to pay attention to subsection (5). I will not read out the subsection or even a translation of it, because I do not think that the Committee would take kindly to it at this late hour, but it is designed to deal with the point which my hon. Friend was making. It is an extremely good piece of drafting, but I do not think that it would be to the taste of the Committee to have it read now.

This is an important issue and we will look, between now and Report, at Clause 13. We shall look at it from the point of view of profit from the administrative point of view, and from the general policy angle of whether it has too wide an ambit. The Government fully realise the anxieties felt and will look at it again. But at first sight it seems to me to go too far to suggest that we must take out of the Clause shares of a company being shares officially quoted on the Stock Exchanges of the United Kingdom and where 25 per cent. of the shares are held by the public. I do not believe that one could make an Amendment as wide as that without wrecking a Clause which is necessary to the Government's whole scheme.

11.30 p.m.

Sir Cyril Black (Wimbledon)

I do not want to detain the Committee for more than a few moments at this comparatively late hour, particularly in view of the speech which my hon. Friend the Financial Secretary has just made to the Committee, but I think that it should be made clear that many of us, I think, on this side of the Committee hold the view that, as drafted, the purposes of the Clause are perfectly reasonable but the operation of the Clause in a number of particulars, as I could show if I were to take time to do so, is practically impossible

In view of what my hon. Friend has said I do not intend to make the speech which I certainly would have made if he had given an uncompromising reply to the, points already made by my hon. Friends the Members for Worcester (Mr. Walker) and Exeter (Mr. Dudley Williams), but I take it from what has been said that my hon. Friend is willing to consider, and to consider carefully and even sympathetically, any cases of injustice and practical difficulty which can be brought to his notice and which, in the view of many of us, would inevitably arise under the Clause as it stands at the moment.

I understand from what my hon. Friend has said that it is his intention to look at the matter seriously in the light of what has been said tonight and other representations which may be made to him, and if that is so, as I understand it to be, I do not intend, at any rate on this occasion, to burden the Committee with the speech which I would otherwise have made.

Mr. Diamond

In just two minutes, because the hour is somewhat late, I appeal to the Government, when giving this matter consideration, to consider even further the point which was well made by the Financial Secretary, namely, referring to the fundamental fallacy in the argument which the hon. Member for Worcester (Mr. Walker) put forward. The hon. Member for Worcester, who is very well informed on all these matters, said to begin with that, in principle, he was in favour of what the Clause intends to do, but, in particular, he wanted to exclude certain companies, and, although he did not say so specifically, obviously he had in mind the exact parallel of the Surtax provisions.

In the Surtax provisions there is a complete antithesis between the company on the one hand and the shareholders on the other hand. There is the company wanting to hang on to its profits and not distribute them for they would be taxable; there are the shareholders, namely, 25 per cent. of them, desiring to receive dividend. There is a complete antithesis between the one and the other. On this proposal which we are now considering there would be no antagonism between the board and a section of the shareholders: they would be sharing tax-free profits. In those circumstances, the parallel is absent.

Mr. Walker

I am grateful to the Financial Secretary for his promise to reconsider this matter, and for his reference to subsection (5), which is obviously regarded as a treasured piece of drafting. It is a good piece of drafting which three hon. and learned Gentlemen on this side of the Committee have interpreted for me. However, in view of the assurance which has been given, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause, as amended, ordered to stand part of the Bill.

Mr. H. Brooke

On behalf of my right hon. and learned Friend the Chancellor, I should like to express appreciation to both sides of the Committee for the very fair progress we have made today. In my judgment, we have reached a point from which we ought to be able to conclude our discussion on the remaining Clauses and Schedules of the Bill tomorrow and yet at a reasonable time of night, and we shall be able to start clear away on the new Clauses next week. If that is generally acceptable to the Committee, I beg to move, That the Chairman do report Progress and ask leave to sit again.

Mr. Callaghan

I am glad the Chief Secretary thinks that we have made good progress today. I agree with him. Of course, I could not say now whether we shall be able to finish the Clauses tomorrow, because so much depends upon the right hon. Gentleman's hon. Friends, who have a number of Amendments on the Notice Paper. Therefore, a great deal of the pace will depend upon them. Speaking for myself, I hope that the Committee will accept the right hon. Gentleman's Motion.

This evening, I was fascinated as I listened to the intricacies of the capital gains tax. The quality of the Treasury Bench reading has improved. The diction is good, the expression is most marked and the Treasury Ministers sometimes read as though they are actually making a speech. I enjoyed listening. I felt that I understood at least one word in five. I ask the Financial Secretary to go a little more slowly now and again, however, so that those of us with slower comprehension can at least try to pretend that we are taking past in the debate when he is speaking.

We have had a number of changes in bowling today. At the end of each over, it has been interesting to watch who would speak next. The Attorney-General bowls straight up-and-down stuff. There is nothing very guileful about it, but he goes on steadily. The Financial Secretary moves the ball both ways. We are never sure which way it will come, but he is capable of making it move in the air and he does it very well. The Solicitor-General has stood at long stop all day and has not been called. There he has been, holding the coats with his briefs in his hand, but has not had a chance of coming on to bowl.

The Chief Secretary opened the bowling, but he had so many runs knocked off him that he bas not appeared at the wicket again. The Economic Secretary, a good change bowler, bowled a couple of overs, but he did not look much like getting a wicket and he retired to square leg and has not reappeared. We have not seen the captain all day. So disgusted was he with the operation that he has not been near the field of play.

I do not think that this team is likely to get many wickets this evening. The Government bowling has been of such an ordinary character recently that it is clear that we should give them a rest in the pavilion. Therefore, if my hon. Friends agree, I am ready to accept the Motion and I hope that tomorrow we will make good progress.

I hope, however, that we do not part too much on terms of acerbity. I have been interested to see a large number of hon. Members opposite present tonight to discuss the capital gains tax. I wish that they had been here yesterday to help me in connection with a simple proposition to relieve of taxation those who are lowest paid. Had they heard the case that was put, I believe that we would have heard a great deal more pressure upon the Treasury. I hope that they are not only interested in the capital gains tax, but will join us later on the new Clauses and help us in our efforts for some of the other people who are affected and not merely property companies in the City of London.

Question put and agreed to.

Committee report Progress; to sit again Tomorrow.