HC Deb 23 May 1962 vol 660 cc597-629
Mr. Marcus Kimball (Gainsborough)

I beg to move, in page 35, line 45, at the end to insert: Provided that, in the case of any person so dying, this subsection shall not have effect in respect of any property situated out of Great Britain in which such person was entitled to a beneficial interest in possession prior to the tenth day of April nineteen hundred and sixty-two. The effect of this Amendment is to provide that anybody who held foreign real property before 10th April this year would not be liable to pay death duty on it. Hon. Members opposite will remember that it was their Government in 1949 which re-enacted the provision, in Section 28 (2) of the Finance Act of that year, under which foreign real property held by residents in the United Kingdom would not be subject to death duty.

People who have bought foreign real property have done nothing that was without the law. Many of them have bought it in order to help the Commonwealth and, in fact, as I said on Second Reading, many Commonwealth Governments have found it necessary to reduce their own death duty in order to encourage people in this country to leave their investments in the Commonwealth.

I think that the Chancellor was a little harsh when he introduced this part of his Budget because he used the word "avoidance." There is no avoidance in this. It is, in fact, straight, wise and sensible investment. I would remind the Committee of a famous judgment given by Lord Atkin, who said: It has to be recognised that the subject, whether poor and humble, or wealthy and noble, has a legal right so to dispose of his capital and income as to attract to himself the least amount of tax. The Inland Revenue is never slaw to take advantage of every single power that it has got in order to extract the maximum amount of tax from any individual taxpayer's pocket. So people who have invested in foreign real property have done so as a wise and sensible move to mitigate the amount of tax which they have to pay, in order to help the Commonwealth and in many ways to bring back to this country, through the investment in property abroad, very large sums of money for foreign exchange which is badly needed.

I do not wish at this late hour to delay the Committee by repeating any of the arguments which have already been adduced on Second Reading. I should, however, like to add two points which were not mentioned on that occasion. First, on the question of valuations of foreign real property, is the British Treasury going to accept for death duty purposes the valuation of, say, a valuer in the Bahamas? We have seen some blatant advertisements at the back of Country Life advertising property in the Bahamas. I can visualise advertisements inviting people to leave their money in the Bahamas. The British Treasury will not have British valuation officers in every one of these countries.

In addition to that point, I would mention one other on the question of accountability. In this country an executor pays death duty before he can get probate. Under the laws of many of these foreign countries, and Commonweath countries, the property does not pass to the executors. It passes straight to the heirs. So the executors will be forced to pay a bill for Estate Duty when they do not own the assets.

The very large number of my hon. Friends who have turned up at this late hour shows that there is an immense amount of feeling on this side of the Committee about the gross inequity of this move by the Chancellor. But we do not want to delay the Committee, and if we are told something about this perhaps being looked at again before Report, I am certain that none of them will delay the Committee.

I ask my right hon. and learned Friend to bear in mind that even the United States Government have found it necessary to make some very considerable concessions on bringing in just this sort of tax, and I hope that we may have some favourable or encouraging noises from my right hon and learned Friend.

Dr. Alan Glyn

I support my hon. Friend the Member for Gainsborough (Mr. Kimball), who put the case very briefly. I should like to add just a few points.

First, it was in very good faith that many people after the war invested money overseas and in the Commonwealth in a genuine endeavour to replace those assets which were sold during the war in the national interest. It is extremely hard that they should now be penalised by any form of retrospective taxation. My point is that we axe departing from a very real and important principle here in that we are taxing something which is outside our jurisdiction and which in many cases is under the sovereignty of another nation. This point brings about very real practical difficulties.

First of all, there is the difficulty of the assessment of the value. I would merely cite the case of land in Kenya. It may have a certain value today, but it is extremely difficult to sell, and it is almost impossible to put any real value on it because it is not a movable property, and it is also extremely difficult to negotiate. I am convinced that the Treasury is equally incapable of placing a figure for death duty purposes on an asset of that nature. On that subject, are death duties to be paid out of sterling in this country or will the Government compel them to be paid out of assets in the country where the property lies?

Another difficult problem is that the laws of the country in which the property is situated are often very different in respect of inheritance. For instance, in France property may well not pass to the person to whom it has been left under a British will but will, under French law, be divided among certain beneficiaries. There may be a very real problem in respect of death duties. Part of such an estate may have to be distributed in France and part in this country. In France a man who leaves his property to the dogs' home cannot cut out this issue, and his issue has a claim in law in the country in which the property is situated. That will give rise to very real difficulties in assessing the value of the death duties to be paid.

I should have thought it would have been very much easier if the tax had been so devised that it should not be payable until the funds from the property abroad were remitted to this country, and then death duties should be paid on the remitted funds and not on the property which lies outside our jurisdiction.

Mr. William Roots (Kensington, South)

I hope that the Attorney-General will deal with something which seems to me to be of great importance.

Section 28 of the Finance Act, 1949, gave a specific exemption—it was not just a loophole—to immovable property abroad, and this to some extent, I suppose, encouraged people to invest in that way. To alter the position out of hand at a time when, in many parts of the world, the property investment situation is extremely difficult, is unfair. When one remembers that the Finance Act, 1949, was passed by the Labour Government—and one has never detected any desire among hon. Members opposite to mitigate any form of estate duty—it seems that some period during which this alternation would take effect is justified.

Everybody knows that there have been abuses, and I do not think anybody would object to those which have taken advantage of the position to an extent which was virtually dishonest—at any rate, in my view—being caught. But I cannot believe that it is impossible to devise a provision which would at least enable genuine investors to rearrange their affairs in accordance with this new proposal.

It is clear that the worst offenders, in terms of tax evasion, are those who seek to purchase property abroad when death is almost upon them. Therefore, to draw a line at which these provisions are to come into force, or to introduce a sliding scale, seems clearly justified in view of the fact that the House stated a specific exemption for this form of investment. But it is unfair, having induced people to take a certain line, to alter that line out of hand. Had there not been specific encouragement by the House, the position might have been different. I do not think that the ordinary argument of retrospection does apply, but having set up the system as it was set up in 1949, it does not seem right to alter it out of hand.

Mr. Roy Jenkins (Birmingham, Stechford)

Perhaps I may respond to the extremely courteous remarks of the Financial Secretary about my knowledge of the Budget of 1909 by endeavouring to give support to the Government on this aspect of the Budget of 1962. I hope that it will be helpful, for I trust that they will not give way on this Amendment.

It may be the case, as one has been told since the Budget proposals were announced, that there is strong feeling on the benches opposite about this, but if so, I hope that it is based on something more substantial than the arguments deployed in this debate so far. I know that the hon. Member for Gains-borough (Mr. Kimball) was endeavouring to be as speedy as he could, and we are grateful to him for it, but he did not make out a substantial case. Indeed, it was rather a contradictory one.

At times he tried to say that this investment overseas was carried out as a straight, sensible commercial investment. If that were so, there is no real complaint about putting it on the same basis as investment made at home. The only conceivable case in which there might be ground for saying that people were being unfairly treated would be if the investment had been made on unsound commercial grounds in the absence of a particular exemption.

Mr. Kimball

We discussed this at length on Second Reading. There is immense political risk overseas but none in this country—unless there is a danger of a Socialist Government.

Mr. Jenkins

That may be so, but there are risks in all sorts of investment and that is something investors have to take into account in deciding what is and what is not a sensible investment. The hon. Gentleman said that these were sound, sensible, commercial investments. That phrase embraces the political risks which may or may not be involved. Does he or does he not mean that most investment of this sort has been undertaken only because of the provision in the Finance Act of 1949 and that otherwise it would not have been undertaken? If that is so, it is clearly not in any sense tax evasion but tax avoidance. It is an investment made solely because by making it one escapes death duties whereas if one makes investments in other forms one does not.

11.30 p.m.

What we have to consider is whether this is a sensible way of organising one's death duty provision or whether the benefits which flow from it are for the benefit of the country as a whole. I do not believe that this would be so. I do not think that retrospection in the normal sense of the word is involved in this. The hon. and learned Member for Kensington, South (Mr. Roots) was clear about this point. To say that it was retrospective legislation would be to say that we could never close a death duty loophole. Is it really the case that we ought in perpetuity to give a special death duty concession for property overseas to anyone able to make such an investment, to transfer capital out of this country in a way which would not be done were it not for this concession?

I do not think that most of the investment made overseas and which will be affected by the Clause is going to provide aid to under-developed areas in any sense of the word. Most real property investment in parts of the West Indies and in the Commonwealth has not been made in the under-developed areas. There has been a great deal of British investment in Manhattan in the last few years which can hardly be described as an under-developed area.

Mr. David James (Brighton, Kemptown)

Will the hon. Gentleman explain, in that case, what precisely he believes Sir Stafford Cripps had in mind when he made this concession?

Mr. Jenkins

That is not part of my purpose this evening. I have no idea what Sir Stafford Cripps had in mind at the time—one would possibly find out what he had in mind by studying the debates of 1949 carefully—but in 1962 I do not take the backward looking view that what happened in 1949, or in any other year, is necessarily the complete answer to what we ought to do in the future. It may be that Sir Stafford, like other Chancellors, made certain mistakes. I have no objection to having a new look if it is what we want to do in the future. I am quite clear that one does not wish artificially to encourage investment outside this country which would not be made on sound commercial grounds.

On the whole, we have been too starved of capital in this country and have overburdened ourselves by pushing capital outside the country. I certainly wish to give no artificial stimulus in this direction. I also echo very strongly the remarks made by my hon. Friend the Member for Glasgow, Craigton (Mr. Millan) on the previous Clause that if we are to have a death duty let us have it broad-based with rather lower rates than at present. Do not let us have in this field as in so many others a high rate of tax founded on a narrow basis. This is a desirable proposal to broaden the tax basis as far as Estate Duty is concerned and one which I hope the Committee will accept.

Mr. John Diamond (Gloucester)

I wish to support this Amendment for two reasons which I am sure will appeal to hon. Members opposite. Of course, the Amendment does not deal with the Question of whether or not the law should be altered. The Amendment deals with only a very limited point—the decision to alter the law having been taken, whether it should take effect from a given date or not until a later date. All those who are aware of the circumstances of Estate Duty avoidance know that Estate Duty on property can be avoided for only about ninety years ahead and that the great bore about Estate Duty avoidance schemes is that one cannot guarantee that the Government of the day will play the game and allow Estate Duty to be avoided on all the deaths occurring during those ninety years because they have not that sense of fairness and may come along and alter the law. If they alter the law, all these beautiful Estate Duty avoidance schemes go by the board because the Government of the day have the right to alter the law as they think fit.

Anybody who believes that Estate Duty avoidance schemes should continue unharmed and undamaged as they have been for the last vast number of years, so that they have the effect that nobody other than an untrusting father needs to pay Estate Duty, and anybody who believes that Estate Duty should continue to be so organised that one should be saved from the necessity of wondering whether in any particular year, 5, 10 or 15 years ahead, the Government might decide to alter it, will support an Amendment of this kind which secures for all time to Estate Duty avoiders peace of mind and freedom from Estate Duty.

The other reason is that an Amendment of this kind supports enterprise of the kind of which I have an example in my hand. This is an advertisement from The Timesof 1st March, 1961, and is headed: Reduce United Kingdom Estate Duty by buying Nassau (Bahamas) leasehold property. It goes on to show a very attractive block of flats and proceeds to give all the details and, in terms of welcome enterprise, says: To allow persons securing one or more flats an opportunity of seeing their investment, we will undertake to pay all reasonable expenses for a purchaser or his representative to visit Nassau. This is a very enterprising advertisement. Not only can Estate Duty be saved, but it can be saved in a most pleasant way by a tax-free, Estate Duty-free, paid holiday to the Bahamas in a way which, I imagine, is more attractive than going on most of the Parliamentary delegations which, after all, are only paid for—there is no saving in tax and there is no saving in Estate Duty.

I am sure, therefore, for those valid reasons of perpetuating the right to avoid Estate Duty for all time, that this Amendment should be supported.

The Attorney-General

My hon. Friend the Member for Gainsborough (Mr. Kimball) raised this subject on Second Reading and I replied to him fairly fully on that occasion. He has not repeated those arguments tonight and I do not propose to repeat at length any of the arguments which I deployed then. He based his case tonight on the ground that the Finance Act, 1949, provided for exemption from Estate Duty for foreign immovables. My hon. Friend called that a concession. In fact it was nothing of the sort. It made no change in the law. In the 1949 legislation there was no more than a restatement and continuation of an exemption which had dated since 1894, and that restatement was necessary because of the abolition in that Finance Act of legacy and succession duties. I think that that ought to be made quite clear, because on that ground my hon. and learned Friend the Member for Kensington, South (Mr. Roots) also sought to base an argument.

My hon. Friend also said that the people who were investing in immovables abroad were doing nothing without the law, and that there was no avoidance in this. I agree that they were doing nothing outside the law, but I think that no one who heard the facts deployed during the Second Reading debate could fail to recognise that there is a serious leakage here—I do not think that "abuse" would be too strong a word to use.

The hon. Member for Gloucester (Mr. Diamond) referred to one advertisement. During the Second Reading debate I referred to others, and it is the case that about £14 million has been invested in Jersey mortgages of 1 to 3 per cent. Even last Monday there appeared this advertisement in The Times: Estate Duty. Jersey Land Mortgages are still good for the saving of Estate Duty in respect of deaths occurring before the Finance Bill is passed in two months' time. We have available up to £250,000 of mortgages in lots of £10,000 each or less. FOR IMMEDIATE SALE. COMPLETION WITHIN 24 HOURS. Title in each case has been approved by Jersey Solicitor and property inspected by us. I do not think that anyone seriously disputes that that kind of thing has to be stopped, and of course the Amendment would not stop that kind of thing at all.

It may be that a lot of investment overseas was wise and sensible, but my right hon. and learned Friend and I are of the opinion that this has to be stopped, and if we tackle that situation there then arises the question whether it really is logical or justifiable, when movables abroad are subject to Estate Duty, to let the exemptions for immovables remain.

I have listened anxiously for any argument which would justify the continuation of this illogicality. I know that it has existed for a long time, but I find it difficult to find any grounds for defending its continuance. Even if it were desirable to continue the exemptions for certain categories of persons, it would be very difficult to distinguish—indeed, I can see no way of doing it—between those who have invested for what my hon. Friend would regard as good motives, arid those who have invested for the purpose of avoidance of Estate Duty. There may be cases at one end of the scale, and others at the other end, but in between there will be cases where consideration of the tax avoidance factor has no doubt played its part.

Having listened to my hon. Friend on two occasions, I do not feel convinced by his arguments, and I must advise the Committee to reject this Amendment, operating as it would for the benefit of those who have invested in Jersey mortgages as well as those who have invested for motives which cannot be criticised.

My hon. Friend asked me two questions. One was about valuations. It does not primarily arise on this Clause, and all I can say is that the Revenue would require to be satisfied that the value of the overseas property had been assessed as accurately as possible. The valuation might be very low in some territories and high in others.

Provision is made in the Bill for col. lection of Estate Duty not only from executors but also from beneficiaries and others. If my hon. Friend looks at the last few words of subsection (2) he will see that provision is made for that.

11.45 p.m.

My hon. Friend said that if I could make encouraging noises promising to look at this proposal with a favourable eye beween now and Report, that would satisfy him at this hour of the night. I always dislike disagreeing with any of my hon. Friends, but I have to tell him and those who share his view about this that we have looked at this very carefully indeed, both before the introduction of the Budget and the Finance Bill and since the Second Reading of the Bill. I do not want him to think that we have shut our minds to all further arguments that may be advanced, but at the same time I do not wish to hold out any hope of making any amendment to this Bill which would satisfy the point of view he and his hon. Friends have expressed.

I say that straight away, but, if it will comfort him at all, there is one particular case which it may be desirable—I say "may be"—that we should meet. I just draw attention to this. When we dealt some years ago with gifts inter vivos there was a departure from the general rule—the hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) will remember this—so that liability did not occur for gifts inter vivos made within the five-year period before the Act came into force. The reason was that it might well be that the person Who received the gift might have spent it before any liability for Estate Duty arose in consequence of the death of the donor within the five-year period. It is conceivable—I cannot put it higher than that—that one might get a case here where there had been a transfer of immovable property abroad to a donee and the sale by the donee of that property and expenditure of that money or the creation of a settlement with that money so that that money would no longer be under his control. In such a case it might be advisable and right to make a similar exemption in relation to the death which occurred within the five-year period where, of course, the transfer takes place before the passage of this Finance Bill and the death takes place after it.

The same point might arise in regard to settlements. If it will be any comfort to my hon. Friend and his friends, I say that we shall give this point serious consideration between now and Report and, if we hink this is a case—it is very unlikely that there will be many of them—Which should be met, we shall not hesitate to meet it.

Sir Cyril Black (Wimbledon)

Before my right hon and learned Friend concludes his reply, could he deal with two interesting points, one of Which arises from what he has said?

He spoke of accountability of the proceeds of the real property overseas and the possibility of it being recovered from the person who received it and not from the executors. How would that operate in the case of a United Kingdom citizen owning property overseas, willing that property to someone not a resident of the United Kingdom but living outside the jurisdiction of the courts here who had received the property direct so that it never came into the hands of the executors? Could the executors in this country in those circumstances be liable to pay Estate Duty on property which never passed into their control, which could not pass into their control and over which at no point could they exercise any control?

My second point is this: what is the position where there are local regulations in the territory in which the property is situated which prevent the repatriation of the money arising from the sale of the real property? I take the example of South Africa—now outside the Commonwealth. I believe that it is not possible to repatriate a capital sum in conditions of that kind. Let us suppose that a United Kingdom citizen owns real property in South Africa; he dies; the property is realised, and the money is available in a bank in South Africa but cannot be repatriated to this country owing to currency restrictions. Can the executors, notwithstanding, be required to pay Estate Duty out of funds in this country?

The Attorney-General

My hon. Friend has raised two interesting points. They do not arise out of the Amendment, but I will do my best to answer them. I first draw his attention to subsection (2). Perhaps I should point out that this provision applies also to foreign movables as well as to foreign immovables, because difficulty has been experienced in collecting duty on property abroad where the executors in this country had no control over that property—for instance, where it is in the hands of separate foreign executors who are themselves outside this country.

Under the provisions of the subsection the Inland Revenue will be able to require the payment of duty on foreign property from either the executor or the beneficiary and to enforce the liability against any assets brought to this country which represent the dutiable property.

The subsection in question provides that the executor shall be accountable for the duty on all foreign property, both movable and immovable, of which the deceased was competent to dispose, and to meet the possibility that the English executor might not be entrusted with the administration of the foreign property and might not have sufficient funds in his hands to pay duty on that foreign property his liability is restricted to the assets that he has received as executor. The trustees and beneficiaries are also liable for the duty on the foreign property. That answers the greater part of the question my hon. Friend put about the liability of executors and beneficiaries.

My hon. Friend also raised the question of the situation with regard to the transfer of money from South Africa to this country, where the transfer might be prohibited. As I understand the position.. at this late hour of the night, the executor would not be liable because the money would not come to his hands, but I shall write to my hon. Friend on those detailed points if he wants me to do so. It is difficult to answer these detailed points when they are put to me with so little notice at this time of night.

Mr. Houghton

Earlier in the day we were defending the interests of the property-owning democracy; I suppose that we are now defending the interests of the property-owning aristocracy. I feel sure that some hon. Members opposite would have an interest to declare in this matter. We would probably agree that this overseas investment has been used for more than ordinary commercial purposes. In the world today there are what President Kennedy has described as "tax havens", and many American as well as British citizens have gone to them.

Hon. Members on this side of the Committee cannot say that the Government are wrong in their proposals in the Clause. We have difficulty in supporting the Amendment, because, as my hon. Friend the Member for Gloucester (Mr. Diamond) pointed out, it would mean that investments made in this way before the appointed day would escape Estate Duty for the length of the life of those who made them and thus benefit could endure for many years to come.

I think that there is always a problem in changing the law when people have done certain things in the circumstances of the law as it was and find that the ground is, so to speak, swept from under their feet. I well remember the case to which the Attorney-General has referred. It was the case of the vanishing horse. A donor had given away a valuable race horse, and first the race horse died and then the donor died; and the value of the race horse had to be brought back into the estate for death duty purposes since it had been given away within a brief period before the death of the donor. But, of course, there was no horse, and therefore there was no gift to realise in the hands of the donee. It all seemed very hard indeed if the donee had to make good the loss of the horse.

We were all greatly moved by this double tragedy of the death of the horse and the donor, and I think that the Chancellor agreed that in such circumstances there should be relief from the Estate Duty which otherwise would be payable. This case is not on all fours with that. But the only practical point I wish to make relates to the notice to be given when the law is changed as it is proposed. One could say that all living persons concerned can theoretically rearrange their affairs to take note of the change in the law. But the interval between the announcement of this proposed change on Budget day and the effective date of the change, which is the date of the passing of the Bill into law, is relatively short and does not give people enough time to rearrange their affairs. It seems to me that it is not entirely fair to catch people, as it were, on the hop, and that they should be given time to disengage themselves from any commitment which they may not wish to continue in view of the change in the law. I am not going into any question of motive. I think that fair notice is a reasonable suggestion to make and I do not think that any harm would be done if reasonable notice were given.

In earlier Clauses we have dealt with gains which have been secured within a brief time which will be taxable and which in the longer term will not be taxable. Everyone knows where they are. We have not gone back over the past. Any person making a new investment knows exactly how he stands. Anyone who makes an investment before the appointed day, in that case at all events, gets caught by the new tax. But the period of realisation is so short in the case of capital gains that there is no almost indefinite exemption given in a manner similar to that of Estate Duty. I was a little puzzled by what the Attorney-General read out. I may be very dense at this hour, but I was not quite sure what advantage there was in rushing into these mortgages in the Channel Islands before this Measure is passed. Will they not be liable to Estate Duty if they die? Can the right hon. and learned Gentleman enlighten me?

12 m.

The Attorney-General

Yes, if they died before the passage of the Finance Bill there would be a benefit.

Mr. Houghton

So this is an advertisement to a dying man? The things that people think of! Fancy dying men worrying themselves to death over getting into the Channel Islands before they leave this mortal coil.

I accept that, but are there all that number of people who are about to die and have money to invest in the Channel Islands. I do not think there will be many replies to that advertisement—and, in any case, who likes to think that he will die within twenty-four hours? One cannot do this thing without instructing one's solicitors. The solicitors cannot do it behind one's back, can they, and say, "He's going to die in twenty-four hours; let's do some investing for him"—

Mr. Diamond

My hon. Friend must be aware, as, I should think, every hon. Member is, that with any number of people who get an illness from which they suspect they may not recover, one of the first things they do, after calling in the doctor, is to call in the solicitor—[Laughter.]—no, quite seriously—and arrange their affairs; a very understandable, and sensible and almost unanimous practice. It would make a substantial difference if, in such a case, the solicitor were aware of the circumstances, and were to say to his client, "This is something you can deal with immediately, on the spot"—which is something that most beneficiaries would want—immediately on the spot; beneficiaries are generally there in attendance.

Mr. Houghton

I am much obliged to my hon. Friend. I see quite clearly now that those who are alive and kicking are not interested in that particular advertisement. I remember the case of a noble Lord who went out to chop down a tree. It would have made all the difference if he had signed a document before he went out.

Is there any harm in suggesting that a reasonable period of notice of this operation should be given. Presumably, people who die in the meantime would get some benefit. It would be fair to everyone to say "We shall change the law, and you have a reasonable time in which to rearrange your affairs, if you wish to." That is the only suggestion I make. I do not think that there is very much sympathy to be spent on the number of people who have embarked on this means of Estate Duty avoidance. On this side, we are nothing if not fair, even when dealing with rich men.

The Attorney-General

I will say to the hon. Gentleman that I like his interest in giving what he calls a reasonable time for arranging affairs, but I do not know what he contemplates about the kind of arrangement that could be made. I should have been interested had he elaborated that a little. Was he contemplating an arrangement that would preserve the present exemptions from Estate Duty? Here, we are dealing with immovable land overseas. Movables overseas are liable to Estate Duty, and all property in this country is liable to Estate Duty, but I am rather interested to think what kind of arrangement of affairs the hon. Gentleman was contemplating.

Quite apart from that, may I put this to him? Except for those who will, unfortunately, die on the day when the Finance Bill becomes an Act, it is not the case that the time for making arrangements is limited to the period between the announcement in the Budget and the passage of the Finance Bill. There is the time between the announcement and the time death occurs in which any changes can be made. That period will vary according to the individuals. I was interested by the idea but I find some practical difficulties with regard to it and when one bears in mind the magnitude of the figures—£14 million or so in mortgages for Jersey alone at such low rates of interest—one realises that Estate Duty avoidance must have featured largely in the transactions.

When one bears in mind the advertisements from Nassau and the Bahamas I think that my right hon. and learned Friend would have found it very difficult to have extended the period of exemption so that those effecting these transactions at 24 or 48 hours' notice would have continued to enjoy exemption from liability for a longer period.

Mr. Houghton

I had no more in mind than putting a forward date to the change. After all, there is a forward change already—from the date of the passing of the Bill. If the date of 1st January, 1963, were given as the date for the change everyone would have notice that the change was going to take place on that date. If they wished to dispose of their assets in overseas countries in the meantime and bring the money back home—or do whatever else they wished to do with it—they would be aware of what they are doing and have reasonable time in which to do it. They would know that if they decided to keen their overseas assets after that date, they would be liable to Estate Duty under the Clause. It is as simple as that and I was simply trying to be helpful.

Mr. Roots

My right hon. and learned Friend has drawn attention to how tender is his heart in these matters. He has drawn the attention of the Committee to the way the Clause, before the passing of the Bill, is encouraging a terrible wave of deaths among those who may have invested in Jersey mortgages. Had he accepted the Amendment, which places the date from 10th April, this terrible wave of deaths might have been avoided. Would not that have been of some assistance?

Mr. Kimball

In view of the limited concessions my right hon. and learned Friend has promised—

Mr. David James

It would seem that they are of advantage only to the spendthrift and not to the prudent man.

Mr. Kimball

—Or they could be of advantage when the asset has been put into a marriage settlement or has been spent. My right hon. and learned Friend has given two very real concessions and I am grateful to him. In view of that, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. W. Clark

I beg to move, in page 35, line 45, at the end to insert: Provided that in the case of any person dying after the tenth day of April, one thousand, nine hundred and sixty-two, the subsection shall not have effect in respect of any property situated out of Great Britain in which such person had a beneficial interest in possession for five years or more prior to date of death. The principal value of such property shall be reduced for Estate Duty purposes—

  1. (a) by 15 per cent. thereof if the death takes place in the third year after acquisition of the beneficial interest;
  2. (b) by 30 per cent. thereof if the death takes place in the fourth year after acquisition of the beneficial interest; and
  3. (c) by 60 per cent. thereof if the death takes place in the fifth year after acquisition of the beneficial interest.

The Chairman (Sir William Anstruther-Gray)

I think it will be for the convenience of the Committee if we discuss with this Amendment, the following.

In page 35, line 45, at end insert: Provided that, in the case of any person so dying, this subsection shall not have effect in relation to any immovable property situate outside Great Britain acquired by any such person as a devisee or legatee or on an intestacy or other devolution on death. In page 35, line 45, at end insert: Provided that, in the case of any person so dying, this subsection shall have effect so that where any immovable property situate outside Great Britain passes or is deemed to pass on his death (estate duty not being chargeable on the property apart from this subsection) the principal value of the property shall be reduced for estate duty purposes—

  1. (a) by 25 per cent. in the case of such immovable property purchased or acquired more than five but less than ten years prior to the death of the deceased;
  2. (b) by 50 per cent. in the case of any such immovable property purchased or acquired more than ten but less than fifteen years prior to the death of the deceased;
  3. (c) by 75 per cent. in the case of any such immovable property purchased or 615 acquired more than fifteen but less than twenty years prior to the death of the deceased; and
  4. (d) by 100 per cent. in the case of any such immovable property purchased or acquired more than twenty years prior to the death of the deceased.
In page 37, line 13, at end add: (7) For the purposes of calculating any reduction of the principal value of the property passing or deemed to pass, the reductions (if any) allowable under the proviso to subsection (1) of this section shall be taken into account before any account is taken of any reduction in the principal value allowable under section sixty-four of the Finance Act, 1960.

Mr. Clark

That will be satisfactory. As the Committee knows, this Amendment is closely allied to the previous one and it is not necessary for me, therefore, to recanvass all the arguments. My right hon. and learned Friend has drawn attention to the fact that this exemption from death duty on overseas assets has been in existence since 1894. It was reaffirmed during the Socialist regime from 1945 to 1951, and I am certain that all hon. Members will agree that it has had a tremendous effect on investment, particularly in the underdeveloped countries.

Obviously people invest overseas in the hope of getting some sort of return. But that investment must be conditioned, I feel certain, by the concession that the investor knows he will get regarding death duty. My hon. Friend the Member for Gainsborough (Mr. Kimball), who moved the last Amendment, knows that I did not agree with that Amendment and I am glad that my right hon. and learned Friend has resisted it. The hon. Member for Gainsborough knows that, to my mind, his Amendment would have created two classes of property overseas—those purchased before 10th April, which would not have been caught, and those purchased after that date, which would have been. It is rather the attitude of "I'm in the right boat, Jack", and that does not make for very good law so far as Estate Duty is concerned.

I would remind my right hon. and learned Friend the Attorney-General that in the Conservative Party manifesto at the last General Election what we might call one of our "planks" was the promise that we would do all we could to help the under-developed countries. I should like, incidentally, to hear what the Colonial Secretary and the Secretary for Commonwealth Relations have to say about this point, but if we are to help those countries we should remember what effect withdrawal of this concession for Estate Duty purposes will have on investment overseas. We say that it will have a deleterious effect.

There has been in the past quite a lot of talk about tax avoidance in this matter of overseas investment. I would remind the Committee that The Times dealt with the matter in a leading article on 15th May, pointing out that the Chancellor was in a dilemma. The argument was that, on the one hand, here was a concession which was desirable so far as the under-developed countries were concerned while, on the other, some people were "getting away with it" simply by investing abroad merely to escape Estate Duty.

I ask my right hon. and learned Friend to consider the Amendment which, in brief, brings these overseas investments within the purview of the legislative governing gifts inter vivos. I think that the hon. Member for Sowerby (Mr. D. Houghton) had a very good point when he said that some sort of notice should be given to the taxpayer that the concession is to be withdrawn. The hon. Gentleman suggests 1st January, 1963, but if such notice were given, there would be such a rush to sell overseas property. We must remember that people who invest overseas take a tremendous political risk nowadays. We have seen that fact amply demonstrated even in the last two years. I should say that I have no vested interest in this because I own no property of any sort abroad and it is a quite sincere point of view, but there is a political risk, and we do not want to discourage genuine investors.

I hope that my right hon. and learned Friend will look at this. Our Amendment states that if an investor has held his property for more than five years he shall be outside the duty provisions; and then there follows a scale, whereby the value of the property shall be reduced by 15 per cent. if death occurs in the third year after acquisition, 30 per cent. if in the fourth year, and 60 per cent. if in the fifth year after acquisition. In short, our Amendment is on all fours with the rules governing gifts inter vivos made in this country. We have a bad precedent in that people, just before death, have made gifts in order to avoid paying the duty, but this has been tackled so far as this country is concerned and my hon. Friends and myself cannot see why it cannot be extended to cover overseas investments.

It may be that the Chancellor does not like the idea of the sliding scale for the third, fourth, and fifth years but if he does not, I am sure that we should be willing to compromise on the time limits. The point is that here is a definite breach to which we must attend. We must encourage people to invest overseas but let us catch the tax avoiders. For goodness sake do not penalise the true and genuine investors. I hope that the Government will give consideration to this Amendment.

12.15 a.m.

Mr. Michael Coulson (Kingston upon Hull, North)

My right hon. and learned Friends the Attorney-General and the Chancellor of the Exchequer have both said at various times that the principle behind this Clause is to catch persons who purchase property abroad as a method of tax evasion. This is apparently increasing and I for one do not wish to see it continue.

Whilst I accept the general intention of this Clause, like many of my hon. Friends I am concerned about the operation of the Clause as it affects genuine investors. Some of my hon. Friends have advanced arguments for amending Clause 23 so I will not waste the time of the Committee in further discussing these proposals. Anyway, most of them have been rejected. I should, however, like to add one or two small points.

Investment abroad, despite what has been said by some hon. Members, in many cases has been made at considerable risk and not all in luxury parts of the world. A considerable amount of investment has been made in Africa, for example—investment which this and previous Governments of this country, whatever their political complexions, have urged people to make. They have made a considerable contribution to the economic welfare and viability of those countries, including under-developed countries. In fact, they are an essential and, indeed, major part of our economic aid to those countries. If the Clause becomes law in its present form there is a real danger that our investment abroad will be greatly reduced.

After the comments made so far about the West Indies, I hesitate to introduce any such comments into my argument, but apart from the luxury side of certain aspects of life in the West Indies there is no doubt that this is one of the under-developed parts of the world. My right hon. and learned Friend will be aware of the concern felt in parts of the West Indies about the effect of this Clause.

I understand that the Government of the Bahamas, for one, are worried about the slowing down of much-needed British capital which has been invested in the tourist industry in the past. Mr. Sandys, who is the chairman of the Bahamas Government Development Board, said the other day: We are not interested in the tax dodger, but freedom from United Kingdom estate duty could be a plus factor in the flow of investment money to the Bahamas. There is another side to this problem as well, and it is this. As there is a likely decrease in British investment in these countries, at the same time there could be an increase of foreign investment—for example, from Germany where there is no duty on overseas real estate owned by German nationals, and from America where I understand there is no duty on property owned by Americans abroad, although I understand that President Kennedy has indicated that lesiglation is to be introduced, but even if it is introduced American rates of estate duty are considerably lower than ours.

My hon. Friends and I who have appended our names to certain of these Amendments will obviously accept the need to catch tax dodgers, especially death duty dodgers, but we feel that the Amendments standing in my name in page 35, line 45, to insert a proviso and in page 37, line 13, to add subsection (7) are on the right lines, even if the drafting is not perfect, in order to draw distinctions between these people and genuine investors.

The Amendment in page 35, line 45 suggests proportionate reductions in Estate Duty ranging from 25 per cent. to 100 per cent. depending on whether a foreign property has been owned by the deceased for between five and twenty years. I hesitate to suggest that it is a better Amendment than the Amendment in the name of my hon. Friend the Member for Nottingham, South (Mr. W. Clark) in page 35, line 45, which also seeks to insert a proviso, but I think it is perhaps nearer the Chancellor's intention of catching tax dodgers.

I ask my right hon. and learned Friend to give the spirit of these Amendments every consideration on Report, even though he cannot agree to an Amendment tonight. The other Amendment standing in my name, in page 35, line 45, attempts to deal with what seems to me to be inequitable under the Clause, namely, that Estate Duty should be payable on foreign property where this has not been purchased by the deceased as a means of evading Estate Duty or anything else. Surely my right hon. and learned Friend knows that many of them have been held overseas for many years, some for centuries. When first established, they were established at considerable risk, and many fulfil a very important part in the economy of the overseas territory concerned.

I ask my right hon. and learned Friend to give very earnest consideration to this position and to see whether at a later stage of the Bill he could not adopt an Amendment to this effect.

Mr. F. M. Bennett (Torquay)

I want to ask my right hon. and learned Friend a question supplementary to the reply that he gave to my hon. Friend the Member for Wimbledon (Sir C. Black) which I do not think either of us clearly understood.

Let me give a practical example. Suppose someone two years ago who owned land overseas gave it away to somebody living outside the jurisdiction of this country. Are we to understand from my right hon. and learned Friend's reply that although the land was given away two years ago, within the five-year rule, and never came within the purview of the executor over here, its value is to be held to account so that the estate in this country will have to bear the full burden of the Estate Duties not only on the estate coming into the hands of the executor but also on the estate which had passed out of the hands—

The Deputy-Chairman (Sir Robert Grimston)

The hon. Gentleman is getting a long way from the Amendment.

Mr. Bennett

Robert, I have been trying to repeat, for elucidation, a question put earlier which you ruled in order.

Mr. John Farr (Harborough)

I support the Amendment moved by my hon. Friend the Member for Nottingham, South (Mr. W. Clark).

I should declare an interest in this matter. I own a tract of agricultural land in Southern Rhodesia. Normally if one declares an interest in a subject under debate, the words that follow can, perhaps quite reasonably, be suspect by one's hearers.

Mr. Callaghan

The hon. Member is not going to die yet.

Mr. Farr

However, hon. Members may agree that it is of some advantage in this case to have an interest to declare in that I am able to tell my right hon. and learned Friend something about the very real difficulties that holders in this country of investments overseas have to face as it is without added difficulties being imposed by the Finance Bill. As I said, I support my hon. Friend's Amendment, but I would rather see neither Clause 23 or Clause 24 in the Bill.

The Deputy-Chairman

Order. I am sorry to interrupt, but these are points which would be better raised on the Question, "That the Clause stand part of the Bill". They are outside the scope of the Amendment. Perhaps I ought to have been a little tighter on the previous Amendment. We cannot go on spreading ourselves all over the place. As I have said, these points can be raised on the Question, "That the Clause stand part of the Bill".

The Attorney-General

I will deal with the Amendments which have been under discussion as briefly as I can but at the same time comprehensively.

My hon. Friend the Member for Kingston upon Hull, North (Mr. Coulson) seemed not to appreciate quite what I have already said once this evening and what was said by the Chancellor and myself on earlier occasions, namely that while the occasion for the change is the evasion of Estate Duty that is going on at the present time, the intention is to make immovables abroad subject to Estate Duty just as movables abroad have been for many years. It is not just the case that the intention is to catch the tax evaders. It is because of the tax evasion that it has become necessary to change the law, and, in changing the law, to bring immovables abroad into the scope of Estate Duty, I should like him to approach the problem with that in mind.

The two other Amendments are similar, apart from the periods involved. Both my hon. Friends commented on the nature of investment abroad. It should he recognised that some of this investment—for instance, perhaps, in Jersey and other territories—has not always had an entirely beneficial effect. I leave that on one side, however, for there is no point in discussing it now.

The first Amendment deals with the acquisition of beneficial interest. It does not, as my hon. Friend the Member for Nottingham, South (Mr. W. Clark) suggested, deal with gifts inter vivos, and the ordinary rule with regard to such gifts will apply whether or not the property is land overseas or in this country or any other form of property.

My hon. Friend asks that if land is held for five years or more prior to the date of death it should be exempted from Estate Duty. That would cut down the scope of this proposal very considerably. It has to be borne in mind that the Amendment is not confined to property acquired before the date of the Budget announcement. It would also apply to property acquired at any time in the future as well as in the past. Therefore, to accept such a provision would be to hold out a continuing inducement to would-be avoiders to buy immovable property abroad in the hope of surviving five years after the purchase. Even if the person survived for only two years, that would bring a worth-while advantage.

While I appreciate the intention behind the Amendment, the effect would be more or less to nullify the proposal to charge duty on foreign immovables. It might exclude some obvious cases of avoidance—death-bed purchasers taking advantage of advertised offers to arrange everything in 72 or 24 hours—but by no means all investment in foreign immovables, if it takes place near the end of a tax avoider's life, is made with regard to the avoidance of tax.

If the object of the Amendment is to distinguish between the tax avoider and the genuine investor, it would not be achieved in the case of the death-bed or near death-bed purchaser. We do not feel, for these reasons, that we could accept the proposal of my hon. Friend the Member for Nottingham, South. Nor can we accept the last Amendment. It would have the same effect. It would not be confined to property acquired before the date of the announcement, but would include any property acquired in the future. If I had to choose between the two, I would say that the last Amendment was the better, but for the reasons I have advanced against the Amendment moved—they apply equally though with not quite the same force—I must ask the Committee to reject it too.

The first of the two Amendments being discussed with that of my hon. Friend the Member for Nottingham, South, seeks to secure that …in the case of any person so dying, this subsection shall not have effect in relation to any immovable property situate outside Great Britain acquired by any such person as devisee or legatee or on an intestacy or other devolution on death. That would mean that the purchaser of an estate overseas would find it liable to Estate Duty. On the death of anyone who inherited from him, to the second, third and fourth generations may be, then the estate would be exempted from Estate Duty. I really could not advise the Committee to accept that. It would really lead to the very kind of difficulty, which my hon. Friend the Member for Nottingham, South said he was against, by having two categories of property, perhaps adjoining—I thought that there was great force in his argument—one exempted by law from Estate Duty and the other not, and the one exempted going on indefinitely.

12.30 a.m.

I have endeavoured to deal with the points made, even though rather shortly, but I hope the Committee will appreciate that serious consideration has been given to them. For the reasons which I have given I cannot advise the Committee to accept the Amendment.

Mr. Coulson

Will my right hon. and learned Friend answer one question? Will he accept the spirit of my Amendment if restricted to property acquired before 9th April this year?

The Attorney-General

I am sorry to disappoint my hon. Friend again, but the answer to that, I am afraid, is "No".

Mr. David James

My right hon. and learned Friend said the occasion was evasion, but the intention was to catch fixed assets. Why should a perfectly sensible and reasonable occasion, to which all subscribe, give rise to an intention to change the law of sixty-five years' standing?

The Attorney-General

I can answer that quite shortly. It really is an anomaly that when movables abroad are subject to Estate Duty, immovables are not. I said earlier in the debate that I could see no justification for the distinction. If a man has an estate here worth £ 20,000, when he dies he pays Estate Duty on the lot. If he has £ 10,000 here and £ 10,000 in movables abroad, he pays Estate Duty on the lot. But at the present time if he has £ 10,000 here and £ 10,000 in immovables abroad, he pays Estate Duty on £ 10,000 only. When we consider the equity and logic of this I cannot see any ground on which one can justify the retention of that exemption.

Mr. Geoffrey Hirst (Shipley)

I am very grateful to my right hon. and learned Friend for dealing with this matter with great courtesy and patience but not, I am afraid, with a frightful lot of sympathy. I am quite sure that in supporting my hon. Friend the Member for Nottingham, South (Mr. W. Clark) I am saying what he is thinking. Indeed, my name appears on the Amendment. We had in mind letting down fairly lightly those who hold such property abroad for genuine purposes. I think that we have heard a bit too much about Jersey mortgages. That is not the fundamental background against which to view these investments abroad.

This sort of investment has been something which has been accepted as perfectly reasonable by both sides of the Committee. The Amendment may be worded badly. It is difficult to word these things accurately. There would not be an awful lot of last-minute dodgers. In the main, they would be people with funds abroad invested for genuine purposes, and it would not be unreasonable to do something about them.

If my right hon. and learned Friend's argument that this procedure inter vivos will perpetuate this sort of concession is correct, then, quite frankly, these people can perpetuate it by entering into inter vivos arrangements. I am not, if I may respectfully say so, deeply impressed with that argument. I am afraid that my right hon. and learned Friend is being rather unsympathetic to the genuine person who has taken a great deal of risk. That the flow of capital overseas is going to be accentuated is quite the wrong idea.

If there is this business of Jersey mortgages going on, that must be stopped and it is perfectly reasonable that it should be stopped and in that the Government would have the united support of the Committee. But a large volume of opinion in the Committee and outside is worthy of more consideration by the Government and we are concerned with genuine investors who have been encouraged to invest abroad, who have taken these political risks and whose investments have hitherto been exempted for well-known and perfectly sound reasons acceptable over many years. Using the argument that something which we are trying to stop may be perpetuated if we try to meet those people, when the present abuse can be stopped by the ordinary law, is unkind, unreasonable and unjust.

The Attorney-General

I will reply very shortly to my hon. Friend the Member for Shipley (Mr. Hirst), who warmed up considerably as he proceeded with his speech. I make no objection to any of his observations. I am sorry that he thought that I was unsympathetic, but I was glad that he did not accuse me of being enamoured of Estate Duty. I should have resented that.

At the same time, none of the suggestions put forward so far has drawn a line to distinguish between the genuine investor in land and the one seeking tax evasion. When my hon. Friend speaks of a genuine investment in land, I would have thought that it would be rather hard to say which form of investment was more beneficial—the investment by the creation of industry in an overseas territory, the building of a factory, the starting of a company, running a company, the buying of shares. They may be very beneficial, but shares have been liable to Estate Duty throughout. I hope that my hon. Friend will not think that I am unsympathetic when I say that I find it difficult to see any real logical justification or justification in equity for continuing to exempt this one form of possession.

Mr. F. M. Bennett

Why wait ten years?

The Attorney-General

It can always he said of something that it should have been done before. It might have been done in 1894. The occasion has now arisen because of the abuses and when we are tackling abuses these things are brought to light. My right hon. and learned Friend is right in his decision to eliminate this anomaly as that will do something to restore equity not only between persons who own property in this country and those who own property overseas, but also between the owners of different forms of property.

Dr. Alan Glyn

My right hon. and learned Friend said that he could see no difference between a person who owned shares and a person who owned the reality. I should have thought that the difference was fundamental. Whereas the person who owns shares can readily dispose of them and they can be readily valued, the person with real property, when that property has been under someone else's jurisdiction, has property which it is difficult to value and difficult to realise.

Amendment negatived.

Question proposed,That the Clause stand part of the Bill.

Mr. Farr

Sir William, when your predecessor in the Chair very properly called me to order, I was saying that I thoroughly objected to Clauses 23 and 24.

The Chairman

Order. The hon. Member is going too far. We are discussing Clause 23.

Mr. Farr

I was going on to say that ten years ago, when the Labour Party was in office, it had had six years in which to pass legislation of this sort and that, for one reason and another, it had not seen fit to take any action. To me this piece of legislation smacks of Socialism.

I want to refer to the important part that private investment from this country is playing overseas at the moment. In 1961 total private investment overseas amounted to the staggering figure of no less than £357 million. In 1960 it was £336 million. In 1959 it was about £344 million. These figures include investments by oil companies and by insurance companies, and investment in stocks and shares, but the larger part of the sums refer to private investment in property of various sorts.

I know that my right hon. and learned Friend agrees that it is essential to encourage private investment from this country in overseas territories. There is at the moment no practical incentive for people to invest in movable property, but there is some slight incentive to do so in immovable property because it cannot be assessed for Estate Duty in this country, although it can be, and frequently is, levied in the overseas country in which the immovable property is situated.

Sir William, is it in order for the hon. Member for Cardiff, South-East (Mr. Callaghan) to mutter continually when an hon. Member is endeavouring to make a speech?

The Chairman

The Committee is aware that it is certainly for the better if speeches are not interrupted by too much conversation, but a little conversation is often our experience.

Mr. Farr

Before your predecessor called me to order, Sir William, I was saying that there was some advantage in having an interest in the subject under discussion, and I specifically want to point out that if a person in this country has an immovable asset overseas, for instance, a block of agricultural land such as I and other hon. Members on this side of the Committee have, or a business, or a factory, he has considerable difficulty in operating his business from a distance of 2,000 or 3,000 miles.

Right hon. and hon. Members who have a farm or a business in the wilds of Cornwall find it extremely difficult to run that farm or business if other duties demand their presence in London. It is slightly more difficult for those whose interests are in Scotland or Northern Ireland and who have to live in London. How much more difficult is it for someone who lives in London to run a business 5,000 miles away?

In addition to that discouragement from investing in immovable property overseas, there is the political risk to which reference has been made. The point was made that the value of property in Africa—and more particularly in Kenya—and Algeria—which is not entirely French—has plummetted to virtually rock bottom in recent years.

12.45 a.m.

To sum up, I have three points I wish to emphasise. First, I emphasise that anyone brave enough to invest in immovable property overseas under present conditions has a very difficult task to control and develop his enterprise and make something of it as conditions stand. Secondly, there is a danger, almost overnight, of rapid depreciation of what once was a fine going concern to practically nothing due to some political upset or explosion in the country where the immovable asset is situated. Thirdly, as my right hon. and learned Friend himself and other Treasury Ministers have said many times, there is a great necessity to encourage, not to discourage, all forms of property investment from this country in territories overseas.

It is not the task nor the duty of this Government to make it more difficult for people in this country to invest in our Commonwealth overseas. I remind them that our Commonwealth and former Empire was founded in the first place by private investors going there and investing their own individual skill and knowledge and capital. It is the free interchange and exchange of capital between the mother country and territories of our Commonwealth overseas which tend to form one of the strongest remaining links which hold the Commonwealth together.

Mr. Callaghan

I confess to a little impatience with some of the speeches we have heard. I hope that I shall be allowed that impatience because, with hon. Friends and with members of the Front Bench opposite, I have sat here all day. Sometimes this House reminds me of Soho in that it is very respectable in the day-time, but it should be seen after 10 o'clock at night.

To spend an hour and a half on an Amendment which I am willing to bet does not affect many of my constituents and, I am equally willing to bet, does not affect many of the constituents of the hon. Member for Harborough (Mr. Farr)—indeed only a tiny proportion—is enough to make one impatient. I am all in favour of a reasonable discussion about a matter which affects even only one person, but when I consider the disproportionate amount of time spent on this in comparison with other matters and when hon. Members present their own personal interest, there is reason for our impatience. If hon. Members opposite are not satisfied, then they have their remedy; they could divide against the Government, but they will not do that.

I am sorry if I interrupted the speech of the hon. Member. I did not mean to do that; that is the fault of the microphones rather than a fault of mine. I wish that hon. Members opposite had been here to help us with some of the other Amendments which would affect 30 million or 40 million instead of spending an interminable time on an Amendment to which the Government had made their opposition quite clear and on which their supporters clearly would not divide against their Government.

The Attorney-General

I do not want to say anything to encourage my hon. Friends to divide on this matter. We have had an interesting debate and the points have been somewhat complicated. I am personally glad to have had the opportunity of putting forward the reasons for the attitude of the Government and I take full note of What my hon. Friend has said.

I said to my hon. Friend the Member for Wimbledon (Sir C. Black) that I would write to him on a point he raised. If my hon. Friend the Member for Torquay (Mr. F. M. Bennett) would like to write about the point he raised, which does not arise on the actual content of the Clause—the effect of legislation overseas on remittances to this country—I shall certainly see that his inquiry is answered. I also take full note of what my hon. Friend the Member for Harborough (Mr. Farr) said. I endorse and support the interruption of the hon. Member for Cardiff, South-East (Mr. Callaghan) to this extent, that now, having discussed this matter very fully and in the light of what I said about considering the matter between now and Report, perhaps we could have this Clause and proceed with the next business.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clauses 24 to 27 ordered to stand part of the Bill.