HC Deb 08 December 1964 vol 703 cc1322-4
The Chancellor of the Exchequer (Mr. James Callaghan)

With permission, Mr. Speaker, I will now make a short statement.

As the House will recall, I promised that as soon as I was able to do so I would provide further details of my proposals for a corporation tax and a capital gains tax.

I am accordingly circulating in the OFFICIAL REPORT, in reply to a Written Question on the Order Paper today, information about certain features of the proposals which, as at present advised, I have it in mind to put before Parliament.

Mr. Maudling

We cannot comment until we see the details, but is the Chancellor aware that, while everyone will welcome anything designed to rectify the damage done by instant Government in this field, we on this side are very doubtful, once again, about the method used to propagate this information? Unless I am wrong, it seems that the first that all hon. Members except one will hear of this will be in the newspapers.

Mr. Callaghan

I do not know that this is very "instant", because the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) indicated in his Budget speeches in 1961 and 1962 that he was considering introducing this tax to get rid of the Income Tax and Profits Tax—[Interruption.] I have looked it up this morning.

I think that there is a very real desire for information. I am, therefore, arranging to put copies in the Library, and also, at four o'clock, copies of the Written Answer will be available in the Vote Office, so that hon. Members generally can see what is proposed.

Mr. Geoffrey Lloyd

Will the Chancellor bear in mind that on the occasions referred to, my right hon. and learned Friend the Member for Wirrall (Mr. Selwyn Lloyd) indicated consideration, but the right hon. Gentleman himself in his recent speech indicated intention, which is very different? Whilst appreciating that the right hon. Gentleman's intention now is to restore the confidence destroyed by the Government themselves, will he bear in mind that confidence will only be properly revived if the Government make a forthright declaration that they appreciate the constructive rôle of rising profits in a competitive economy, and give up the practice of whispering one thing in the luncheon rooms in the City and saying something different to their hon. Friends upstairs?

Mr. Callaghan

I think that three years is time enough for consideration of this particular reform, which is long overdue. I must say that if ever I venture into the luncheon rooms in the City I trip over almost every hon. Member opposite.

Mr. Stratton Mills

Is the Chancellor aware that a Royal Commission has examined the idea of a corporation tax? Is he not aware of the danger of rushing into this method of taxation without having given it proper thought? Would be consider referring this scheme to a high-ranking representative committee, for it to examine the implications and report to him before the Budget?

Mr. Callaghan

I am most anxious that this scheme should fit the needs of modern industrial society, and I think that after ten years of consideration there is really very little that is not known for and against the scheme. The reason for my making this statement today, giving a general outline of intentions, is to enable those who will be principally affected to make representations to the Board of Inland Revenue, which will be fully considered in advance of legislation being introduced next April.

Mr. Duffy

Is my right hon. Friend aware that hon. Members can only decide, after they have had a chance of looking at the details of the statement, whether anxiety was rather unnecessarily raised and confidence rather unnecessarily disturbed if his proposals are immoderate, if his proposals are out of line with existing practice elsewhere, and if we decide that his proposals are not such as could have been anticipated with a little intelligence?

Mr. Callaghan

I am much obliged to my hon. Friend. I think that a great deal of anxiety was caused because some people—I do not know who—did not read what I said in my Budget speech. If they had read what I then said, there would have been very little doubt in anyone's mind about what I intended.

Mr. Selwyn Lloyd

In view of what the right hon. Gentleman has said about my statements, will he see that his right hon. and hon. Friends read again column 803 of HANSARD for 17th April, 1961, and column 971 of HANSARD of 9th April, 1962?