HC Deb 07 July 1965 vol 715 cc1612-30
Mr. Deputy-Speaker

The next Amendment, No. 228, in the name of the hon. Member for Nottinghamshire, South (Mr. William Clark) in line 14, at end insert: Provided that for the purposes of this section any scheme or arrangement whereby the individuals carrying on a business or profession in partnership pay any pension or annuity to an individual who has retired from the partnership or to the widow or widower of an individual who has been a partner shall not be treated as a settlement if the Commissioners of Inland Revenue are satisfied—

  1. (a) that such pension or annuity first becomes payable on attainment by such individual of the age of 65 or any greater age or on earlier retirement through incapacity or on death of such individual; and
  2. (b) that the aggregate value of any benefits afforded by such a scheme or arrangement is reasonably comparable to the value of the benefits usually afforded by statutory 1613 superannuation schemes in similar circumstances or by such a scheme as would be approved by the Commissioners if the partnership was a company; and
  3. (c) that such pensions and annuities are not assignable or commutable in whole or in part; and
  4. (d) that in the case of any pension or annuity payable to such individual who shall retire at the age of 65 years of any greater age such individual was on 1st April 1956 over 50 years of age; and
  5. (e) no service of such individual otherwise than as sole proprietor of or as a partner in the business or profession shall be taken into account for the purposes of paragraph (b) of this proviso.
is not selected for separate debate, but may be discussed with Amendment No. 305.

Mr. MacDermot

I beg to move Amendment No. 305, in Page 7, line 25, at the end to insert: (3) Notwithstanding subsection (1) of this section, subsection (1) of the said section 415 shall not apply to income consisting of annual payments made—

  1. (a) under a partnership agreement, by a member of a partnership to or for the benefit of a person, or, if he is dead, the widow or dependants of a person, who has ceased to be a member of the partnership by retirement or death; or
  2. (b) by any person, in connection with the acquisition by him of the whole or part of a business, to or for the benefit of the person from whom it is acquired or, if he is dead, his widow or dependants;
being, in either case, payments made under a liability incurred for full consideration, or to income arising under a settlement made by one party to a marriage by way of provision for the other after the dissolution or annulment of the marriage or while they are separated under an order of a court or under a separation agreement, being income payable to or applicable for the benefit of that other party. This Amendment gives effect to an undertaking which I gave in Committee in our debate on Clause 12 when dealing with covenanted annual payments by the continuing members of a partnership to a retired partner. I pointed out at the time that if a concession was to be made—and I indicated that we were favourable to the idea—in logic, it should also be made to apply to payments by the purchaser of a business to the vendor and payments by a separated or divorced husband to his former wife.

The main purpose of Clause 12 is to deny Surtax relief to individuals who make payments under convenant to other individuals by way of bounty. It is not intended that the Clause should apply to annual payments which are in the nature of bona fide commercial payments made for full consideration in connection with a business on a partner's retirement, or the sale of a firm. Equally, similar considerations apply in the class of covenant between husband and wife to which I have referred. All three classes are covered by the Amendments which we are considering.

Mr. John H. Osborn (Sheffield, Hallam)

I thank the Financial Secretary for an Amendment, which will go a long way and have a great effect, though admittedly on very few people, and I refer, in particular, to professional people. It was for them that I moved an Amendment in Committee. I wrote to the Financial Secretary because there were various types of partnerships involving those on retirement or widows, and I find those concerns that were incorporated were able to make adequate "top-hat" provisions. Those that were not incorporated, particularly members of the Law Society, chartered accountants, surveyors, auctioneers and valuers, were at a disadvantage. This concession will go a long way to meet the problems of dependants of professional people.

I would be grateful if the Financial Secretary would endeavour to clarify certain specific points. In paragraph (a) the words "under a partnership agreement" are referred to. Lawyers with whom I have discussed it would like to delete the words "partnership agreement" and insert "partnership agreement or arrangement". They have stressed that in a professional partnership there is no question of full consideration applying, but there is a moral arrangement between partners with those who have retired, and widows and dependants of partners. I presume it is not the intention in the case of a partnership that that sort of arrangement should be formally written into a deed of partnership.

The assurance I ask for is: would the Board of Inland Revenue be satisfied with a loose arrangement of the kind I have tried to apply—a type of moral obligation which partners have accepted for those who retire? Perhaps the Financial Secretary would look at this again, because it is possible that there has been a slight misprint. I should have thought there were three sections here: (a) dealing with a partnership agreement, (b) dealing with the acquisition of a business, and (c) concerned with marriages. I would have liked item (c) inserted before "or to" in line 8 of the Amendment. All I would ask is: where does full consideration come into dealings with widows and dependants?

4.45 p.m.

My third point is that new subsection (3) is a negative one. It cancels Section 415 of the 1952 Income Tax Act, which is also a negative one. Do payments to retired partners or their widows and dependants have to be for seven years or more under a deed of covenant? Can they be for a shorter period, and do they have to be subject to a deed of covenant at all for this exemption?

My fourth point is: has the position been made adequately clear about the capital value of annuities purchased, particularly so far as Estate Duty is concerned? The Financial Secretary did write to me about this. He quoted the case of re Miller's Agreement, Uniacke v. Attorney-General, and he said, at the end of his letter: This case is generally followed, and unless the agreement were so worded as to give the widow an enforceable interest—which would not normally happen—as the law stands no question of estate duty would arise. He has given me that assurance in writing to satisfy a number of uncertainties, and I would be grateful if he could confirm it.

On the question of renewals of existing seven-year covenants, there is some need for legal clarification. There is no such thing as a partnership agreement with a widow or a dependant, as I understand it, and, as I have mentioned before, there is no question of full consideration.

I would like to quote an example. Partners A, B and C have an arrangement to look after the dependants or the widow of any one of them who is unfortunate. Partner C dies and, as I see it, it could well be that partners A, B and X agree to look after widow C. Eventually, one could get a situation where partners X, Y and Z looked after widow C. Can a new partnership deed provide for the continuation of the annuity to the retired person or widow?

One specific question which I was asked when I discussed this Amendment with those involved was this. Partners do accept a moral obligation to look after the widows of those who have retired and died. It is sometimes necessary to increase the annuity, particularly in the case of a widow of a partner who died many years ago. Is it in order, under this type of arrangement, to obtain Surtax relief on this increase?

I appreciate that these are searching questions, but this is the sort of clarification that will be required, and I shall be very grateful if the Financial Secretary will go as far as he can to let us know what is in his mind. It is a great concession, and has been welcomed. These are points of detail, and as much clarification as possible will be appreciated.

Mr. Graham Page (Crosby)

May I, too, express satisfaction at the Financial Secretary having given this very important concession to a case which was so strongly argued from this side in an earlier stage of the Bill. Had it not been conceded, as the Bill stood there would have been very considerable hardship in that the payments described in this Amendment would have been the income of the payers for the purpose of Surtax. In the previous debate, the Financial Secretary admitted that there was a case for the three types of payments mentioned in the Amendment to be restored to the exceptions in Section 415 of the Income Tax Act, 1952. The arguments had been directed towards the two types of payments in paragraphs (a) and (b) of the Amendment; that is to say, payments in respect of partnership agreements, and payments in respect of the acquisition of a business.

I am sure that the Financial Secretary would wish to acknowledge the assistance coming not only from hon. Members on this side, but also from the professions outside—particularly the Law Society—which made representations to him. On that previous occasion, the hon. and learned Gentleman produced, out of the blue it seemed, the third type of payment which appears in the Amendment, and I think that he will acknowledge the representations made to him by the Law Society in that respect, too.

Although my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) has referred to a number of points of drafting, I should have thought that the Amendment covered the subject adequately, and it is a great satisfaction to us that this concession has been made to arguments so strongly put from this side.

Mr. Charles Fletcher-Cooke (Darwen)

I should like to reinforce what has been said about "full consideration" as applied to widows or dependants. There may be no provision here, but if we have what way be regarded as a non-contributory pension—and particularly a non-contributory pension paid to a widow or dependant—it seems to me that there might be some danger in saying that it is not under a liability incurred for full consideration, and that there is an element of "bounty" in it—which was the word used by the Financial Secretary as being objectionable for reasons which we follow. If there is an element of bounty here—and I think that there is—we should not like the purpose to be vitiated by it.

If the hon. and learned Gentleman is to speak again, perhaps he will pay particular attention to what in this context the words "full consideration" mean, and what the word "bounty" means.

Mr. MacDermot

If I have the leave of the House to speak again, I can say that we have considered the points raised by hon. Members, and by the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) and the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) in particular. Perhaps I might deal with their remarks first.

As the hon. and learned Member surmised, the distinction we draw is between covenants that are in the nature of a bounty and covenants that are of the nature of business or commercial transactions. For that reason, we do not think it possible to extend the relief in the case of annual payments that are made ex gratia or for less than full consideration to the retiring partner or the dependants of a deceased partner.

I hasten to stress that this does not mean that the widow of a partner is left out of these provisions. She is included, provided she is provided for in the original agreement. If no provision is made, say, at the time of the retirement of a partner that the covenant shall inure to the benefit of the widow, and he then dies, and the surviving partners decide, in effect, out of their bounty, which is what it is, to make provision for the widow, it does not fall within the class of case with which we are concerned.

The reason for our preserving the distinction is that it would not be possible for us to make a concession in this type of case wthout undermining the Clause in other cases. It could then extend to ex gratia payments made not only to a former partner or his widow, but to other persons who might have been connected with him—an instance is a former servant. It could be extended also, and could be abused in various ways. One can imagine the difficulties that would flow, for example, in the not infrequent case where a father and son go into partnership together. A lack of the distinction would open up an easy way in such a case for the son to get a Surtax reduction for an annuity paid to his father ex gratia which, in the normal way, would be disallowable for Surtax purposes. We must, therefore, preserve the distinction that is contained in the present wording of the Amendment.

The effect is that renewals of seven-year covenants, as such, will not apply and, again, there is no need to do so, because it is a perfectly normal provision in such covenants to make them run for life if that is what is desired. If the partners do not agree to that, but only to a covenant for a limited period and there is a renewal later, that is bounty. It is an ex gratia payment.

I confirm the passage which the hon. Member for Hallam read from my letter to him that that is our view of the Estate Duty position, and the Revenue will act accordingly. I may not have covered one or two points in the numerous questions that the hon. Gentleman put to me, but perhaps he will allow me to study carefully what he said. I can reply then with more accuracy than I think I could now. I thank the hon. Member for Crosby (Mr. Graham Page) for what he said about the Amendment, and gladly respond to his invitation to acknowledge our debt to the assistance we have had in these matters from the Law Society and other professional bodies.

Mr. William Clark (Nottingham, South)

It would be churlish for anyone on this side of the House not to welcome this Amendment, but I know that the Financial Secretary will agree that it was sparked off by the assiduous work of my right hon. and hon. Friends—

Mr. MacDermot

And the Law Society.

Mr. Clark

In addition to that of the Law Society. The spirit and principle of the Amendment was raised by us in Committee. Even for the Committee stage the Chancellor put down well over 260 Amendments and has put down well over 200 Amendments for the Report stage. Amendments have littered the Notice Paper because of the initiative shown on this side.

I am sure that the Financial Secretary will agree that when, in a partnership agreement, provision is made for the dependants or the widow of a retiring partner, it is essential for the partners to cover every eventuality. I am sure that I am right—and perhaps the hon. and

(8) This section shall apply in relation to the provision of a gift as it applies in relation to the provision of entertainment, except that it shall not by virtue of this subsection apply in relation to the provision for any person of a gift consisting of an article incorporating a conspicuous advertisement for the donor, being an article—
(a) which is not food, drink, tobacco or a token or voucher exchangeable for goods; and
b) the cost of which to the donor, taken together with the cost to him of any other such articles given by him to that person in the same year, does not exceed £1.

and also the Opposition Amendment to Amendment No. 315 in line 8, at end add "exclusive of purchase tax".

Mr. Deputy-Speaker

If the House has no objection.

Mr. Diamond

The purpose of the Amendment and Amendment No. 315 is to provide exemption from the restriction upon which the Bill at present insists in regard to entertainment expenses. The Committee decided that entertainment expenses shall not be allowed except so far as entertainment of foreign buyers is concerned, but it was, of course, always understood that normal advertising expenditure in the ordinary way would be an allowable expense. However, there is a field between normal advertising expenditure and entertainment expenditure which requires to be defined.

There was a discussion in Committee when it was sought that gifts up to £3 in value should be allowed for Income learned Gentleman will confirm by a nod that I am—in believing that if, in the original partnership agreement for the retired partner, there is provision that the income can go for as many years, or for the life of the widow, it can be varied upwards. That, I think, would take it out of the definition of bounty.

We acknowledge the justice that is now being done, particularly to professional partnerships, but I must again remind the House that this concession was squeezed out of the Government by hon. Members on this side.

Amendment agreed to.

5.0 p.m.

The Chief Secretary to the Treasury (Mr. John Diamond)

I beg to move Amendment No. 9, in page 9, line 29, to leave out "and gifts".

Perhaps it would be convenient to discuss with this Amendment the Government's Amendment No. 315, in page 10, line 13, at end insert:

Tax purposes, but it was demonstrated that that could be an alternative way of providing entertainment expenditure in the form of bottles of whisky and so on. We did not want to stop trade advertising in the various ways in which it is pursued so long as it did not conflict with what is normally allowed for entertainment expenses.

The effect of these Amendments is to provide an exception to the general disallowance where the gift consists of advertising material for the donor other than, food, drink, tobacco or a token or voucher exchangeable for goods subject to the condition that the aggregate value of the gifts made by any donor should not exceed £1.

This would mean that gifts of calendars, trays, diaries and the like, stamped with the name of the donor and being clear advertisements and not of such value that added to another gift of the same donee would amount to more than £1, would be allowable for tax purposes. The Opposition Amendment to Amendment No. 315 requires that the £1 should be regarded as exclusive of Purchase Tax. This the Government would not be able to recommend to the House because it would introduce a complication which is much too difficult and unnecessary in these circumstances.

The tax rates, in most cases, will be 25 per cent. Corkscrews conjure up an acceptable form of advertising gift not quite entertainment expenditure, but not wholly irrelevant thereto, and on them the rate of tax would be 10 per cent. It would be very difficult for those involved in this business to know what rate of tax is involved or to cope with a situation if the rate of tax was altered, as it might be from time to time. If the amount of £1 were inclusive of Purchase Tax, this would be the right way to deal with the altered situation.

After full consideration with the two main trade associations concerned, the Government decided that it was right and it would be quite convenient for £1 inclusive of Purchase Tax to be the limit. Diaries and calendars are normally of a maximum price of 15s. and the other items are of small value. The figure of £1 is not unduly restrictive but the complication of making this free of Purchase Tax would be difficult. I hope that the Amendment I have moved, associated with Amendment No. 315, will be acceptable to the House.

Mr. William Clark

As the Chief Secretary said, this matter was raised in Committee and was given a very full hearing. The object of the Bill originally was to exclude all sorts of gifts. We now have an extraordinarily complicated position which should be brought to the attention of the House. First, the Government say in their original Bill that no gift should be allowable. Then the Chancellor, after certain representations and following the debate in Committee, tabled an Amendment excluding calendars and diaries. I believe that that Amendment was tabled last Thursday. On Friday, the Opposition tabled an Amendment to the Amendment cutting out calendars and diaries and asking that the whole range of gifts used in an advertising sense should be excluded from the imposition on entertainment expenses.

On Tuesday this week, the Government had a third thought and tabled Amendment No. 315. I understand that for one reason or another various things happened yesterday, and that but for that it would have been possible to have reached this Clause yesterday, or in the early hours of this morning. I shall not go into the reasons why we did not go so far as Clause 14. The Government thought once and were wrong. They then listened to my hon. Friends putting forward powerful arguments and very valid points.

The Government thought again and excluded calendars and diaries. Then they had another think and yesterday put down their Amendment so that the Opposition are precluded from tabling an Amendment which could have been debated in other circumstances yesterday. Short of moving a manuscript Amendment, the Opposition are deprived of putting forward another Amendment on this question.

The Amendment to Amendment No. 315 is a starred Amendment. It is tabled to draw attention to the fact that in this whole matter the Government have acted in a hasty and ill-considered manner. One difference between our Amendment to the Chancellor's first Amendment and Amendment No. 315 is that the Chancellor now says that if in one year the various gifts made to customers or potential customers are added together the value must not exceed £1. A second difference is the exclusion of Purchase Tax. Obviously, there is a complication if one excludes Purchase Tax, but I do not think it a valid argument to say that it is so complicated that it cannot be accepted.

On the question whether the amount should be £1 or not per year, we should compare what other countries do. Other countries have similar restrictions in their fiscal legislation about entertainment gifts. In America, one is entitled to provide a gift of up to 4 dollars, which is well above £1. In Germany, one is able to make gifts in an advertising sense of up to £9 a year. In this country, the Government say it must be £1. If there were so much complication the Chancellor could have made the amount 22s. 6d. to cover Purchase Tax. The whole of this Bill in Committee and on Report has shown that time and time again the Government make three or four attempts at the same point and never until they are pressed by my hon. Friends do they seem to see sense.

Of course, we welcome half a loaf as being better than no bread, but the Government are being typically niggardly about this matter. It is typical of the niggardliness of the Socialist Government that the Chief Secretary says proudly, "You can now give a corkscrew as a gift" and that he is taking away the bottle. This is typical Socialism. "You can have the good things in life, but not today; we shall show you how to open them but we will not give you anything to open". If the Chief Secretary speaks again, I am sure that he will pay tribute to the work put into this problem by my hon. Friends and will admit that the Government have again yielded to pressure and constructive criticism from this side of the House.

Mr. Norman Miscampbell (Blackpool, North)

One can at least welcome this Amendment. We have had two or three goes at this problem. It seems incredible in view of what would have been suffered under the original ideas put forward by the Government that a change was not made long before. Now, at last, those employed in a considerable industry in my constituency will be relieved of what appeared to be a heavy burden. May I briefly show how important the Amendment is. I can give some figures relating to a firm in my constituency called Starline Business Gifts. Eighty per cent. of its business would have been affected by the Government's original proposals. The first Amendment relieved about 20 per cent. of its business. Of the remaining business, 50 per cent. is now relieved of the impost because of the Government's change of mind and the decision to allow any form of gift advertising.

The giving of ashtrays and ballpoint pens with the names of the donors on them is perhaps the most effective way of making the small trader remember the donor's name. It is as though he was given a card which he had to use and see every day. As such, this is the most legitimate form of advertising.

I did not know until I looked into the matter that almost 100 per cent. of the holders of motor vehicle licences which are stuck on car windscreens are produced in Blackpool. All of these holders carry the name of the person or firm who sells the car to the purchaser. This is also a very legitimate form of advertising, and a very effective one.

On behalf of the 190 people employed in the Blackpool firm I welcome the Amendment. It appears that common sense has at last triumphed. However, I wonder whether the term "common sense" can be applied to the last two lines of the Amendment. I can understand the Government's desire to limit the gift to £1. If the House seeks to pass legislation which is enforceable, it is not practicable to say, "But you may give them only £1 worth of goods in any one year".

In practice, gifts of this sort are handed out by tradesmen moving round the town or the county. It will be almost impossible for them to say, "You had an ashtray last week. You are not entitled to a ballpoint pen next week". In any case, it would be sufficient if the total value of the gift were limited to under £1. There is a limit to the average human being's appetite for ballpoint pens, ashtrays, and holders for motor vehicle tax certificates. With these cautionary words, the Amendment is to be welcomed.

Mr. Donald Box (Cardiff, North)

I seem to remember that when we discussed this subject in Committee the Chief Secretary had some difficulty in distinguishing between a bottle of whisky and a diary. This was no doubt due to the late hour at which we discussed the matter. Like my hon. Friend the Member for Blackpool, North (Mr. Miscampbell), I welcome the Amendment, because it seems that in some corners of the Government at any rate common sense sometimes prevails. However, I have reservations, because I want to take up one word in the Amendment as proposed.

I refer to the word "conspicuous" qualifying the word "advertisement". We are entitled to ask the Chief Secretary what he means by "conspicuous". It is obviously the Government's intention that the advertiser's name should appear on the gift, but it can appear in various sizes and various degrees of prominence.

May I show the House an example which I produced at about 4.30 in the morning in Committee and which did not cause much stir then? I do not think many people would dispute that what I now hold in my hand is a prominent advertisement and it would, therefore, seem to fall within the terms of the Amendment. I now hold in my hand a diary on which there is a very discreet advertisement. I have here a case designed to contain a cheque book; it has on it the name of one of the Big Five banks which is even more difficult to discern. In fact, the name can hardly be seen.

This will be a difficult Amendment for inspectors of taxes to interpret. One of the fears I have about the Bill is that far too much discretion is being placed in the hands of inspectors of taxes. It is not fair to them, nor is it fair on taxpayers, that they should be placed at the mercy of the discretion of inspectors of taxes in various parts of the country whose views may differ considerably.

That is all I want to say, except to express the rather pious hope that in regard to the word "conspicuous" the Chief Secretary will allow common sense to prevail once more and give us his interpretation of how this part of the Amendment will apply in practice.

5.15 p.m.

Mr. Geoffrey Hirst (Shipley)

As the Member who moved the Amendment in Committee which gave rise to this discussion, I want to say something about it. I made two speeches on the subject in Committee, so I will not go into the merits of the argument again, because they are well known.

I agree with my hon. Friend the Member for Nottingham, South (Mr. William Clark) that the Government think many times about some things. However, there are times when they do not think at all. This matter started by the Government not thinking at all, but it ended by them thinking many times in a rather confusing way. The Amendment I moved in Committee was tabled by my hon. Friend the Member for Barry (Mr. Gower). I took it on late at night without having had much notice. I managed to put my case over rather better than the Government have done, though they have had several weeks' notice. The Government could have had this discussion with the trade earlier—I know that to a certain extent they did have it—and thereby have saved themselves a good deal of trouble.

The Government now argue that if the figure was stipulated to be exclusive of Purchase Tax the matter would be made very difficult, because of the varying rates. They argue that the right way to go about it would be to set a limit on the gift of 25s. They could at that stage have done all the thrice thinking which they have been doing since, more or less huffing themselves at a Treasury game of halma.

It is very niggardly of the Government to start arguing about the Purchase Tax question at this stage, when we cannot do much about it. I said in my concluding speech in Committee, with that graciousness which comes to me at four o'clock in the morning, that the Government would look incredibly stupid if they did not do something before Report. My prognostication has brought off a double. The Government have managed to be incredibly stupid and they have done something before Report. I did not expect that when I made that remark.

The Government have done something, even if they have got the House into a muddle on this matter. However, it will be a considerable help to the trades concerned. I cannot think that the Chief Secretary will expect too much praise—only a little; I am giving a little today—in a matter like this, which could have been cleared up in about half an hour's conversation with the trade. After I spoke to my hon. Friend the Member for Barry, I spent three minutes making a trunk call and waking somebody in the middle of the night. On S.T.D.—it worked on that occasion—I got the answer in about three minutes, which I thought was rather good. Armed with that answer, I made two substantial speeches in Committee. Therefore, I feel that the Government might have done more about it.

I still think that in one way or another they should meet the case we seek to make on the starred Amendment to their Amendment. I do not know how it can be done at this stage. That is one of the difficulties we face on Finance Bills. They should think the matter out properly and not table one Amendment after another and then oppose an Opposition Amendment with the minimum of consultation. That is a peculiar way of going on. Although they have substantially met the point, they will not get more than five marks out of 10 from me on this occasion.

Mr. J. H. Osborn

I have in my constituency a firm which manufactures gifts such as calendars, and this Amendment will make a vast difference to its business. This Clause could have wiped out a perfectly legitimate business of making gifts.

There is sentiment in business, and, but for this Amendment, the Clause would have wiped out a lot of sentiment which counts for much. I have here a pen bearing the name of an American company on it. I visited that company 18 months ago, with an inadequate pen. That company is a customer of mine. This is the sort of gift which will register in my mind, as it will register in the minds of hundreds of people. It is the type of gift that counts. Those who have to decide what gifts to give and when to give them can get a headache if they also have to decide whether these gifts are part of an advertising campaign or whether they are designed to cement friendship.

These gifts are not only for top executives. I have a typical gift here. It has my name on it, and, in fact, I have an interest in it. It is the sort of gift which goes to the man on the shop floor. It is a ruler. It is a form of legitimate advertising. Whether the name on it is conspicuous or not is another matter. The same might apply to a pocket knife. This is the sort of gift which is acceptable by people on the shop floor. It is reasonable that this Amendment should be accepted for it permits this sort of article to be given and it cements a friendship between the seller and the man who uses industrial products.

The only question that I raise is whether the value of these gifts is sufficiently high. At this point I am moving from the shop floor to the higher levels. Yesterday someone who is much concerned with the home trade pointed out that those who try to invade our home market by importing from overseas or exporting from overseas into this country usually have to be in the position of entertaining and giving gifts which have considerably greater impact than our own home salesmen can give. A person who is trying to serve the home market may well find that gifts and advertising gimmicks from overseas are so much better than our own, and it is regrettable that the proposal to extend the value of such gifts was not accepted. The present figure is much too low, but no doubt we can deal with that point on some future occasion.

Mr. Raymond Gower (Barry)

This matter has had a most astonishing history. When, together with my hon. Friends, I put down the original Amendment which referred merely to diaries and calendars, I recalled the despondency expressed by so many people connected with the printing and preparation of these articles. Indeed, Dr. King, the Government, by their attitude and their unwillingness at that stage to accept that narrow Amendment, gave the impression that they were opposed to the whole idea. As these diaries and calendars are printed so long in advance, tremendous anxiety was created in the printing works and in the firms which place orders for these articles a long way ahead. Dr. King, I can reveal that even among the employees in one or two firms which I consulted there was a good deal of anxiety about this matter—

Mr. Deputy-Speaker (Dr. King)

Order. The hon. Member has been in the House for a long time. He must know that we are not in Committee, and he must address the Chair properly.

Mr. Gower

I apologise, Mr. Deputy-Speaker, for addressing you incorrectly.

As I was saying, there was a good deal of anxiety among the employees. In due course a new Clause was put down by the Government and we moved an Amendment to extend it to certain other named articles, and again we received no intimation that this was at all acceptable to the Government. The ridiculous nature of the proposal at that time was that it would have permitted a calendar or a diary but it would not have permitted an address book or an engagement book or something of similar size and value.

Mr. Hirst

Nor an ashtray.

Mr. Gower

As my hon. Friend the Member for Shipley (Mr. Hirst) points out, it would not have permitted an ashtray—nor a ballpoint pen. Apparently yesterday the Government decided that they were prepared to put down a reasonable Amendment. However, I join with my hon. Friend the Member for Cardiff, North (Mr. Box) in drawing attention to the word "conspicuous". I do not think it should be included. Surely one does not expect the name of the advertiser on an advertising diary to be particularly conspicuous. One expects the advertising to be done in a rather dignified manner. Dignity rather than prominence is usually the feature for which we look. A conspicuous advertisement might be most undignified and reflect discredit on the person who prepared it. Therefore, I hope the Chief Secretary in replying will define this term "conspicuous", or, if possible, move a manuscript Amendment to delete it.

In addition, I hope the right hon. Gentleman will address himself to this further point. As my hon. Friend the Member for Blackpool, North (Mr. Miscampbell) observed, this wording is ridiculously tight in that it cannot reasonably be applied. With the greatest care nobody could ensure that two of these articles might not from inadvertence go to the same donee, and the wording therefore seems unnecessary.

Mr. Diamond

With your leave, Mr. Deputy-Speaker, and that of the House, I should like to reply. I have been asked by two lawyers to say what is the meaning of the word "conspicuous". I am advised that the meaning is conspicuous. A business man seeking to give an advertising gift would not wish the name to be so discreetly hidden as incapable of being read except by turning the article upside down and using a magnifying glass. Therefore, it is perfectly reasonable that the word "conspicuous" should be in the Clause to make clear that what we are talking about are advertising gifts and not gifts.

Therefore, as every hon. Member has in his own way welcomed the Clause and as, in particular, I have been given something which I never thought I should live to receive—five marks out of 10 from the hon. Member for Shipley (Mr. Hirst)—I call this my day of days.

Amendment agreed to.

Further Amendment made: In page 10, line 13, at end insert: (8) This section shall apply in relation to the provision of a gift as it applies in relation to the provision of entertainment, except that it shall not by virtue of this subsection apply in relation to the provision for any person of a gift consisting of an article incorporating a conspicuous advertisement for the donor, being an article—

  1. (a) which is not food, drink, tobacco or a token or voucher exchangeable for goods; and
  2. (b) the cost of which to the donor, taken together with the cost to him of any other such articles given by him to that person in in the same year, does not exceed £1.—[Mr. Diamond.]