HC Deb 12 July 1965 vol 716 cc162-84
Mr. Peter Emery (Reading)

I beg to move Amendment No. 289, Clause 79, in page 159, line 21, to leave out "four fifths" and to insert "three-fifths".

We move to the Corporation Tax overseas. The Amendment, although short, is technical and involved. The Government's policy so far has meant re-writing the transitional relief, and this has been after considerable pressure. We have welcomed it as far as it has gone but it means that at certain times there is bound to be a dividend freeze if certain companies are not to lose the amount of relief which the Bill would allow. It is to deal specifically with a dividend freeze which might last as long as seven years that the Amendment has been moved. The position at the moment is that in order to recompense for the considerable loss of double taxation relief after the introduction of Corporation Tax for companies trading overseas, the Government have given this relief.

Two set principles have arisen for the Government. The first is the overall principle that they wish to see less investment overseas. I do not intend to go into that in detail because we have discussed it already. They want to see greater investment in the United Kingdom.

Secondly, a point affecting the Amendment, we have the proposal that relief should be given. We believe that "relief" is not the right word and that it should be allowed as a matter of right to companies whose dividend distribution would be unfairly hit by the Government's policy. So far that is quite good, and there is no criticism, but the story must be taken two steps further. Let us take a company Z which follows the Chancellor's special policy, decreases its overseas investment and turns some of its investable money into investment in this country. As a successful company, according to the Chancellor's own statement at the Dispatch Box, its returns will be greater than they would have been overseas. We come to the last stage of this company; that if it sees fit to distribute any of these greater returns—indeed, if it follows the policy set by the Chancellor—then, if its dividends are greater than the base calculation, that company is immediately penalised for doing what the Treasury has urged. Its relief allowed under the Clause as drafted would immediately be decreased.

It is fair to say, therefore, that for every £ extra that a company distributes over its base year calculation then, from the point of view of relief, it will have to pay £1 16s.; and this is the distributable income after Corporation Tax and withholding tax. This seems to be a particular hardship and something of a nonsense.

Several things will result and they cannot be to the benefit of the Treasury, the country or the company. It is for these reasons that the Amendment might alleviate the position. The first is that it will stop any company in this position trading overseas from increasing its dividends over this seven-year period, because it will immediately lose part of this relief. If the relief is considerable, it will be the normal trading practice of the company not to increase its trading dividends so as not to avoid losing the relief.

This is where we come to the dividend freeze over the seven-year period. It would mean that successful companies would be likely to hold unusually large cash balances over this seven-year period. Large amounts of cash would be held in balance, which is something the Treasury and companies would not wish to happen. The strangest thing is that it is only the really progressive, go-ahead and successful companies, doing precisely what the Chancellor is urging companies to do, which would be so penalised, which seems to be a complete nonsense.

The transitional relief—although we are not criticising it in this context—makes the position worse in the way the Chancellor has organised it, because instead of a dividend freeze over five years it is likely to be extended over seven years. This is an even greater reason for us returning to this point and for our attempting to meet some of the problems which I have outlined.

The Amendment does not go as far as we originally urged on the Government. We originally urged that the four-fifths position should be brought to a two-fifths position. That suggestion was rejected by the Government and we are now suggesting a three-fifths position in an attempt to get agreement in the centre, as it were. In other words, whereas the Government have said that for every £ distributed over the base year position this would cost £1 16s., we are urging that instead of it costing £1 8s., as we originally suggested, it should be £1 12s. There can be no doubt that this is a difficult problem. Indeed, the Chancellor himself said: Then there is the question of the dividend freeze. Here is involved a choice between being fair to the company and being fair to the nation … I must consider carefully when I am helping shareholders … that I do not give away too much of the taxpayers' money in this regard. I have to try to hold the balance". That was a reasonable statement, but I do not see how it applies to this situation. If there is to be a dividend freeze the same amount of relief money will be given and we will not have the distribution for seven years.

9.45 p.m.

If, therefore, it will not affect the amount given in relief, why will the Chancellor not attempt to get the money distributed and get companies to think it worth while to do exactly what he wants—invest at home, and be able to show their shareholders that the policy is working? No company will want to invest over a period as long as seven years and not be able to show the shareholders that the policy is working. I therefore do not think that this is a matter of holding the balance between the shareholders and the nation's interests. It is only sensible to try to ensure that there are not these large-scale balances. I suggest that if the Chancellor does not accept Amendments like this one, or Amendment No. 344 in Clause 79, he will not obtain the overall policy he seeks of having more investment at home than overseas.

I have just quoted from the Chancellor's remarks. In the next column he said: My view is, after the conclusion of 14 hours of debate on this aspect, that overseas investment will continue on a very substantial scale. I have no doubt of that. I am reinforced in that by the views of the chairmen of companies who have been in touch with me."—[OFFICIAL REPORT, 22nd June, 1965; Vol. 714, c. 1571–2.] Since that statement was made the Chancellor has been challenged both in this House and outside it to reveal his sources. The right place to do so would seem to be in dealing with an Amendment which we think will go some way to assist the policy the Chancellor wants and, at the same time, assist companies.

Mr. MacDermot

In a short and forceful speech the hon. Member for Reading (Mr. Peter Emery) has again raised some questions that were discussed very fully in Committee. In many ways his argument appeared to have been addressed both to this Amendment and to Amendment No. 344 in Clause 79, although we are not discussing the two together. In a sense, some of his arguments would be more relevant to the next Amendment.

The Opposition's argument ignores the real purpose of the transitional overspill relief, and to some extent attributes to my right hon. Friend motives which have not guided him in framing the Bill. The purpose of this transitional relief is to assist those companies trading overseas in countries with a high rate of company taxation which, as a result of the introduction of the Corporation Tax here, would, during the interim period, be compelled either to cut back severely in their plough-back of profits or cut their dividends so severely that it might in some cases cause hardship to their shareholders.

That is the object of the relief, and its purpose is to meet the case that was made widely that, without relief of this kind, companies would be unable to maintain their dividends. I would stress that the relief that has been given in this respect is very considerable, and the further concessions that were made in Committee were probably, in terms of cost, more expensive than almost all the other concessions put together. It is a very substantial relief indeed. The ground then shifts, and we have the argument about the dividend freeze.

We must face the fact that there is only one long-term solution that can enable these companies to absorb the impact in the change in the system, and that is growth. It is to tide them over the period and to extend that period—it has been extended from five to seven years—that they are given the opportunity to tide over this impact of the new tax system. In so far as they achieve the growth they are not in need of this interim relief. Nevertheless, so long as they plough back increased profits they will continue to enjoy the benefit of the relief. It is this which is now characterised as a dividend freeze. Only if they increase their dividend distribution will relief be reduced by four-fifths of the increase in the distributions.

The Opposition case, as argued in Committee and today, is based on the assumption that it is the intention of the Chancellor in all cases to induce these companies which are trading overseas to disinvest abroad and bring their money back to invest it in this country. I remind the House, if it is necessary—it was contained in one of the passages of the Chancellor's speeches read by the hon. Member—that my right hon. Friend made it abundantly clear that it is his belief and intention that our investments overseas should continue to grow and we should continue to be net investors overseas.

One of the main purposes of these tax changes in their effect on overseas investment is to bring this into balance so that we do not invest overseas more than we can afford. That does not mean that we are trying to make every overseas company bring its profits over here. It is a matter for judgment by the companies concerned, but, if they can extend their business overseas given the assistance of this relief, that is something perfectly consistent with the whole framework of my right hon. Friend's policy. We cannot accept the hypothesis upon which these Amendments are based.

With reference to the four-fifths, as I stated in Committee in strict logic it might be quite defensible to say that the whole amount by which dividends are increased should go in reduction of the relief, but it was thought right that there should be some margin and some room left. Consequently, the four-fifths was decided upon. We have had a number of Opposition Amendments. One which was put on the Notice Paper and was not selected was that there should be no reduction at all. One moved in Committee said that there should be two-fifths and now we have this Amendment which says the amount should be three-fifths. Bearing in mind the general purpose of the transitional relief as I have stated it, we feel that four-fifths can be regarded as fair.

In Committee, I was asked what the cost of a further reduction from four-fifths would be. I was not in a position then, and I must tell the House that I am not in a position now, to give a reliable estimate, because this is not a matter susceptible to the kind of calculation on which one can usefully put a figure. I do not want to exaggerate the matter, or to suggest that any very large sums are involved running into many millions of pounds as there were in some Amendments we discussed earlier today, but in some companies this could represent very substantial figures. It is not on that basis that I advise the House to

reject the Amendment, but on the basis of the principle underlying the transitional relief.

Mr. Emery

I speak again by leave of the House. I did not find the Financial Secretary's reply particularly convincing. There is no doubt that we shall not be able to see the effect until we see what happens in future. It is something which will affect companies on their reinvestment, and, as the Financial Secretary is unable to give us estimates, I advise my hon. Friends not to press this Amendment to a Division, because obviously the position will have to be re-examined in the light of events in the next two or three years.

Mr. Lubbock

This is the second occasion this evening on which the Opposition have failed to press to a Division a matter which I consider to be of the utmost importance. I am at a loss to understand why they are being so squeamish in their treatment of these objectionable provisions.

I was entirely dissatisfied with the Financial Secretary's answer. He failed to deal with the case of the overseas company which has ploughed a lot of money into development. I am thinking particularly of a mining company which, over a period of years, has invested in exploration in an overseas territory. It is only now beginning to receive any benefit from that investment. Hitherto it would have been able to pay dividends, but it is now going to be penalised by this Finance Bill—a position the board could not have foreseen at the time it decided to invest large sums overseas.

I fear that the Clause will deter large mining companies in particular from investing at the same rate overseas as they have done in the past, and that this will do immense damage to the help we have given hitherto to developing countries, particularly in the Commonwealth.

Therefore, whatever the hon. Member for Reading (Mr. Peter Emery) may say, this Amendment should be pressed to a Division.

Question put, That "four-fifths" stand part of the Bill:—

The House divided: Ayes 271, Noes 251.

Division No. 250.] AYES [9.57 p.m.
Abse, Leo Alldritt, Walter Bagier, Gordon A. T.
Albu, Austen Atkinson, Norman Barnett, Joel
Allaun, Frank (Salford, E.) Bacon, Miss Alice Baxter, William
Beaney, Alan Harper, Joseph Orbach, Maurice
Bellenger, Rt. Hn. F. J. Harrison, Walter (Wakefield) Orme, Stanley
Bence, Cyril Hart, Mrs. Judith Oswald, Thomas
Benn, Rt. Hn. Anthony Wedgwood Hattersley, Roy Owen, Will
Bennett, J. (Glasgow, Bridgeton) Hayman, F. H. Padley, Walter
Binns, John Hazell, Bert Page, Derek (King's Lynn)
Bishop, E. S. Henderson, Rt. Hn. Arthur Paget, R. T.
Blackburn, F. Herbison, Rt. Hn. Margaret Palmer, Arthur
Blenkinsop, Arthur Hobden, Dennis (Brighton, K'town) Pannell, Rt. Hn. Charles
Boston, T. G. Holman, Percy Pargiter, G. A.
Bottomley, Rt. Hn. Arthur Houghton, Rt. Hn. Douglas Park, Trevor (Derbyshire, S.E.)
Bowden, Rt. Hn. H. W. (Leics S.W.) Howarth, Harry (Wellingborough) Parker, John
Boyden, James Howarth, Robert L. (Bolton, E.) Parkin, B. T.
Braddock, Mrs. E. M. Howell, Denis (Small Heath) Pavitt, Laurence
Bradley, Tom Howie, W. Pearson, Arthur (Pontypridd)
Bray, Dr. Jeremy Hoy, James Pentland, Norman
Broughton, Dr. A. D. D. Hughes, Cledwyn (Anglesey) Perry, Ernest G.
Brown, Hugh D. (Glasgow, Provan) Hughes, Emrys (S. Ayrshire) Prentice, R. E.
Brown, R. W. (Shoreditch & Fbury) Hughes, Hector (Aberdeen, N.) Price, J. T. (Westhoughton)
Buchanan, Richard Hunter, Adam (Dunfermline) Probert, Arthur
Butler, Herbert (Hackney, C.) Hunter, A. E. (Feltham) Pursey, Cmdr. Harry
Butler, Mrs. Joyce (Wood Green) Hynd, H. (Accrington) Rankin, John
Callaghan, Rt. Hn. James Hynd, John (Attercliffe) Redhead, Edward
Carmichael, Neil Irving, Sydney (Dartford) Rees, Merlyn
Castle, Rt. Hn. Barbara Janner, Sir Barnett Reynolds, G. W.
Chapman, Donald Jeger, George (Goole) Rhodes, Geoffrey
Coleman, Donald Jenkins, Hugh (Putney) Richards, Ivor
Conlan, Bernard Jenkins, Rt. Hn. Roy (Stechford) Roberts, Albert (Normanton)
Corbet, Mrs. Freda Johnson, Carol (Lewisham, s.) Roberts, Goronwy (Caernarvon)
Cousins, Rt. Hn. Frank Johnson, James (K'ston-on-Hull, W.) Robertson, John (Paisley)
Craddock, George (Bradford, S.) Jones, Dan (Burnley) Robinson, Rt. Hn. K. (St. Pancras, N.)
Crawshaw, Richard Jones, Rt. Hn, Sir Elwyn (W. Ham, S.) Rodgers, William (Stockton)
Crosland, Rt. Hn. Anthony Jones, J. Idwal (Wrexham) Rogers, George (Kensington, N.)
Crossman, Rt. Hn. R. H. S. Jones, T. W. (Merioneth) Rose, Paul B.
Dalyell, Tam Kelley, Richard Ross, Rt. Hn. William
Darling, George Kenyon, Clifford Rowland, Christopher
Davies, G. Elfed (Rhondda, E.) Kerr, Mrs. Anne (R'ter & Chatham) Sheldon, Robert
Davies, S. O. (Merthyr) Kerr, Dr. David (W'worth, Central) Shinwell, Rt. Hn. E.
de Freitas, Sir Geoffrey Lawson, George Shore, Peter (Stepney)
Delargy, Hugh Leadbitter, Ted Short, Rt. Hn. E. (N'c'tle-on-Tyne, C.)
Dell, Edmund Short, Mrs. Renée (W'hampton, N. E.)
Dempsey, James Ledger, Ron Silkin, John (Deptford)
Diamond, Rt. Hn. John Lever, Harold (Cheetham) Silkin, S. C. (Camberwell, Dulwich)
Dodds, Norman Lever, L. M. (Ardwick) Silverman, Julius (Aston)
Doig, Peter Lewis, Arthur (West Ham, N.) Silverman, Sydney (Nelson)
Donnelly, Desmond Lipton, Marcus Skeffington, Arthur
Driberg, Tom Loughlin, Charles Slater, Mrs. Harriet (Stoke, N.)
Duffy, Dr. A. E. P. Mabon, Dr. J. Dickson Slater, Joseph (Sedgefield)
Dunn, James A. McBride, Neil Small, William
Dunnett, Jack MacColl, James Snow, Julian
Edelman, Maurice MacDermot, Niall Soskice, Rt. Hn. Sir Frank
Edwards, Rt. Hn. Ness (Caerphilly) McGuire, Michael Spriggs, Leslie
Edwards, Robert (Bilston) McInnes, James Steele, Thomas (Dunbartonshire, W.)
English, Michael McKay, Mrs. Margaret Stewart, Rt. Hn. Michael
Ennals, David Mackenzie, Gregor (Rutherglen) Stonehouse, John
Ensor, David Mackie, John (Enfield, E.)
Evans, Albert (Islington, S. W.) MacMillan, Malcolm Stones, William
Evans, Ioan (Birmingham, Yardley) Mahon, Peter (Preston, S.) Strauss, Rt. Hn. G. R. (Vauxhall)
Fernyhough, E. Mahon, Simon (Bootle) Stross, Sir Barnett (Stoke-on-Trent, C.)
Finch, Harold (Bedwellty) Mallalieu, E. L. (Brigg) Swain, Thomas
Fitch, Alan (Wigan) Mallaleiu, J.P.W. (Huddersfield, E.) Swingler, Stephen
Fletcher, Sir Eric (Islington, E.) Manuel, Archie Symonda, J. B.
Fletcher, Ted (Darlington) Mapp, Charles Taverne, Dick
Fletcher, Raymond (Ilkeston) Marsh, Richard Taylor, Bernard (Mansfield)
Floud, Bernard Mason, Roy Thomas, George (Cardiff, W.)
Foley, Maurice Maxwell, Robert Thomas, Iorwerth (Rhondda, W.)
Foot, Michael (Ebbw Vale) Mellish, Robert Thornton, Ernest
Ford, Ben Mendelson, J. J. Tinn, James
Fraser, Rt. Hn. Tom (Hamilton) Mikardo, Ian Tomney, Frank
Galpern, Sir Myer Millan, Bruce Tuck, Raphael
Garrett, W. E. Miller, Dr. M. S. Urwin, T. W.
Ginsburg, David Milne, Edward (Blyth) Varley, Eric G.
Gourlay, Harry Molloy, William Wainwright, Edwin
Greenwood, Rt. Hn. Anthony Monslow, Walter Walden, Brian (All Saints)
Gregory, Arnold Morris, Alfred (Wythenshawe) Walker, Harold (Doncaster)
Grey, Charles Morris, John (Aberavon) Wallace, George
Griffiths, David (Rother Valley) Murray, Albert Watkins, Tudor
Griffiths, Rt. Hn. James (Llanelly) Neal, Harold Weitzman, David
Griffiths, Will (M'chester, Exchange) Newens, Stan Wells, William (Walsall, N.)
Gunter, Rt. Hn. R. J. Noel-Baker, Rt. Hn. Philip (Derby, S.) White, Mrs. Eirene
Hale, Leslie Norwood, Christopher Whitlock, William
Hamilton, James (Bothwell) Oakes, Gordon Wigg, Rt. Hn. George
Hamilton, William (West Fife) Ogden, Eric Wilkins, W. A.
Hamling, William (Woolwich, W.) O'Malley, Brian Willey, Rt. Hn. Frederick
Hannan, William Oram, Albert E. (E. Ham, S.) Williams, Alan (Swansea, W.)
Williams, Clifford (Abertillery) Winterbottom, R. E.
Williams, Mrs. Shirley (Hitchin) Woodburn, Rt. Hn. A. TELLERS FOR THE AYES:
Willis, George (Edinburgh, E.) Woof, Robert Mr. Ifor Davies and
Wilson, Rt. Hn. Harold (Huyton) Zilliacus, K. Mr. John McCann.
Wilson, William (Coventry, S.)
Agnew, Commander Sir Peter Foster, Sir John MacArthur, Ian
Alison, Michael (Barkston Ash) Fraser, Rt. Hn. Hugh (St'fford & Stone) Mackenzie, Alasdair (Ross & Crom'ty)
Allan, Robert (Paddington, S.) Fraser, Ian (Plymouth, Sutton) McLaren, Martin
Allason, James (Hemel Hempstead) Galbraith, Hn. T. G. D. Macleod, Rt. Hn. Iain
Amery, Rt. Hn. Julian Gardner, Edward McNair-Wilson, Patrick
Anstruther-Gray, Rt. Hn. Sir W. Gibson-Watt, David Maitland, Sir John
Astor, John Giles, Rear-Admiral Morgan Marples, Rt. Hn. Ernest
Atkins, Humphrey Gilmour, Ian (Norfolk, Central) Marten, Neil
Awdry, Daniel Gilmour, Sir John (East Fife) Mathew, Robert
Baker, W. H. K. Glover, Sir Douglas Maude, Angus
Barber, Rt. Hn. Anthony Glyn, Sir Richard Maudling, Rt. Hn. Reginald
Barlow, Sir John Codber, Rt. Hn. J. B. Mawby, Ray
Batsford, Brian Goodhart, Philip Maxwell-Hyslop, R. J.
Bell, Ronald Goodhew, Victor Maydon, Lt.-Cmdr. s. L. C.
Bennett, Sir Frederic (Torquay) Gower, Raymond Meyer, Sir Anthony
Berry, Hn. Anthony Grant, Anthony Mills, Peter (Torrington)
Biffen, John Grant-Ferris, R. Miscampbell, Norman
Biggs-Davison, John Grieve, Percy Mitchell, David
Birch, Rt. Hn. Nigel Griffiths, Eldon (Bury St. Edmunds) Monro, Hector
Black, Sir Cyril Griffiths, Peter (Smethwick) More, Jasper
Blaker, Peter Gurden, Harold Morrison, Charles (Devizes)
Bowen, Roderic (Cardigan) Hall, John (Wycombe) Munro-Lucas-Tooth, Sir Hugh
Box, Donald Hall-Davis, A. G. F. Murton, Oscar
Boyd-Carpenter. Rt. Hn. J. Hamilton, M. (Salisbury) Neave, Airey
Boyle, Rt. Hn. Sir Edward Harris, Frederic (Croydon, N.W.) Nicholson, Sir Godfrey
Brewis, John Harris, Reader (Heston) Noble, Rt. Hn. Michael
Brinton, Sir Tatton Harvey, Sir Arthur Vere (Macclesf'd) Nugent, Rt. Hn. Sir Richard
Bromley-Davenport, Lt.-Col. Sir Walter Harvey, John (Walthamstow, E.) Onslow, Cranley
Brooke, Rt. Hn. Henry Harvie Anderson, Miss Orr-Ewing, Sir Ian
Brown, Sir Edward (Bath) Hastings, Stephen Osborn, John (Hallam)
Bruce-Gardyne, J. Hawkins, Paul Osborne, Sir Cyril (Louth)
Bryan, Paul Hay, John Page, John (Harrow, W.)
Buchanan-Smith, Alick Heald, Rt. Hn. Sir Lionel Page, R. Graham (Crosby)
Bullus, Sir Eric Heath, Rt. Hn. Edward Pearson, Sir Frank (Clitheroe)
Burden, F. A. Hendry, Forbes Peel, John
Butcher, Sir Herbert Higgins, Terence L. Percival, Ian
Campbell, Gordon Hiley, Joseph Peyton, John
Carlisle, Mark Hill, J. E. B. (S. Norfolk) Pickthorn, Rt. Hn. Sir Kenneth
Carr, Rt. Hn. Robert Hirst, Geoffrey Pike, Miss Mervyn
Cary, Sir Robert Hobson, Rt. Hn. Sir John Pitt, Dame Edith
Channon, H. P. G. Hogg, Rt. Hn. Quintin Powell, Rt. Hn. J. Enoch
Chataway, Christopher Hopkins, Alan Price, David (Eastleigh)
Clark, William (Nottingham, S.) Hordern, Peter Pym, Francis
Clarke, Brig. Terence (Portsmth, W.) Hornby, Richard Quennell, Miss J. M.
Cole, Norman Hornsby-Smith, Rt. Hn. Dame P. Ramsden, Rt. Hn. James
Cooke, Robert Howard, Hn. G. R. (St. Ives) Rawlinson, Rt. Hn, Sir Peter
Cooper, A. E. Howe, Geoffrey (Bebington) Redmayne, Rt. Hn. Sir Martin
Cooper-Key, Sir Neill Hunt, John (Bromley) Rees-Davies, W. R.
Cordle, John Hutchison, Michael Clark Renton, Rt. Hn. Sir David
Corfield, F. V. Iremonger, T. L. Ridley, Hn. Nicholas
Costain, A. P. Irvine, Bryant Godman (Rye) Roberts, Sir Peter (Heeley)
Courtney, Cdr. Anthony Jenkin, Patrick (Woodford) Rodgers, Sir John (Sevenoaks)
Craddock, Beresford (Spelthorne) Johnson Smith, G. (East Grinstead) Roots, William
Crawley, Aidan Johnston, Russell (Inverness) Scott-Hopkins, James
Crosthwaite-Eyre, Col. Sir Oliver Jones, Arthur (Northants, S.) Sharples, Richard
Crowder, F. P. Jopling, Michael Sinclair, Sir George
Curran, Charles Joseph, Rt. Hn. Sir Keith Smith, Dudley (Br'ntf'd & Chiswick)
Dalkeith, Earl of Kaberry, Sir Donald Smyth, Rt. Hn. Brig. Sir John
Dance, James Kerr, Sir Hamilton (Cambridge) Soames, Rt. Hn. Christopher
Davies, Dr. Wyndham (Perry Barr) Kershaw, Anthony Spearman, Sir Alexander
d'Avigdor-Goldsmid, Sir Henry Kimball, Marcus Stainton, Keith
Dean, Paul King, Evelyn (Dorset, S.) Stanley, Hn. Richard
Deedes, Rt. Hn. W. F. Kitson, Timothy Steel, David (Roxburgh)
Digby, Simon Wingfield Lagden, Godfrey Stodart, Anthony
Doughty, Charles Lambton, Viscount Stoddart-Scott, Col. Sir Malcolm
Douglas-Home, Rt. Hn. Sir Alec Lancaster, Col. C. G. Studholme, Sir Henry
Drayson, G. B. Langford-Holt, Sir John Talbot, John E.
Elliot, Capt. Walter (Carshalton) Legge-Bourke, Sir Harry Taylor, Edward M. (G'gow, Cathcart)
Elliott, R. W. (N'C'tle-upon-Tyne, N.) Lewis, Kenneth (Rutland) Teeling, Sir William
Emery, Peter Litchfield, Capt. John Temple, John M.
Errington, Sir Eric Lloyd, Rt. Hn. Geoffrey (Sut'n C'dfield) Thatcher, Mrs. Margaret
Farr, John Lloyd, Ian (P'tsm'th, Langstone) Thomas, Sir Leslie (Canterbury)
Fell, Anthony Lloyd, Rt. Hn. Selwyn (Wirral) Thomas, Rt. Hn. Peter (Conway)
Fisher, Nigel Loveys, Walter H. Thompson, Sir Richard (Croydon, S.)
Fletcher-Cooke, Charles (Darwen) Lucas, Sir Jocelyn Tiley, Arthur (Bradford, W.)
Fletcher-Cooke, Sir John (S'pton) McAdden, Sir Stephen Tilney, John (Wavertree)
Turton, Rt. Hn. R. H. Ward, Dame Irene Woodhouse, Hn. Christopher
Tweedsmuir, Lady Weatherill, Bernard Woodnutt, Mark
van Straubenzee, W. R. Wells, John (Maidstone) Wylie, N. R.
Vaughan-Morgan, Rt. Hn. Sir John Whitelaw, William Yates, William (The Wrekin)
Vickers, Dame Joan Williams, Sir Rolf Dudley (Exeter) Younger, Hn. George
Walder, David (High Peak) Wills, Sir Gerald (Bridgwater)
Walker, Peter (Worcester) Wise, A. R. TELLERS FOR THE NOES:
Walker-Smith, Rt. Hn. Sir Derek Wolrige-Gordon, Patrick Mr. Eric Lubbock and
Wall, Patrick Wood, Rt. Hn. Richard Mr. Peter Bessell.
Sir E. Boyle

I beg to move Amendment No. 344, Clause 79, in page 159, line 45, at the end to insert: (d) if in the related period of any year of assessment for which relief is claimed there has been any increase in the company's profits over the profits of the next preceding accounting period, then for the purposes of this subsection the dividends paid by the company in the year of assessment shall be treated as reduced by the proportion of the excess that the dividends paid in the next preceding year of assessment bore to the profits of the next preceding accounting period. The purpose of the Amendment is to ensure that as, during the seven-year transitional period, the profits of a company investing overseas rise, the dividends should be able to rise in proportion. I should like to make clear to the House at the start of my remarks that it is certainly our intention on this side of the House if necessary to press the Amendment to a Division. The only reason why it was not our intention originally to press the previous Amendment to a Division was that each of these Amendments relates to Clause 79(4); and it is a fairly common proceeding on the Report stage of the Finance Bill that when we have two successive Amendments to a subsection we divide on one but not on both.

I should like to explain why we consider this Amendment of considerable importance. The Chancellor said in Committee, and the Financial Secretary has said it again just now, that Clause 79 as amended by the Chancellor is an expensive Clause. That may be, but it is also important to remember that the Chancellor's Amendments have made subsection (4) a more serious matter than it was before, because the subsection means that we now have not a five-year transitional period but a seven-year transitional period. Therefore the idea of a seven-year dividend freeze is clearly a more serious matter than a five-year dividend freeze, and it is that matter with which the Amendment seeks to deal.

We have made it quite clear, and I think that I made it clear in Committee, that we had two strong objections to the thought of a seven-year dividend freeze for the companies investing overseas. First, I pointed out that it was in the public interest and not just in the shareholders' interest that a corporation should be able to go to the market on reasonable terms. One reason which I pointed out was that it was clearly in the interest of our balance of payments that shareholders in this country should be able to act as a catalyst to attract overseas borrowing. Secondly, I pointed out that in my view any idea of dividend limitation over a long period was totally contrary to the economic system as we have it in this country, and with some justice I quoted from the writing of Mr. Kaldor himself during the early 1950s in advancing that point.

I give a simple example of the purpose of the Amendment. The Amendment says that if one takes a company which in the past year has profits of £1,000 and distributes £50, then, during the period of seven-year transition, if its profits rise to £1,200 it should be able to raise dividends in proportion, that is to £60, without suffering the penalties under this subsection.

What were the arguments in Committee which the Chancellor raised against the Amendments which we moved then and which are relevant to the Amendment which I am moving now? The Chancellor simply relied on two points. First of all, he said that he had a choice between being fair to the company and being fair to the nation. We on this side simply do not accept that distinction. It is in the national interest, not just in the shareholders' interest, that companies should be able to raise capital on reasonable terms.

10.15 p.m.

Second, the Chancellor said that he must see that he does not give away too much of the taxpayers' money. I was interested in his remark, I should like to give away more, in one sense, to the shareholders … "—[OFFICIAL REPORT, 22nd June, 1965 Vol. 714, c. 1571.] I do not quite know what he meant by those words, "in one sense". When people say that they would like to do something "in one sense" or "in the strict sense", they are apt to become rather obscure. I think that it was Dean Inge, years ago, who said that, in the strict sense Marx was not a Marxist. I am not at all clear what the Chancellor meant when he said that he would like to give away more, "in one sense", to the shareholders.

But in any case I do not have to pursue that inquiry too far because the Financial Secretary, in replying to the last Amendment, gave me the point which is the most important one of all. He said, quite rightly, that the essential matter for large corporations trading abroad and earning income for this country is growth. I completely agree. I am sure that the hon. and learned Gentleman will not dispute that growth is bound up with the raising of new capital, and neither will he dispute in this context the importance of not cutting dividends and not restraining the increase of dividends below what is reasonable.

I maintain that, if a company increases its profits, it is entirely right and reasonable that its dividends should grow in proportion so that the proportion of dividend cover remains as it was before. The proposal we now make in this respect is entirely reasonable from the point of view of the transition period covered by the Clause.

I realise the Chancellor's difficulty here. The transitional arrangements are so designed, and the drafting of the Clause is such, that the help which is given under it is in the form of, as it were, special assistance. But I maintain that, although it may not be possible to devise a Clause which in all respects works absolutely equitably—indeed, one of our objections to the scheme of Corporation Tax in the Bill especially in its overseas aspects, is precisely that it will not work out equitably, and that there are a number of companies which will feel hardly done by—it is possible in this instance to devise a formula which will work equitably as between one company and another. The idea of dividends rising in proportion to profits is a perfectly simple matter and one which the Chancellor could adopt without violating the general principles in the Bill.

Those are the reasons why, quite rightly, we come back to this matter on Report. We regard acceptance of this Amendment as essential for large corporations whose growth is of vital importance to this country. My hon. Friend the Member for Reading (Mr. Peter Emery) has already referred to the Chancellor's statement in Committee that those chairmen whom he had consulted had told him that they intended to continue with overseas investment, and he has drawn attention to the correspondence in The Times since we last raised this matter.

I maintain that the Amendment is entirely justified in itself. It is essential that these large corporations should be able to pursue a policy of growth and to raise capital on reasonable terms. The Chancellor could accept this Amendment without violating the general principles of the Corporation Tax which he has introduced. We object to a number of aspects of his scheme of Corporation Tax. We cannot believe that it will remain unaltered for the future, but we cannot now, on this Amendment, go over the debates on Clause 60 again. However, even within this general framework, this is an Amendment which ought to be accepted, and I, therefore, press it strongly in the hope that, even at this late stage, the Financial Secretary will show that he realises how important is the raising of capital to these corporations whose activities are vital to the nation.

Mr. MacDermot

We are dealing with an Amendment very similar to the last one. We are not only going over again ground which we covered in Committee; we are inevitably going over a good deal of the ground that we covered just a few minutes ago. I say at once to the right hon. Gentleman that if we felt able to move in the direction in which we are being urged to move on this Clause, I think that this Amendment would provide a better guide to the kind of action that we should take rather than the last one, because it is directly related to the growth factor.

The point of common agreement which is established between us is that for these companies which are in need of transitional relief the long-term solution must lie in growth. There have been argument as to where the greatest incentive to growth comes and where growth companies look to for their capital—to what extent it comes from plough-back, to what extent it comes from going into the market for fresh capital. It is easy, but foolish, to generalise too much on these matters because circumstances vary enormously for different companies.

For that reason, I would accept to some extent what the right hon. Gentleman has said, that whatever solution one takes in these matters it may broadly be the right solution but it will not meet the case of every single company. That is inevitable when one is seeking to alter a tax system in this way, which we believe will provide more useful real incentives. That, we think, applies also to our treatment of this problem, because we think that by limiting the concession as we are doing in the case of companies which pay increased dividends so that four-fifth of that increase goes in reduction of the amount they receive by way of relief, we are providing a real built-in incentive to the companies to plough back their increased profits in a way that will assist them in the long run towards the solution of their own problems.

This must, as I say, be a matter for the individual judgment of particular boards as to how their own company is affected. We have to take a general view and say which way we think that the incentives should operate. But, as I commented on the last Amendment that we discussed, when one has a company trading overseas, it is trading in a country with a high rate of company taxation. This is, by definition, what we are considering, because it is here throat the overspill relief problem arises—how it is going to meet the ultimate situation when the transition period is over and it is then confronted with the effect of the Corporation Tax system with no overspill relief for that higher tax that it pays abroad than the Corporation Tax in this country.

Broadly, such companies are faced with a choice, either that they seek during the interim period to expand and increase their overseas trading by increased investment abroad so that at the end of the

period they will be able to pay as good dividends to their shareholders here and continue with a prosperous business overseas, or, if they think that this is not something which they feel confident they can do, they may take the alternative decision and bring back their profits to this country and invest them here.

But we think that the right kind of incentive which we ought to build into the tax system is to provide an incentive to such companies to plough back, to maintain their position overseas and to be able to use this transition period for the purpose for which it was originally asked and for which it is designed—to tide them over this period, to enable them to do the requisite amount of reinvestment without depriving their shareholders of the sort of dividend distribution to which they have been accustomed.

It is for these reasons that, as a matter of judgment, we think it right to stand by our decision. As the hon. Member for Reading (Mr. Emery) said in discussing the last Amendment, it is a matter of judgment and on any basis it will be some years before one can see whose judgment is proved right. If, in that situation then, it is shown that some companies are being harshly treated, no doubt that will be considered by the Chancellor of the day. But, as matters stand, we feel bound to advise the House to adhere to the Government's decision.

Mr. Peter Emery

Although it may be a matter of judgment, we are trying to establish a definite principle that, where there is a rise of profits, these companies should have the right to a rise in their dividend distribution. Let it be clearly understood that twice we have asked for substantiation of the Chancellor's remarks in Committee which are being contradicted outside this House and that at no time have we had a direct answer. It was obvious that the hon. and learned Gentleman did not have his heart in his work and we urge the House to divide.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 254, Noes 272.

Division No. 251.] AYES [10.27 p.m.
Agnew, Commander Sir Peter Amery, Rt. Hn. Julian Awdry, Daniel
Alison, Michael (Barkston Ash) Anstruther-Gray, Rt. Hn. Sir W. Baker, W. H. K.
Allan, Robert (Paddington, S.) Astor, John Barber, Rt. Hn. Anthony
Allason, James (Hemel Hempstead) Atkins, Humphrey Barlow, Sir John
Batsford, Brian Grant, Anthony Murton, Oscar
Bell, Ronald Grant-Ferris, R. Neave, Airey
Berry, Hn. Anthony Gresham Cooke, R. Nicholson, Sir Godfrey
Bessell, Peter Grieve, Percy Noble, Rt. Hn. Michael
Biffen, John Griffiths, Eldon (Bury St. Edmunds) Nugent, Rt. Hn. Sir Richard
Biggs-Davison, John Griffiths, Peter (Smethwick) Onslow, Cranley
Birch, Rt. Hn. Nigel Gurden, Harold Orr-Ewing, Sir Ian
Black, Sir Cyril Hall, John (Wycombe) Osborn, John (Hallam)
Blaker, Peter Hall-Davis, A. G. F. Osborne, Sir Cyril (Louth)
Bowen, Roderic (Cardigan) Hamilton, M. (Salisbury) Page, John (Harrow, W.)
Box, Donald Harris, Frederic (Croydon, N.W.) Page, R. Graham (Crosby)
Boyd-Carpenter, Rt. Hn. J. Harris. Reader (Heston) Pearson, Sir Frank (Clitheroe)
Boyle, Rt. Hn. Sir Edward Harvey, Sir Arthur Vere (Macclesf'd) Peel, John
Braine, Bernard Harvey, John (Walthamstow, E.) Percival, Ian
Brewis, John Harvie Anderson, Miss Peyton, John
Brinton, Sir Tatton Hastings, Stephen Pickthorn, Rt. Hn. Sir Kenneth
Bromley-Davenport, Lt.-Col. Sir Walter Hawkins, Paul Pike, Miss Mervyn
Brooke, Rt. Hn. Henry Hay, John Pitt, Dame Edith
Brown, Sir Edward (Bath) Heald, Rt. Hn. Sir Lionel Powell, Rt. Hn. J. Enoch
Bruce-Gardyne, J. Heath, Rt. Hn. Edward Price, David (Eastleigh)
Bryan, Paul Hendry, Forbes Pym, Francis
Buchanan-Smith, Alick Higgins, Terence L. Quennell, Miss J. M.
Bullus, Sir Eric Hiley, Joseph Ramsden, Rt. Hn. James
Burden, F. A. Hill, J. E. B. (S. Norfolk) Rawlinson, Rt. Hn. Sir Peter
Butcher, Sir Herbert Hirst, Geoffrey Redmayne, Rt. Hn. Sir Martin
Campbell, Gordon Hobson, Rt. Hn. Sir John Rees-Davies, W. R.
Carlisle, Mark Hogg, Rt. Hn. Quintin Renton, Rt. Hn. Sir David
Carr, Rt. Hn. Robert Hopkins, Alan Ridley, Hn. Nicholas
Cary, Sir Robert Hordern, Peter Roberts, Sir Peter (Heeley)
Channon, H. P. G. Hornby, Richard Rodgers, Sir John (Sevenoaks)
Chataway, Christopher Hornsby-Smith, Rt. Hn. Dame P. Roots, William
Clark, William (Nottingham, S.) Howard, Hn. G. R. (St. Ives) Scott-Hopkins, James
Clarke, Brig. Terence (Portsmth, W.) Howe, Geoffrey (Bebington) Sharples, Richard
Cole, Norman Hunt, John (Bromley) Sinclair, Sir George
Cooke, Robert Hutchison, Michael Clark Smith, Dudley (Br'ntf'd & Chiswick)
Cooper, A. E. Iremonger, T. L. Smyth, Rt. Hn. Brig. Sir John
Cooper-Key, Sir Neill Irvine, Bryant Godman (Rye) Soames, Rt. Hn. Christopher
Cordle, John Jenkin, Patrick (Woodford) Spearman, Sir Alexander
Corfield, F. V. Johnston, Russell (Inverness)
Costain, A. P. Jones, Arthur (Northants, S.) Stainton, Keith
Courtney, Cdr. Anthony Jopling, Michael Stanley, Hn. Richard
Craddock, Sir Beresford (Spelthorne) Joseph, Rt. Hn. Sir Keith Steel, David (Roxburgh)
Crawley, Aidan Kaberry, Sir Donald Stodart, Anthony
Crosthwaite-Eyre, Col. Sir Oliver Kerr, Sir Hamilton (Cambridge) Stoddart-Scott, Col. Sir Malcolm
Crowder, F. P. Kershaw, Anthony Studholme, Sir Henry
Curran, Charles Kimball, Marcus Talbot, John E.
Dalkeith, Earl of King, Evelyn (Dorset, S.) Taylor, Edward M. (G'gow, Cathcart)
Dance, James Kitson, Timothy Teeling, Sir William
Davies, Dr. Wyndham (Perry Barr) Lagden, Godfrey Temple, John M.
d'Avigdor-Goldsmid, Sir Henry Lambton, Viscount Thatcher, Mrs. Margaret
Dean, Paul Lancaster, Col. C. G. Thomas, Sir Leslie (Canterbury)
Deedes, Rt. Hn. W. F. Langford-Holt, Sir John Thomas, Rt. Hn. Peter (Conway)
Digby, Simon Wingfield Legge-Bourke, Sir Harry Thompson, Sir Richard (Croydon, S.)
Dodds-Parker, Douglas Lewis, Kenneth (Rutland) Tiley, Arthur (Bradford, W.)
Doughty, Charles Litchfield, Capt. John Tilney, John (Wavertree)
Douglas-Home, Rt. Hn. Sir Alec Lloyd, Rt. Hn. Geoffrey (Sut'n C'dfield) Turton, Rt. Hn. R. H.
Drayson, G. B. Lloyd, Ian (P'tsm'th, Langstone) Tweedsmuir, Lady
du Cann, Rt. Hn. Edward Lloyd, Rt. Hn. Selwyn (Wirral) van Straubenzee, W. R.
Elliot, Capt. Walter (Carshalton) Loveys, Walter H. Vaughan-Morgan, Rt. Hn. Sir John
Elliott, R. W. (N'c'tle-upon-Tyne, N.) Lubbock, Eric Vickers, Dame Joan
Emery, Peter Lucas, Sir Jocelyn Walder, David (High Peak)
Errington, Sir Eric McAdden, Sir Stephen Walker, Peter (Worcester)
Farr, John MacArthur, Ian Walker-Smith, Rt. Hn. Sir Derek
Fell, Anthony Mackenzie, Alasdair (Ross & Crom'ty) Wall, Patrick
Fisher, Nigel McLaren, Martin
Fletcher-Cooke, Charles (Darwen) Macleod, Rt. Hn. Iain Ward, Dame Irene
Fletoher-Cooke, Sir John (S'pton) McNair-Wilson, Patrick Weatherill, Bernard
Maitland, Sir John Wells, John (Maidstone)
Foster, Sir John Marples, Rt. Hn. Ernest Whitelaw, William
Fraser, Rt. Hn. Hugh (St'fford & Stone) Marten, Neil Williams, Sir Rolf Dudley (Exeter)
Fraser, Ian (Plymouth, Sutton) Mathew, Robert Wills, Sir Gerald (Bridgwater)
Galbraith, Hn. T. G. D. Maude, Angus Wise, A. R.
Gardner, Edward Maudling, Rt. Hn. Reginald Wolrige-Gordon, Patrick
Gibson-Watt, David Mawby, Ray Wood, Rt. Hn. Richard
Giles, Rear-Admiral Morgan Maxwell-Hyslop, R. J. Woodhouse, Hn. Christopher
Gilmour, Ian (Norfolk, Central) Maydon, Lt.-Cmdr. S. L. C. Woodnutt, Mark
Gilmour, Sir John (East Fife) Meyer, Sir Anthony Wylie, N. R.
Glover, Sir Douglas Mills, Peter (Torrington) Yates, William (The Wrekin)
Glyn, Sir Richard Miscampbell, Norman Younger, Hn. George
Godber, Rt. Hn. J. B. Mitchell, David
Goodhart, Philip Monro, Hector TELLERS FOR THE AYES:
Goodhew, Victor Morrison, Charles (Devizes) Mr. Geoffrey Johnson Smith and
Gower, Raymond Munro-Lucas-Tooth, Sir Hugh Mr. Jasper More.
Abse, Leo Garrett, W. E. Miller, Dr. M. S.
Albu, Austen Ginsburg, David Milne, Edward (Blyth)
Allaun, Frank (Salford, E.) Gourlay, Harry Molloy, William
Alldritt, Walter Greenwood, Rt. Hn. Anthony Monslow, Walter
Atkinson, Norman Gregory, Arnold Morris, Alfred (Wythenshawe)
Bacon, Miss Alice Grey, Charles Morris, John (Aberavon)
Bagier, Gordon A. T. Griffiths, David (Rother Valley) Mulley, Rt. Hn. Frederick (Sheffield Pk)
Barnett, Joel Griffiths, Rt. Hn. James (Llanelly) Murray, Albert
Baxter, William Griffiths, Will (M'chester, Exchange) Neal, Harold
Beaney, Alan Gunter, Rt. Hn. R. J. Newens, Stan
Bellenger, Rt. Hn. F. J. Hale, Leslie Noel-Baker, Rt. Hn. Philip (Derby, S.)
Bence, Cyril Hamilton, James (Bothwell) Norwood, Christopher
Benn, Rt. Hn. Anthony Wedgwood Hamilton, William (West Fife) Oakes, Gordon
Bennett, J. (Glasgow, Bridgeton) Hamling, William (Woolwich, W.) Ogden, Eric
Binns, John Hannan, William O'Malley, Brian
Bishop, E. S. Harrison, Walter (Wakefield) Oram, Albert E. (E. Ham, S.)
Blackburn, F. Hart, Mrs. Judith Orbach, Maurice
Blenkinsop, Arthur Hattersley, Roy Orme, Stanley
Boston, Terence Hazell, Bert Oswald, Thomas
Bottomley, Rt. Hn. Arthur Henderson, Rt. Hn. Arthur Owen, Will
Bowden, Rt. Hn. H.W. (Leics S.W.) Herbison, Rt. Hn. Margaret Padley, Walter
Boyden, James Hobden, Dennis (Brighton, K'town) Page, Derek (King's Lynn)
Braddock, Mrs. E. M. Holman, Percy Paget, R. T.
Bradley, Tom Houghton, Rt. Hn. Douglas Palmer, Arthur
Bray, Dr. Jeremy Howarth, Harry (Wellingborough) Pannell, Rt. Hn. Charles
Broughton, Dr. A. D. D. Howarth, Robert L. (Bolton, E.) Pargiter, G. A.
Brown, Hugh D. (Glasgow, Provan) Howell, Denis (Small Heath) Park, Trevor (Derbyshire, S.E.)
Brown, R. W. (Shoreditch & Fbury) Howie, w. Parker, John
Buchanan, Richard Hoy, James Parkin, B. T.
Butler, Herbert (Hackney, C.) Hughes, Cledwyn (Anglesey) Pavitt, Laurence
Butler, Mrs. Joyce (Wood Green) Hughes, Emrys (S. Ayrshire) Pearson, Arthur (Pontypridd)
Callaghan, Rt. Hn. James Hughes, Hector (Aberdeen, N.) Peart, Rt. Hn. Fred
Carmichael, Neil Hunter, Adam (Dunfermline) Pentland, Noman
Castle, Rt. Hn Barbara Hynd, H. (Accrington) Perry, Ernest G.
Chapman, Donald Hynd, John (Attercliffe) Prentice, R. E.
Coleman, Donald Irving, Sydney (Dartford) Price, J. T. (Westhoughton)
Conlan, Bernard Janner, Sir Barnett Probert, Arthur
Corbet, Mrs. Freda Jeger, George (Goole) Pursey, Cmdr. Harry
Cousins, Rt. Hn. Frank Jenkins, Hugh (Putney) Rankin, John
Craddock, George (Bradford, S.) Jenkins, Rt. Hn. Roy (Stetchford) Redhead, Edward
Crawshaw, Richard Johnson, Carol (Lewisham, S.) Rees, Merlyn
Cronin, John Johnson, James (K'ston-on-Hull, W.) Reynolds, G. W.
Crosland, Rt. Hn. Anthony Jones, Dan (Burnley) Rhodes, Geoffrey
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.) Richard, Ivor
Crossman, Rt. Hn. R. H. S. Jones, J. Idwal (Wrexham) Roberts, Albert (Normanton)
Cullen, Mrs. Alice Jones, T. w. (Merioneth) Roberts, Goronwy (Caernarvon)
Dalyell, Tam Kelley, Richard Robertson, John (Paisley)
Darling, George Kenyon, Clifford Robinson, Rt. Hn. K. (St. Pancras, N.)
Davies, G. Elfed (Rhondda, E.) Kerr, Mrs. Anne (R'ter & Chatham) Rodgers, William (Stockton)
Davies, S. O. (Merthyr) Kerr, Dr. David (W'worth, Central) Rogers, George (Kensington, N.)
de Freitas, Sir Geoffrey Lawson, George Rose, Paul B.
Delargy, Hugh Leadbitter, Ted Ross, Rt. Hn. William
Dell, Edmund Ledger, Ron Rowland, Christopher
Dempsey, James Lever, Harold (Cheetham) Sheldon, Robert
Diamond, Rt. Hn. John Lever, L. M. (Ardwick) Shinwell, Rt. Hn. E.
Dodds, Norman Lewis, Arthur (West Ham, N.) Shore, Peter (Stepney)
Doig, Peter Lipton, Marcus Short, Rt. Hn. E. (N'c'tle-on-Tyne, C.)
Donnelly, Desmond Loughlin, Charles Short, Mrs. Renée (W'hampton, N. E.)
Driberg, Tom Mabon, Dr. J. Dickson Silkin, John (Deptford)
Duffy, Dr. A. E. P. McBride, Neil Silkin, S. C. (Camberwell, Dulwich)
Dunn, James A. McCann, J. Silverman, Julius (Aston)
Dunnett, Jack MacColl, James Skeffington, Arthur
Edelman, Maurice MacDermot, Niall Slater, Mrs. Harriet (Stoke, N.)
Edwards, Rt. Hn. Ness (Caerphilly) McGuire, Michael Slater, Joseph (Sedgefield)
Edwards, Robert (Bilston) McInnes, James Small, William
English, Michael McKay, Mrs. Margaret Snow, Julian
Ennals, David Mackenzie, Gregor (Rutherglen) Soskice, Rt. Hn. Sir Frank
Ensor, David Mackie, John (Enfield, E.) Steele, Thomas (Dunbartonshire, W.)
Evans, Albert (Islington, S.W.) MacMillan, Malcolm Stewart, Rt. Hn. Michael
Evans, Ioan (Birmingham, Yardley) Mahon, Peter (Preston, S.) Stonehouse, John
Fernyhough, E. Mahon, Simon (Bootle) Stones, William
Finch, Harold (Bedwellty) Mallalieu, E. L. (Brigg) Strauss, Rt. Hn. G. R. (Vauxhall)
Fitch, Alan (Wigan) Mallalieu, J. P. W. (Huddersfield, E.) Swain, Thomas
Fletcher, Sir Eric (Islington, E.) Manuel, Archie Swingler, Stephen
Fletcher, Ted (Darlington) Mapp, Charles Symonds, J. B.
Fletcher, Raymond (Ilkeston) Marsh, Richard Taverne, Dick
Floud, Bernard Mason, Roy Taylor, Bernard (Mansfield)
Foley, Maurice Maxwell, Robert Thomas, George (Cardiff, W.)
Foot, Sir Dingle (Ipswich) Mayhew, Christopher Thomas, Iorwerth (Rhondda, W.)
Foot, Michael (Ebbw Vale) Mellish, Robert Thornton, Ernest
Ford, Ben Mendelson, J. J. Tinn, James
Fraser, Rt. Hn. Tom (Hamilton) Mikardo, Ian Tomney, Frank
Galpern, Sir Myer Millan, Bruce Tuck, Raphael
Urwin, T. W. White, Mrs. Eirene Wilson, Rt. Hn. Harold (Huyton)
Varley, Eric G. Whitlock, William Wilson, William (Coventry, S.)
Wainwright, Edwin Wigg, Rt. Hn. George Winterbottom, R. E.
Walden, Brian (All Saints) Wilkins, W. A. Woodburn, Rt. Hn. A.
Walker, Harold (Doncaster) Willey, Rt. Hn. Frederick Woof, Robert
Wallace, George Williams, Alan (Swansea, W.) Zilliacus, K.
Watkins, Tudor Williams, Clifford (Abertillery)
Weitzman, David Williams, Mrs. Shirley (Hitchin) TELLERS FOR THE NOES:
Wells, William (Walsall, N.) Willis, George (Edinburgh, E.) Mr. Ifor Davies and
Mr. Joseph Harper.