HC Deb 15 February 1966 vol 724 cc1107-8
Q5. Mr. William Hamilton

asked the Prime Minister if he will initiate an inquiry into the extent and desirability of the practice whereby infringements or evasion of statute law are dealt with in secret outside the law courts by private bodies, with a view to introducing legislation to stop this practice.

The Prime Minister

If my hon. Friend is referring to the recent Stock Exchange investigation into bond washing, the inquiry was necessary since it concerned breaches of Stock Exchange rules designed to facilitate the enforcement of the statutory provisions. As my hon. Friend knows, the Inland Revenue is making a comprehensive investigation of these transactions.

Mr. Hamilton

Does not my right hon. Friend agree that it is a thoroughly dangerous practice that what is, in effect, a private court should sit in private, without knowledge by the public, and impose penalties on people who have, so far as I know, no right of appeal from that court? Will my right hon. Friend undertake to see that these people pay the taxes which they are now evading to an enormous extent and that the necessary action is taken by a public body accountable to this House?

The Prime Minister

That raises several questions. Where there was a breach of the Stock Exchange's own regulations, it was entirely appropriate for the Stock Exchange to inquire into it. If there is any question of an evasion of taxation—I use the word "evasion", meaning a breach of the law—this is a matter for the Inland Revenue to deal with. Third, if it is a question of tax avoidance because the law was not drawn tightly enough, this will be a matter for legislation. But I think that the lesson of the whole business is that some people in the City, at any rate, might be better employed trying to help the export trade and to meet this country's industrial requirements rather than spending all their time on activities of this sort.

Sir J. Rodgers

Will the Prime Minister agree that the Stock Exchange is to be commended for the action it took in putting its own house in order and taking this action against a breach of its own regulations and rules?

The Prime Minister

As I said, I think that the Stock Exchange was right to inquire into any breaches of its own regulations, and, if those regulations need tightening, I hope that the Stock Exchange will take whatever action is necessary. That is for the Stock Exchange. The question of breaches of the law or the dodging of taxes is a matter for the Inland Revenue.