HC Deb 22 February 1966 vol 725 cc210-1
10. Mr. Hamling

asked the Chancellor of the Exchequer what further steps the Treasury proposes to take to deal with tax avoidance in connection with dealings on the Stock Exchange.

Mr. Callaghan

As I said in my Answer on 15th February it will take some time to complete the investigations into the recent series of transactions which may have involved tax irregularities. I cannot say yet what new tax legislation may be required to prevent these abuses.

Mr. Hamling

Would not my right hon. Friend agree that there is some urgency in the matter because the small taxpayer pays his tax regularly and honestly and is much offended by this sort of practice on the Stock Exchange?

Mr. Callaghan

I assure my hon. Friend and the House that there will be no delay in dealing with this matter; but these arrangements are so ingenious that they will involve separate examination of many individual transactions, and it will take a great deal of the Revenue's time to try to pin them down.

Mr. Iain Macleod

Will the right hon. Gentleman confirm that although tax evasion is reprehensible, and can and should be corrected by this House, it has always been accepted that it is right for people, or at any rate open to them, so to arrange their affairs that they pay the least amount of tax on those transactions?

Mr. Callaghan

That is a matter of philosophy on the general issue. I hope that the right hon. Gentleman will not apply his remarks to this particular case, because I think that it may well go much further than arranging one's affairs to avoid the payment of the maximum amount of tax. In this case—I am choosing my words carefully—there may well be an example of something that is much more reprehensible.

Mr. Grant

Would not the right hon. Gentleman agree that it is the vigilance of the Stock Exchange Council which has brought many of these practices to the light of day?

Mr. Callaghan

Yes, Sir. If the hon. Gentleman remembers, in my Answer of 15th February I said exactly that. The Revenue would not have discovered it if it had not been for the activities of the Stock Exchange Council; but the fact remains that whether suspension from the Floor of the Stock Exchange is sufficient to deal with this matter is something that must be further considered.

Mr. Manuel

Would not my right hon. Friend agree that while it is all right for individuals to make the best possible tax arrangements, they should do so within the rules laid down by this House.

Mr. Iain Macleod

That is the point I made.

Mr. Callaghan

With respect, it was not. It may have been the point which the right hon. Gentleman was trying to make, but the reason why these members were suspended by the Stock Exchange Council was that they did not observe the rules which had been laid down.