- (1) Any expense not exceeding £40 which is incurred by an individual in respect of professional assistance in or incidental to preparing his return of income and statement of capital gains and claim for allowances in any year of assessment shall be deducted from or set off against his income for that year.
- (2) A deduction as provided in subsection (1) shall also be allowed in respect of professional assistance in complying with notices under the Income Tax Acts, and any enactment relating to the Capital Gains Tax: Provided that, if such notice in respect of information relating to the liability of some person other than the person on whom the notice is served, the deduction shall operate in respect of the income for the next following year of assessment of the person on whom the notice is served.
- (3) For the purposes of this section—
- (a) "professional assistance" means assistance provided by a solicitor, a member of an incorporated society of accountants, a bank, a stockbroker or a member of such professional body as the Commissioners of Inland Revenue shall certify as qualifying under this section; and
- (b) "individual" shall include the trustees and personal representatives of an individual.
- (4) This section shall not apply in computing the total income of any individual for the purposes of surtax.—[Mr. Biffen.]
§ Brouqht up, and read the First time.122
§ Mr. John Biffen
(Oswestry): I beg to move, That the Clause be read a Second time.
The debate which has just concluded, on new Clause No. 30, was concerned with a subject which has been before Parliament on a number of occasions. I think I am correct in saying that this is the first time that a new Clause dealing withFees for assistance in completing tax returns complying with noticeshas been before hon. Members. I hope that if I follow the adage that brevity will encourage charity, a short speech from me will encourage a forthcoming answer from the Treasury.
I imagine that such a new Clause comes before the Committee this year because of last year's Budget, which considerably complicated the matter of tax returns, particularly in relation to the Capital Gains Tax. The purpose of the new Clause is to allow private individuals to have allowed against their tax assessments up to £40 for the preparation of their tax returns by professionally competent bodies.
My arguments in support of the new Clause are based on three propositions; the first is equity, the second is economy and the third, a wider proposition, is that 123 it would encourage a greater spread of ownership and savings. My argument on equity is really concerned with the fact that business accounts already have the facility which my hon. Friends and I seek to extend to private individuals. I understand that the facility which is granted for the preparation of business accounts is granted by custom rather than by statute. Nevertheless, the equity of the argument is that a private individual should enjoy this facility in addition to business organisations from I.C.I. down to the smallest firm.
My second argument, that of economy, is more difficult to establish. It seems, however, incontrovertible that the tax system has become incredibly complex. This is particularly so since last year. Indeed, the protest from the Inland Revenue Staff Association gives more eloquent testimony to my argument than any other source I could quote.
§ 7.45 p.m.
§ I believe that there is not only danger in the escalating cost of administration, but that there is a serious likelihood of a breakdown or dislocation in our whole tax collecting system. It is to meet these impending difficulties that the new Clause is directed. There is, therefore, a genuine argument of economy because the cost of tax collection could be considerably mitigated if the new Clause were accepted. Undoubtedly the consequence of accepting it would be to lead to the encouragement of the use of professional services in presenting and computing tax liability.
My third proposition is that the new Clause would encourage a wider spread of share ownership. This is a perfectly legitimate point. I was interested to note in the Economist of 2nd July an article entitled "Shareholders", from which I will give two brief quotations. The article stated:
The concentration of the investment habit in the professional and managerial classes … is high. A survey carried out last year by the Acton Trust among manual workers uncovered little prejudice against investment, but did find widespread ignorance and little interest.
Later, the article went on:
So Britain has a long way to go to catch up America in spreading the net of shareholding. Looking at the proportions of shareholders in each country Britain seems to be
thirteen years behind. Will it ever catch up? There are a lot of factors working against it.
§ One further factor which is now working against it is the incredible complexity of organising one's tax returns once one ventures into the realm of share ownership. I believe, therefore, that on that third ground also the case for the new Clause stands.
§ I promised the Chief Secretary that I would be brief. I have kept my promise and I hope that he will not disappoint my expectation.
§ Mr. Barnett
I am delighted to be able to support the hon. Member for Oswestry (Mr. Biffen) in the principle of his argument, although I could not accept the new Clause as drafted or the way it would work in practice. I must, first, declare my keen personal interest in this matter, being a practising accountant.
I was disturbed to hear the hon. Gentleman say that he was hoping brevity would encourage charity. I hope that it will never be thought that the new Clause is intended in any way as a form of charity to my profession. Indeed, I doubt if many accountants would be happy with the Clause as drafted, and I hope to show why.
Most, if not all, accountants—certainly those I know—are already working to capacity, most of them beyond it. Acceptance of this Clause would therefore mean that something else would have to be delayed. If accountants were to be involved in a great deal of extra work in the completion of small personal Income Tax returns, the preparation of accounts or something else would have to be delayed. At the present time, inspectors of taxes, presumably by instruction, are very much quicker in demanding not only Income Tax returns but balance sheets and accounts and, when these are not submitted, the inspectors are listing them for hearing by General Commissioners very much earlier than was the case in the past. Fresh instructions would therefore have to be issued if this new Clause, or anything like it, were to to be accepted.
The other reason for my belief that many accountants would not be happy about it is the difficulty of charging a reasonable fee. Preparation of the small Income Tax return is not terribly profitable work by comparison with other work 125 in the profession, because in the time it takes to complete the Income Tax return an accountant can, for example, complete a complicated tax computation, make final adjustments of balance sheets, interview clients, and so on, which would certainly be very much more profitable.
I certainly do not make use of that fact as an argument for not accepting the Clause, but if it were not possible to charge a remuneration reasonable to the accountant what would happen would be that the very small types of returns would be handled by junior staff. The accountant's office would, in effect, be a sort of post office through which these matters would pass. I am sure that is not what the hon. Gentleman has in mind.
I therefore think that, in practice, the greatest benefit from the type of Clause the hon. Member has in mind would be to those who need to have completed the largest and most complicated Income Tax returns. The fact is that small and complicated returns are often the most difficult and take the longest time. One gets the man who has, say, £1,000 worth of shares and who likes a very wide spread. That greatly increases the difficulty of the computation of capital gains. I only recently had that type of case to deal with. In such circumstances, the computation of capital gains is very complicated and it is extremely difficult, if not impossible, to charge a fee commensurate with the time involved in the computation.
As I say, I have no objection to the principle behind the Clause. My main reason for supporting it is the point of equity mentioned first by the hon. Member. It seems to me that here we are getting back to what we debated the other day—the question of equity between those paying under Schedule D and under Schedule E. Accountancy charges for the completion of Income Tax returns under Schedule D are generally allowed by the inspectors, presumably because the word "necessary" is not included in the Schedule D wording, although I myself would have thought that even taking the "wholly and exclusively" argument to its logical conclusion there is a case for disallowing part of the accountancy charges. In the case of the Schedule D return. There is a concession here and I certainly do not complain about it. In the same way as 126 there is in the many other cases I referred to the other day.
What I am concerned about is the inequity existing between those millions of taxpayers on Pay-As-You-Earn who cannot have advice as an allowable charge and the others under Schedule D who can get such advice. If we could devise a system whereby those taxed under Pay-As-You-Earn could have an allowance made in respect of aid for completing their returns I would be delighted, because there must be many ordinary average employees who pay more tax today than they should pay just because the are not claiming some of the allowances to which they are entitled. That is undoubtedly true.
At the same time, I do not believe that the 20 million taxpayers on Pay-As-You-Earn will immediately rush to accountants on being told that for every E or guinea they pay in fees they will get up to a maximum of 8s. 3d. in the £ allowed them. It would not work that way. The bulk of people paying under Pay-As-You-Earn will still not get advice because they will still not seek it. If I thought that there was some way of their getting that advice I would be delighted but, as I say, I do not think that it would work that way. That is why if one is giving real help to small taxpayers, I should prefer the type of Clause I moved the other day whereby we could give those on Pay-As-You-Earn immediate and direct relief, for tools, books, and so on. However the principle behind the Clause has equity on its side. I certainly think that there is a case for making a charge for assistance in computing capital gains an allowable expense, because it would be very difficult to dispute the logical case, and this is a normal Revenue argument, that a charge in order to be allowable must be directly concerned with earning the money on which tax is to be paid. This is specifically the case where the person is earning capital gains, because any charge for computing the liability is very relevant to him in his earning of those gains. Even if we cannot accept the Clause, and I do not think that we can as it stands, there is a case for giving relief in relation to the assistance given in the computation of capital gains.
I do not know about the cost of the Clause, but I do not think that it would 127 be very great, as I do not believe that many people would apply for the relief. Nevertheless, I hope that if we cannot accept the Clause this time, the Treasury will bear in mind the whole principle of trying to bring some equity to those on Pay-As-You-Earn who are not getting adequate advice and many of whom are at the present time paying more tax than they should be paying.
§ Mr. Anthony Grant
(Harrow, Central): I am very pleased to support the new Clause; and particularly to follow the hon. Member for Heywood and Royton (Mr. Barnett). I am sure that the Chief Secretary will take note of the fact that even if, in this case, we do not have his hon. Friend's vote we at least have his spirit, and will appreciate that on both sides of the Committee there is considerable sympathy with the spirit behind this Clause.
The hon. Gentleman is an accountant and I am a solicitor. I noticed the other day that my accountant had a notice on his desk to the effect that the new taxation was causing serious danger to the health of accountants. I must say that the hon. Gentleman looks extremely well, but it seems to me that the health and temper of everybody, professional and lay, are being strained by the complexity of the new tax Clauses. The hon. Member made the point very well that it is very unfair that the large company, probably employing highly skilled professional staff, should be able to claim a tax allowance for that assistance whereas those who really need professional assistance in the preparation of their small tax returns cannot so claim. It is the large firms that usually go to accountants to do the work, and the small individual who usually goes to the solicitor because he cannot afford to pay the accountant's fees.
There is equity in this Clause, and perhaps I might cite a recent instance that occurred in my own firm. One of my partners was consulted by a taxpayer, who produced an Income Tax return form for the year 1966–67. One must never forget that the honest taxpayer is in danger of very great penalties if he does not obey instructions, and this return demanded that the taxpayer should enter particulars of all assets acquired during the year on which a chargeable gain 128 would accrue if the assets were realised. It said nothing about the £1,000 limit on chattels or what sort of assets were included. The ratepayer was worried about it.
We communicated with the inspector of taxes. Considerable correspondence culminated in the Inland Revenue having to put out a statement publicly—it was published in many professional journals—setting out what was to be included in Question No. 22 of the form and what was not. This took place after considerable correspondence and after our client and probably many others had had to consult solicitors or accountants for advice. Obviously, a fee would have to be charged and that could not be allowed against their tax. Had they been a large industrial organisation, they could have charged the fee against their tax. This is extremely unfair.
§ 8.0 p.m.
§ I want to follow what was said by my hon. Friend the Member for Oswestry about the need to encourage wider share ownership. I am pleased that he referred to the Acton Trust. I was a member of the Executive Committee of the Wider Share Ownership Council which commissioned the Acton Trust to carry out a survey. My hon. Friend is right that it revealed very considerable ignorance about shares and the way in which one can acquire capital gains. But the Trust also revealed that there was a very great desire among even humble people to learn more about shares and to acquire a wider share ownership. We should encourage these people.
§ I know that the Chief Secretary understands this and sympathises, but he must realise that the Finance Act, 1965, is one of the greatest impediments to the spread of share ownership. One small but important aspect is the investment club movement. The right hon. Gentleman will know what sympathy I have with that and how I have attempted to ease its path through the jungle of Capital Gains Tax legislation. These are worthy people who desire to spread share ownership throughout the community. The Capital Gains Tax has put an impossible impediment in the path of their growth, so much so that many of them are ceasing business and, more important, losing a great deal of the enthusiasm which they had.129
§ If the Clause were passed, or if the Government made a concession on it, it would enable the investment club movement, as well as many ordinary individuals who desire to acquire shares, to offset some of the expenditure made on professional advice, if they can afford to do that. From these points of view—that of fairness and equity and that of a desire to encourage the spread of share ownership throughout the country by responsible people—I hope that the Chief Secretary will indicate sympathy with the object and a small concession.
§ Mr. Stratton Mills
(Belfast, North): There seems to be mounting evidence that the Treasury has not yet fully appreciated the tremendous burden which the Capital Gains Tax will place on ordinary people in completing their Income Tax returns. This Clause, which I strongly support, makes the point very well. The hon. Member for Heywood and Royton (Mr. Barnett) mentioned the pressure from the Inland Revenue for people return their tax forms and to return company accounts. From conversations with accountants, I suspect that a great many personal tax returns have been held up because of complications in computing Capital Gains Tax returns. I should be obliged if the Chief Secretary could give us figures, approximate though they might be, of the number of personal tax returns which have been received to date by the Inland Revenue compared with last year, although I appreciate that this may be too difficult to do without notice.
If it is known that one takes an interest in tax matters, when one goes round one's constituency people continually ask for advice. I have had three very simple cases put to me recently. In one case an individual holding ordinary shares had a free bonus issue of preference shares. He sold the preference shares. He wanted to know how he applied Capital Gains Tax rules to that situation. Another individual had received a rights issue, and he sold it without taking it up; there was a small amount of capital gains on that account, and his problem was how it was to be calculated. Another man owned a few houses, and each had a tenant in occupation; he got vacant possession of one of the houses, which he sold, and problems about calculating the Capital Gains Tax that arose. Those 130 are not of course immensely difficult problems to Members of this Committee.
I do not wish the Chief Secretary to reply to the examples that I have given. I gave advice as best I could to the individuals as to how to calculate their Capital Gains Tax. But the important point is that I fear that they do not fully understand the situation because we talk in an entirely different language compared with a person who has not sat through the long debates on the Finance Bill. Such people as I referred to do not spend all their time coping with tax problems. They have a small amount of wealth, and they are not able to grasp the very complicated principles involved in the tax. It is laughable to tell them that it is all in the 146 pages of the booklet on the Capital Gains Tax prepared by the Inland Revenue. I suspect that the bulk of ordinary people holding shares will be forced to go to accountants to deal with their Capital Gains Tax problems. The accountants may charge a big fee for that because it is very difficult and time-consuming work.
In a Parliamentary Question on 10th May I referred the right hon. Gentleman to paragraph 6 of the Income Tax return, which states that assets acquired during the year had to be returned in a tax return. Schedule 10 of the Finance Act, 1965, says in paragraph 6(1) that the Inland Revenue:may require particulars of any assets acquired by the person on whom the notice was served".No one going through the debates last year got the impression that that would be included automatically in every tax form sent out. It was thought that the Inland Revenue was taking power perhaps for the purposes of an investigation where it was suspicious. If one accepts the Capital Gains Tax, one must accept the need for such a power, but it was not thought that it would be automatic in every single case. I feel that there was some deception last year because that was not specifically brought to the attention of the Committee. This is just one more thing to make more difficult the return of Capital Gains Tax each year.
In a Parliamentary Question on 17th May I asked the Chief Secretary whether it would be satisfactory for individuals to make a full statement of their potential Capital Gains Tax liability during the 131 year, perhaps sending in all their contracts, or, if they had sold a house, giving details of it, providing full information, and then for the Inland Revenue in turn to calculate what the chargeable gain on that individual would be. But no. The Chief Secretary replied:Individuals have to calculate their capital gains or losses and enter them in their Income Tax returns."—[OFFICIAL REPORT, 17th May, 1966; Vol. 728, c. 1100.]We have been in correspondence about this and I think that it is nonsense.
There should be a scheme to prevent the necessity for this new Clause, whereby individuals of moderate means would be able to tell their inspector of taxes what assets they had sold during the year and there would thereby be a free accountancy aid scheme for capital gains tax payers. [An HON. MEMBER: "It would not be free in the end"] I accept that it would not be entirely free. But taxpayers should be able to discuss this matter with their inspector, perhaps submitting a schedule of all their dealings in the year from which he could calculate the tax. The wealthy person need not do such a thing. He can engage an accountant who will in any case charge him a hefty fee for other work.
I hope that the Chief Secretary will consider whether some more flexible system could not be evolved to avoid the necessity for thousands of people to be thrown into the arms of chartered accountants.
§ Sir John Eden
(Bournemouth, West): I am glad to have the opportunity of supporting the new Clause and to congratulate my hon. Friend the Member for Oswestry (Mr. Biffen) on tabling it. He undertook to be brief and I thought that he was very moderate. I do not know whether this was because he had good cause to be optimistic or whether there had been collusion. I hope that there has been collusion and that the Chief Secretary will depart from his customary stoney manner in this Committee and come forward with some modest little benefit or assistance in this connection.
I support the new Clause because I am in the unhappy position of being in this regard an ordinary individual. 132 Even though I have sat through long stages of this Committee, I do not suppose for a moment that I could possibly master all or even a few of the complexities of the provisions of the Capital Gains Tax. A friend brought to my notice an example which he had worked out and it was the subject of a reference made earlier in our proceedings by my hon. Friend the Member for Wycombe (Mr. John Hall) on 22nd June in column 808 of HANSARD.
My hon. Friend drew attention to a perfectly normal series of transactions over 10 years involving not very large sums of money and including a legacy or a rights issue and normal sale of shares but at no time involving a sum greater than £2,000. The accountant—who is an expert—covered six foolscap sheets of working and at the end of the operation he concluded that the total sum on which tax was liable to be paid was about £317. The result took an enormous amount of time to work out.
That accountant took the trouble to try to explain the transaction to a professional assembly. With the assistance they had of his prepared foolscap sheets and his demonstrations on a blackboard, it took him 1¼ hours to explain to this expert audience how he had arrived at his conclusion. This sort of thing is not good enough because it denies to the individual citizen one of his basic rights—the right to ensure that he shall be dealt with fairly and justly in taxation. He cannot be sure under the present position.
§ 8.15 p.m.
§ The Government have made life so incredibly complex for all of us that they have a duty to support a Clause of this nature. This Clause is extremely modest in its requirements and tries to get some form of assistance for those who will most need it and most deserve the help asked for. It is an appalling reflection on the present situation that we have to put forward a new Clause like this and to say that life is becoming so hideously complicated for the ordinary citizen that in order to do his simple duty as a citizen the completion of an Income Tax return form he should get the benefit of professional assistance and be allowed to offset the charges of doing so.
§ This is an appalling reflection upon the complexity of modern life, much of 133 it foisted on us by the present Government. I am not at all surprised because I have never thought that Socialists would make good capitalists. I have never thought that they were the right or likely people to make a success of capitalism. They are emotionally and philosophically unsuited to the task and the Administration has shown this clearly, for at every stage in their Budgets they have made life for all of us much more difficult, more complicated and unnecessarily confused. This is an admirable Clause which would make some slight improvement to an otherwise thoroughly rotten Bill.
§ Mr. Peter Hordern
(Horsham): I congratulate my hon. Friend the Member for Oswestry (Mr. Biffen) on the new Clause and I am glad that it has the support of the hon. Member for Heywood and Royton (Mr. Barnett), who at least gave it his philosophical if not his practical support. No doubt the Chief Secretary will also give it his support, not only philosophical but practical as well. He told us last year that the extra taxes—Corporation Tax and Capital Gains Tax—were simplicity themselves. The Committee will agree that the experience we have heard from our constituents throughout the country has been that it is not so much the weight of the taxes themselves which is so intolerable—that is bad enough—but the physical problem of dealing with the complexities which has caused so much disturbance in professional circles. This is generally admitted on all sides.
As a private individual it is difficult enough dealing with the complicated tax form, which has been made more complicated by the new taxes produced by the Government. One feels rather more reluctant, however—I am sorry to say this to the hon. Member for Heywood and Royton—to approach one's accountant who one knows is very busy dealing with the complexities of Corporation Tax, and now the Selective Employment Tax, about which he must engage himself with the companies he is advising. As a private individual one feels a very small minnow in a very large pond and is reluctant to approach one's accountant and tries to struggle with the form oneself.
Let us consider the wretched accountant. He has difficulty not only with the 134 affairs of the companies whose interests he is there to advance but in getting through to the Inland Revenue. I do not want to exaggerate the position, because I do not want to suggest that there will be a Poujadist movement among taxpayers. Nevertheless, something of the kind appears to have happened in the Inland Revenue.
I remind the Committee of the annual conference at Scarborough in May of the Inland Revenue Staff Federation. There was a resolution from London North branch deploring the lack of service given to the public as a result of pressure of work and staff shortages. That was as nothing compared with a resolution from Cardiff branch, which revealed a sad situation. Cardiff was alarmed at the possibility of a complete breakdown in morale. I am sure that morale did not actually break down, but on 23rd May a stiff note was sent to the Treasury and there was a ban on work on the Capital Gains Tax by 6,000 Income Tax officers who claimed £100 special allowance to cover the work involved out of the office in learning details of the new tax. I am happy to say that that little fracas was settled very quickly indeed, for rather obvious reasons, and four days later the ban was called off on the understanding that they would settle for £50 which was to be forthcoming at the end of July. That was a rapid settlement by any standards, and certainly by the standards to which we are accustomed to these days, but it was compensation for having to master the underlying theory.
This was a productivity agreement if ever there was one, because what they originally asked was simply an allowance for learning the details of the new tax, and now they were being told that under this productivity agreement they would have to go a good deal further than that and master the underlying theory. Anyone concerned with mastering the underlying theory of the Capital Gains Tax would have to go a good deal further back than even Mr. Kaldor. They would have to have a knowledge of Marx and various other Communist and Socialist philosophers and other people with whom our tax officials do not normally have to deal. Therefore, considering the physical problem of dealing with the tax, I am sure that the request 135 for £40 relief for the taxpayer is a model of moderation.
The poor wretched taxpayer has to do his best on the printed document which he gets from the Inland Revenue. Fortunately, he is not asked to master the underlying theory, but I have no doubt that eventually there will be another section in this wretched form in which there will be a question to discover whether he has understood the underlying theory. The form which is large and now excessively complicated is very puzzling to someone like myself who is reluctant to approach his accountant, knowing that he is busy with his work. If the hon. Member for Heywood and Royton would like to take on my account, I would be delighted if he could relieve me of some of my problems.
Perhaps the Chief Secretary can reply to a specific question. On page 3 of the form there is a section "Chargeable Assets Acquired". In a section of about half an inch, one is expected to put down the dates of the acquisition and the cost or the acquisition's value. Very helpfully, the Revenue authorities have included a yellow form which is an explanatory memorandum. Section K of this yellow form says:You must also give details … of chargeable assets acquired in the year whether they were obtained by purchase, exchange, gift or by inheritance under a will or intestacy.I presume—I do not know and I am seeking information—that the intention is that if one has happened to come into possession of a chargeable asset, a chattel, which may possibly appreciate in value to more than £1,000, one should give details on the form. I imagine that that is what is required—I cannot put any other construction on that passage—and yet the physical difficulties of providing the information are enormous.
For instance, if one were to buy a picture for £200 this year, how is one to know whether it will appreciate in value to more than £1,000 in the future? It could easily do so, but is that the kind of thing which one has to put on the form? If one is left a few books by a relative and one goes through them and sells one in a few years' time for more than £1,000, how is one to determine what the value of the book was when it come into one's possession? Those 136 are the sorts of questions which fill the recipient of the form with complete dismay and I do not know what the purpose of this section is. It may be to provide a sort of Domesday Book of the accumulated wealth of the country. Certainly if the Inland Revenue or the Government are serious in requiring this information a great deal of information will be given, and the Revenue may be swamped by the total.
The accountants themselves will be very heavily burdened by this extra pressure of work and are simply bound to put up their fees. They will be able to do nothing else with the natural market pressure of the law of supply and demand, but with the additional effect on firms of accountants of the Selective Employment Tax, they are very likely to put up their charges. It is difficult to think of a reason for them not to do so, for they have a patriotic reason for raising their charges to meet the Selective Employment Tax which would otherwise not be successful in carrying out the Chancellor's intention of having disinflationary effects. The private individual will therefore be faced with increases in accountants' fees and for that reason alone the Government should agree to the Clause.
I hope that the Chief Secretary will try to enlighten us about some of the meaning of this extraordinary form which must be baffling millions of people and that he will take into account the considerable pressure which these demands are making and will allow the concession to go through.
§ Sir Eric Errington
(Aldershot): I want to add a few words to the debate from a less ambitious point of view than that already expressed. I am one of those who believe that Income Tax inspectors are extremely helpful and kindly to some of us who make our individual returns. For example, I know that in dealing with motor car depreciation and Dominion Income Tax, without the very kindly help which is given by the inspector of taxes to me to make my return after I have discussed the matter with him, my returns would probably be very wrong.
It is not always realised that the inspectors offer considerable help. I know that not only from my own experience, but from that of my constituents. However, sad to say, there are frequently many 137 errors when a constituent is not wise enough to get some sort of advice from the inspector who is ready to give it, or from someone employed to give such advice.
§ 8.30 p.m.
§ We are facing a situation in which, as a result of the Capital Gains Tax, there are almost unlimited complications. There is the yellow book, about which we have heard, which has 165 pages, and is an extremely complicated document. If it happened that people did as I have previously done—and do not intend to do in the future—that is to submit a return on chargeable gains—I am sorry, I am not in the joke with the Chief Secretary. I do not think that I am getting the right hon. Gentleman's attention.
§ Mr. Diamond
I can assure the hon. Gentleman that I have listened to every word. If I may say so, some of the arguments are very familiar, but I am listening most carefully.
§ Sir E. Errington
I thought that I had been guilty of unconscious humour. I take it that the object of a return of chargeable gains is to find out who has given or sold something which may be in the nature of a gain to the person making the return. I understand that it is not what he has received by way of chargeable gain which matters, but the person who has sold or given something which may be a gain, and for which he would be liable to make a return.
What I am suggesting is that if one wants, as I presume one does, good returns. properly dealt with, one must have people with correct technical knowledge to deal with such affairs, otherwise the works will be clogged up. If one does not have such experienced people and the taxpayer does not make use of accountants, then there is the likelihood that the system will be choked up as a result of people making what they believe to be proper and adequate returns but which are really, meaningless in relation to their tax liability.
I heard the other day of someone who had shares in a company which was taken over. The takeover bid involved debenture, preference, and ordinary shares. I am uncertain as to how this is going to be worked out; the probability 13 that if it is not dealt with in 138 the first instance there will be a great waste of time. For all of these reasons I should like the Chief Secretary to consider this, not necessarily from the point of view of the taxpayer, for whom conditions are hard enough, but from the point of view of his own hard-working staff.
§ Mr. Kenneth Lewis
(Rutland and Stamford): I will follow the lead set by my hon. Friends and keep my speech short. This is the first time that I have listened to a debate in this Chamber and felt my heart bleeding for accountants. After having listened to the hon. Gentleman the Member for Heywood and Royton (Mr. Barnett) I have come to the conclusion that the Chief Secretary must be glad that he has changed his occupation in recent years. I also felt that the burden of work for accountants was a stricture upon the Treasury for the complication of the tax structure, and this seemed to make the case for the new Clause. I am sure that the £40 which would be allowed against the taxpayer would be received from the accountants by way of increased tax and Surtax payments which would undoubtedly arise through the increased work which they would receive.
Having been away from all-night sittings for a short while I feel in a benevolent mood towards the Treasury. One of the things which has most pleased me since I entered this House was an occasion when I went into my constituency, a year or two ago in order to answer constituents' questions. As nobody asked me any questions—a Conservative Government were in power at the time so that that was perfectly understandable—I took the initiative and asked some questions of various people. I asked one individual whether he had any complaints and he said, "Yes, I am paying too much Income Tax." I said that I was, too, and that we all were. Again, as it was a Conservative Government, I wrote to the Conservative Chancellor of the Exchequer. He looked into the matter. Without having to go to an accountant, this man got a rebate of £36 and a deduction of tax of 6s. a week.
This just shows that mistakes can be made and that the small man, in these days of complicated tax matters, requires 139 assistance. He does not get the same assistance as the director of a company or a man engaged in a partnership. Directors of companies and partners get advice, and more likely than not they get it free. They do not have to employ accountants privately because their companies have accountancy departments. They simply go to the accountants and say, "I am in trouble with my tax return. Can you help me?"
The man imposed on most of all is the man who has had advice for most of his working life and who has retired. He has a mixed income—a retirement pension and a private income perhaps from buying and selling stocks and shares which involves him in Capital Gains Tax. This is a complication which requires him to continue to seek the advice which he has always had, but probably for the first time he finds that he is no longer allowed the fee.
The Chief Secretary should consider the new Clause amenably. If he does not accept it, he should at least offer a compromise so that the small man is given the help which he requires.
§ Mr. Diamond
The hon. Member for Oswestry (Mr. Biffen) said that he hoped that brevity would encourage charity. I assure him that it encourages a charitable attitude of mind and a charitable response. As he may know, the persuasiveness of any speech is in inverse ratio to its length. I wish to answer the three clear, short arguments which he addressed to the Committee.
The first ground on which he moved the new Clause was equity. He said that business accounts were drawn up on the basis that the fees paid to the accountant for calculating business profits and losses and the tax computation were allowable, although he was good enough to recognise that this was by custom rather than by statute; therefore, should not the same apply to the individual? The hon. Gentleman is very nearly on a good point, but not quite. It is not the case in law, and it is not the case universally in practice, that no distinction is made between the charges made by professional accountants for computing the business accounts and for computing the business tax liability. Certainly statute provides no such relief.
140 It is, however, obvious that if a firm of accountants is engaged in both the auditing and accountancy work and the tax work on behalf of a company, it is almost impossible to segregate the hours of work and so arrive at the appropriate charges for doing each kind of task. Because of the difficulty of sorting it out, I recognise that, in practice, the part of the fee which the professional adviser charges which would relate to the tax work is often allowed as a deduction because it is included in the larger fee charged for preparing the accounts, which is a properly chargeable item. But I assure the hon. Member for Oswestry that, first, this is not a statutory provision, and, secondly, it is by no means a universal practice.
I go further and say that whenever a business has been involved in an obvious long and complicated tax appeal on an assessment—it may have become public knowledge, for example—and where, obviously, a good deal of the work involved by the accountants has been in respect of that tax appeal, an appropriate figure, by agreement by the taxpayer through his accountant and the Revenue, is written back; an appropriate proportion of the accountancy or other professional charges is disallowed as being in respect of the tax work and not in respect of the computation of the profits of the business.
Therefore, even on the ground on which the hon. Member was nearest to establishing his case—on the ground of equity—first, it is not the case in law; secondly, it is not universally the case in practice; and thirdly, where it is the case in practice, it is only because of the administrative impossibility of segregating out. There would be an endless argument about which clerk spent how much of a certain day doing which job and it would be impossible to segregate it out. That, therefore, is my answer on the hon. Member's first main point.
On the second point, the hon. Member drew attention to the question of economy. He said that the tax work is now complex. The hon. Member for Aldershot (Sir E. Errington) came to my assistance by saying that it always has been complex. He pointed out that there were problems with regard to car depreciation in which he found it difficult to work out the tax allowance, and he would go and have 141 a word, very wisely, with the inspector of taxes, who would be only too glad to help him.
The hon. Member said that there were problems of Dominion Income Tax relief. Every practitioner knows that there are few problems more complicated than Dominion Income Tax relief, which floors nearly everybody. That is an old situation. The hon. Member for Aldershot was quite right in saying that in these two respects, which he gave purely as examples, tax always has been complex. It was always difficult—now, he says, impossible—for the layman to be sure that he was getting the right answer in computing figures which had to be included in his Income Tax return.
The hon. Member for Oswestry drew attention to the difficulties of coping with the Capital Gains Tax and these have been repeated by many hon. Members. I admit that with a new tax one has extra difficulty. Extra work is involved in starting the tax and getting it going. My own firm belief is that once we have got over the first few years of Capital Gains Tax and the figures are simply put on a renewal basis year after year—whatever new has to be added—it will be found that the volume of additional work is not great, and the complexity will be much reduced as soon as one is accustomed to the work. Here is both the difficulty of a new tax to which we are not accustomed, and the problem of starting to provide information which may not be needed for many years ahead.
As everybody knows, with the Capital Gains Tax the real difficulties are in finding out past history, what happened to particular shares which changed their form and had various rights issues, bonus issues, and so on. The only way of preventing such trouble arising in the future is to have a full return now so that all the information is available, and life will be a good deal easier in the future.
One recognises that with a new tax, new in type and new in the sense that it requires a good deal of information in its first year, there is inevitably a certain amount of additional work. It is on Capital Gains Tax that all the difficulty has arisen both for the Inland Revenue and for the accountancy profession; and it has led to complaints made by hon. Members and voiced in today's debate. It is not the case with Corporation Tax; 142 there are no complaints about Corporation Tax. I assure the hon. Gentleman that the accountancy profession knows full well that Corporation Tax is no more difficult than coping with the taxes whose place it has taken.
§ 8.45 p.m.
§ Mr. Hordern
Would the right hon. Gentleman be good enough to deal with the particular point of Capital Gains Tax relating to chattels and whether one is obliged to return on the form a chattel which may potentially have grown in value to over £1,000?
§ Mr. Diamond
I hope I may be forgiven if I seem to be taking on more than my job at this Box and acting as though I were in the Chair; but I would say that this new Clause deals with the allowability of professional charges. Whether the form was long or short, whether it included one tax or two taxes or 10 taxes, the position would be precisely the same. This is not the occasion to go into a long and detailed dissertation on what is in a particular form or what is not in a particular form. The answer is that this matter has been dealt with. I would attempt to deal with it if it had not previously been dealt with, but, as it is, I hope the hon. Member will excuse me for not going wide of the questions which the hon. Member who moved the Second Reading of the new Clause addressed to me with such brevity and point. If I may, therefore, I will turn to the arguments he put to me.
§ Sir E. Errington
The right hon. Gentleman did say the difficulty arose in regard to the Capital Gains Tax. Of course, that is so. He also said that Corporation Tax did not provide a difficulty. I hope the Chief Secretary realises that Capital Gains Tax applies to individuals who have not the facilities which he has just been adumbrating.
§ Mr. Diamond
I appreciate that point. I was dealing with a different point, as to whether or not this Clause sprang from problems arising out of additional taxes of all kinds or whether it was solely due to Capital Gains Tax. It is mainly due to Capital Gains Tax, and that problem, I am suggesting, is a temporary problem. Therefore, there is not so much need to have regard to it as would otherwise be the case.
143 I want to come particularly to Capital Gains Tax and to my hon. Friend the Member for Heywood and Royton (Mr. Barnett), who said he would support the principle of allowability of charges arising out of a gain, because, he was saying, if one is taxed on the gain then the gain is such a figure as remains after allowing for the cost of evaluating the gain. Of course, he is quite right, and that is why appropriate charges are allowable. I refer my hon. Friend to paragraph 4(2) of Schedule 6 of last year's Finance Act, where he will see that fees relating to valuations or apportionment required by the computation rules in relation to Capital Gains Tax are in fact allowed.
§ Mr. Barnett
Perhaps I did not make the matter sufficiently clear. I am aware, of course, of the fact that a charge is allowable in that case under that Act. What I was really saying—I thought I had made the point—was that the actual computation of the tax was equally relevant to the whole question of earnings gained.
§ Mr. Diamond
In that case I cannot go as far as that with my hon. Friend. I agree that it is absolutely the case, and I would share his view, that valuation required by the rules to ascertain the correct figure of a gain is a proper charge in arriving at the gain because the gain is only realised net of this cost. I do not think the duty of making the return of one's income is in the same category.
I hope, therefore, that I have satisfied the hon. Gentleman the Member for Oswestry that, on the basis of equity, this is only a question of practice and of limited practice; and that on the question of economy the complexity is of short term; and, for Capital Gains Tax, valuation costs are in fact allowed in appropriate circumstances.
§ Mr. Stratton Mills
As far as I can make out, the computation of the gain is not included in this booklet. Before it is re-issued, would the right hon. Gentleman look at it and perhaps put in something in a prominent place to advise taxpayers?
§ Mr. Diamond
I hope I shall be forgiven if I do not comment on the second 144 part of the hon. Gentleman's intervention. I will look into his first point.
The hon. Member for Oswestry raised the question of wider share ownership and gave figures for the United States. He said that we were 13 years behind them. Presumably the hon. Gentleman cited the United States experience in support of his argument, but, far from being 13 years behind the United States, we are over 50 years behind them in introducing our Capital Gains Tax.
It is the Capital Gains Tax which has caused the complexity, and the United States have had a capital gains tax for over 50 years. Every taxpayer has had to make a return of all his income, including short and long-term capital gains, for over 50 years in the United States. I cannot accept that that is one of the reasons why share ownership is limited. I agree that it is limited, and some recent figures which I saw in the Economist a short time ago indicated that the proportion of the population who hold equity shares is something like 4 per cent. Surely the hon. Gentleman must agree, a fortiori, that, as they have had it much longer in America, their share ownership is much more widespread.
§ Mr. Diamond
I listened carefully to the argument of the hon. Member for Oswestry, and he related it exactly to the Amendment. That deals with the allow-ability of charges in computing the figure. His argument was that, because it is being made more complex by adding Capital Gains Tax, there is inadequately wide share ownership. On the contrary, in America they have had to make returns for capital gains tax over the past 50 years and more, and they have an even wider share ownership.
The short answer is that on his three grounds, the hon. Gentleman does not make his case. But the overwhelming point is the one to which the Royal Commission on the Taxation of Profits and Income drew attention, and that is the real argument of principle to which, in 145 his speech, the hon. Gentleman did not turn his mind. I cannot do better than refer the Committee to what the Royal Commission said in paragraphs 927 to 929 in Chapter 30 of its Final Report. In particular, in paragraph 928 it said:… there is no general principle that would require a taxpayer's taxable income to he affected by the fact that he may have incurred some expense in performing his general duty of making a proper return.That was the view of the Royal Commission; it has been the view of all Governments since; and it is the view of the present Government. It is a duty laid upon the taxpayer, and any expense that he incurs in doing that is one of the things on which he spends his own taxed income.
The question of principle remains whatever it was. We accept it. We accept what the Royal Commission had to say. In the three grounds which the hon. Member put forward, he did not show anything which would upset that case or the general principle. I am sorry, but I cannot recommend the Clause to the Committee.
§ Sir Charles Mott-Radclyffe
(Windsor): I had no intention of intervening in the debate on this Clause—still less have I any intention of prolonging the discussion for more than a couple of minutes—had it not been for the Chief Secretary's reply, I wonder whether the right hon. Gentleman would be kind enough to look at page 170 of the Finance Act, 1965, at the Sixth Schedule. It deals with the method of computation of capital gains, to which reference has been made by my hon. Friend. About halfway down the page there is the following paragraph: "… a chargeable gain is E (0) T/P+T
+ E(1)T/P(1) + E(2) T/P(2) + T"
and then rather euphemistically, it says, "and so on."
More years ago than I care to remember, when I was at school my mathematics master invited me to give the right answer to what seemed to me to be an extremely complicated multiplication formula on the blackboard. I had no 146 idea what the answer was, but I made a guess and said, "I think, Sir, that the answer is to divide the bottom line by 6", to which he replied, "If that is what you think, come up here and I will divide your bottom line by 8".
If the right hon. Gentleman is seriously telling the Committee that any ordinary individual can interpret this incredibly complicated algebra formula without the advice, which will be expensive, of highly skilled accountants, then he ought to suffer the same fate as I did many years ago.
§ Mr. Terence L. Higgins
(Worthing): I cannot help but feel that my hon. Friend the Member for Windsor (Sir C. Mott-Radclyffe) would have been well advised to have consulted an accountant at an early age.
I think that we must take issue with the Chief Secretary on the answers which he gave in reply to this excellent debate, because the point made by my hon. Friend the Member for Windsor and by my hon. Friend the Member for Horsham (Mr. Hordern) is very relevant. If it is the case that in the computation of capital gains the algebraic formula to be used is of the complexity which my hon. Friend has mentioned, or if it is to raise bigger problems of the kind to which reference has been made, surely it is advantageous that technical advice should be made available to our constituents? Indeed, I support my hon. Friend the Member for Oswestry (Mr. Biffen) in saying that the Government should bear part of the cost.
We cannot accept the arguments put forward by the Chief Secretary that discussion of these complexities is not very relevant. It is because of the greatly increased complexity of the taxation system that we feel that our constituents should be given some advantage of the kind suggested here. The Chief Secretary said that this was something which would be all right in a few years. At least there will be some case for giving relief in those few years, but, while the matter may become somewhat simpler over the years, because the amount of capital which a person has may build up into what my hon. Friend described as a kind of Domesday Book of capital, many of these problems will remain complex.
147 I think that this becomes clear if one examines some of the documents which have been sent to shareholders by individual firms. I have one here. It runs to two pages of foolscap and the calculations given to shareholders are based on a set of eight assumptions. They proceed to give a series of illustrations of the ways in which capital gains could be computed on alternative bases. This involves complicated arithmetic. It is a mass of fractions, expressed in numerical terms of the kind to which my hon. Friend was just referring. It deals with fractions like twelve-thirty-sixths and twelve-fifteenths. I would have thought that since even the Chief Secretary earlier on had some trouble with the rather simpler fraction of eleven-twelfths he might be moved to agree that our constituents, who have to struggle to complete their tax forms in a way which gives an honest appraisal of their position, ought to have this tax concession.
§ 9.0 p.m.
§ It is a very modest request. It is not a £40 limit, as some of my hon. Friends have suggested, but merely the right to write off against tax the sum of £40. We would have thought that the fact the people could write this amount off against tax if they consulted professional accountants would be of considerable advantage to the Inland Revenue authorities, since the preparation of the returns would be carried out in a proper manner, thereby correspondingly reducing the burden upon those authorities. It is surely not unreasonable in those circumstances to ask that part of the cost, at least, should be written off against tax.
§ I take issue with the argument put forward by the Chief Secretary in regard to equity. Am I wrong in thinking that if a person is engaged in a trade or profession he is allowed to write off his accountants' fees against tax? If so, is there not some case for extending this concession into a wider field, on the lines that we suggest? I do not wish to delay the Committee, but I must point out that we feel that this is an excellent proposal and one which the Committee ought to approve.
|Division No. 91.]||AYES||[9.5 p.m.|
|Alison, Michael (Barksten Ash)||Awdry, Daniel||Bell, Ronald|
|Allason, James (Hemel Hempstead)||Balniel, Lord||Bennett, Dr. Reginald (Gos. & Fhm)|
|Astor, John||Batsford, Brian||Biffen, John|
§ In conclusion, I want to take up three points made by the hon. Member for Heywood and Royton (Mr. Barnett). Although it is suggested that those arguments were against the new Clause, they all supported the points put forward by my hon. Friend. The hon. Member said, first, that accountants were already working to capacity and that if the Amendment were accepted it would place an even greater burden upon them. If there is a need for an accountant's services, this proposal is likely to increase the number of people going in for accountancy, and this will create the situation that we want. On the other hand, if we do not encourage this situation to develop accountants will increase their prices.
§ Further, the hon. Member spelt out at great length the difficulty experienced by an accountant in preparing even quite a small return for an individual client. If it is difficult for a qualified accountant, who is an expert in this field, it is surely fact more difficult for individual constituents. We have only to look at the complexity of the form and the explanatory notes to realise how many of our constituents—some of them with only a few shares— would have great difficulty in meeting the legal obligations which the House has placed upon them.
§ If more of the cost of this kind of preparation can be placed upon the Exchequer rather than upon individual constituents we shall get somewhat closer to the real social cost of administering the tax. If a system of cost accounting is applicable to the Victoria Line it is equally applicable in taxation.
§ If the Chief Secretary will give us an assurance that he will reconsider this very modest proposal we shall be prepared to listen to what he has to say—otherwise I must advise my hon. and right hon. Friends to vote for the new Clause.
§ Question put, That the Clause be read a Second time:—
§ The Committee divided: Ayes 115, Noes 189.149
|Black, Sir Cyril||Harrison, Brian (Maldon)||Mitchell, David (Basingstoke)|
|Blaker, Peter||Harrison, Col. Sir Harwood (Eye)||More, Jasper|
|Body, Richard||Harvie Anderson, Miss||Morrison, Charles (Devizes)|
|Boyle, Rt. Hn. Sir Edward||Heald, Rt. Hn. Sir Lionel||Mott-Radclyffe, Sir Charles|
|Braine, Bernard||Heath, Rt. Hn. Edward||Murton, Oscar|
|Brown, Sir Edward (Bath)||Heseltine, Michael||Nabarro, Sir Gerald|
|Bruce-Gardyne, J.||Higgins, Terence L.||Neave, Airey|
|Bullus, Sir Eric||Hiley, Joseph||Nott, John|
|Carlisle, Mark||Hill, J. E. B.||Osborn, John (Hallam)|
|Chichester-Clark, R.||Hirst, Geoffrey||Page, Graham (Crosby)|
|Clegg, Waller||Hobson, Rt. Hn. Sir John||Percival, Ian|
|Cooke, Robert||Holland, Philip||Pike, Miss Mervyn|
|Costain, A. P.||Hordern, Peter||Prior, J. M. L.|
|Crawley, Aidan||Hornby, Richard||Pym, Francis|
|Crowder, F. P.||Howell, David (Guildford)||Ramsden, Rt. Hn. James|
|Dalkeith, Earl of||Hunt, John||Rees-Davies, W. R.|
|Dance, James||Hutchison, Michael Clark||Renton, Rt. Hn. Sir David|
|Dean, Paul (Somerset, N.)||Kaberry, Sir Donald||Ridley, Hn. Nicholas|
|Deedes, Rt. Hn. W. F. (Ashford)||Kerby, Capt. Henry||Roots, William|
|Dighy, Simon Wingfield||Kimball, Marcus||Rossi, Hugh (Hornsey)|
|Dodds-Parker, Douglas||Kirk, Peter||Sharples, Richard|
|Eden, Sir John||Kitson, Timothy||Taylor, Sir Charles (Eastbourne.)|
|Elliott. R. W.(N'c'tle-upon-Tyne, N.)||Knight, Mrs. Jill||Thatcher, Mrs. Margaret|
|Errington, Sir Eric||Lambton, Viscount||Turton, Rt. Hn. R. H.|
|Eyre, Reginald||Lancaster, Col. C. G.||Vickers, Dame Joan|
|Fletcher-Cooke, Charles||Langford-Holt, Sir John||Walker-Smith, Rt. Hn. Sir Derek|
|Foster, Sir John||Lewis, Kenneth (Rutland)||Ward, Dame Irene|
|Fraser, Rt. Hn. Hugh (St'fford & Stone)||Loveys, W. H.||Weatherill, Bernard|
|Gilmour, Sir John (Fife, E.)||McAdden, Sir Stephen||Whitelaw, William|
|Glover, Sir Douglas||Maclean, Sir Fitzroy||Wills, Sir Gerald (Bridgwater)|
|Gower, Raymond||Macleod, Rt. Hn. Iain||Wilson, Geoffrey (Truro)|
|Gresham Cooke, R.||Maddan, Martin||Wylie, N. R.|
|Gurden, Harold||Mawby, Ray|
|Hall, John (Wycombe)||Maxwell-Hyslop, R. J.||TELLERS FOR THE AYES:|
|Hall-Davis, A. G. F.||Mills, Peter (Torrington)||Mr. George Younger and|
|Harris, Frederic (Croydon, N.W.)||Mills, Stratton (Belfast, N.)||Mr. Anthony Grant.|
|Harris, Reader (Heston)||Miscampbell, Norman|
|Anderson, Donald||Driberg, Tom||Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)|
|Archer, Peter||Dunn, James A.||Kenyon, Clifford|
|Armstrong, Ernest||Dunnett, Jack||Kerr, Dr. David (W'worth, Central)|
|Atkins, Ronald (Preston, N.)||Dunwoody, Mrs. Cwyneth (Exeter)||Kerr, Russell (Feltham)|
|Atkinson, Norman (Tottenham)||Dunwoody, Dr. John (F'th & C'b'e)||Leadbitter, Ted|
|Bacon, Rt. Hn. Alice||Edwards, William (Merioneth)||Lee, John (Reading)|
|Bagler, Gordon A. T.||Ellis, John||Lester, Miss Joan|
|Baxter, William||English, Michael||Lewis, Arthur (W. Ham, N.)|
|Bellenger, Rt. Hn. F. J.||Ensor, David||Lomas, Kenneth|
|Bence, Cyril||Evans, Ioan L. (Birm'h'm, Yardley)||Lyon, Alexander W. (York)|
|Bennett, James (G'gow, Bridgeton)||Fitch, Alan (Wigan)||Lyons, Edward (Bradford, E.)|
|Bessell, Peter||Fletcher, Raymond (Ilkeston)||McBride, Neil|
|Bidwell, Sydney||Fletcher, Ted (Darlington)||McCann, John|
|Bishop, E. S.||Floud, Bernard||MacDermot, Niall|
|Blackburn, F.||Foley, Maurice||Macdonald, A. H.|
|Booth, Albert||Foot, Sir Dingle (Ipswich)||McKay, Mrs. Margaret|
|Boston, Terence||Ford, Ben||Mackenzie, Gregor (Rutherglen)|
|Bowden, Rt. Hn. Herbert||Forrester, John||Mackie, John|
|Bradley, Tom||Fowler, Gerry||Mackintosh, John P.|
|Brooks, Edwin||Fraser, John (Norwood)||Maclennan, Robert|
|Broughton Dr. A. D. D.||Fraser, Rt. Hn. Tom (Hamilton)||McMillan, Tom (Glasgow, C.)|
|Brown, Bob (N'c'tle-upon-Tyne, W.)||Gardner, A. J.||McNamara, J. Kevin|
|Brown, R. W. (Shoreditch & F'bury)||Garrett, W. E.||Manuel, Archie|
|Buchan, Norman||Garrow, Alex||Marquand, David|
|Butler, Herbert (Hackney, C.)||Ginsburg, David||Mason, Roy|
|Butler, Mrs. Joyce (Wood Green)||Gourlay, Harry||Mayhew, Christopher|
|Callaghan, Rt. Hn. James||Gray, -Dr. Hugh (Yarmouth)||Milian, Bruce|
|Carmichael, Neil||Gregory, Arnold||Mitchell, R. C. (S'th'pton, Test)|
|Coe, Denis||Grey, Charles (Durham)||Morgan, Elystan (Cardiganshire)|
|Coleman, Donald||Hamilton, James (Bothwell)||Morris, Alfred (Wythenshawe)|
|Conlon, Bernard||Harrison, Walter (Wakefield)||Morris, Charles R. (Openshaw)|
|Corbet, Mrs. Freda||Hazell, Bert||Mulley, Rt. Hn. Frederick|
|Cullen, Mrs. Alice||Heffer, Eric S.||Murray, Albert|
|Dalyell, Tam||Herbison, Rt. Hn. Margaret||Norwood, Christopher|
|Davidson, James (Aberdeenshire, W.)||Hooley, Frank||Oakes, Gordon|
|Davies, Dr. Ernest (Stretford)||Hooson, Emlyn||Ogden, Eric|
|Davies, Harold (Leek)||Houghton, Rt. Hn. Douglas||O'Malley, Brian|
|Davies, Robert (Cambridge)||Howie, W.||Orbach, Maurice|
|Delargy, Hugh||Hunter, Adam||Oswald, Thomas|
|Dempsey, James||Hynd, John||Owen, Will (Morpeth)|
|Dewar, Donald||Jay, Rt. Hn. Douglas||Page, Derek (King's Lynn)|
|Diamond, Rt. Hn. John||Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)||Palmer, Arthur|
|Dickens, James||Johnson, James (K'ston-on-Hull, W.)||Pannell, Rt. Hn. Charles|
|Doig, Peter||Johnston, Russell (Inverness)||Pardoe, John|
|Parker, John (Dagenham)||Shaw, Arnold (Ilford, S.)||Walden, Brian (All Saints)|
|Parkyn, Brian (Bedford)||Short, Rt. Hn. Edward (N'ctle-u-Tyne)||Walker, Harold (Doncaster)|
|Pearson, Arthur (Pontypridd)||Short, Mrs. Renée (W'hampton, N.E.)||Wallace, George|
|Pentland, Norman||Silkin, John (Deptford)||Watkins, David (Consett)|
|Perry, Ernest G. (Battersea, S.)||Silkin, S. C. (Dulwich)||Weitzman, David|
|Perry, George H. (Nottingham, S.)||Slater, Joseph||Wellbeloved, James|
|Price, Christopher (Perry Barr)||Small, William||Wells, William (Walsall, N.)|
|Price, William (Rugby)||Snow, Julian||Whitaker, Ben|
|Purley, Cmdr. Harry||Spriggs, Leslie||Williams, Alan Lee (Hornchurch)|
|Rankin, John||Steel, David (Roxburgh)||Williams, Clifford (Abertillery)|
|Rhodes, Geoffrey||Steele, Thomas (Dunbartonshire, W.)||Williams, Mrs. Shirley (Hitchin)|
|Richard, Ivor||Swain, Thomas||Williams, W. T. (Warrington)|
|Roberts, Albert (Normanton)||Swingler, Stephen||Wilson, William (Coventry, S.)|
|Robertson, John (Paisley)||Symonds, J. B.||Winnick, David|
|Robinson, W. O. J. (Walth'stow, E.)||Tinn, James||Winstanley, Dr. M. P.|
|Roebuck, Roy||Tuck, Raphael||Woodburn, Rt. Hn. A.|
|Rose, Paul||Urwin, T. W.||Yates, Victor|
|Ross, Rt. Hn. William||Varley, Eric G.|
|Rowland, Christopher (Meriden)||Wainwright, Edwin (Deame Valley)||TELLERS FOR THE NOES:|
|Ryan, John||Wainwright, Richard (Colne Valley)||Mr. Joseph Harper and|
|Mr. William Whitlock.|