HC Deb 26 October 1966 vol 734 cc1066-89

(1) Where for the purpose of assessing levy in connection with a chargeable act or event—

  1. (a) an allowance under Schedule (Allowance in respect of estate duty) to this Act is or may be required to be made, but no certificate relevant to the assessment of the levy has been issued under Part III of that Schedule, or
  2. (b) the appropriate deduction under Schedule (Deductions from levy in respect of capital gains tax and corporation tax) to this Act is or may be required to be made, but no certificate as to the amount of that deduction has been issued under Part IV of that Schedule,

the Commission may serve a notice of assessment of levy which does not take account of that allowance or deduction.

(2) Where an objection to a notice of assessment of levy (on whatever grounds the objection is made) is referred to the Lands Tribunal under section 47 of this Act, the Tribunal—

  1. (a) shall not postpone a decision on that reference by reason only that the notice does not take account of any such allowance or deduction, if no such certificate as is referred to in paragraph (a) or paragraph (b) of the preceding subsection (as the case may be) has been issued as therein mentioned, and
  2. (b) shall not discharge the notice for that reason.

(3) Where the last preceding subsection applies, then if before the Lands Tribunal gives a decision on the reference in question—

  1. (a) a certificate relevant to the assessment of the levy is issued under Part III of Schedule (Allowance in respect of estate duty) to this Act, or
  2. (b) a certificate under Part IV of Schedule (Deductions from levy in respect of capital gains tax and corporation tax) to this Act is issued indicating that a deduction under that Schedule is required to be made,

that certificate, and the application in pursuance of which it was issued, shall, for the purposes of section 47(2) of this Act, be included among the matters which the Tribunal is required to consider on that reference.

(4) In this and the next following section any reference to the issue of a certificate under Part III of Schedule (Allowance in respect of estate duty) to this Act shall be construed as including a reference to the issue of a certificate in pursuance of any regulations made under Part IV of that Schedule.—[Mr. Willey.]

Brought up, and read the First time.

Mr. Willey

I beg to move, That the Clause be read a Second time.

The new Clause deals with the problem which may well arise because the determination of Estate Duty or Capital Gains Tax may take longer than the assessment of the levy under the Bill. An allowance or deduction for Estate Duty or Capital Gains Tax may be made. The new Clause provides that the Commission can serve a notice of assessment of levy which does not take account of any allowance or deduction if no certificate has been issued, though it is known that an allowance or deduction may be required to be made.

The new Clause also deals with the question of the Lands Tribunal. If an objection to a notice of assessment is taken to the Lands Tribunal, the tribunal disregards the question of a certificate. Subsection (3) of the new Clause deals with the situation which could arise where a certificate relating to the deduction or allowance may be issued during the proceedings before the Lands Tribunal. It provides that this is a matter which the Tribunal can then take into account.

5.45 p.m.

Mr. Rossi

I should like to pursue the question of the certificate which is mentioned several times in the new Clause and to which the Lands Tribunal is required to have particular regard if it comes before it when considering questions about the amount of the levy.

According to paragraph 28 of the Schedule on page 3199 of the Notice Paper, the certificate issued by the Commissioners of Inland Revenue shall be conclusive evidence of the matters contained in the certificate. But, as we shall see in a moment, a number of factors will have to be taken into account and a series of complicated arithmetical problems will have to be worked out. None of this will be necessarily known to the person applying for the certificate. If there is an error in the figures in the certificate, he cannot challenge it, because the certificate is conclusive proof of what is contained in it. It seems wrong that one arm of the Government which is concerned with raising and collecting revenue should be in a position to give a certificate which, by itself, is conclusive evidence and which cannot be challenged by the person to whom it relates. He cannot go to a court of law to have it upset or investigated.

I turn to the other matters which have to be contained in the certificate. Part II of the Schedule deals first with something which is called the "gross principal value". That means, broadly, the probate value of the land which is the subject matter of the levy which the Commission is trying to raise. That is a relatively simple matter to ascertain, because on the death of a person valuers for probate or Estate Duty purposes make a valuation and after negotiation a value is accepted by the Estate Duty office. That is the probate value.

Having discovered the gross principal value, the Inland Revenue, when preparing its certificate, has to arrive at another figure. It has to find what is known as the "net principal value". It does that by deducting from the probate value any mortgage which may have existed on the property in question. That is easy enough to understand. It is standard practice for Estate Duty purposes. But, in addition, it is required under paragraph 14(1) of the Schedule to deduct so much of the funeral expenses and so much of the debts and liabilities of the deceased as for the purposes of estate duty leviable on his death was or is allowable as a deduction from the value of the dutiable interest. That immediately raises problems because such matters as funeral expenses and the debts and liabilities of the deceased are not chargeable against a particular asset of the estate, a particular piece of land. Only the mortgage on the land is chargeable against it. The funeral expenses, and so on, are chargeable against the estate as a whole.

It may well be that this paragraph requires the Inland Revenue to apportion the funeral expenses, the debts and other liabilities of the estate——

Mr. Costain

It does not say so.

Mr. Rossi

—as between the dutiable interest and the other assets of the estate; but, as has just been said behind me—the point has been anticipated—the paragraph does not say that. Therefore, we are entitled to ask whether the Minister means that the whole of the debts of an estate—all the liabilities of the deceased—are to be deducted from the principal value of the one asset that becomes subject to the levy, in order to arrive at the net principal value. That is how the paragraph can be read. If the Minister intends an apportionment, he should have said so.

This is a Committee matter, but I make no apology for raising a Committee matter on Report on the Floor of the House, because this is a Clause that should have been dealt with in Committee and not on the Floor of the House. If now we are raising difficulties for the Minister because of that, I make no apology whatever. Our intention here is to expose to the country at large what a ridiculous Bill this is.

To arrive at the net principal value, I express it as an algebraic equation: GPV for gross principal value, minus, in brackets, mortgage, plus FE for funeral expenses, plus debts, over X, the unknown quantity—is it a proportion of the whole?—close bracket, equals NPV or net principal value. That is one stage of the exercise through which the Commissioners of Inland Revenue have to go to issue the certificate.

Now, however, they are concerned with other problems and other matters. When we turn to pages 3197 and 3198 of the Amendment Paper, we find that they have to find the Estate Duty rate which is applicable to the net principal value. To do that, they have to take the original rate of the estate, if I understand it correctly. The Minister will forgive me if I get this wrong, having seen it at relatively few hours' notice. Having done that, the Commissioners have to disregard any allowance for Estate Duty purposes which has arisen because of agricultural property or which has arisen for business purposes under Section 28 of the Finance Act, 1954, but shall have regard to marginal relief under the Finance Act, 1914.

When they have done all that, the Commissioners have the rate of duty leviable and they have to multiply the net principal value by that figure. Having done that, they then have to express it as a proportion of the gross principal value. Having done that, again they must express it as a percentage.

I therefore continue my equation by multiplying NPV—which we know is GPV minus, in brackets, mortgage, plus FE and debts, over X, close bracket—by the rate of Estate Duty subject to the variation in the 1954, 1914 and 1925 Finance Acts as they may or may not apply. We then put that over the gross principal value and multiply by 100. When we have done that, to and behold we have found the effective rate of duty.

Mr. Eyre

Hurrah !

Sir Mannar Nicholls (Peterborough)


Mr. Graham Page

My hon. Friend should not interrupt in the middle of this.

Sir Harmar Nicholls

I only wanted to ask the cost that every Inland Revenue office will have to find to get a computer to work all this out.

Mr. Rossi

The Minister will, no doubt, take due note of that and let us know later in the debate.

Having arrived at the effective rate of duty, the Inland Revenue will then have another little mathematical exercise to perform. The Revenue has to find the excess gross value of the estate. It finds the excess gross value of the estate by going back to the gross principal value and deducting from it, not the net principal value—nothing as simple as that—but an altogether new concept, the modified value.

One arrives at the modified value in a number of different ways depending under which case number one comes. To give an example, when dealing with a sale of land one has to go back to the last relevant disposition to get one's modified value. Having got one's modified value, one subtracts it from the gross principal value. Having subtracted it, one is then given the excess gross value. Having got the excess gross value, one multiplies it by one's effective rate of duty—which, as we all know, is GPV minus, in brackets, mortgage, plus FE, plus debts, over X, multiplied by the rate as varied by the three Acts, over GPV, multiplied by 100.

When that is done, one then has one's appropriate allowance which is deducted from the levy. The certificate of the Commissioners of Inland Revenue is conclusive evidence that the sum has been done correctly and that they have left nothing out or have not added in the date or done something of that kind.

That is the sort of nonsense to which every man and woman who owns any house or the smallest plot of land, who has the misfortune to suffer death in the family and has an inheritance, will be put. This is what the Government are thrusting upon them. It has taken me several hours of very close study at short notice to read through the 387 lines of the Schedule, and I think that I am just beginning to have a glimmer of an understanding. But that happens to be because it is part of my business outside the House to deal with matters of this kind. I assure the Minister that if I find considerable difficulty in this matter, a great many also of my professional collagues will find difficulty. To the average man in the street it will be completely unintelligible.

I repeat that it is disgraceful that this should be brought before the House at three or four days' notice for our serious consideration. How can we decide on a matter of this kind, know what all the answers are and understand all these various figures, formulae and algebraic symbols which I have been putting to the House? How can we arrive at a balanced judgment on complicated technical matters of this kind, in which we need the assistance of the best professional minds? How can we do it in this short space of time? It is ridiculous, a discourtesy to the House and a shame on the Government.

6.0 p.m.

Mr. Peyton

I have seldom known, in the time I have been a Member of the House of Commons, an occasion on which a back-bench Member of the Opposition got up and gave such a lucid explanation—[HON. MEMBERS: "Hear, hear."]—of an intolerable mixture introduced from the other side of the House. It seems to me that common gratitude demands that the Minister should make a substantial allotment out of his bounteous salary to my hon. Friend the Member for Hornsey (Mr. Rossi) who placed the Minister immensely in his debt. I was not able, I must confess, to follow all my hon. Friend's algebraic formulae without the aid of a blackboard.

Perhaps the next time he is compelled, by that courtesy which we know was born into him, and feels obliged to do this he will seek the permission of the Chair to bring a blackboard with him, because if the Government are to go on like this the need for such occasions as this is going to be multiplied, because all our requests, put in varying degrees of eloquence, for elucidation have met with no response whatever from the Minister. I must say that this new Clause, and the cargo which accompanies it, is quite intolerable.

There is only one short point I wish to make, and I understand that I can make it in view of the more liberal Ruling, given by your predecessor in the Chair, Mr. Irving, and it arises out of words of the new Schedule, Allowance in Respect of Estate Duty. In Part III paragraph 30(1), to be found on page 3200 of the Amendment Paper, has these words: A certificate issued by the Commissioners of Inland Revenue under this Part of this Schedule shall be construed as having been issued on the assumptions specified in paragraph 27(1) of this Schedule"— which I do not propose to read out— and shall have effect without prejudice to any question whether those assumptions are correct or not. What I want to ask the Minister, for I am in the same position as all of us and I have had no time or chance to get very much professional advice on this point, is this simple question, whether that provision is as nasty and obnoxious as it appears to be.

Sir D. Walker-Smith

I want to address myself for a moment to the same provisions which have been referred to by my hon. Friend the Member for Yeovil (Mr. Peyton), but, like him, I should like, as I am sure all hon. Members would, to express appreciation of the masterly and lucid explanation of the Estate Duty provisions which has been given by my hon. Friend the Member for Hornsey (Mr. Rossi) and warmly to second the very proper suggestion of my hon. Friend the Member for Yeovil as to the practical way in which the Minister could express his appreciation on this matter.

I rise only on a relatively narrow point. Subsection (3) of this new Clause says: Where the last preceding subsection applies, then if before the Lands Tribunal gives a decision on the reference in question (a) a certificate relevant to the assessment of the levy is issued under Part III of Schedule"— that is, the Estate Duty Schedule— or (b) a certificate under Part IV of Schedule (Deductions from levy in respect of capital gains tax and corporation tax)… that certificate, and the application in pursuance of which it was issued, shall, for the purposes of section 47(2) of this Act, be included among the matters which the Tribunal is required to consider on that reference. I shall be grateful if the Minister would perhaps just tell the House how he envisages the procedure in regard to such a case arising.

As I understand it, and I am looking at paragraph 31 of the Corporation Tax Schedule at page 3210, the same page as my hon. Friend the Member for Yeovil referred to, A certificate issued by an inspector under this Part of this Schedule shall be construed as having been issued on the assumption specified in paragraph 29(1) of this Schedule and shall have effect without prejudice to any question whether that assumption is correct or not. There then follows a provision in regard to the conclusive evidence nature of the certificate to which reference has been made, but the extent to which it is conclusive evidence is expressly stated to be Subject to the preceding sub-paragraph". That, as I read it, means it is not conclusive in regard to the assumption made by the inspector that the opinion of the Commission is correct on any matter arising under Part I or Part II of that Schedule in respect of any question or act or event which constitutes a taxable disposal.

That does seem at first blush—and like other hon. Members I have not had an opportunity yet, I fear, to make a detailed study of these provisions, as my hon. Friend the Member for Hornsey has clearly made—to open up a possible, fairly wide, area in which the certificate of the inspector will not be conclusive; and these matters will presumably, therefore, be justiciable before the Lands Tribunal in any proceedings arising out of an objection to the notice of assessment for the levy.

That, so far as it goes, is gratifying, and I see the Minister nods assent at what I have said the position would be. That, as I say, so far as it goes, is gratifying. But, of course, procedurally it may give rise in practice, I think, to some difficulty, because the duty placed by subsection (3) of the new Clause is mandatory, that is to say, the Tribunal "shall" take into account the certificate with this wide area of possible dispute and justiciability among the matters which it is considering.

It may very well be, of course, that the moment when the certificate arrives is the moment which exists in, I think, all cases in the Lands Tribunal, certainly all the cases of which I have cognisance, between the end of the hearing and the giving of the award, because in the Lands Tribunal, for obvious reasons, judgment is reserved, and there is, therefore, that period. So if the certificate arrives during that interim period, what then, procedurally, is to happen? Is this something which is to be catered for by some amendment of the Lands Tribunal's rules by way of reconvening the Tribunal for the hearing? Or what is the position to be? Otherwise this Clause is placing a mandatory duty on the Tribunal to take into its consideration matters on which it will not have the assistance either of evidence or of submission by counsel engaged in the case.

I cannot feel that would be what the new Clause is intended to mean, but it does seem to me to be the position which will result from it. Perhaps the right hon. Gentleman or the Parliamentary Secretary will add a word of further explanation in regard to that point.

Mr. Skeffington

Perhaps I could help the House on some of the points which have been raised. I do not want to go too far into all of them. I think I would be out of order if I tried to answer all the points by the hon. Member for Hornsey (Mr. Rossi) because some of those can arise, in fairness I think he will agree, only on consideration of the Schedule itself. One does not want to anticipate that discussion.

Mr. Rossi

On a point of order. I am prepared to give the Minister till the early hours of the morning to give the answers.

Sir Harmar Nicholls

If it was in order for my hon. Friend the Member for Hornsey (Mr. Rossi) to make the points he did, I should have thought it to be in order for the Minister to reply to them.

Mr. Skeffington

When I need the assistance of the hon. Gentleman I will let him know. I have been here for some lime and have not yet arrived at that particular point.

Sir Harmar Nicholls

On a point of order, Mr. Deputy Speaker. I put my point of order to you, and the brusque way in which it was dealt with by the hon. Gentleman does not come into it. Is it not a fact in this House that, if a point is in order when it is made, the answer to it is equally in order?

Mr. Deputy Speaker (Mr. Sydney Irving)

This is a very difficult question for me to answer. The point about the Schedule has been clearly made by my predecessors. Hon. Members must leave me to decide whether anything that the hon. Gentleman says is out of order.

Mr. Skeffington

I was not greatly encouraged by the intervention of the hon. Member for Peterborough (Sir Harmer Nicholls), but I shall try to be as informative as I can.

It may be helpful to the House to know, in regard to the conclusiveness of the certificate, that there is at least one very good precedent, which is to be found in Section 9 of the Finance Act, 1894, where, in subsection (3), a certificate of the Commissioners shall be conclusive evidence.

Sir J. Foster


Mr. Skeffington

I am trying to be helpful. If I am to be interrupted by the hon. and learned Member for Northwich (Sir J. Foster) and other hon. Members at every sentence, it will not be easy.

Sir J. Foster

On a point of order, Mr. Deputy Speaker. The hon. Gentleman has imputed to me that I am trying to interrupt him on an unimportant point. I was trying to correct him on what he was saying.

Mr. Deputy Speaker

That is not a point of order, I am afraid.

Mr. Skeffington

Perhaps at a more convenient point, I might give way to the hon. and learned Gentleman.

The hon. Member for Hornsey raised points about the calculations which are referred to in detail in the Schedule. That is a new Schedule, appearing on the Order Paper as Amendment No. 185. I do not want to rehearse all the points which the hon. Gentleman made, and again it would be out of order, but if he looks with his usual acumen at paragraphs 13 and 14, he will see broadly what they provide for. They provide for the deduction of any mortgage which is deductible for Estate Duty purposes. The Schedule does not spell out in detail all the matters which will be the subject of the calculation, because the usual Estate Office practice can be assumed to be followed, as it is in other cases. Paragraph 14 also shows the deduction of other debts and liabilities, including funeral expenses and so on in particular.

The hon. Gentleman then made a point about the certificate, and it is really the point mentioned by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smih). If I may say so, he was quite correct in his assumptions. The certificate gives the gross principal values and the effective rate of duty, but the calculations from the Commission will be subject to appeal if there is disagreement. It is only into those two matters that the certificate goes.

The hon. Gentleman asked what would happen if there was a mistake. The answer is that always, if there is a mistake, administrative action is taken. If an assurance is required, I am prepared to give it in respect of a mistake which is proved in the wording of the certificate itself.

These provisions will be seen very much better later in our discussions. They are a very valuable addition to the levy payer and arise again as a result of second thoughts and a new opportunity in the two new Schedules, so that all matters are now dealt with together, instead of as they were before. In Committee, the hon. Gentleman complained that one had to look at four Clauses. Now the matters are all together in the two Schedules, and I would have hoped, therefore, that we might have received his congratulations.

6.15 p.m.

Mr. Graham Page

The Parliamentary Secretary has skated over a lot of thin ice, but he has not dealt with the point of the Clause.

My hon. Friend the Member for Hornsey (Mr. Rossi) took the House down the difficult path of the certificate. I should like to go back to the first words which the right hon. Gentleman used when, very briefly, he moved the new Clause. He said that the determination of the Estate Duty may take longer than the assessment of the levy and that that was the purpose of the Clause. That means to say that the Estate Duty authorities can take their time—perhaps a matter of six years—to calculate what the certificate should say and what figures should be put into it.

In the meantime, the Commission can assess the levy. The Commission can then serve notice, and that notice can become the operative assessment, with the levy becoming due and payable from the chargeable owner while the Estate Duty authorities are still trying to work out the Estate Duty allowance. The matter can be taken before the Lands Tribunal on the basis of the Commission's assessment, and the Estate Duty authorities can still go on calculating the figure. They are left in the background, and no consideration is taken of them. Finally, through the procedure of assessing a levy, giving notices and so on, when the Commission come down on the chargeable owner for payment, he has to pay no matter what allowance he may receive later.

Why should there be payment of the levy simply because the Estate Duty authorities are too slow in giving the certificate? Why should the levy be taken out of a man's pocket when it is quite possible that the allowance which he will get out of the Estate Duty certificate will exceed the levy?

That applies not only to the Estate Duty Schedule. It applies also to the Capital Gains Tax and Corporation Tax Schedule. The Inland Revenue authorities are required to give a certificate in that case of the allowance which the levy payer can have against the levy, but the levy payer can be made to pay the levy and has to wait for that certificate to get his relief against that money. He has to pay the money into the Exchequer and leave it lying there until he can get some relief.

It must be remembered that we are not dealing with inspectors of taxes here, with the Inland Revenue so far as the assessment of levy is concerned, or with those Treasury servants whom we have come to know over the years. We are dealing here with a new body of appointed civil servants making up a Land Commission. That Commission is not there only to impose a levy and collect it. It has power to take a person's property from him without notice or inquiry and without any deed or document signed by that person. It is a body which not only can take all those rights from a citizen but can impose a levy on him at the same time and make him wait for his allowance. The Commission can say to him, "We want the full levy from you now, and you may get your relief from it at some time."

That is the purpose of the Clause. It is one which ought never to have appeared in the Bill. If a man is entitled to relief from levy, the charging of him with the levy should wait until the relief has been decided. It is not for him to decide what the relief is. It is for the Estate Duty authorities or the Inland Revenue to decide. If they are slow, the levy should not be taken from him in the meantime. The Clause is a thoroughly bad one.

Mr. W. Baxter

I was greatly impressed by the speech of the hon. Member for Hornsey (Mr. Rossi). I think that the House must be very grateful to him for his lucid explanation of the details of the Clause. It is only right that we should compliment someone who is prepared to devote his time and energy to giving the House a proper interpretation of what is before it, and, irrespective of political complexions, I think that the hon. Gentleman is entitled to get at least my compliments for the work that he has done.

What I am concerned about is that there are some small estates, some people who have a small piece of land, or some small property, and perhaps all their resources have been put into it. I am afraid that, having coped with the full rigours of the law resulting from the setting up of this new organisation, and having paid all the penalties which might be placed on their shoulders, they will find that after having paid a tax here, an imposition there, and legal and other expenses elsewhere, they are in debt at the end of the day.

This Clause may cause great hardship to some sections of the community, because, when all is said and done, there are many people who own small estates and small properties. It is not the majority of the population who own the larger estates. I put it no higher than that. I am wondering whether, without any real intention to do so, by pressing this to its logical conclusion the Minister may be putting a heavy imposition on people who should not be asked to bear this burden.

If we pass legislation we must make it reasonably fair and equitable, and I want to be told whether there are minimum standards for this whole rigmarole. I have met many people who, even without this imposition, have great difficulty in winding up estates, and this is another problem with which they will have to contend.

Nobody like myself can possibly understand this Clause. It takes a gentleman in the profession to which the hon. Member for Hornsey belongs to assess the full implications of it. It may be that the Minister will include at the end of the Bill a list of the people who understand this Measure, so that we will be able to look at the list and say, "A, B and C, understand it, or at least they have received the Minister's stamp of approval", and then consult them.

I do not say that lightly, because for many years I was a member of a local authority, and I know the great difficulty which county clerks and their assistants had in trying to give a reasonable interpretation of the previous Act. This Measure is as complicated, if not more so, than the previous one, and it may have some considerable backwash throughout the country in respect of the people to whom I have referred.

I repeat that I am indebted to the hon. Member for Hornsey for his point of view of the Clause.

Mr. Willey

My hon. Friend has grasped the point at issue. It is quite a simple one. Let us consider a typical case in which there may be a substantial amount of levy. We are saying that we will make an allowance or deduction in respect of capital gains or Estate Duty. Some minor adjustment may be involved. There is no reason why the Commission, carrying out its work expeditiously, and making the operative assessment, should not proceed.

Mr. Eyre

Would not the right hon. Gentleman agree that thousands of solicitors throughout the country will be concerned in carrying out actions of this kind relating to quite small estates to decide whether the levy should be 2s. 9d. or 1s. 4d.? Has the right hon. Gentleman borne in mind the total amount of effort which will be required to make these calculations, and the total amount of costs which will have to be borne, on quite small estates? Will he consider an exemption of, say, £5,000 of Estate Duty, so that we do not repeat the folly of the Capital Gains Tax?

Sir Harmar Nicholls

I was wondering whether the right hon. Gentleman was going to respond to the point made by my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre). The hon. Member for West Stirlingshire (Mr. W. Baxter) made a very fair, and, I thought, impressive intervention in this discussion, and I felt that the reply which he received from the right hon. Gentleman amounted to nothing at all.

Parliament is now on the Report stage of this Bill. The object of having a Report stage is to enable careful scrutiny to be given to things which have been considered in Committee so that people can understand what they are all about. This sort of things affects every estate which comes under the purview of probate. I do not think that the House can allow itself to be fobbed off in the way that is being attempted by the right hon. Gentleman and his Parliamentary Secretary. This is just not good enough.

My hon. Friend the Member for Hornsey (Mr. Rossi) made out a case which must be answered if Parliament is to mean anything. His argument was supported by my hon. Friend the Member for Crosby (Mr. Graham Page). As things stand, the House is being asked to pass a Clause which is incomprehensible. We know Parliament and its procedures well enough to know that we cannot always expect the Minister in charge of a complex Measure such as this to be able to give clear decisive answers to complicated arguments such as those presented by my hon. Friend, and supported by the hon. Gentleman, but the least that we expect—and in the past we have usually had this—is that the right hon. Gentleman will tell the House that the Government recognise the anomalies which have been pointed out, that they are not able to give a clear answer now, but that they will look at the matter with sympathy to see whether, when the Bill goes to another place, the Clause can be amended so that it can be understood by the people whom it will affect.

I do not want to argue the technical details. I should find myself in pretty poor shape if I were to try. I have heard arguments advanced by people who are professionally qualified to discuss the matter, and I find that this is all above my head. Nevertheless, I am likely to be affected by this, and we have a responsibility to the country not to pass Measures of this kind which are understood by only a small clique of people who are specially trained to look at abstruse Measures such as this and understand them. I have a great regard for my colleagues, but I do not want to put my fate and that of my constituents, in their hands. Parliament ought to understand how the Bill will work.

The Parliamentary Secretary was rude to me. He is not usually rude. It is, perhaps, a sign that he feels that he has been put in an invidious position in being asked to get this Clause through. I do not believe that the House ought to accept the Clause without at least an indication from the Treasury Bench that the Government will look at it again, either to present the case in a way that can be understood, or to amend the Clause so that it can be understood.

This is not a matter of technicalities. This is a matter for argument. There are not many Members present in the Chamber, but this Measure will affect everybody in the country, and if Parliament is to do its job it is not good enough to say, "A very clever and able speech was made by the hon. Member for Hornsey, and the right hon. Gentleman adroitly passed it over and smoothed things out. What a good Parliamentarian he is". I have met the right hon. Gentleman on several occasions, for example, when we were discussing the Sugar Bill, and the abattoir Bill, which were just as difficult as this Measure, and I know how good he is at smoothing things over and getting away with it. We introduced the abattoir Bill when we were the Government. I do not think that the right hon. Gentleman's attitude is good enough when we are dealing with a Measure such as this one.

I ask the right hon. Gentleman—or if not him his hon. Friend who has been given the responsibility of getting this Clause through the House—to tell us that he is impressed with the arguments which have been put forward from both sides of the House, and that before the Bill becomes an Act, or before it goes to the other place, he will do all that he can to set out the position so that it can be clearly understood, or amend the Bill.

6.30 p.m.

Sir D. Glover

When my hon. Friend the Member for Peterborough (Sir Har-mar Nicholls) was speaking I was interested to hear that the right hon. Gentleman, at a previous stage in his career, had been connected with the abattoir Bill. That is a clear indication of where this Clause ought to go.

I always enjoy listening to the speeches of the hon. Member for West Stirlingshire (Mr. W. Baxter), who speaks with great courtesy and clarity. But if the Minister were unwise enough to accept the hon. Member's suggestion that a list should be added at the back of the Bill giving the names of those people who understand it, I am afraid that that list would be conspicuous by the absence of the names of the right hon. Gentleman and his Parliamentary Secretary. I say that with great kindness and no ill-feeling, because very few people understand the Bill.

Mr. Rippon


Sir D. Glover

It is therefore quite understandable that the Minister and his Parliamentary Secretary have been unable to tell the House what the Clause means. They do not understand it any more than anyone else. Yet here we are, as a House of Commons, passing legislation which will be almost unworkable because there will never be enough people who know how to make it work.

Like my hon. Friend, I do not pretend to be a solicitor; I speak as an ordinary Member of Parliament. As I understand the Clause—or as I partly understand it—it contains the same obnoxious feature that applied in the case of the Bill which brought in the Selective Employment Tax, under which the State grabs money from the people and agrees that at a future date—if conditions are right—that money shall be repaid, seizing thereby money to which it has no right, and on which it pays no interest. If any private trader endeavoured to act in such a way he would quickly finish up in the courts.

Yet this is a provision which has been carried out twice in a month by the Government. They are taking levy money, and at some future date—how long in the future nobody knows—the person or the estate concerned may receive more back than has been paid. These are the economics of bedlam, as I coined the phrase during the debates on the Finance Bill. The great weakness of the Government is that they always think that they are dealing with millionaires. They say "These people have vast estates; it does not matter if we take some of their money away from them. They have plenty." As has been said, an enormous number of small estates will be involved which will not have the money to pay to the Commission. In that case the other part of the estate, which might be a hereditament in which somebody is to live, will have to be sold to find the necessary money.

I ask the right hon. Gentleman either to make this much clearer to the House of Commons or—as I suggested in the first place—to take it to the abattoir and do with it what should have been done before we started discussing it this afternoon.

Mr. Clegg

I want to take up the point raised by the hon. Member for West Stirlingshire (Mr. W. Baxter). He referred to people who like to do probate work themselves. There are many such people, and they receive an enormous amount of help from the Probate Office. They are given a leaflet with the necessary form, telling them how to fill it in. I defy the right hon. Gentleman to devise an explanatory leaflet explaining what my hon. Friend the Member for Hornsey (Mr. Rossi) has explained today. To put that in writing and distribute it to the public would be an absolute nonsense. People would not understand it.

The other thing that the right hon. Gentleman might tell us is what steps he is taking to train those civil servants who will form part of the Land Commission in their duties in understanding the Bill. Under the Finance Bill we have already had civil servants being paid an extra £100 for understanding what, compared with this, is an extremely simple and noncomplicated form. If the right hon. Gentleman could give us an indication of the steps that he is taking to make this system work it would be helpful.

My hon. Friends and I, together with the hon. Member for West Stirlingshire, are convinced that, unless something is done, when the Bill becomes an Act there will be absolute bedlam, and that the machinery of administration, which is carried out not only by civil servants but by many professional men, will grind to a nasty halt.

Sir J. Foster

When the Minister explained what the Clause was supposed to do, in a very sketchy fashion, he referred to subsections (1), (2) and (3). He did not—and I imagine that this was by design—refer to subsection (4), which says, in effect, that a certificate issued under that subsection shall have effect as if it were issued in pursuance of Regulations. If we turn to the relevant Schedule we find that those Regulations are very wide, and can provide for almost anything. The effect is very strange. What the supplementary provisions under Part IV of that Schedule say is if the conditions of paragraph I do not apply—and that means that the whole Schedule does not apply—nevertheless Regulations can be made under Part IV applying the Schedule provided that certain similar but not exactly similar conditions apply. In other words, we have the Schedule, in paragraph 1, saying that if certain conditions exist relating to the death of a person six years before, and to interest passing in land, and so on, an allowance is payable in respect of Estate Duty. Part IV says that if one or more conditions specified in paragraph 1 of Part I are not fulfilled Regulations can be made for the issue of a certificate under Part IV where the conditions in paragraphs (a), (b) and (c) apply. If one reads those paragraphs one finds that they are like the provisions of paragraph 1(1) of Part I of the Schedule, but not exactly the same. The Minister has not explained how, in effect, he has added another Schedule of equal length, with conditions which are not the same as in paragraph 1.

It is a very unwise form of delegated legislation. It means that we have Regulations which are very wide indeed, being subject to such exceptions and modifications, and together with any such additional provisions, as may be so specified. In this connection I want to refer to the very telling point made by the hon. Member for West Stirlingshire (Mr. W. Baxter). If two deaths involving small estates occur, one very soon after another, according to paragraph 34 those provisions shall have effect in relation to those deaths cumulatively so as to require or enable the appropriate allowance to be made by reference to each of them. That is in favour of the person who has to pay the levy. But we can imagine a dispute occurring about the size of the allowance.

I ask the right hon. Gentleman to explain, in simple language, the effects of Part IV and to draw the attention of the House to the conditions that he had in mind when he drafted these provisions, to the effect that the conditions in paragraph (1) are not fulfilled but the conditions here are fulfilled. I do not want to weary the House by reading out (a), (b) and (c), but they are very like the conditions in sub-setcion (1). In fact (c) seems to me to be exactly the same.

Therefore, the absurd result of saying that, in Part IV, if one of the conditions in subsection (1) is not fulfilled but if the conditions in (a), (b) and (c) are fulfilled, one can issue new certificates under new Regulations and do whatever one likes. Then we find that one of the conditions of (c) is the same as in subsection (1). I should like the right hon. Gentleman to explain what happens there.

Mr. Allason

I hope that the Minister has now got the feeling of the House about the Clause. There is still time for him to give an undertaking that he realises that he has put himself in an awkward position. There is, happily, another place where Amendments could be made. If he would give that undertaking, he would make hon. Members on both sides a great deal happier.

The Clause is a far cry from the great idea of the Government that they would tax land speculators out of existence. They said that they would get social justice this way, but the sort of social justice we are getting is that someone with a small estate would have to face this tax on top of Estate Duty and other taxes. A chargeable act or event in this respect does not signify somebody deliberately speculating. It is somebody dying which creates the event.

I hope, therefore, that the Minister will have second thoughts. The principle of grabbing a levy or tax which is not due and then graciously giving it back later is thoroughly obnoxious to the House. I hope that, even at this last moment, the Government will show some sign of relenting.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 203, Noes 127.

Division No. 180.] AYES [6.43 p.m.
Abse, Leo Chapman, Donald Edwards, William (Merioneth)
Albu, Austen Coe, Denis Ellis, John
Allaun, Frank (Salford, E.) Coleman, Donald English, Michael
Alldritt, Walter Concannon, J. D. Ennals, David
Anderson, Donald Corbet, Mrs. Freda Ensor, David
Armstrong, Ernest Craddock, George (Bradford, S.) Evans, Ioan L. (Birm'h'm, Yardley)
Atkins, Ronald (Preston, N.) Crawshaw, Richard Faulds, Andrew
Atkinson, Norman (Tottenham) Crosland, Rt. Hn. Anthony Fernyhough, E.
Bacon, Rt. Hn. Alice Crossman, Rt. Hn. Richard Finch, Harold
Bagier, Gordon A. T. Cullen, Mrs. Alice Fitch, Alan (Wigan)
Beaney, Alan Dalyell, Tarn Fitt, Gerard (Belfast W.)
Bence, Cyril Davidson, Arthur (Accrington) Fletcher, Raymond (Ilkeston)
Bennett, James (G'gow, Bridgeton) Davies, Dr. Ernest (Stretford) Fletcher, Ted (Darlington)
Bishop, E. S. Davies G. Elfed (Rhondda E.) Floud, Bernard
Blackburn, F. Davies, Harold (Leek) Foot, Michael (Ebbw Vale)
Blenkinsop, Arthur Davies, Robert (Cambridge) Ford, Ben
Boardman, H. Delargy, Hugh Forrester, John
Booth, Albert Dell, Edmund Fowler, Gerry
Boyden, James Dempsey, James Galporn, Sir Myer
Braddock, Mrs. E. M. Dewar, Donald Gardner, Tony
Bradley, Tom Dickens, James Garrett, W. E.
Brooks, Edwin Dobson, Ray Garrow, Alex
Broughton, Dr. A. D. D. Doig, Peter Ginsburg, David
Brown, Hugh D. (G'gow, Provan) Dunn, James A. Gourlay, Harry
Buchanan, Richard (G'gow, Sp'burn) Dunnett, Jack Gray, Dr. Hugh (Yarmouth)
Butler, Herbert (Hackney, C.) Dunwoody, Mrs. Gwyneth (Exeter) Gregory, Arnold
Butler, Mrs. Joyce (Wood Green) Dunwoody, Dr. John (F'th C'b'e) Grey, Charles (Durham)
Cant, R. B. Eadie, Alex Griffiths, David (Rother Valley)
Carmichael, Neil Edwards, Robert (Bilston) Griffiths, Rt. Hn. James (Llanelly)
Hale, Leslie (Oldham, W.) Maxwell, Robert Rose, Paul
Hamilton, William (Fife, W.) Mendelson, J. J. Ross, Rt. Hn. William
Hamling, William Millan, Bruce Rowland, Christopher (Merideh)
Hannan, William Miller, Dr. M. S. Rowlands, E. (Cardiff, N.)
Harper, Joseph Milne, Edward (Blyth) Shinwell, Rt. Hn. E.
Haseldine, Norman Mitchell, R. C. (S'th'pton, Test) Shore, Peter (Stepney)
Hazell, Bert Morgan, Elystan (Cardiganshire) Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Henig, Stanley Moyle, Roland Short, Mrs. Renée (W'hampton, N. E.)
Herbison, Rt. Hn. Margaret Neal, Harold Silkin, Rt. Hn. John (Deptford)
Hooley, Frank Newens, Stan Silverman, Julius (Aston)
Homer, John Noel-Baker, Rt. Hn. Philip (Derby, S.) Silverman, Sydney (Nelson)
Houghton, Rt. Hn. Douglas Oakes, Gordon Skeffington, Arthur
Howarth, Robert (Bolton, E.) Ogden, Eric Small, William
Howie, W. O'Malley, Brian Spriggs, Leslie
Hughes, Hector (Aberdeen, N.) Orbach, Maurice Steele, Thomas (Dunbartonshire, W.)
Hughes, Roy (Newport) Orme, Stanley Summerskill, Hn. Dr. Shirley
Hunter, Adam Oswald, Thomas Symonds, J. B.
Hynd, John Owen, Dr. David (Plymouth, S'tn) Thomas, George (Cardiff. W.)
Jenkins, Rt. Hn. Roy (Stechford) Owen, Will (Morpeth) Thomas, Iorwerth (Rhondda. W.)
Johnson, James (K'ston-on-Hull, W.) Padley, Walter Thornton, Ernest
Jones, Dan (Burnley) Page, Derek (King's Lynn) Tinn, James
Jones, J. Idwal (Wrexham) Palmer, Arthur Tomney, Frank
Kenyon, Clifford Pannenll, Rt. Hn. Charles Varley, Eric G.
Lawson, George Park, Trevor Wainwright, Edwin (Dearne Valley)
Leadbitter, Ted Parkyn, Brian (Bedford) Walker, Harold (Doncaster)
Lewis, Ron (Carlisle) Pearson, Arthur Pontypridd) Watkhis, David (Consett)
Lomas, Kenneth Pentland, Norman Watkins, Tudor (Brecon & Radnor)
Loughlin, Charles Perry, George H. (Nottingham, S.) Whitaker, Ben
Lyons, Edward (Bradford, E.) Price, Christopher (Perry Barr) Whitlock, William
Mabon, Dr. J. Dickson Price, Thomas (Westhoughton) Willey, Rt. Hn. Frederick
McCann, John Price, William (Rugby) Williams, Alan (Swansea, W.)
MacColl, James Probert, Arthur Willis, George (Edinburgh, E.)
Macdonald, A. H. Randall, Harry Wilson, William (Coventry, S.)
Mackenzie, Gregor (Rutherglen) Rankin, John Winterbottom, R. E.
Mackintosh, John P. Rhodes, Geoffrey Woof, Robert
McMillan, Tom (Glasgow, C.) Roberts, Goronwy (Caernarvon) Zilliacus, K.
MacPherson, Malcolm Roberts, Gwilym (Bedfordshire, S.)
Manuel, Archie Robertson, John (Paisley) TELLERS FOR THE AYES:
Mapp, Charles Robinson, W. O. J. (Walth'stow, E.) Mr. Walter Harrison and
Marquand, David Rodgers, William (Stockton) Mr. Neil McBride.
Alison, Michael (Barkston Ash) Gower, Raymond Mills, Stratton (Belfast, N.)
Allason, James (Hemel Hempstead) Grant, Anthony Mitchell, David (Basingstoke)
Astor, John Grant-Ferris, R. Monro, Hector
Atkins, Humphrey (M't'n & M'd'n) Grieve, Percy More, Jasper
Awdry, Daniel Grimond, Rt. Hn. J. Morgan, Geraint (Denbigh)
Baker, W. H. K. Hall, John (Wycombe) Morrison, Charles (Devizes)
Batsford, Brian Hall-Davis, A. G. F. Munro-Lucas-Tooth, Sir Hugh
Baxter, William Harrison, Col. Sir Harwood (Eye) Murton, Oscar
Bennett, Sir Frederic (Torquay) Harvey, Sir Arthur Vere Nabarro, Sir Gerald
Black, Sir Cyril Harvie Anderson, Miss Neave, Airey
Boyd-Carpenter, Rt. Hn. John Hastings, Stephen Noble, Rt. Hn. Michael
Brinton, Sir Tatton Heald, Rt. Hn. Sir Lionel Onslow, Cranley
Brown, Sir Edward (Bath) Hesettine, Michael Osborne, Sir Cyril (Louth)
Buchanan-Smith, Alick (Angus, N&M) Hiley, Joseph Page, Graham (Crosby)
Bullus, Sir Eric Hogg, Rt. Hn. Quintin Pardoe, John
Burden, F. A. Holland, Philip Pearson, Sir Frank (Clitheroe)
Carlisle, Mark Hooson, Emlyn Percival, Ian
Chichester-Clark, R. Hordern, Peter Peyton, John
Clegg, Walter Hutchison, Michael Clark Pounder, Rafton
Cooke, Robert Jenkin, Patrick (Woodford) Pym, Francis
Corfield, F. V. Jennings, J. C. (Burton) Ramsden, Rt. Hn. James
Costain, A. P. Johnston, Russell (Inverness) Ridley, Hn. Nicholas
Crouch, David Joseph, Rt. Hn. Sir Keith Ridsdale, Julian
Dance, James Kaberry, Sir Donald Rippon, Rt. Hn. Geoffrey
Davidson, James (Aberdeenshire, W.) Kimball, Marcus Roots, William
Dean, Paul (Somerset, N.) Kirk, Peter Rossi, Hugh (Hornsey)
Deedes, Rt. Hn. w. F. (Ashford) Knight, Mrs. Jill Royle, Anthony
Dodds-Parker, Douglas Lewis, Kenneth (Rutland) Russell, Sir Ronald
Eden, Sir John Loveys, W. H. Shaw, Michael (Sc'b'gh & Whitby)
Errington, Sir Eric McAdden, Sir Stephen Sinclair, Sir George
Eyre, Reginald MacArthur, Ian Steel, David (Roxburgh)
Farr, John Mackenzie, Atasdair (Ross&Crom'ty) Summers, Sir Spencer
Fisher, Nigel Maclean, Sir Fitzroy Taylor, Frank (Moss Side)
Fletcher-Cooke, Charles McMaster, Stanley Thatcher, Mrs. Margaret
Fortescue, Tim Maginnis, John E. Thorpe, Jeremy
Foster, Sir John Marten, Nell Tilney, John
Gibson-Watt, David Maude, Angus Turton, Rt. Hn. R. H.
Gilmour, Sir John (Fife, E.) Maxwell-Hyslop, R. J. van Straubenzee, W. R.
Glover, Sir Douglas Maydon, Lt.-Cmdr. S. L. C. Wainwright, Richard (Colne Valley)
Goodhart, Philip Mills, Peter (Torrington) Walker-Smith, Rt. Hn. Sir Derek
Webster, David Wood, Rt. Hn. Richard TELLERS FOR THE NOES:
Whitelaw, William Worsley, Marcus Mr. R. W. Elliott and
Wilson, Geoffrey (Truro) Wylie, N. R. Mr. George Younger.
Wolrige-Gordon, Patrick

Clause read a Second time, and added to the Bill.