§ 3.33 p.m.
§ Mr. John Hall (Wycombe)
I beg to move Amendment 175, in page 31, line 36, at the end to add:Provided that the foregoing provisions of this subsection shall only apply where—
- (a) the body from which the interest was transferred (the transferor company) was beneficial owner of not less than ninety per cent. of the issued share capital of the body to which the interest was transferred (the transferee company) or where a third body corporate was beneficial owner of not less than ninety per cent. of the issued share capital of each, and
- (b) the transferor company and the transferee company have ceased to be associated by reason only of the transferor company or the third body corporate ceasing to be beneficial owner as aforesaid, and have not so ceased by reason of the liquidation of the transferor company.For the purpose of paragraph (a) above any share capital of the transferee company owned by the said third body through the transferor company shall not be taken into account in calculating the amount of share capital owned by the third body in the transferee company.From the point of view of audience rating I suppose that this is the best spot in the daily programme of Parliament, but I am afraid that the series of Amendments now to be discussed arc rather technical and lack popular appeal. In moving this Amendment I cannot hope to match the atmosphere of screaming farce which marks Government replies in debates on S.E.T., nor can I hope to rival the Chief Secretary's colourful and imaginative accounts of the terrible tax that lurk beyond our shores. Nevertheless, I believe that this Amendment and the Amendments which follow are not unimportant, because they will, if nothing else, clarify certain obscurities about the stamp duty Clauses as they are at present worded.
95 Clause 25 is primarily a relieving Clause. I do not want to be accused of looking a gift Clause in the paragraphs, but subsection (4), as now worded, seems to attack innocent transactions where the assets transferred continue to be at least 90 per cent. group owned. The Amendment is designed to provide that the loss of exemption shall arise only where it is the transferee company which ceases to be within the group; that is, the liability to duty arises only if the assets leave the group. Under the present law it is possible in certain circumstances for assets to be transferred within various companies in such a way that duty is avoided. I hope that this Amendment as drafted will meet this point, and I hope, also, that it meets the point of relieving the penalisation of otherwise innocent transactions.
It is because I believe the Amendment to be fully justified that I move it with complete confidence that the Government will see this point of view and be prepared to accept it.
§ The Financial Secretary to the Treasury (Mr. Niall MacDermot)
I am grateful to the hon. Member for Wycombe (Mr. John Hall) for the brevity with which he has moved the Amendment, because we have a heavy programme ahead of us. I shall try to meet him with equal brevity. I can assure him that we take his point here and think that something should be done to improve the Clause.
Subsection (4) counters the device under which relief from transfer duty in respect of transfers within a group of companies can be obtained for a transfer paid for, in effect, by a person outside the group and forming part of an arrangement under which one of the companies leaves the group. It has been represented to us—the hon. Gentleman has put the argument—that the solution that we have sought to this problem may hit at innocent transactions. I need not go into the details of it.
I am afraid that what is proposed in the Amendment does not meet this point. Clause 25(4) depends on the conception of a group consisting of the transferor and transferee companies, and if the transferor leaves the group there is no longer a group for the subsection to fasten 96 on to and it no longer gives any protection against avoidance. So we think that we shall need to try to attack the problem in a different way. This may mean that a new Ways and Means Resolution will be required and possibly even recommittal of the Bill, but no doubt, with cooperation, this need not provide any very great hurdles.
We have in mind a provision on the lines of strengthening the existing anti-avoidance provisions of Section 50 of the Finance Act, 1958. This will have some disadvantages in lacking precision, but as we cannot meet the point by amending Clause 25(4) without opening the door to avoidance we think that these disadvantages will have to be accepted.
If the hon. Gentleman will be willing to withdraw his Amendment, I can assure him that we will look at this and bring forward later the best means we can of meeting the point.
§ Mr. John Hall
I am sure that the Committee is grateful to the hon. and learned Gentleman for the way in which he has received the Amendment. When I moved it I thought that the logic and reason of it were such that it would impress the Government benches, as it has done. I hope that the hon. and learned Gentleman will be equally receptive to some of the other Amendments that we shall be moving later. However, in view of what he has said, it is with much pleasure that I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Question proposed, That the Clause stand part of the Bill.
§ Mr. John Smith (Cities of London and Westminster)
I shall not detain the Committee for long, but I think that this Clause needs a bit of examination as a whole. I do not think that subsection (1) goes nearly far enough. It is to be welcomed as a step towards the eventual final abolition of stamp duty, which is an obsolete and damaging tax. It is even older than the Inland Revenue. It was introduced at a time when nobody could think of anything workable which was better.
It is now a very complicated tax, and subsection (2) is evidence of that. It is very uneven in its incidence: if one buys a factory manufacturing goods for export 97 one pays the tax; if one buys a Rubens one does not. It is often not very difficult to avoid the tax. It represents well under 1 per cent. of the revenue of the country and takes a whole department, not necessarily the largest department, of the Inland Revenue to deal with it. It costs over twice as much, pound for pound, as Customs and Excise duties, and I feel that it is a direct obstacle to the process of saving and investment which we all want to encourage.
I say that simply by way of introduction, because we are here dealing with the tax as it affects property conveyances. After the passage of the Bill this Clause as it affects property conveyances may perhaps raise £15 million in this way. I question whether this is the best way for the country of raising this money.
Assessing stamp duty on property can be very complicated. In 1965–66, I notice, over 10,000 valuations had to be made and agreed in respect of gifts of property alone, and, as the Committee knows, valuations of property engage the time both on the Government side, the Inland Revenue side, and the public's side, of very skilled and valuable people indeed, all of whom are now badly needed to argue about the Land Commission; and all this is for 1 per cent. tax; that is, one decimal penny in the pound.
This argument can take 12 months, or even more if the matter goes to court. This is extremely costly. It is costly to the economy. We all know the costs of leaving a site vacant whether it be for Government offices or commercial premises, but sometimes the cost is even greater than we realise, in that not only is the owner not getting a return on his money, but is paying ground rent as well. The highly-trained and important people on both sides, important people in the officies at Worthing, are simply lost to the country by this process just as much as if they had gone down the brain drain.
This cost to the economy is greater, in my view, now, because whereas in the past the adjudicator of stamp duty was always arguing for the value of property to be put up, and the people on the other side were arguing for it to be put down, very often the Stamp Duty Office is now arguing to get the value of property reduced and the owners are arguing for it to be put up because of the incidence 98 of Capital Gains Tax, and this makes matters more confused.
I have here, as usual, a letter from one of my constituents which is a very fair sample. He got into trouble with the Stamp Duty Office over "submission to the Adjudication Department of the Stamp Duty Office of Orders of the Court approving schemes for the variation of trusts". I went into this and there is an amount of work involved in this particular type of adjudication procedure that is very great indeed.
The £15 million, which is what this tax will raise in the form set out is, of course, very agreeable for the Inland Revenue, and, of course, it pays the Revenue to collect it; but I very much doubt whether it pays the economy of the country as a whole. There are, of course, far more small transactions than large ones but the cost of levying a tax like this is not much more, except in cases which have to be adjudicated, for large transactions than it is for small ones. Therefore, the way to start cutting down this jungle is to raise the level of exemption.
It has been done a little this year, but I feel that subsection (1) does not go nearly far enough and that one simple way of improving it would be by this year exempting all property up to £7,000 which is the second figure mentioned.
I wonder what the point is of the complication of collection of a tax of a ½ of 1 per cent.—half a decimal penny per £—on a very narrow band of transactions. It is not as though the Chancellor were the Dame of Sark, who I understand, is able to levy a treizieme, which is, I suppose, something over 7½ per cent., but I wonder whether ½ a per cent. is really worth it.
The third point I want to make—
§ 3.45 p.m.
§ Mr. Eric Lubbock (Orpington)
The Chancellor has one thing in common with the Dame of Sark, in that by his policies he is trying to drive motor vehicles off the road.
§ Mr. Smith
I yield to no one in my admiration for that gallant lady, who took such a magnificent stand in the war, but I do not wish to pursue her resemblances and differences to and from the Chancellor at this moment.
99 Further, if conveyances are to receive relief, why not mortgages? Presumably, the man who needs a mortgage to buy his house is in greater need of relief than the man who does not need a mortgage, and a point I have never seen made, is that a mortgage is most often secured by a life policy which itself attracts stamp duty, so that the man burdened with a mortgage pays three sets of duty while the laughably termed "rich" man, who does not need a mortgage, pays only one set. The stamp duty on small mortgages cannot possibly pay for its collection, and I urge the Chancellor to look at this.
If conveyances are to be relieved, will the Chancellor please consider the abolition of stamp duty on leases. This duty on leases raises something over £2 million a year, but it is raised from literally countless transactions. The average receipt must be tiny and this tax cannot possibly pay for its collection.
Finally, why has the Chancellor chosen the date of 1st August? I do not see why changes in stamp duty should not be able to take place forthwith like other changes in taxes. The transactions to be relieved will be held up to get reduced duty, and there will be a flood of business just after 1st August in the middle of the holiday season when solicitors and their staffs and even, indeed, the Controller of Stamps and his staff are trying to get a bit of a holiday. There will be a queue of clerks all trying to get things stamped and get off on their holidays, and that will add to the normal confusion of life, and the normal confusion in the office in Worthing. It will make a lot of trouble, I feel, which could be avoided by altering the date.
To sum up, stamp duty may pay the Revenue, but I do not think that it pays the country. I feel that in the end it ought to go; but a start should be made by abolishing stamp duty on leases and mortgages and on all but the very largest conveyances; and the Chancellor should amend this Clause on Report, to allow the Clause to take effect forthwith.
§ Mr. Raymond Gower (Barry)
My hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith) has put forth reasonably and 100 fairly a powerful case for examination of the stamp duty system as it remains even after the improvements of recent years and in this Bill. I wish that he had put down an Amendment. It is not always the things which are put down in the first flush of enthusiasm which are necessarily the best. He has had valuable later thoughts about this and has called attention to something which should be closely examined.
§ The Deputy Chairman (Mr. Sydney Irving)
The hon. Member for Barry (Mr. Gower) is getting away from the Clause. We can only discuss the Clause as it stands.
§ Mr. Gower
The imperfections of the Clause have been effectively stated by my hon. Friend, Mr. Irving, and I shall not go further in emphasising the validity of the points he made.
I hope that the Financial Secretary paid attention to the comparison between the person who pays cash for a house or other property and the person who has to take out a mortgage. It seems senseless that the man who has to pay a mortgage is prejudiced not only in that sense, but also by having to pay stamp duty, whereas the man who can afford cash does not.
My hon. Friend also referred to the impact of the duty on a person buying what is not today a particularly expensive property. I have had experience of this in my professional career and I know that the person who buys such a property is usually stretched to the limit. When he finds himself called upon to pay the necessary legal costs, the last straw is the stamp duty. It is difficult to explain to him.
I hope that the Chancellor will give this serious consideration. Perhaps, as my hon. Friend has suggested, he will come forward with an Amendment on the Report stage. If the right hon. Gentleman cannot, I hope that he will take the point as being valid for the future. We should scrap most of the stamp duty system.
§ The Deputy Chairman
Order. We cannot have a general debate on stamp duty. This Clause makes changes on the margin and we can only discuss those changes.
§ Mr. Charles Fletcher-Cooke (Darwen)
Last year, I put down a Clause which, if added to the Finance Act, 1966, would have had the effect of abolishing stamp duty. It received no support from any one on either side. I raised this matter on the Second Reading of the Bill and again received no support. I am glad to see that today, out of the rules of order, support is growing for my view. Anything that in any way diminishes this ancient and barbaric tax will have my support.
§ The Deputy Chairman
Order. I am sorry to interrupt the hon. and learned Gentleman's campaign, but he is out of order.
§ Mr. Fletcher-Cooke
My argument is that of a moderate man, Mr. Irving, and I am prepared to support a Clause which diminishes the incidence of this barbaric and ancient tax even to the small extent that this great number of words purports to do.
Administering directly stamp duty involves about 170 civil servants—far too many. Apart from that, and perhaps increased by this Clause, are innumerable people, in accountants' offices and in private industry, who are concerned to administer this totally out-of-date tax. In so far as the Clause diminishes the tax, it must have our support.
As I pointed out on Second Reading, the tax was invented in the reign of William and Mary, when there were no Commissioners of Inland Revenue and no policing of the tax services at all. The only way of policing these matters was to rule that one could not produce a settled contract in court without having it properly stamped. I hope that you will agree, Mr. Irving, that the tax is out of date and not in keeping with the white hot, jet-propelled technological age in which we live.
§ The Deputy Chairman
Order. The hon. and learned Gentleman is now get- 102 ting into a general debate about administration. He can only discuss this Clause as it relates to the changes in the rates. He must now come back to order or resume his seat.
§ Mr. Fletcher-Cooke
My point, in getting into order, Mr. Irving, is that this Clause reduces the incidence of the duty and, therefore, I hope, the number of persons concerned with the levying of the tax. To that extent, I cannot imagine that anyone would oppose it. Now that we tax the cash flow through Income Tax and Capital Gains Tax and other methods that a modern and sophisticated economy has adopted, to that extent this duty should be diminished to what we are talking about now. I understand that this Amendment—
§ Mr. Fletcher-Cooke
I am referring to Amendment No. 175, moved so eloquently by my hon. Friend the Member for Wycombe (Mr. John Hall).
Mr. Deputy Chairman
Order. Can I help the hon. and learned Gentleman? We are discussing the Question, "That the Clause stand part of the Bill". We have disposed of Amendment No. 175.
§ Mr. Fletcher-Cooke
I understand that, in my temporary absence from the Chamber, Amendment No. 175 was withdrawn, but that was without my consent. I should not have allowed it to be withdrawn had I been here. It was an extremely good Amendment.
§ Mr. Lubbock
I am disappointed that your Ruling, Mr. Irving, and the information just given to the hon. and learned Member for Darwen (Mr. Fletcher-Cooke), interrupted a very valuable and informed speech to which I listened for some time without the feeling that I was being prevented from speaking myself—which is a feeling that I sometimes have in this Committee. I hope that the hon. and learned Gentleman will have the opportunity to return to the interesting discussion on some other occasion; but it is worth underlining a point and asking the Financial Secretary to reply.
As the hon. and learned Member for Darwen said, we are reducing to some 103 extent the incidence of the duty by raising the limits on which it operates. To that extent, also, the number of persons administering the tax will be reduced, just as the number of persons outside—accountants, solicitors and others—will be reduced. Thereby, the country will be saved money.
What was the proportion of the cost of the duty to total revenue before this change and what estimate has the Financial Secretary of the proportion afterwards? In looking at any tax, the Committee should examine it from the point of view of collection. The Income Tax system is fairly efficient because the number of people employed in administering it is quite small in relation to the volume of revenue collected.
§ 4.0 p.m.
§ We all know—and it has been discussed on many previous Finance Bills—that the stamp duty is a highly inefficient tax. Therefore, if the hon. and learned Gentleman can show us that only a marginal improvement has been made in the proportion of cost to total revenue by raising the limit in this way, there will be strong argument for saying on another occasion—not now, because I do not want to incur your displeasure, Mr. Irving—that the tax should be removed altogether. That is as far as I want to go, but we should like these figures to make up our minds on this point.
§ The Clause is raising the value of houses on which this tax bites. I cannot remember the last occasion when these maxima were altered, but I would like to know whether the increase which is proposed has kept pace with alterations in the index of building costs during the intervening period. That is extremely important, because house prices in my constituency have gone up substantially in recent years.
§ The same is true of south-east England, and particularly of the Greater London area. In my constituency, one does not get much of a house for less than £7,000, astonishing as that may seem to some of my hon. Friends and hon. Gentlemen who represent constituencies in the north of England, where an equivalent house would cost half as much. We have to pay very heavily because of the pressure on accommodation in south- 104 east England. Therefore, it is important that the cost, which has been increasing, should be recognised in any alteration of the values on which stamp duties are assessed.
§ I should not be content if we went only as far as redressing the position which obtained before, because there is considerable pressure on the building industry. I was informed only last week that supplies of common bricks have completely dried up. That is a complete transformation in a few weeks from large surpluses all over the country to shortages. That, again, will affect the price of houses. It is astonishing how rapidly the situation can change in the building industry from one of slackness to a serious over-pressure which will inflate prices.
§ Therefore, I hope that the hon. and learned Gentleman will be able to convince me that we are not only keeping pace with the changing value of the cost of houses since the limits were last revised, but that, in setting the new limits, he has fully taken into account the likely increase in building prices which we will see over the next few years.
§ Mr. John Hall
As so often happens in this Committee, this interesting debate has arisen rather unexpectedly. We are indebted to my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith) for raising the point about stamp duties in general. Although an Amendment has not been tabled, I am sure that this is something that the Financial Secretary will consider very carefully and that, possibly, the words of my hon. Friend and, indeed, those of the hon. Member for Orpington (Mr. Lubbock), may fall on receptive ears and that, on Report, we might find that stamp duty may be abolished. That is perhaps expressing too high a hope, but, nevertheless, this has been a very useful if short, debate.
I want to raise a rather different point. As I understand the situation under the present legislation, capital duty and transfer duty rights operate on mergers and takeovers when the consideration is more than 90 per cent. in shares, provided that the bidding company is acquiring not less than 90 per cent. of the capital of the company to be acquired. The point I wish to raise follows from this, and I 105 hope the Financial Secretary will consider and perhaps do something about it on Report.
The situation, as I have outlined it, means that should company A own more than 10 per cent. of company B, and then decide to merge completely, even though the whole of the transaction may be in shares there is no relief for either capital duty or transfer duty. This generally results in a scheme being undertaken under Section 206, which seems to avoid transfer duty rather than a straightforward operation under Section 209 of the Companies Act.
There appears to be no logical reason—I am sure that the Financial Secretary will agree—why, if these reliefs were intended to apply to mergers of companies, they should be forfeited in the event that one company happens to have an investment in the other. There is a strong logical argument for introducing legislation so that, provided the operation is designed to result in total ownership and the consideration is not less than 90 per cent. in shares, then, regardless of the interest the acquiring company may have to start with, similar relief should apply.
I only mention this on the Question now before Committee so that the Financial Secretary might consider it and perhaps do something on Report.
§ Mr. Joel Barnett (Heywood and Royton)
Subsection (4) of the Clause purports to do something about the possibility of avoidance of the duties. I know that my hon. Friend has said that he will consider the Clause—presumably when he considers the Amendment which was withdrawn—but I hope that he will consider whether subsection (4) is necessary to deal with any possibility of avoidance.
Subsections like this in the tax laws can be counter-productive, because we could be having all sorts of provisions to close up loopholes to save possibly very small amounts of avoidance. Avoidance might be reprehensible in some circumstances, but in circumstances of this kind, where the amount involved may be very small—unless my hon. and learned Friend can give me figures, showing that without the subsection there is likely to be substantial avoidance—I would prefer not to have this type of provision.
106 If, for instance, to save £1 million in tax, it involves countless hundreds and thousands of solicitors and accountants dealing with the tiny difference between whether a company is associated or not in the terms of this subsection, it might be worth considering whether we need to have it. Larger considerations of social justice may be involved, but where there is not any great social justice involved, I hope that my hon. and learned Friend will very carefully consider whether it is worth stopping this hole, because of the amount of extra work involved, both for the Revenue side and others, for example, in deciding what is an associated company.
In this case, a 90 per cent. holding is needed for exemption. I am not sure that 75 per cent. would not be enough. Seventy-five per cent., or even less at times, is considered adequate for the purposes of association, or for where companies are considered for tax purposes to be associated, where they are not subsidiaries or parent companies, where there are the same shareholders in two or three companies. The whole thing becomes very involved and, for the amount of revenue which might or might not be saved, it may be worth considering doing away with the whole subsection.
§ Mr. John Nott (St. Ives)
I support what has been said by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke). My limited experience of these matters is that in mergers and amalgamations an enormous amount of time is taken up trying to take advantage of the stamp duty concession. Experience would show that more mergers and amalgamations have been delayed and complicated as a result of issuing houses trying to take advantage of these stamp duty concessions than could possibly be worth while.
I agree with the hon. Member for Heywood and Royton (Mr. Barnett) that this sort of concession would be much better abolished so that people would know exactly where they were. Issuing houses certainly act fully within the law when they take advantage of the concession, but an enormous amount of the time of solicitors, accountants, barristers, issuing houses and everyone else is taken up in trying to meet it.
107 It is time that the Chancellor started thinking about abolishing stamp duty altogether. On Second Reading, the Financial Secretary chided me about getting my foot in the door about one provision, but at least it would be a move in the right direction if he could simplify procedure and take out certain complicating aspects such as these. I cannot believe that it would do any harm to issuing houses, although there might be some pernickety, technically-minded accountants who would complain.
§ Mr. MacDermot
The Opposition have a remarkable facility for making what is a concession sound as though it is a new charge. In a speech which was wholly out of order the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) drew attention to the fact that the Clause makes a concession, although anyone listening to the debate would have been quite unaware of that fact. Even he thought that he was speaking to an Amendment when, in fact, he was speaking to the Question, "That the Clause stand part of the Bill." I could not follow hon. Members in the general debate which they sought to raise, attacking stamp duty as a whole. The duty brings in a revenue of more than £80 million and the cost of collection is about 2 per cent.
I was asked some questions which were in order and which I shall seek to answer. I was asked why there was not complete exemption up to £7,000 and what was the point of having a reduced rate band for which the ½ per cent. rate was applied. This is another example of something which is found in many other respects, namely, the need to avoid a sudden jump which would give rise to a sense of injustice among those who found themselves on the wrong side of the dividing line. If no duty were paid up to £7,000 while a rate of 1 per cent. suddenly became applicable from £7,001, it would be considered that that was unfair. For that reason there is a reduced rate band and, whenever the two have moved, they have moved in parallel.
I was asked why this provision had to take effect from 1st August. The reason is the nature of stamp duty. The Provisional Collection of Taxes Act, 1913, does not apply to stamp duty. As the hon. 108 and learned Member for Darwen pointed out, one of the origins of stamp duty is that a document for legal purposes is useless until it is duly stamped, and unless it were known with certainty what the law was, people would not be able duly to stamp a document or to know that it was duly stamped. Therefore, unlike other taxes to which the Provisional Collection of Taxes Act applies, it could not be made applicable from Budget day and could not be made applicable until after the passing of the Finance Bill.
The hon. Member for the Cities of London and Westminster (Mr. John Smith) had a terrible vision of an appalling queue of clerks all waiting to go on their holidays and not being able to do so because of this duty. This change has been made in 1947, 1956, 1958 and 1963 and I am not aware that on those occasions there has been any such problem as he has suggested.
The hon. Member for Orpington (Mr. Lubbock) wanted to know what would be the cost of this increase in the limit. The limits for exemption from transfer duty on houses are being increased from £4,500 to £5,500 and for the reduced rate from £6,000 to £7,000. The cost is estimated at £2½ million this year and £3½ million in a full year, and from those figures the hon. Member will be able to work out the proportions for which he asked.
§ Mr. Lubbock
The cost of the concession is the revenue which will not be collected and is £2½ million this year and £3½ million in a full year. I wanted to know how much saving would be made in administration, how many fewer officials would be needed to administer the duty by reason of the increase in the exemption.
§ Mr. MacDermot
The hon. Gentleman must put down a Question about that. He cannot expect me to answer questions like that "off the cuff".
The hon. Member also asked how the movement in these limits compared with limits in building costs. I do not have the figures. The last time when the limits were raised was in 1963, but I do not have the figures before me. These limits 109 are considerably in excess of the average cost of houses transferred, but that is the national average, including old houses as well as modernly-built houses. The position is that the limits have been raised by £1,000 compared with what they were three or four years ago.
The hon. Member for Wycombe (Mr. John Hall) put a technical argument which he asked me to consider before Report, and I gathered that he himself might give further thought to it. I shall be glad to study what he had to say.
My hon. Friend the Member for Heywood and Royton (Mr. Barnett) raised the general issue of anti-avoidance provisions and asked us to consider, not only in this context but generally, whether anti-avoidance provisions in any particular case were worth the trouble, in other words, whether the amount saved would be likely to justify the increased costs of administration, not only for the Revenue, but for others concerned with transactions, and so on. That, of course, is a factor to be taken into account in framing anti-avoidance provisions and I will certainly bear in mind what he had to say about the problem, and I promise to study subsection (4).
However, it is well-known experience that once an anti-avoidance device has been established, unless action is taken to stop it, there is a great rush for the breach in the Revenue's defences. That is illustrated by my hon. Friend's own suggestion for 75 per cent. instead of a 90 per cent. test. I am advised that a provision for 75 per cent. would lead at once to avoidance and to a considerable number of purely artificial transactions to exploit the resulting gap in the stamp duty. I take his point, but I am doubtful about its application in this instance.
§ Mr. John Smith
I would like to apologise briefly to the Financial Secretary. He stated that the matters raised by me should have been raised in the form of Amendments. Well, I have not had much luck with Amendments, and I have rather given up putting them down.
§ The Deputy Chairman
Order. For the hon. Gentleman's own safety in the future he had better not raise these matters. He cannot discuss anything that has not been accepted as an Amend- 110 ment on the Question "That the Clause stand part of the Bill".
§ Mr. Smith
I just wanted to make one point, which was that the Financial Secretary mentioned that stamp duty raised about £80 million—for the latest recorded year it raised, in fact, just over £76 million. There are 171 different categories and rates under which this duty is raised. Two of those rates, the simplest ones, stamp duty on share transfer and on cheques, about which there is no possible complication, raise nearly half of the duty. It is the 169 other rates and categories which raise this, large in absolute terms, but, relative to the total Revenue, rather trifling sum. I hope that the hon. and learned Gentleman will have a look at this. I am afraid that I am becoming a bit of an Ancient Mariner to the hon. and learned Gentleman. As I said, that is why I did not put down Amendments.
§ Question put and agreed to.
§ Clause ordered to stand part of the Bill.