§ The Joint Under-Secretary of State for Economic Affairs (Mr. Harold Lever)
I beg to move Amendment No. 32, in page 34, line 43, to leave out from 'unless' to the end of line 18 on page 35 and insert:'it is to be repaid within five years of the date of issue, or is repayable on demand or after notice not exceeding twelve months by the person for the time being entitled to repayment; and where any loan capital has been issued without payment of duty under the said section 8 by reason of the terms as to its repayment, and those terms are varied in such a manner that it would have been chargeable with duty under that section if the new terms had been the terms of issue—
- (a) the said section 8 shall apply thereto as if it were an amount of loan capital issued by
533 the company at the time when the variation took effect, but
- (b) if duty under the heading "Marketable Security", or that beginning "Mortgage, Bond, Debenture, Covenant", in Schedule 1 to the Stamp Act 1891 has been paid on one or more trust deeds or other instruments securing the capital or any part thereof, or securing it together with other loan capital, the duty chargeable by virtue of paragraph (a) above shall be reduced by an amount equal to the excess of the duty paid on those instruments over that which would have been so payable if they had not secured it or, as the case may be, that part of it.(4) For the purposes of the last preceding subsection, loan capital shall not be treated as falling to be repaid within five years of its date of issue if it is issued pursuant to an agreement under or by virtue of which the borrower is or may be entitled to receive another loan for a period which will or may expire more than five years after that date.'This Amendment was put down as a result of discussion in Committee in which very constructive proposals and arguments were advanced by the Opposition. I think that the effect of the Amendment will more than meet the—
§ Mr. Lever
I think that the effect of Amendment will more than meet the demands made in Committee. The result of the Amendment is that now any stock issued which has a life of not more than five years will be exempt and that any stock which is repayable on demand or on not more than 12 months' notice will be exempt. This, of course, refers to stock not quoted on the Stock Exchange.
The result is that the more permanent capital of a company will be assimilated at the full rate and temporary capital will be exempted from that rate. This meets the suggestion made particularly by the hon. Member for Wycombe (Mr. John Hall) in Committee, to whom we are obliged.
§ Mr. John Hall
It is not very often that I am in a position of being able twice in succession to thank the Government for an Amendment which carries out promises given to us in Committee. As the hon. Gentleman said, this Amendment very largely carries out what we had in mind. The only question I put is whether there was a particular reason for the period of five years being stipulated. I understand that when the matter was discussed 10 years was mentioned. Did the hon. Gentleman have anything in mind 534 when introducing five years instead of a longer period? Subject to that point, on which I should like him to comment, we welcome the Amendment and thank the Government for introducing it.
§ Mr. Harold Lever
I speak again by leave of the House. It is a matter of judgment at what point we should cut off the exemption. We were anxious to exempt anything that could be regarded as short-term temporary borrowing. We came to the conclusion that this would be fairly done at five years. Ten years would be too much in the nature of fixed capital rather than temporary capital. We thought this the best and fairest point of time for cutting off.
I do not remember that in Committee more than two years were asked for, but in providing for five years we thought that we had taken a judgment which was reasonable.
§ Amendment agreed to.
Further Amendment made: No. 33, in page 36, line 9, leave out from 'duty' to 'executed' in line 11 and insert:
'under the heading "Marketable Security", or that beginning "Mortgage, Bond, Debenture, Covenant", in Schedule 1 to the Stamp Act, 1891, has been paid on one or more trust deeds or other instruments'.—[Mr. Harold Lever.]
§ Mr. Harold Lever
I beg to move Amendment No. 34, in page 36, line 16, to leave out from 'on' to 'had' in line 18 and to insert:'those instruments over that which would have been so payable if they'.This is a drafting Amendment. I pay tribute to the hon. Member for Wycombe (Mr. John Hall), who had a hand in suggesting both these useful Amendments.
§ Amendment agreed to.