§ Question proposed, That the Clause stand part of the Bill.
§ Mr. Brian Walden
Since we are now saying "Goodbye" to this Bill—[HON. 643 MEMBERS: "Not yet."]—downstairs in this Chamber, although we shall he saying "Hello" to it in Committee upstairs, I should, albeit briefly, like to say, speaking for myself but also, I think, for my colleagues, that the debate on the Bill has been conducted here between the Front Benches with extreme good humour, and I would particularly congratulate the Chancellor on that from two points of view.
I was a PPS at the Treasury in the old days and I know what being a Chancellor of the Exchequer is like. It is rough, and a Chancellor has an enormous number of responsibilities. The right hon. Gentleman has come frequently to this Committee, and that I appreciate, and he has always come in a good mood, unfailingly courteous. It is true of his colleagues as well, and I should like to make that point however much we may disagree with particular things which are in the Bill.
That thing with which in particular we disagree—we wish to end on a niggle—is estate duty relief——
§ The Chancellor of the Exchequer (Mr. Anthony Barber)
Since I do not propose to reply to this debate I should like to intervene very briefly, and I thank the hon. Gentleman for allowing me, to reciprocate what the hon. Gentleman has said and to pay my respects and to give any thanks to those who on the Opposition Front Bench have, I think, gone out of their way on this occasion to enable us to conduct our proceedings during these six days in a very civilised way indeed.
§ Mr. Walden
I thank the right hon. Gentleman very much indeed. It is things like that that make the party activists worry about us, so it may be best for me to interject some unpleasant controversy into our proceedings—but very briefly, given the hour and given the hard debates we have had, especially last night.
We of course do not like estate duty relief which goes to public schools. That is why we put down an Amendment. It was to stop this proposed relief going to public schools. The Amendment was not selected, but I want to say two or three things about this proposal in the Clause.
644 Firstly, we have in this country always had a charities problem. I made some reference a moment ago to the fact that I was a PPS at the Treasury. I used then to dread debates on charities because they invariably meant that I ran to and fro, because the Chancellor, with all due respect to him, had a somewhat vague grasp of what was and what was not included in the provisions relating to charities. I see the present Chancellor nodding, so giving me some reason to think that even he is not clear on this matter either. We have always had a problem on the matter of charities, and the problem is a fiscal nuisance.
It does not end there. We call "public schools" what the Americans call "private schools". It adds to the definitional problem that we have many religious schools and schools of other kinds which are not directly what I and others mean when we use the term "public schools" in ordinary conversation. They are not "public" schools, but they are, nevertheless, included in the definition as well.
All in all we have a difficult problem but, nevertheless, the Labour Party wishes to complain. We do not wish to see estate duty relief extended to cover what the Americans call private schools, and what I call non-religious public schools charging fees to supply children with an education which they ought to be given by the State.
We shall not tonight argue whether public schools should or should not exist, and, if they do, under what conditions they should exist. All I say is that if they are to exist those who keep them in existence, and the governors and governing bodies of them ought not to expect to get tax concessions for a form of education which is highly controversial and which, in the view of this side of the Committee, discriminates against the best interests of the population because of the amount of resources which it takes.
We fear that that is what is happening under the Clause, but we shall not press the matter to a Division. We dislike this provision, and we should like to hear from the Government whether they intend to do anything to mitigate the consequence which we see, namely, that public schools are likely to get tax-free bequests which we think they ought not to get. 645 On that point of principle, from this side of the Committee I say good-bye to the Bill and look forward to seeing our friendly enemies upstairs on another occasion.
§ Mr. Norman Tebbit (Epping)
If I may intervene briefly, and perhaps lose any friends that I have in the Committee for doing so at this stage——
§ Mr. Tebbit
It is kind of the hon. Gentleman to say so.
I should like to draw my right hon. Friend's attention to paragraph (c) which refers to the relief to be given to a deceased widow or widower. I wonder whether my right hon. Friend would consider extending such relief to an orphaned child. A surviving spouse may be in need of this concession, and it is a wise one to have made, but the need of a child left without parents may be very much greater.
I hope that my right hon. Friend will give serious consideration, either in the Bill or in a subsequent one, to making available to an unfortunate orphaned child the concessions which he has made available to the surviving spouse.
§ Mr. Piers Dixon (Truro)
As hon. Members know, I am no great advocate of measures to make it easier for wealth to be passed from one generation to the next, but I have no hesitation in supporting the two main provisions of the Clause.
In their public statements hon. Gentlemen opposite often imply that it is more blessed to receive than to give. I believe, on the contrary, that it is more blessed to give than to receive. The problem is that every gift involves a receipt. In this Clause we have for once a wonderful opportunity of making gifts possible by individuals which do not involve receipts by individuals.
I was particularly glad to see this provision introduced, if only because it appears in my party's election address in dealing with charities. Perhaps we are coming more and more to have government by manifesto. I should not regard that as a bad thing, and my party has been true to what it said.
646 Charities have always benefited from the covenant system as it relates to income, and now we are in the fortunate position that, from the point of view of their capital, charities receive a concession on capital gains tax, and are now to receive a concession on estate duty.
I commend to my right hon. and hon. Friends one small aspect which applies in the United States and which may be considered for this country in some subsequent year. In the United States, if a legatee wishes to waive his rights in a deceased's estate, he can arrange for that sum of money to go to a charity of his choice. That is not my understanding of the Bill's provisions. I should like that to be considered in another year.
There may be some who consider that we are giving too many concessions to a deceased's spouse. But we should consider this matter in a European context. Estate duty—and I am not talking only about the deceased's spouse provision—is very much higher in this country than it is in the Common Market countries. Belgium is the only country where it approaches our level. There it is about 40 per cent. per capita of what it is in Britain. For every £100 which goes on estate duty per capita in Britain,£40 goes on it in Belgium. In the Netherlands, France and Italy, it is about 20 per cent., and in Germany it is about 10 per cent.
The reason why that is so is basically because children have advantages under inheritance tax systems in Europe which they do not have in this country. Hon. Members on the Opposition benches will be glad to know that I have no particular brief for that type of concession. But in Continental Europe, there are also advantages for the spouse. That is true of all the major European countries. Italy is the only country where children have an advantage over the widow. I would not advocate in the slightest that we should follow an Italian pattern.
The wonderful thing about Britain is that from 1972 it will be the one country where a widow will have an advantage over the children. I have no hesitation in congratulating my right hon. and hon. Friends on having introduced this Measure. This is not a gift from someone to someone else who has the receipt; in all moral and humanitarian terms, the 647 money is the lady's own money which she is receiving anyway. I have no hesitation in supporting the Clause.
§ Mr. Loughlin
I am fascinated. As I understand it, we are dealing with Clause 112 which relates toEstate duty: relief for surviving spouse, charities and certain institutions.I am glad to see the Chancellor of the Exchequer nodding his head in agreement with my contention as to what we are debating. The hon. Member for Truro (Mr. Dixon), in spite of the fact that not one word has been uttered from this side of the Committee in opposition to the Clause, began his speech by suggesting that the Opposition sometimes believe that it is more blessed to receive than to give, whilst he and his hon. Friends believe that it is more blessed to give than to receive.
That is a fantastic situation. It is true that the hon. Member is very young in terms of service in the House of Commons and has not been a Member for long. My estimate is that he will not be here much longer. I do not know how he can say what he has said in a Committee of this kind on an issue which is relatively non-controversial. Even the £15,000 referred to really means £30,000. This Clause is for the benefit of people who are much better off than the majority of people I represent. It is deplorable that a Member, with all the nastiness, wrapped in sugared phrases, that we are accustomed to expect from hon. Members opposite, should use a Clause of this kind to make political capital.
I always try to keep in order in the Chamber. I never want to challenge anyone. I do not wish to transgress the rules of order, because this is a very narrow Clause, but what we have heard tonight is typical of the type of Tory Member we are getting here who is completely immoral and unscrupulous and is prepared to use a Clause like this to make political capital when there is no reason for doing so.
§ Mr. Nott
The hon. Member for Birmingham, All Saints (Mr. Brian Walden) raised the question of public schools and the relief which such schools which are charities will obtain under the Clause. We do not believe that there is any justification for singling out one type of 648 charity in order to exclude it from the benefit of relief given to charities generally. The term "charity" covers several fields, including the advancement of education. This purpose has been regarded as charitable in law in this country for centuries.
I am as aware as the hon. Gentleman of the suggestion that charities should be defined in a more restricted way for tax purposes. This proposal has been put forward from time to time. The Labour Government were approached on this issue and they did nothing about it. Successive Chancellors of the Exchequer of both parties have not felt able to distinguish between one sort of charity and another. No definition has suggested itself which would command the specifically wide measure of public support which would enlarge or narrow the definition.
In the last resort, this must be a matter of political judgment. Even if it were possible to introduce a more restricted definition, the Government would not agree that there was any case for cutting out public schools as charities. These institutions contribute to the advancement of education in this country, which must be regarded as an outstandingly worth while objective.
My hon. Friend the Member for Epping (Mr. Tebbit) raised an interesting and imporant point relating to the surviving spouse. He was anxious that we should give consideration to another category which raises hon. Members' sympathy. My right hon. Friend the Chancellor noted my hon. Friend's remarks, and the comments of my hon. Friend the Member for Truro (Mr. Dixon) These matters will always be borne in mind. Some of the points raised by my hon. Friend the Member for Truro are relevant to the Green Paper on inheritance tax, and I have no doubt that many of the topics to which he referred will be discussed when that Green Paper is debated.
The Clause implements the proposals in the Budget speech. The three prongs of the Clause, property going to the National Trust, the National Gallery, the British Museum and certain other bodies concerned with the preservation of the national heritage should be free from 649 estate duty, and properties going to charities to a maximum of £50,000 and properties going to surviving spouses to a maximum of £15,000. These are three worth while objectives. Subject to the small proviso made by the hon. Member for Birmingham, All Saints, the Clause will be welcomed by the Committee.
§ Question put and agreed to.
§ Clause 112 ordered to stand part of the Bill.
§ Bill (Clauses 1, 9, 12, 63, 64, 71, 73, 110, 112 and Schedule 4) reported, with an Amendment; to lie upon the Table.