HC Deb 28 November 1972 vol 847 cc224-5
9. Mr. William Hamilton

asked the Chancellor of the Exchequer if he will formulate plans for taxing heavily the unearned gains of land speculators.

Mr. Patrick Jenkin

They are already liable to tax. Profits accruing to an individual from speculative dealings in land are liable to tax at full income tax and surtax rates. Companies pay the full corporation tax rate and in addition their shareholders are liable at graduated rates of any distributions.

Mr. Hamilton

Does not the Chief Secretary recognise that in spite of that considerable profits are being made, so much so that the Chancellor himself has described them as offensive although he has done nothing about them? Does not the hon. Gentleman consider that it borders on the obscene to freeze agricultural workers' and hospital ancillary staffs' wages while these speculators are reaping enormous benefits with the Government doing nothing about them?

Mr. Jenkin

It is quite wrong to say that the Government are doing nothing. The Inland Revenue's armoury for dealing with speculative gains is a strong one. It was toughened by legislation passed by the Labour Government and supported by us. If the hon. Gentleman knows of any case where he believes that speculative gains in property transactions have not been properly taxed—

Mr. Hamilton

Read the newspapers.

Mr. Jenkin

—perhaps he will pass the details to us so that they may be examined.

Mr. Evelyn King

Is not this Question, although admittedly ambiguous, much more complex than it appears? If it refers to those who purchase land and build houses upon it, would not the effect of the suggestion by the hon. Member for Fife, West (Mr. William Hamilton) be one of two things? Would it not either raise the prcie of the house or increase the number of homeless people, which is not necessarily a good thing.

Mr. Jenkin

Those are obviously factors that any Government must take into consideration but as the rate of tax on the transactions mentioned by the hon. Member for Fife, West (Mr. William Hamilton) goes up to 75 per cent. in the case of speculative dealings and up to 87¾ per cent. if it is caught by the clause passed by the previous Government, I should have thought that they were sufficiently stringent penalties for transactions of this sort.

Mr. Sheldon

Will the Chief Secretary say how many assessments have been made during the last two years under Section 488 of the Income Tax Act, 1952, and for how much were those assessments?

Mr. Jenkin

The hon. Member for Heywood and Royton (Mr. Joel Barnett) has a Question down for written answer on that subject today. Obviously it is not possible to give details of individual assessments of that sort.