HL Deb 26 February 1970 vol 308 cc159-60
VISCOUNT ADDISON

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government, in view of the widely recognised hardship suffered by the holders of undated Government stocks who have seen their capital drastically reduced, and in view of the failure of successive Governments so far to find means of alleviating their hardship, whether they will consider allowing losses in these stocks prior to April, 1965, to rank against profits made on other realised stocks and shares.]

LORD BESWICK

My Lords, this Government, like its predecessors, has looked very carefully into the position of long-term holders of undated securities and examined a number of possible solutions, but has concluded that there is nothing which can be done in the way of altering the terms on which these securities are held which would not create more problems than it solved. The Government could not adopt the proposal made by the noble Lord because we could not allow relief on losses without making gains on the same securities chargeable to capital gains tax. This would reverse the decision taken in the 1969 Budget to take gilt-edged securities out of the field of capital gains tax, exempting gains and disallowing losses alike.

VISCOUNT ADDISON

My Lords, I thank my noble friend very much for his reply. May I put this supplementary question to him?—though I appreciate that I may not receive a reply to-day. Would Her Majesty's Government consider any other means by which this hard-ship might be relieved, such as the establishment of a sinking fund to purchase the stocks in the market at present prices?

LORD BESWICK

My Lords, as I am sure my noble friend would agree, one way of helping the gilt-edged holders is to maintain the balance-of-payments strength and the competitiveness of the export industries. The indirect benefit to the gilt-edged market has been considerable. As I indicated at the beginning of my answer the Government sympathise with the difficulties of the long-term holders of these stocks. If my noble friend puts forward proposals which do not have disadvantages, I will undertake to see that they are considered.

LORD RATHCAVAN

My Lords, would not the noble Lord agree that the exemption from capital gains tax of the price appreciation of Government stock, which I suggested in a Question in your Lordships' House more than a year ago and which was not then very well received, has done more than anything else to improve the status of the gilt-edged market which is now in a better state than it has been for many years?

LORD BESWICK

My Lords, I am sorry if the noble Lord feels that he has been deprived of any feeling of satisfaction to which he is entitled as a result of the adoption of his proposal. But I agree with what he said about the result of the action taken.