I beg to move, "That the Clause be read a Second time."

This new Clause deals with industrial and provident societies. It provides that these societies should be charged the Profits Tax at the rate of 5 per cent., that is the lower rate, instead of the higher rate, namely 12½ per cent. The treatment of these societies was raised during the Committee stage of this Bill in the Debate on Clause 35, which deals with building societies, and a request was then made by certain hon. Members that industrial and provident societies should receive equal treatment with building societies.

The House will have noticed that building societies previously paid 1½ per cent., and that now, under the terms of this Bill, they will pay 3 per cent.; but that 3 per cent. has to be paid on profits before and not after deducting interest on loans or deposits. The 5 per cent. for industrial and provident societies, which it is proposed to incorporate in the Bill, will be computed on the ordinary basis, that is, after deducting loan but¹not share interest. It may be asked by hon. Members opposite why the Co-operative societies, who are the chief organisations to benefit by this change, should be permitted to pay at the lower rate rather than the higher, and the answer is that the share capital of these societies is not analogous to the ordinary share capital of commercial trading concerns. The lower rate will benefit largely small holdings of shares, and these shares are a sign of membership in the particular Co-operative society concerned.

I think that only about 20 per cent. of the share capital invested in this way is actually used to finance trading activities. The great bulk of it—I am told it amounts to something like 80 per cent. —is passed on to the Wholesale Society and invested by them, mostly in Government securities. Therefore it can be said that investments of this kind, that is, shares in Co-operative societies of this nature, are more investments accepted to encourage thrift than for use in the society's business. Investments of this kind take their place with those in many other corporations like those in a savings bank, and there is a limit, namely £200, placed on the amount which any individual can invest. Many of the members leave the interest which accrues to them to accumulate and be added to their holding, and do not normally withdraw it as and when it becomes due.

If the House assents that these features are there and that they do mark off industrial and provident societies from ordinary trading concerns, it does, I think, put them in a special category of their own, so that the dividends on their share capital is more akin to fixed interest on loan capital than to dividends on share capital in an ordinary company. Interest on loan capital is allowable as a deduction in computing profits for Profits Tax purposes, and does not rank as a distribution attracting the 12½ per cent. tax. A similar problem arose in 1937, and those hon. Members who were in the House then will recall the discussions that took place. The problem arose over building societies, and it was pointed out that there was little distinction between the share and loan capital of these societies, and, in that instance, by general agreement in all parts of the House, the situation was met by a special provision which limited the Profits Tax for such societies. As I have reminded the House, the Profits Tax has been 1½ per cent, up to now for building societies, and it is now proposed that it should be raised to 3 per cent.

When we had the discussion on the Committee stage, the Chancellor the Exchequer, after listening to the Debate, agreed that there was a case which should be considered. He has, in the interval, looked at it again, and has come to the conclusion that it will be fair and just to place these provident and industrial societies in this category of their own and to allow them to pay at the rate of 5 per cent. rather than the full.rate of 12½ per cent. The House will see that this is a compromise. My right hon. Friend has not accepted the suggestion that they should be placed exactly on all fours with the building societies and pay 3 per cent., but he has fixed a rate of 5 per cent. which he thinks is reasonable in the circumstances. I would add that, at the moment, they pay 5 per cent., and, therefore, so far as that is concerned, the position will really he unchanged, although I have to say that, in spite of the fact that the rates will remain the same, industrial and provident societies will, in fact, pay more under the legislation now going through the House.

If it is asked why Co-operative societies are placed in a different category from building societies, I think the short answer is that it is quite obvious from the facts and figures that they do not use this share capital to the full for trading activities, and that the greater proportion is invested mainly in Government stocks. Nevertheless, unlike building societies, some of it is used in trading activities, and, therefore, it is right, in the view of my right hon. Friend, to fix the rate at 5 per cent. This does indicate the difference between a Co-operative and a building society and also makes clear the difference between a Co-operative society and an ordinary trading concern. The financial effect, if the new Clause is accepted, will be that the cost will be about £250,000 per year, taking into account the fact that Profits Tax will be allowed as a deduction for Income Tax. The position of Co-operative societies as a whole will be that, whereas they formerly paid 5 per cent. on trading profits only, they will now pay 5 per cent. on trading profits plus investment income. The additional charge, I am informed, will be about £325,000 a year. I hope that, with that brief explanation, the House will agree with what my right hon. Friend desires to do and will accept the incorporation of the new Clause in the Bill.

This is one of the most barefaced proposals which I have ever heard made by a Government to benefit their own political friends. I listened with great interest to what the Financial Secretary said, and there was not a word in it which could justify this proposal. He started by drawing an analogy with building societies, which, as all hon. Members know, are in a wholly different position with regard to taxation, and always have been. The arrangements for taxation of building societies are on a wholly different basis, and their circumstances are totally different. The Financial Secretary, in fact, admitted that just now. He differentiated between the Co-operative societies and the building societies, saying that the position of their share and loan capital was different. He sought to justify it by saying that we are not going to give the Co-operative societies quite as good terms as we are giving to the building societies. I do not know whether hon. Members fully understand what this proposal means. It is not a proposal related to the dividend, which is the discount allowed to those who trade with the Cooperative societies; this is related to the interest received on the share capital of those who invest in Co-operative societies, and is, therefore, wholly analogous to the money invested in a company, or any other concern belonging to a private trader.

3.30 p.m.

I find it difficult to understand how the Financial Secretary has the effrontery to bring this proposal before the House. Of course, I have no doubt that he is very much encouraged by the fact that he has a very large majority. If a proposal of this sort, which is so obviously unjust, is pushed through the House. I cannot help feeling that there will be pretty serious reactions against a Government who are ready to indulge in this sort of financial trickery. I do not know whether the right hon. Gentleman thinks that because share capital in some concerns is limited to £200, they should be treated differently from concerns in which more can be invested. That is an argument which does not seem to have much justice or sense about it. I hope that the Chancellor of the Exchequer will withdraw this monstrous Clause.

I am sorry to note the unfriendly way in which this Clause is received by hon. Members opposite. The right hon. Gentleman was careful to say that there was a separate case to be made out for building societies. Perhaps, had he told the House what that separate case was, he would have given away his opposition to another separate case to be made for the Co-operative movement. The Cooperative movement consists of people who are persuaded, as a matter of policy, to lay aside for capital purposes, in the price they pay for their commodities—in the form of an automatic sale—money that shall ultimately be used for general capital or social purposes. Preferably, it would be well to use it within the Co-operative movement, and those of us who are co-operators have advocated that it should be used in that way. Instead, in large measure, it is used, as the Financial Secretary explained, in the form of investments in Government stocks. It is a very good thing for the country, as well as for the individual co-operator, that there is this method of persuading literally millions of people—nine million people are members of the Co-operative movement—that this process of raising capital should be adopted.

That is the special case for the Co-operative movement, and it is as good a case—and can, in my judgment, be better defended—as any that could be made for the building societies. I am very glad that my right hon. Friend the Chancellor has made this concession, although I am not altogether sure whether he ought not to have made the full concession for which we asked. However, he has at least made this concession. I am perfectly certain that if the Conservatives wish to make this a debating point for electoral or general political purposes, they will have the greatest difficulty in explaining why this concession, which is readily allowed in other respects with reference to the building societies, should not be allowed to this highly beneficent social process that exists in the Co-operative movement, of persuading people to buy their goods at a price that will enable, at the end of a quarterly or yearly period, a sum to be put aside, to be used as personal savings, and, ultimately, as social capital. I am certainly in favour of this proposal.

The Financial Secretary, in commending this new Clause to us, was at some pains to anticipate that some argument might devolve upon the Cooperative societies from, I think he said, this side of the House. I think his wisdom is revealed to us in anticipating the thunder from the hon. Member for West Ealing (Mr. J. Hudson), who has put before us what, of course, are the real reasons behind this proposal. First of all, nine million potential electors now demand their pound of flesh before the sands finally run out for the Socialist Government. Then there was some reference to beneficent social consequences. The hon. Gentleman did not make it clear to me, at least, just what those social consequences were going to be, unless it was that the Co-operative societies propose to lose a considerable amount of their depositors' money by investing it in the gilt-edged market in its present state of decline. I do not know whether that is what the hon. Gentleman who was thundering from the Left a minute or two ago had in mind.

There are one or two curious features about this proposal. If it is to be advanced on the ground which the Financial Secretary gave, one cannot really understand why it was not contained in the original Budget proposals. There has been a lapse of time since the introduction of the Budget which has made possible the perfect crime which is now placed before us. First of all, it allows time for the hon. Gentleman and his nine million friends to bring forward this ultimatum, because, quite obviously, that is what it is. The cheers from hon. Members opposite made it clear that the Government: had been told to stand and deliver on this matter; that there was to be no nonsense about it. Of course, the second thing that makes the crime perfect and only possible this week—and that is why it has been postponed until now—is the Government's attack on the reporting of Parliamentary Debates by the cutting down of newsprint, and it is now hoped that this matter will escape notice and will be able to be slipped through.

I submit that those are two obvious reasons for the delay in bringing this matter forward. The Financial Secretary made an endeavour to probe into the past. He told us about some discussions which took place in 1937, when, as it happens, both he and I were temporarily absent from this assembly owing to the displeasure of certain electors, but, at least, he knows that there was no Profits Tax in 1937. I think we all know that. Why did he delve into the past and bring up a Debate in 1937, unless, of course, there was something connected with the National Defence Contribution which figured in the Finance Bill of that year? At any rate, the reference seemed a little obscure.

As regards building societies, I am not going to repeat some remarks which I made during the Committee stage, when I put forward—and I was one of those who stressed it particularly—the need for building societies to have some preferential treatment in this matter. The reason l gave was the one I repeat now, that there we have an instrument which is playing a useful part, and which can play a more useful part, and will do so when there is a change of Government on the rising of the people. The Co-operative societies have made no contribution whatever to the well-being of the people.

Is the hon. and gallant Gentleman not aware that the Co-operative societies have built very many comfortable and commodious houses at a nominal rent for members of the working classes?

I hope the hon. Member, whose frequent championship of the Methil Co-operative Society in connection with the naval base at Rosyth, we know, is comfortably housed under their auspices. Nothing is more likely to soothe his temper in this House than if he can be comfortably accommodated somewhere else.

Is the hon. and gallant Gentleman not aware that after the last war, the Royal Arsenal Cooperative Society bought a whole housing estate which would have become derelict but for their support and financial aid in helping to house homeless people? Is he also not aware that within 12 miles of this House there are scores of houses which have been constructed by the Cooperative movement, and there are also hundreds of houses more which have been built because the Co-operativemovement lent money to help working people to get their own homesteads?

I have no objection to the hon. Member for Doncaster (Mr. Walkden) attempting to put himself on side, after his rough treatment by the Parliamentary Secretary to the Ministry of Food. Of course, a limited number of houses of inferior quality have been put up under those auspices, and a certain number of working class people have been enabled by the Co-operative Society to buy their own houses Where the societies do that, of course, they are performing the function of building societies, which I am now advocating, in helping people to buy their own homes. But I repeat that, by and large, the Cooperative societies have made no contribution of any real value to the social wellbeing of the people in this country. They are and have been for a great many years a convenient method of evading taxation of one kind and another. I repeat here and now that the case for the building societies rests upon a social contribution of that kind. However, as I said earlier, the moment has arrived for the perfect crime. The Press are in course of being muzzled. The nine million co-operators have now presented the pistol at the Government's head. The hon. Member for West Ealing, having refreshed himself on non-alcoholic lines has come down here in an extremely ferocious frame of mind, and it will only remain for the Opposition to stand as the champions of social improvement by resisting this discriminatory tax.

I trust hon. Members will view this matter quite impartially, I quite appreciate the incapacity of the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) to draw a distinction between the Co-operative movement and a private company, but I wish to make that distinction clear. Before I do so, in order to disabuse the minds of hon. Members of the idea that the Co-operative movement is treated differently from any private company, I shall refer to the words of the right hon. Member for the Scottish Universities (Sir J. Anderson), who speaking in this House on 17th October, 1944, pointed out clearly:

"Since 1933 the Co-operative Societies have been taxed on the whole of their profits in the same way as limited companies. The "divi" paid by such societies, which is the sum paid as discount, rebate, dividend or bonus referred to in Subsection (3) of Section 31 of the Finance Act, 1933, is allowed as a deduction in arriving at the assessable profits in the same way as a discount or rebate allowed by a company would be deducted, and I am not prepared to propose legislation to alter this position, which is in accordance with the recommendations both of the Royal Commission on the Income Tax and the later Raeburn Comniittee."—[OFFICIAL REPORT, 17th October, 1944: Vol. 403, C. 2210.]

Will the hon. Gentleman agree that it will not be possible for any Chancellor of the Exchequer in future to say that, if this Clause becomes law?

Not at all. I want to indicate how the Co-operative movement functions, and to give some idea of the social benefits to which the hon. and gallant Member for Holderness referred. I understand from proclamations made by the Opposition that they believe in a property-owning democracy. They may believe in it as a theory, but I suggest that in the Co-operative movement we have that idea in practice. We have 91½ million members, with a capital of approximately £310 million. That means, approximately, that 9½ million people have an average shareholding of about £40 each. If that is not approximating towards the ideal suggested by hon. Members opposite, I should like to know what is.

We should realise that right from the beginning, the Co-operative movement, apart from being a trading organisation, has been an organisation with a social mission, and consequently it has inculcated the virtues of thrift and temperance—although that may not be acceptable by a large number of Members in this House—and self-reliance. It was for that reason that, as hon. Members opposite will learn if they care to look up their own history, many of their illustrious forbears condescended to go on platforms of the Co-operative movement and lavish praise upon the social improvements which that movement was effecting. In consequence of that, the great majority of the people in this country treat the local retail society not merely as a trading organisation, but as their banking institution, with the result that we find that in 1945, millions of people have not only placed deposits in the society but they have allowed their dividends and interest to accumulate within the society to such an extent that it became literally impossible for the retail societies to employ the capital placed at their disposal in trade. That is why the Financial Secretary has indicated that out of a total capital of £310 million, approximately 86 per cent. has to take on the form of investment, and slightly less than 14 per cent. is involved in the trade.

That is where we differ from the private limited liability company. The whole of the capital is involved in the trade, and the profit is assessed on the basis of their capital, but the Co-operative movement, of course, employs only about 14 per cent. in trade. The rest of it is passed on, for the most part, by the local retail society to the Co-operative wholesaler, but by law we are denied the opportunity of acquiring more than a certain number of shares in the Co-operative Wholesale Society. As a matter of fact, our shareholding in the Wholesale Society is limited by the C.W.S. itself. For every two members of the retail society, we are allowed to take up one £5 share, so that the whole of the capital in a retail society cannot be invested in the trade so far as the wholesaler is concerned. That now means that we must, therefore, invest it in the banking accounts of the Co-operative Wholesale Society. But just as a retail society cannot engage the whole of its capital for trade, neither can the C.W.S. There are enough complaints on the part of the Opposition about the gigantic development of the Co-operative movement at the present moment, but if we should engage the whole of these capital resources in trade, I think they would begin to complain more bitterly.

The hon. Member talks with such authority, and uses the word "we." Would he tell the House whether he has any interest in this Clause, and whether he has any shares in the Co-operative Society?

My shares are so infinitesimal that they would not influence any judgment or decision of mine on a matter of this kind. The investment of a member is limited to £200, and the hon. Member can imagine what interest I should receive on £200 at 2½ per cent. I think he will see it is not likely to colour my judgment in any way whatsoever. The C.W.S., or great Co-operative Wholesale Society, is unable to employ the whole of the capital placed at its disposal in trade, and the result is that, of course, it is obliged to find investments and it places great sums at the disposal of the Government—even a Tory Government, not merely a Labour Government. It likewise takes up loan stock in local corporations, and so on. Vast sums of money that we placed in investments because we could not engage it in trade, earn interest, which we pay out in interest upon the share capital; but as a local society, we make no profits on the transactions at all, because, as the local member hands it in to the retail society, so the retail society lends it to the Wholesale Society, and passes it on. Is any hon. Member opposite going to argue that because money is placed in a branch of some great banking institution that branch should be taxed? Of course, it should not. The retail society is merely being placed in the position of the branch of a bank.

Without making a long speech I want to indicate that the Bill has two intentions. The first is to prevent inflation, and the second to plough back capital into business. As we know, at the present moment, if the Bill stands as it is, without the introduction of the new Clause, instead of being anti-inflationary, it would be inflationary; because what we should be constrained to do is to prevent members of the community, those millions of people, putting money into the Co-operative societies. We should be obliged to convert the share capital into loan capital. Therefore, we should he handing out the money to the members, which, once in their hands, would become purchasing power. That would have tended toward an inflationary situation which we are endeavouring to avoid. Secondly, for the information of hon. Members who do not seem to know, I would indicate that the great majority of members of Co-operative societies permit their interest and their dividends to accumulate within the retail societies to the extent of about 65 per cent. of the amount to which they are entitled. The whole of that is used by the Co-operative movement for purposes such as I have indicated. But if this Measure were adopted without this Clause, I am afraid we should have to restrict all those prac- tices, and consequently prevent people from saving as they are at the present moment.

There are many other things I should like to say in connection with this, but conclude by reminding the House that the Co-operative movement from its inception has endeavoured to keep prices within the means of the great majority of people, and has expended and is expending substantial sums of money on education, housing, and the institution of social services to relieve the distress of its members. When private companies are ready to act on that principle, I shall be prepared to back them if they wish to receive precisely the same terms.

The very interesting picture of the activities of the Co-operative movement given by the hon. Member for North Bristol (Mr. Coldrick) is not quite complete in certain directions. I saw the very great merits of the Cooperative movement when it was being run entirely for the purposes and aims for which is was originally created. I happen to have, in the area I represent, a Co-operative with a Conservative majority, and so I speak with certain backing. But the picture that the hon. Member has painted is far from complete. Near where I live in the country, one of the local Co-operatives has recently purchased a very large and handsome estate, and I have during the shooting seasons seen the managers and directors having a pleasant afternoon's shooting. That, in its way, is an admirable thing; but whether the people who have put money into that "Co-op" know it is rather different.

There seems to be a point here. A public company has to have articles and a memorandum showing the shareholders exactly for what purposes their money is to be used. I believe that one of the dangers of the "Co-op" movement—as one of its backers I put this forward seriously—is that it is has departed widely from its original aims. It has been buying cinemas, and going into every form of industry. That is probably, in its way, a good thing. But let us be quite clear about it. H it is going in for this form of competition, it should not be unduly favoured by comparison with other organisations—in undertaking things which were not its primary functions I think there is a very considerable danger that the Co-operative movement, which has, in my view, performed great and useful functions for this country, is going to lose a great deal by going on as it is, partly for the reasons I have given, and partly for the political use to which it may put its funds.

If an organisation asks people to invest in it, so that they will be able through it, to purchase their goods or any services which may be provided in the best way, and because thus they will get the best deal, then surely it should limit the uses of the enormous funds accumulated as described by the hon. Member for North Bristol. But if it is going forward into the political arena, and using that money for that purpose, it should be made known in the same way as the activities of private enterprises are known through the articles and memoranda of association.

Is not the hon. Member aware that all Co-operative members read a quarterly—sometimes, a monthly—statement made by the board of directors in great detail, and issued to the whole of the membership so that there cannot possibly be any doubt or ignorance amongst the members as to what is being done with their funds?

I think that in spite of that the directors—

We are discussing a new Clause, and we are not discussing the whole history of the Co-operative movement. I think the Debate is going rather wide.

I was only replying to things which the hon. Member for North Bristol has said. I do believe that the "Co-op." is being harmed in a way by the undue favour that is being shown to it as against private enterprise.

I am a little puzzled by this. I did not have the advantage of hearing my hon. Friend move the new Clause. I have heard the last two or three speeches, which seem to be about Co-operative societies. But when I look at the marginal note of the new Clause I cannot find that there is anything about Co-operative societies in it. The marginal note is about industrial and provident societies. I should like to know from whoever is to reply to this discussion whether the bene- fits, if there are benefits, of this new Clause, are limited to Co-operative societies, or in what way the Co-operative societies become a proper object of Debate under it. I can quite see that the benefit of the Clause would go to the Co-operative societies as well. There are a lot of Cooperative societies which gives me joy. I understand that hon. Members opposite do not share my joy. But I suppose that many other organisations will benefit by this Clause that are not Co-operative societies. I understand that there are a great many organisations and associations which will be covered by such benefits as the Clause gives—associations of allotment holders, for instance, and any kind of agricultural association, and a great many clubs. I understand that hon. Members opposite are interested in clubs, and that the interest in clubs on the other side of the House is as great as the interest in Co-operative societies is on this side. It is rather a pity that something which would confer a benefit on a particular type of society is criticised and cavilled at by hon. Members opposite, because other associations they happen not to like, and whose political affiliations are obnoxious to them, may happen to benefit as well.

I think that the hon. Member for Nelson and Colne (Mr. S. Silverman) would not have made that speech had he had the privilege, as we had, of hearing the Financial Secretary introducing the new Clause, because he would have realised that the Financial Secretary devoted the whole of his arguments, so far as I could follow them, to the justification of the position of the Co-operative societies. The right hon. Gentleman made it quite plain that it was the Co-operative societies who were the main object of this Clause and who, as I think he said, were the main beneficiaries. Very often, in these financial Debates, I have a great deal of sympathy with the Financial Secretary of the Treasury, because I am pretty certain when I see him put up to move an Amendment or a new Clause that there is not very much to be said in favour of it. I was not this time wrong.

The hon. Member for North Bristol (Mr. Coldrick) spoke from a great deal of knowledge, because he is intimately connected with the Co-operative societies of whose internal working he spoke with such authority. I have a considerable amount of sympathy with what he said. The trouble is that, as he must realise, what we are dealing with here is a tax which applies to all forms of companies. It happens to be an extremely bad tax. The trouble of which he complained when this tax is applied to the particular organisations in which he is interested, comes from the inherent badness of the tax itself. Equally hard results can be shown by those interested in other forms of industrial organisations who suffer unfairly from the incidence of a tax which 10 years ago, when the Chancellor of the Exchequer was both younger and wiser, he was himself the first to condemn.

No one on this side of the House, I am sure, would display—certainly I would not—hostility either to the object or the methods of the Co-operative societies as such. Whether they always spend their surplus money which they acquire with the utmost wisdom is not for me to say. Whether the visible results of their successful trading which we see in this House are on the same level as the admirable goods which we see displayed in their shop windows is not for me to judge; but so long as they compete with private enterprise on equal terms and without discrimination in favour of the Co-operative societies, no one on this side of the

I beg to move, "That the Clause be read a Second time."

Hon. Members will know that the Profits Tax is really assessed on the principles of the National Defence Contribution, to which it is a successor. The 1937 Act, which governs the basis of National Defence Contribution, lays it down, in paragraph 11 of the Fourth Schedule, that the amount which may be deducted, in computing profits as remuneration of directors other than whole-time service directors not earning more than 5 per cent. of the ordinary share capital, in the case of director-controlled companies, is not to exceed £1,500 or 15 per cent. of the profits, subject to an overall limit of £15,000. The £1,500 will, of course, apply only to small companies whose profits are not more than £10,000. It was represented during the Committee stage that in present circumstances the limit ought to be raised, and this Clause seeks to raise it to £2,500. The circumstances which give rise to the necessity for a change are the alteration in the cost of living, and that kind of circumstance. This Clause gives effect to a suggestion which originated from hon. Members opposite.

I do not know whether it is your intention, Mr. Speaker, to call the Amendment to the proposed Clause stand ing in the name of my hon. Friend the Member for Chippenham (Mr. Eccles).

Yes, but I cannot do so until the Clause has been read a Second time. When it has been read a Second time, I shall call the Amendment.

I am much obliged, because that being so, I will postpone the remarks I wished to make, except to thank the right hon. Gentleman for having met us halfway in what we asked. We shall have an opportunity to discuss the other half on the Amendment.

As I understand it, the figures in the Finance Act, 1937, are £1,500 or 15 per cent, of the net profits, whichever is the greater, subject to the overriding maximum of £15,000, and that this allowance does not apply to full-time working directors. Therefore, the whole of this sum is available to part-time directors, but not to full-time directors. In view of that, I should have thought this Clause needed a little more explanation. In any case, it will affect only very small companies.

The intention is that it shall affect only small companies. We have two upper limits, the 15 per cent. or the £1,500, and the limit of £1,500 will apply only where the 15 per cent. is less. Director-controlled companies which are very small, are very similar to partnerships, and this Clause is designed to affect these sort of small companies. After all, this has been part of our taxation legislation since 1937, and all we are doing is to alter the limit. We feel that we have hit on the right limit in the case of the small company, and that we have gone a proper distance towards meeting the suggestions which have been made.

I beg to move, as an Amendment to the proposed Clause. in line 7, at the end, to add:

"and for the words 'fifteen thousand pounds,' there shall be substituted the words 'twenty-five thousand pounds.'"

As I understood the Solicitor-General when we were discussing this Clause, his intention is merely to alter the situation for small companies. If he will cast his mind back, he will remember that we tried at an earlier stage to make a case for all companies. That case was based on the very simple premise, that the value of money has completely changed. Whether we buy services or goods, we have to pay much more—very often double—than we paid before the war. We feel that in the case of director controlled companies, if the Government are going to make a concession, they must make a concession to cover all. No reason has been advanced from the Government Front Bench as to why only small companies should be covered. We want all companies, big or small, to get the same concession in view of the change in the value of money So far as I know, it will not cost the Government very much, and it seems only elementary justice that where circumstances have changed, and the Government admit that, they should make their concessions cover every section of industry, and not only one section

I beg to second the Amendment.

We have carefully considered the suggestion made in this Amendment. The new Clause was the result of our reflection on all the arguments which were adduced and which, as the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) has just said, were directed both to the lower and upper limit. The suggestion was that both should be altered, and what we have proposed is a compromise which affects the lower limit. The £15,000 will affect only the very large director-controlled companies whose profits exceed £100,000. It is a question of degree; the line has to be drawn somewhere, and the question is whether, in the case of the £15,000 limit, it can be said that circumstances require that that should be revised. In the case of the very small concern it is felt that that, being rather like a partnership, and having regard to the changed value of money, is not adequate. But we do not think that the same considerations can be urged with regard to what we consider a generous allowance. It will apply only to companies which are director-controlled, and whose profits exceed £100,000. I am very sorry to say that we feel that no case has been made out with regard to the upper limit, and I must therefore ask the House not to accept the Amendment

The explanation of the hon. and learned Gentleman is not very satisfactory. If we base the change in the figure in this Clause on the change in the value of money, then the value 9f money has changed equally in both cases. If there is a logical case for doing it in one instance, there is equally a logical case for doing it in the other. On the other hand, this goes some way towards what we believe to be fair, and it would be unwise and foolish to expect this Government to see sense all at one go. We are content to accept half sense this time, in the sure and certain belief that when the Chancellor has had a year to think it over, he will realise the full strength of our argument, and will give us the other half next year.

I beg to move, "That the Clause be read a Second time."

This Clause deals with liability for Estate Duty consequent on enforced conversion, as an exchange control measure, of bearer securities held abroad. As a wartime measure, it became an obligation, under the Defence Regulations, for bearer securities to be registered in this country, and that being so, it affected very materially the liability for Estate Duty if the owner of the securities happened to be a person who was domiciled abroad. Normally, under the law, the obligation and liability to pay Estate Duty follows on the situation of the securities concerned, and if the securities were situate here they would normally have been liable to pay Estate Duty, although they were owned by someone whose domicile was overseas.

In order to be just to those concerned it was decided that if it could be shown that the person who owned the securities at the time of his death was the same person as owned them at the time they were registered, and transferred from abroad, Estate Duty would not be payable in respect of those registered securities. It was accepted by most people that when the Defence Regulations came to an end—the Regulation in this case is Regulation 3B—that would be dropped, and people would be entitled to have their securities retransferred into bearer. Under the Exchange Control Act, the holding of bearer securities will not be allowed, and what the Chancellor does here is to continue the wartime concession so that under the new Act, which will take the place of Regulation 3B, people in the position I have described will still have the advantage of the wartime concession, which, by general agreement in all parts of the House, was granted at that time.

I found it necessary, a little earlier, to speak in somewhat critical language of the Financial Secretary's speech when commending to us a Clause dealing with Co-operative societies. It is, therefore, with all the greater pleasure that I commend him now for the admirable manner in which he has introduced a Clause which, I think, will be generally acceptable to the House. This is a matter of great complexity, and one over which many people could wonder for hours. The difficulty of the mechanics of collecting Estate Duty on various securities has troubled many professional men for many years, and the Government are to be congratulated on putting this matter right in this new Clause. I cannot employ the language of the hon. Member for West Ealing (Mr. J. Hudson), and say that this should be supported on the grounds of the social uplift which it will bring us. This is a more mundane matter; here, we are keeping our feet on the ground, and this technical matter is now being adjusted. The confident manner in which the right hon. Gentleman has just moved this new Clause shows how different he is, when pleading a just case, from the less comfortable attitude in which he found himself when moving the earlier Clause.

Can my right hon. Friend explain the proviso to the new Clause? I am not clear whether this restricts holders of scrip who are still holders on the date of their death.

I thought I had covered that point—I agree briefly, because I did not want to waste the time of the House. The answer to the question, if I understand it aright, is that if the executors of a person who dies can show that he owned those securities in bearer form, and was the owner at the time when they were compulsorily transferred into registered securities, he would have the benefit of this particular concession, provided, of course, that he fulfilled the other obligation which falls upon that estate, that the domicile would be abroad, and so on.

I beg to move, "That the Clause be read a Second time."

This new Clause abolishes a number of duties on admission to the various learned professions. First, it abolishes the tax upon admission to the degree of barrister in England or advocate in Scotland—that is, £50. Then it abolishes the duty on admission to either of the four Inns of Court in England. That is a phrase taken from the Stamp Act, 1891. I do not know what "either of the four Inns of Court" meant then, but that is the phrase used in that Act. It abolishes the duty on admission of any person as a solicitor of the Supreme Court in England, and as a law agent in Scotland. It also abolishes the duty for authorising a person to act as a notary public. Subsection (2) reduces to a nominal amount the duty payable on articles of clerkship for the purpose of becoming a solicitor in England or in Scotland. Subsection (3) reduces to one-twentieth the duty payable on a practising certificate taken out yearly by a solicitor.

This particular matter has been a bone of contention for a great many years. Indeed, in 1850 and 1853, Bills were introduced in the House with the object of reducing these various duties. They are, in effect, simply a tax upon admission to the learned professions, which in no sense can be said to serve any useful social purpose. The suggestion that they should be removed originated from a number of my hon. Friends, and received support from both sides of the House during the Committee stage. This new Clause is designed to give effect to those proposals.

We ought not to allow this occasion to pass without first congratulating the Chancellor on succeeding in doing what Mr. Gladstone set out to do in 1870, but was never able to achieve, because the tax which we are repealing at the moment originates, in its present form—although in part from the Stamp Act, 1891r—from the Stamp Act, 1870. As my hon. and learned Friend has said, there was considerable difficulty in getting it through the House, and it was only got through because Mr. Gladstone assured everyone that the only purpose of collecting these duties together was to discover what they were and how they could be repealed. The Chancellor of that day said this:

"He looked on this Bill not as a settlement but only as a beginning—as laying the foundation for future labours in the field."

There have been other labourers in the field, and I think we ought to pay the very greatest tribute to the party opposite. In 1937 they began the repeal, and indeed did remove the very heavy duty which weighed on the backs of the aristocracy; the very heavy charges which were payable by Stamp Duty when one was raised from one rank to another in the nobility were removed by the party opposite. But I cannot help feeling that were Mr. Gladstone alive today he would have put the encouragement on learning, and the opening of the learned professions to all classes, before the relief of indigent peers.

However, be that as it may, it is perhaps worth while looking for a moment at the history of the tax, because it is probably one of the oldest taxes at present in force. It was introduced by King William III. His Government copied the tax from Holland, where it had obtained for some time before. I am indeed sorry that none of the hon. Members who represent Northern Ireland are with us today, because I am sure they would impress upon the House the very grave danger of departing from any principles laid down by that Government of that particular monarch. All I can say in their favour is the general view they have expressed, that it is never necessary to go beyond 1690; and as the Stamp Act of King William dates from 1694, perhaps under those circumstances repeal would be permissible. It was made permanent by Mr. Robert Harley, later the Earl of Oxford, who is very rightly regarded as the founder of the Tory Party as we now know it. He introduced as a permanent Measure, the Stamp Taxes of which these Stamp Duties we are discussing form part, to pay interest on the founding of the National Debt which would secure the stock of the South Sea Company. In passing, we ought to pay that tribute to this prototype of Conservative finance. It was, of course, subsequently applied by the party opposite, in the well-known Stamp Act of 1765, to our American Colonies. If I may say so, it does seem to the that we ought again to pay tribute for this outstanding contribution to Anglo-American relations.

Will somebody tell me w hen the hon. Member gets within too years?

In 1785, when the matter was discussed—the last occasion on which the House gave serious consideration to these Stamp Duties, Sir E. Astley observed that:

"He rose because his tax upon dogs had been alluded to. He owned he should be indeed well pleased to see both dogs and attorneys subject to duty. He coupled them thus together because he thought them both articles of luxury."

Now let me come to the Stamp Act, 1815, because it is there that the taxes obtained their permanent form. There was some discussion on this subject, and since the hon. and gallant Member for Holdnerness (Lieut.-Commander Braithwaite) saw fit to make a reference to the newspapers during the Debate on the new Clause on industrial and provident societies, perhaps you would not think me out of Order—

I would think the hon. Member was out of Order. He has already gone extremely wide in his historical references. I ask him now to keep strictly to the proposed new Clause.

Surely, Mr. Deputy-Speaker, on an occasion when the House is getting rid of a number of taxes of very long standing, might it not be possible for a little indulgence to be shown, in order to pay tribute to past Members?

The hon. Member for Hornchurch (Mr. Bing) will appreciate that I am not altogether out of sympathy with him, but in accordance with my strict duty I must rule that he certainly went too wide, and that he must now confine himself to the particular new Clause before the House.

The difficulty I see is that with regard to the tax imposed on news- papers, to which a contribution was made on the freedom of the Press by the Party opposite—

I do not think that that arises. The hon. Member should go on with his own speech.

If I may, f should like to read from the original copy of HANSARD the comment made by the Chancellor of the Exchequer on that occasion and perhaps it will show how difficult it is to discover the exact facts of this tax. All HANSARD says is:

"After a few words from the Chancellor of the Exchequer which were inaudible in the Gallery, a division took place—For the Amendment, 16; Against it, 53; Majority, 17. The Resolution was then agreed to."

This is unlikely to occur in present circumstances and inevitably whatever comparison may be made between the Chancellor of that time and the Chancellor today at least in this matter the balance will be made in favour of my right hon. Friend. The Chancellor today is heard not only throughout this Chamber but very often outside it. On a recent occasion he did address one or two words to the proprietors of football fields about the passing to their patrons of the full effect of tax reductions. Similarly, I hope the Chancellor will advise that the full effect of this relaxation of taxation is passed on by the learned societies to the affected students

I am sorry that the learned Solicitor-General in his opening speech did not deal with the period until this Clause becomes effective. There is an Amendment on the Paper, though I do not know whether it will be called, which raises the question of retrospection, but only in respect of the duty on articles of indenture. As I understand it, the Clause was so drafted that, in fact, the Bill will only go back from the date on which this Finance Bill becomes law, and I would ask the Solicitor-General and the Chancellor of the Exchequer whether they would not consider giving sonic measure of retrospection. There will no doubt be a considerable number of young men and women who have already paid, or will be already due to pay, the amount of this duty between the end of the war and the period when this Clause comes into effect. It seems a little hard that they should be excluded from this benefit. I think it is probably true to say that with negligible exceptions, no duty has been paid from the end of the war back to somewhere about 1939. That does, therefore, create a very convenient resting place, and if the Government could see their way to extend the effect of this backwards, if not as far as was suggested by the hon. Gentleman the Member for Hornchurch (Mr. Bing), at least to the end of the war it would be a very great advantage to a deserving number of the community.

I intend now to call the hon. Member for Nelson and Colne (Mr. S. Silverman). I ought to inform him that his Amendment has been ruled out of Order.

I am much obliged to you. I understand that my Amendment could not in any case have been called until this Clause has been read a Second time, but I am grateful for the information in regard to it. I should like now to say a word or two about the reasons which prompted me to put it down in the hope that I might be able to persuade my right hon. Friend to consider it between now and the date when this Bill becomes law. I should like to say first how much we are indebted to my right hon. Friend for the breadth and generosity with which he has carried out the undertaking which he gave on the Committee stage. On that occasion I had down an Amendment limited to the one solitary point of the £80 Stamp Duty on articles of clerkship. I confess that when I put that Amendment down, I was not unaware that a similar case could be made out for a great many other things, but I thought it was perhaps prudent to begin with the case which was most glaringly indefensible, and which was in a sense different from any other tax of the kind in that other taxes are on admission into a profession, while this tax was on an apprentice beginning to qualify for admission at a later stage to that profession. That seemed to me to be a case hopelessly indefensible and that it would be the weakest part of the wall which if once breached might enable me to get other matters of a similar nature taken up. I thank my right hon. Friend for accepting the principle of that Amend- ment and I ask him to consider that there are other similar cases. I think we are all very grateful now that my right hon. Friend has found it possible to put down this Clause which applies the principle, I think, to all the other cases so far as I know to which the principle does really apply. It is a pleasure to find a thin done, not in a grudging and halting way, but broadly and generously, giving full scope to the principle behind it, and applying that principle wherever it is fair to apply it I think it right to say to my right hon. Friend how much we appreciate that and how grateful we are for it.

Gratitude was once defined as "a lively sense of favours to come." Therefore, put down this Amendment because it seemed to me in two small particulars that the case was still not fully met. If the Amendment that I had put down had been called, and accepted, it would have cost the Chancellor very little, indeed an almost insignificant amount. I can quite appreciate that we cannot make reliefs of taxation of this kind retrospective beyond limits. My Amendment was really a very modest one. I asked my right hon. Friend to make retrospective two classes of case. The first one was this—there is the difficulty which has just been cited about the date on which this is due to come into operation. If my right hon. Friend had happened to think of this first it would presumably have been a Budget Resolution moved on Budget Day. In that case, it would have been law as from that date. My right hon. Friend said when accepting the Amendment in the Committee stage that he was surprised that it had not been moved earlier. Be could have moved it earlier. He could have moved it on Budget Day, and if he had done so it would have been retrospective from then.

Why not make that the date now? That was done in the case of Purchase Tax on various kinds of domestic and electrical appliances. I readily admit that that was purely a purchase tax and not a Revenue tax but it was made retrospective to the beginning of the financial year. It would be very hard indeed to take £80 now from a boy who has paid his Stamp Duty since the very date on which the Chancellor said he was going to let other people off paying. At least, he should make it retrospective to the date on which he could no longer, as Chancellor of the Exchequer, support this imposition. Surely, having said that in the House of Commons, having committed the Government to putting down a Clause to abolish it, he cannot with a clear conscience accept the £80 from that day onwards, and if anybody has paid it, he ought to give it back. It is not unfair to say that the most equitable date on which to draw the line is Budget Day this year, the beginning of this financial year.

The other case is rather different but, I should have thought, not easy to resist. When people who served in the Forces during the war came out, all of them had gratuities of some kind, and some of them had educational grants. They had to prove a number of things before they received an educational grant. They had to satisfy the appropriate Government Department that they were really embarked upon this career before, but as a result many people received rather modest but useful educational grants. Anyone who received a grant of that kind and decided to enter any other profession except the profession of solicitor, was entitled to use every penny of his grant for his support in the meantime while he qualified himself, and until he was able to earn his living in the profession of his choice. If, however, he was a solicitor, the Government promptly took back out of his educational grant £80.

I am not contending that there ought to be a special privileged class in this community of ex Service men. Almost everybody in this last war belonged to that category in one sense or another, and one cannot make a separate class of them or give them special privileges. They must share, like everybody else, in such benefits as the community is able to distribute on a nondiscriminatory basis, and I am not pleading specially for ex-Service men. If, however, we have a class of ex-Service men to whom we give an educational grant, then we ought not to discriminate among them so as to make the grant £80 less if they choose one profession rather than another. I do not know whether it is the Treasury who ought to give it back or the Ministry of Labour, but somehow or other the money ought to be refunded. The discrimination, which nobody supports, ought not to be applied in this case. That was the effect of my Amendment had it been called—

There is a flaw in that argument.

—in the first place, to make the remission of the tax effective as from the beginning of the Financial Year, 1947, for everybody, and, secondly, in the case of ex-Service people who have been given an educational grant, then the £80 ought to be returned to such people if they have paid it since the 30th June. 1945.

I do not easily see what objection in principle there is to either of those two claims. I find it difficult also to see what difficulty there is in practice. Stamp Duty is easily detectable. The man has only to produce his articles with the £80 stamp impressed on them to show clearly on what date it was paid. That would cover all the cases in the first class without further inquiry. In the second class, all he has to do is to show the document—there must have been some letter or certificate issued to him by the appropriate Department—showing that he was then in possession of an educational grant.

May I suggest that the Law Society has all this information on its files, and could distribute the money equitably to the persons who paid it?

I am obliged to my hon. Friend for his admirable suggestion, and if there were any difficulty, I am sure it could be overcome in that way. Finally, I can quite understand.hat there is nothing the Treasury like less than giving money back which has once been paid to them, and I can understand they will sea all kinds of difficulties in performing the operation. Nevertheless, those difficulties ought to be overcome. I am sure that if my right hon. Friend had let the Department decide whether these remissions should ever be made, the Clause might never have been on the Order Paper at all. It is there now because my right hon. Friend thought that it was right it should be there, and was determined that, where justice could be done, it should be done. I think I have made out the case, and I am sure it is not beyond the ingenuity of my right hon. Friend to find a feasible way of giving effect to it The final argument in its favour, which ought to weigh even with every official in the Treasury, is that the amount of money involved is so small that they would never know they had lost it.

I want briefly first to thank the right hon. Gentleman for putting this Clause down. At one moment I thought he had the rather novel idea that this should form a sort of treasure hunt and that if, between now and another stage, we had been able to think of the other clues he had in mind, we were to get a prize. However, I am glad to say that he changed that and he has now done what, I agree, is the wise and generous thing; he has covered all the cases which have come to his knowledge, and all of us are grateful to him for that. I thought really it was a little ungenerous of the hon. Member for Horn-church (Mr. Bing) to speak against this Clause.

I would add my plea to that of the hon. Member for Nelson and Colne (Mr. S. Silverman) and that of my hon. Friend the Member for South Hendon (Sir H. Lucas-Tooth) with regard to the date on which this comes into operation. I, like all of us, take what we can get and, indeed, anyone with the Christian name that I bear naturally asks for more. I should like the Chancellor to go as far as the Amendment of the hon. Member for Nelson and Colne would have asked had it been called but, if that is not possible, I would beg him to think seriously about being able to go back, as he has done in other cases in this Finance Bill, either to the date of the Budget Resolution or at least to the date when he made the announcement in this House that he was prepared to accept this Clause. I have a letter here from a constituent who says that he read with great interest and appreciation the statement of the Chancellor because he thought it meant that his son, who was just about to be articled, would be saved £80. To his great disappointment, when he inquired on the 2nd July about this, he was told that his son would still have to pay £80. I am not a solicitor and I do not know whether it is possible to delay the stamping of those articles and, therefore, simply by delaying the matter take advantage of the date included in the Bill. I appeal to the Chancellor to see whether it is not possible at any rate to antedate this concession to the Budget Resolutions. He has done it in the case of electrical cookers and he has antedated it even further back than that in the case of motor registration fees. It would not establish any terrible precedent and it would be relieving a certain amount of hardship if he could do that.

I would like to thank the Chancellor of the Exchequer for his very generous treatment of this matter. The House will remember that I supported the hon. Member for Nelson and Colne (Mr. S. Silverman) when this remission was first mooted The hon. Member for Nelson and Colne has put up a very powerful argument which has been supported by the right hon. Gentleman the Member for West Bristol (Mr. Stanley), and there is very little more that I need say except with reference to those gentlemen who have been admitted since 5th April and who would also like to have their admission fees of £25 apiece remitted if the Chancellor of the Exchequer would agree. A number of those who have been admitted since that date are ex-Service men. They came out of the Army in 1946, have studied during this period, have passed the final examination and have been admitted. A large number of us have had letters from these people. They have had to spend part of their gratuities in order to pay the £25. It will be a great disappointment if this is not conceded, and I therefore ask the Chancellor to antedate to the 5th April this year the concession which he has so generously made.

I would like to carry the argument of the hon. Member for Nelson and Colne (Mr. S. Silverman) to what I think lie will agree is its logical conclusion. Two points seem to be raised by his arguments. First, the Stamp Duties in general are to be washed out; and, second, solicitors have up to now been in a uniquely unfavourable position, in so far as other people make payments when they become qualified, but solicitors have had to make their payments when they begin to qualify. That being so, the logic of the argument is surely that this concession should not be given merely to ex-Service men or ex-Service women in receipt 01 any educational grant, but that anybody who is in course of qualifying but has not yet qualified should be allowed to have that amount refunded. The only argument against it might be on the grounds that it would cost too much money I feel that it would not cost a vast amount of money, and I should be grateful if we could be told what would be the cost of the full concession.

I listened to the speech of the hon. Member for Hornchurch (Mr. Bing) and felt that in giving us so much interesting information about the past history of this matter he rather overlooked the present. We are all very grateful to the Chancellor of the Exchequer for the remission of these taxes. The need for getting rid of them is long overdue. Many efforts have been made in this House—quite a number of them came very near to success—to get rid of these duties and especially the Stamp Duty on the annual certificate which a solicitor has to have in order to entitle him to practise. I referred to the matter of the present for this reason. It is true that we are all very grateful to the Chancellor for these concessions, but hon. Members on all sides of the House share in this victory. The initiation of it came from my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman). With his usual industry and alertness he seized on this point about the articles of clerkship to a solicitor. It was undoubtedly an extravagant sum to ask an articled clerk to pay when one considers that practically every other instrument of apprenticeship required a stamp of 2S. 6d. only.

There was great disparity between the articled clerk to a solicitor and every other case, in which, as I say, the stamp on the instrument of apprenticeship costs 2s. 6d., with the exception of admission to one of the Inns of Court. In the case of a solicitor's articled clerk, £80 had to be paid and in the case of a Bar student £50 had to be paid. Chat is how this question of remitting these duties started. It must also be said that it was due to the persistence of the right hon. and learned Gentleman the Member for the West Derby Division of Liverpool (Sir D. Maxwell Fyfe) that the matter became ventilated in the way it did. That caused the Chancellor to say that there might be what he called "comparable cases" and that if anyone had put forward a Motion on similar lines in respect of all or any of those cases he would have considered them in the same light. It is perfectly true that in the case of an articled clerk it was an educational tax, just as in the case of admission to one of the Inns of Court it is also an educational tax. Obviously, that is a form of tax which is quite unacceptable in these days.

It was due to that, that some of us approached the Chancellor of the Exchequer on this matter. In the course of those discussions the list for remission expanded. The original idea was that it should apply only to Stamp Duties of an educational character. Then it extended, until now, so far as the legal professions are concerned, it has also swept in all the vocational Stamp Duties. That was the right thing to do because it is quite wrong to select one section of the community, and one section of the professional community, and to impose on them a discriminatory tax of this character. One disparity in tins connection was outstanding, namely, was that whereas a solicitor paid on admission a Stamp Duty of £25, a member of the Bar paid on admission to the degree of barrister £50 and, to keep the variation going, a notary public paid £30. That was a form of disuniforrnity on these various admissions which became absurd.

I think it was due in the first place to the persistent way the right hon. Gentleman the Member for West Bristol (Mr. Stanley) had raised the matter. It was due also—if I may say so modestly—partly to a discussion I had with the Chancellor of the Exchequer that the matter got expanded. I am sure the Chancellor of the Exchequer would agree that I take only partial credit. Following upon that, my hon. Friends also talked to him and—not forgetting the effort made by the right hon. Gentleman the Member for West Bristol—the cumulative effect of that was to impress upon the Chancellor that this was a class of Stamp Duties which ought to be got rid of Thai is much more important than hoary past history about this subject. It is perfectly true that so far as the annual certificate is concerned, that was imposed after the American War of Independence. There seems to have been a competition at that time as to whether a tax should be imposed on retail shops or whether this particular tax on solicitors should be introduced, and the retail shops won. Since then there have been repeated efforts in this House to get rid of the tax. On ten occasions, I believe, they have nearly succeeded, and today for the first time they have definitely succeeded. I am perfectly certain that every member of the legal profession is deeply grateful to the Chancellor of the Exchequer, whether it be an articled clerk, a student going into one of the Inns of Court, a practising barrister either in England or Scotland, or an advocate or a Writer to the Signet or anyone occupying that position who has felt himself aggrieved because of this discriminatory tax which has been imposed upon him. They will all convey their thanks to the Chancellor of the Exchequer for at last getting rid of this long injustice.

I should like to stress the plea for ex-Servicemen which has been made by many hon. Members this afternoon. There is one particular point I want to bring to the attention of the Chancellor of the Exchequer in a letter which I have received from the Sheffield and District Law Students' Society. They stress the fact that many of these ex-Servicemen are older persons and have other financial commitments. They are not in the same position as others coming in at the age of 18, and since some of them are married men, possibly with children, it would be a great assistance if the Chancellor could consider something on these lines.

I have not the Parliamentary experience of my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) or the legal knowledge of my hon. and learned Friend the Member for Gloucester (Mr. Turner-Samuels) so that I do not know how one can support an Amendment which has been ruled out of Order and has not been moved. However, in support of the point made by the hon. Member for Nelson and Colne—with regard to which hon. Members have stated that they have received numbers of letters—I feel that if I cite an example it will strengthen the argument. A young man in a local authority office who, by his competence and skill, had risen to the position of senior clerkship is to be articled to his town clerk. The question of the £80 Stamp Duty is a con- siderable item to him. He noticed that in February of this year the point was raised in this House by a Question, and that my right hon. Friend the Financial Secretary to the Treasury—as is customary on Questions of this kind—said at that time that no forecast could be made of the Budget and referred the questioner to the Budget. I think that people outside this House may be excused if they are not fully conversant with its procedure, and what happened was that this man waited until Budget Day, noticed that Stamp Duties were referred to but that this particular one was not mentioned, thought that the matter had been finally settled, and paid his Stamp Duty. If this retrospective action can be conceded as has been suggested, this is one only of very many similar cases of hardship which might be rectified.

I wish to make two brief observations concerning Subsection (la) of the new Clause which provides for the admission in England of any person to the degree of barrister-at-law. This is a matter which has exercised the General Council of the Bar for a very considerable period, and I am in a position to say that they very much welcome the initiative which the Chancellor has taken in this matter and are grateful that at last this duty is being repealed. I am afraid that it has, perhaps, come as somewhat of a surprise to my politically benighted fellow-members of the Bar that a Socialist Chancellor of the Exchequer should be so forthcoming and generous, but perhaps it is appreciated all the more on that account.

5.15 p.m.

The second observation I wish to make is an entirely personal one. This remission will have the advantage, perhaps, of enabling rather more poor people to find their way to the Bar than would otherwise have been possible, and that is entirely to the good. But, unfortunately, as I think, people become members of the Bar who never intend to practise there at all, and it is about the only profession of which one can become a member without serving an apprenticeship. As hon. Members know perfectly well, all that has to be done is that a certain number of examinations have to be passed which are certainly below the standards of solicitors' examinations, and a certain number of dinners have to be eaten—neither operation a very difficult one. The result is that we may now have people coming to the Bar not in order to practise but in search of a comparatively cheap qualification for other purposes. Personally, I do not think that that is desirable and I hope that those who are concerned with these matters will pay some attention to that aspect of this problem.

First, I should like to thank hon. Members in various parts of the House for the kind things they have said about the new Clause which my hon. and learned Friend moved on my behalf and which proposes either the complete removal or the reduction to a nominal figure of the series of charges therein set out. It is quite right in principle and, as I said on an earlier occasion, I am rather surprised that it has been so long before this has been done. Of course, one thing always leads to another and when my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) first put down the Amendment, he did not say anything about making it retrospective. These thoughts followed, no doubt in logical sequence, and the more one gives the more one is pressed. That we know, and it is quite legitimate, but just occasionally one has to grow rigid. I am not sure that I need do so this afternoon, but sometimes I must, because otherwise it is such an easy game. You make an original proposal, somebody makes a proposal to improve it, you accept it, and that is not the end of the matter. Afterthoughts of further perfections occur and the process is unending like Achilles and the tortoise. At some stage one must stand.

I think, if I may be allowed to put it quantitatively—I am now on the retrospective proposal—that there is very little in this. I cannot imagine that the cautious person who reads his HANSARD, or the parent who does so, will fail to know that this is in the wind. There will have been very few of them between Budget Day and now—half a dozen in one profession and perhaps three or four in another. I regard it as what the lawyers call de minintis. [Interruption.] If my hon. Friend the Member for Nelson and Colne argues back too hard, I shall perhaps grow rigid, whereas now I am open to be convinced. In my view, as I have said, I think there is extremely little in it. I ought just to mention to the House that the Bowles Act does not help here. I went into this very carefully, when I wa3 originally intending to make some propositions regarding Stamp Duties in my Budget proposals and found that that Act does not apply to the Stamp Duties. It would not have been possible to do this on the Budget Resolution. We have had the Budget Resolution. It would not have been operative as from the acceptance of the Budget Resolution because the Stamp Act is not covered by the provisions of the Bowles Act. That is why we put in 1st August as the operative date. We thought that would be the date by which we could expect the Finance Bill to have been passed into law.

I cannot accept the proposition that tax remissions shall, more often than not, be made retrospective. That would lead us into a muddle and it would discourage other Chancellors of the Exchequer from making tax reductions in marginal cases. When the balance might easily go one way or the other, a Chancellor of the Exchequer would be inclined to say, "It might be all right, but I shall be expected to make the thing retrospective. That would cost more money. The whole thing is hardly worth the candle. Let's leave it where it is. "That is a warning of a position into which we ought to try not to get. When one does want to re duce a tax, one cannot make it retrospective to such a degree as to give up revenue which has already been netted, particularly if it has been netted in a previous financial year.

Therefore, if I do anything retrospective my action must be regarded as quite exceptional, and I hope the House will take it as being so. My action must not be made too retrospective. The reason there has been a certain amount of deliberate delay in making observations on the matter is that consultations have been taking place with my expert advisers as to how, at this late hour, something of this sort could be done. It is a very late hour. The Finance Bill is very nearly out of our hands. The only way in which the thing could be done would be for me to propose a manuscript Amendment. I am prepared to do that, if the House is willing to carry the concession back to Budget day. It must be as simple; that. I cannot complicate it by considering classes of beneficiaries who may have paid something before Budget day, even if they be ex-Service men. I cannot be pushed indefinitely far back. That would make the whole thing too complicated. It may be difficult to get the return back from the Law Society —although no doubt they have their records. I am prepared, in the light of the proposals which have been made in the discussion, to make the concession retrospective to Budget day, or to a date just before Budget day. I am advised that can be done, if it is in Order for me to do so, by moving at the right moment a manuscript Amendment, which I have in my hand. I ask your guidance, Mr. Deputy-Speaker, when it would he in order for me to do so.

With regard to the question of a manuscript Amendment, I ought to tell the House that Mr. Speaker is very chary about accepting manuscript Amendments at short notice. In this case, however, I am willing to yield to what I gather is the general wish of the House, and I am prepared, in the circumstances, to accept the proposed manuscript Amendment. A second question arises, which I should mention. The proposal is to refund certain money. If those moneys were in the hands of the Treasury it would require a Resolution in order to authorise the payment out of that money. If, however, the Chancellor of the Exchequer assures me, as I understand is the case, that the moneys are now with the Inland Revenue and have not yet reached the Exchequer, it would be in Order for him to move the manuscript Amendment.

I beg to move, as an Amendment to the proposed Clause, at the end, to add:

"(4) This Section shall be deemed to have come into operation on the sixth day of April nineteen hundred and forty seven and where it is shown to the satisfaction of the Corninissioners that any Stamp Duty has on or after that date become payable and been paid at the rates in force apart from the provisions of this Section, the Commissioners shall repay to the person who paid that duty the difference between the duty which was paid and the duty (if any) payable by virtue of this Section."

I am very much obliged to you, Mr. Deputy-Speaker, for what you have ruled. I think it is the commonsense and practical way of dealing with this matter. The fact is, as you have stated, that moneys do not reach the Treasury at quite such short intervals as this, and that the moneys in question will still be with the Commissioners, I have no doubt. My advisers, working at high pressure, have produced the form of words which I have moved. They know the tricks. I hope I may be allowed to pay my tribute to those Benches which are not part of the House, where persons sit ready to assist Ministers at such short notice.

I am sure that the whole House is grateful to the Chancellor of the Exchequer for the extremely accommodating way in which he has dealt with the appeal made to him from all sides of the House. As has been stated earlier, this is a matter which has engaged the attention of Members on both sides. The Chancellor has met in the most admirable and speedy way the difficulty which has been pointed out to him. I hope that the terms of the Amendment will do the trick eventually. If, on further consideration, it is not sufficient, there will he an opportunity in another place for any rectificatioc to be made.

I was going to put to the Chancellor of the Exchequer another point when he go up to move the Amendment. I was disappointed that he did not deal with the question of the duty of Lao for the Lambeth Degrees. I am not asking for anything to be done about it this year, but I am asking him to consider the matter before next year and to see whether that particular case—a very small one, falling upon a very small class of the community, clergymen—can be considered

I wish to thank my right hon. Friend for the way in, which he has responded to the arguments put to him from all sides of the House. I wish also to pay a tribute to the officials who have enabled him to translate his goodwill into the Amendment which he has loved. We all appreciate very much indeed how difficult it is for the Chancellor to make a concession. In all the circumstances, I thank him very much indeed for having met the view of the House.

I beg to move, "That the Clause be read a Second time."

This is a straightforward Clause in simple language, unlike other Clauses we have had to consider. Its object is to exempt from Stamp Duty the transfer of certain stocks which are issued by corporations carrying on nationalised undertakings and stocks which are guaranteed by the Treasury. As the House knows, all transfers of Government stocks are exempt from Stamp Duty under the provisions of the Stamp Act. The stocks covered here and issued by many of the nationalised undertakings are not, strictly speaking, Government stocks, although they are guaranteed by the Government. Therefore Stamp Duty would have to be paid on that. The effect would be that whereas Government stocks reflect in their price the fact that no Government duty is chargeable on transfers, there would be this type of stocks, which are also in a sense Government stock in that they carry with them a Treasury guarantee at a lower price because they would be subject to tax. It is, therefore, proposed in this new Clause to put them on the same footing as Government stocks so far as Stamp Duties are concerned.

It will be noticed that in Subsection (2) of the new Clause public bodies are named. B.O.A.C. has made an issue, but so far it has not been in the strict sense a public issue. I understand it has been taken up by the National Debt Commissioners. The North of Scotland Hydro-Electric Board are in process of making an issue. Those are the only two issues which have so far been made by the bodies listed here. National Coal Board stock will, of course, be Government stock. The Central Electricity Authority and British Transport stock will, subject to conditions laid down here, by direction of the Treasury, be able to take advantage of this Clause, if it is accepted.

Does the right hon. Gentleman think that this Clause will save the Exchequer money, or cost the Exchequer money?

the Exchequer hardly comes into it. The only people who can come into it are the public, if the transferee had to pay the duty, or the corporation, as many corporations compound for Stamp Duty. I am told that in the case of the new Transport Board, the cost of Stamp Duty for the railway compensation stock alone would be in the neighbourhood of £3¼8 million. So it will certainly save these new nationalised boards money, but not, of course, save the Government money directly.

Although there may be a loss of Stamp Duty to the Government over a considerable period of years, as long as transactions take place in these stocks, none the less the Government must have reason for making the proposal. Is the reason that the stock which will be issued to the various holders of railway stocks and so on will be issued one point dearer, as it were, as Stamp Duty will not be chargeable? If that is the case, I can see the point of the Clause, and welcome it.

I think that is correct. I think the absence of Stamp Duty would have that effect.

I beg to move, "That the Clause be read a Second time."

The purpose of this Clause is to provide obsolescence allowances for buildings generally, so that provision can be made for their replacement out of untaxed income. I ought to mention at once that I have some private interest in this matter. It has been a conspicuous omission in our Income Tax law that no allowance whatever has been permitted for the depreciation of buildings, except in the case of industrial buildings. That, of course, is quite apart altogether from the ordinary allowances for repairs, which is an entirely different matter. All buildings must be regarded as wasting assets to a greater or lesser degree. The Income Tax Act, 1945, made provision for obsolescence allowances in the case of industrial buildings, and the purpose of this Clause is, so far as possible, to adapt the provisions of that Act to buildings generally.

The new Clause does not seek to apply the initial allowances, which were a feature of the Act of 1945. But it seeks to apply in a similar way for other buildings the annual allowances which were provided by that Act for industrial buildings. I recognise that the terms of this Clause are inevitably incomplete. Unfortunately, owing to the Rules of Order, it would not have been permissible to include provision for balancing charges which were involved in the Act of 1945. The House will remember that that Act involved a system of balancing allowances, and balancing charges. As it would be out of Order to introduce something which imposes a charge, the terms of this Clause are necessarily incomplete. The main idea of the Income Tax Act, 1945, in regard to industrial buildings was to enable them to be written off out of untaxed income over a period of 45 years. The site value, of course, does not enter into the picture. In this Clause it is proposed that provision should be made so that commercial buildings can be written off over a period of 75 years, and residential buildings over a period of 99 years.

I must confess that in many respects the terms of the Clause cannot be regarded as satisfactory. I am seeking to raise a very important principle. The Clause is not satisfactory in so far as its provisions apply to the amortisation of leasehold interests, because obviously the rate of amortisation of leasehold interests should be related to the term of the lease, and not to the life of the building. What I am seeking to raise today is the vital principle that some allowance should be made for the obsolescence or depreciation of all buildings. If it appears convenient to extend the principle of the Income Tax Act, 1945, I shall most cordially welcome it. In the discussions on the Income Tax Bill in 1945, it was made clear from the Government Benches that obsolescence allowances for industrial buildings was as far as the Government could then go. It is now time that a further advance was made, and I am encouraged in that view by a document entitled the "Report of the Central Advisory Committee on Estate Development and Management." In February last, a copy of that report was sent to all local authorities by the Ministry of Town and Country Planning. Therefore, I assume that its terms are commended by the Government. In that report I find some interesting passage which have a bearing upon this issue. It is stated, on page 18, in paragraph 65:

"The need for periodic redevelopment renders it very desirable that lessees should ' write off ' their buildings over the period of their estimated useful life. … We recommend this practice and suggest that local authorities should advise its adoption by all lessees."

If that is a right idea, why should the individuals concerned be expected to do that out of taxed income? I submit that it is a thoroughly desirable process that income should be set aside sufficiently to replace a wasting asset in due course. The Chancellor is continually urging upon this House the importance of ploughing back income into capital. I agree with him, and it is one way of preventing a further extension of the inflation which we already have. The Royal Commission on Income Tax, which reported in 1918, offered little encouragement. It appeared to take a stand against the amortisation of any wasting assets. There was at that time an allowance for mills and factories, but I must admit that the Royal Commission reported against any extension of such allowances. Since 1918 things have changed a good deal. First of all, in 1918, the standard rate of Income Tax was 6s. in the Again, since 1918, the position of landlords has become less favourable for one reason and another. At the present time they have to pay Income Tax upon the actual rent they receive, whereas in 1918 they were in the more favourable position of paying Income Tax upon an assessment which was closely associated with the rating assessment. Having regard to the terms of the report from which I have just been reading, and which I presume has the blessing of the Government, I think we can say that the time has arrived when the matter should be considered.

With regard to the appropriate period over which commercial and residential buildings respectively should be written off, this report again throws light upon the subject. I recognise that there must be considerable variations in the probable life of buildings, and that it is difficult to lay down any rule. Indeed, it might be desirable that the allowance should he adjusted according to the probable life of a particular building, but I will not go into that question. In that report, I read:

"… the length of lease of building sites in a central area should be governed by the likely period of useful life of the proposed development as a whole…With some types of property this object may be achieved by adopting the common practice of granting ground leases for 99 years. Under modern conditions, however, commercial development —and particularly shops in central areas—may become obsolete within a substantially shorter period. the time when the general run of buildings in a central area will become obsolete will almost certainly be reached considerably before the end of 99 years

We therefore recommend that, in the interest of good estate management, the general practice in regard to commercial and industrial buildings in central areas should be to grant ground leases for an average term of 75 years."

5.45 p.m.

It will be remembered that under the Income Tax Act, 1945, provision was made to write off industrial buildings in 45 years. Therefore, I do not think that this Clause is being over-ambitious in asking that commercial buildings should be written off over 75 years and residential buildings over 99 years. I hope that we shall have a full reply on the question of principle. I recognise that this Clause would require a good deal of adjustment and adaptation before it could satisfactorily be incorporated in the Statute, but I hope that the principle of this matter will be fully discussed this afternoon.

I beg to second the Motion.

I need hardly remind the Chancellor that what we are asking for in this new Clause is not a new principle, nor is it the first time that this question has been raised in the House. The principle is, of course, that there should be an allowance for any wasting asset. That principle has already been accepted in a limited number of cases. It has been accepted in the case of industrial buildings, and I think also in the case of patents. Is there any valid reason why an allowance should not also be made in the case of commercial and residential property? In other words, where there is any clearly defined wasting asset, why should not the same principle be applied, in particular, as my hon. Friend the Member for Sutton Coldfield (Sir J. Mellor) has just said, with regard to leaseholds? I presume that the Chancellor would agree that a leasehold is, in fact, a wasting asset. I hope that he will not argue that the price which is paid for a leasehold takes that fact into account.

Why not?

that would be valid If taxation were to remain at a static figure, but taxation varies from time to time.

In respect of whom is the leasehold a wasting asset? The landlord holds a valuable and iniquitous asset.

I do not want to argue on that matter. The fact is that the Chancellor is very keen, I think quite rightly, on profits being ploughed back into industry. Here is a case where, as my hon. Friend has pointed out, there is an opportunity for that to be done.

This is not the first time that this matter has been brought up. I would refer the Chancellor to what was said by his predecessor in 1944 He said:

"The position of leaseholds is much more complicated and while I would like to propose outright the application of a similar principle to that which I have outlined for patent rights, I must say no more than that this subject will be further considered."

The Treasury has now had three years to consider it.

And we have had a General Election.

the Chancellor has taken great pride in the fact that he has removed anomalies with regard to duties in other directions. I suggest to him that this is an opportunity for removing yet another anomaly, and an opportunity to be quite logical and apply to the whole range of buildings a principle which has already been accepted.

I am sorry to say that we feel that we cannot accept this new Clause for a variety of reasons. First, I will deal with the technical reasons. It would be quite wrong of me to invite the House to reject a proposal simply because it was technically incomplete, having the advantage of the assistance I have from experts. This new Clause, as the hon. Member for Sutton Coldfield (Sir J. Mellor) said, as a matter of drafting has a radical defect which he himself indicated. It has no provision for any balancing charge. If it had, no doubt it would have been ruled out of Order because it would have imposed an additional charge. Without a balancing charge provision this would simply open the door to the widest possible evasion. People could sell oft an asset from one purchaser to another at increasing prices and, by so doing, procure a grant of gradually growing allowances. Therefore, as a pure matter of drafting, it has a radical and not a technical defect. It has a defect which cannot be cured within the scope of this Debate.

However, in inviting the House to reject the Clause I would not stand upon that, because the objection which I want to raise is really a fundamental objection of principle. The cost of the hon. Gentleman's proposal, though it is difficult to estimate, would be in the region of X20 million. In order to justify a loss of revenue of that sort it would be necessary to make out an extremely strong compelling case. I submit to the House that whatever can be said and whatever has been said in favour of this suggestion, falls very far short of any such compelling case. Reference has been made to the Income Tax Act of 1945. The whole object of this new Clause, as was indicated both by the mover and seconder, is really to assimilate the provisions of the Inca Tax Act, 1945, virtually to all buildings. I gathered that the hon. Member for Hornsey (Mr. Gammans) would have extended the principle even wider, to cover all wasting assets. What the cost of such a proposal would have been, I simply do not know. No doubt, it would be very much in excess of Lai million. When the object of the passing of the Income Tax Act of 1945 is considered, I feel that it cannot possibly be said that the time has arrived for any radical departure such as is now proposed from the principles upon which it was based. I would remind the House of what the then Chancellor of the Exchequer said on the Second Reading of the Income Tax Act, 1945. What he said then was:

"Let me, at this stage, say quite frankly that I know there will be some disappointment that the new allowances for buildings are to be confined in general to buildings used in productive industry and that, for example, offices and hotels are excluded; but I made it quite clear in my Budget speech of last year that my proposals would be deliberately framed in this way, in order to benefit productive and creative industry. The reasons that have led me to make this distinction will, f think, commend themselves to the House. I propose to the House that we should, as an act of conscious policy, deliberately weight the scales in favour of those forms of capital investment which are most necessary to the industrial strength of the community. It is productive or creative industry that produces in the main industrial employment and is the foundation of our national prosperity."—[OFFICIAL REPORT, 14th March, 1945; Vol. 409, c. 258–9.]

I submit to the House that every word of what was said then, applies with equal force now. To bring about a complete departure from that principle is what is now proposed. The new Clause would include all commercial and private buildings, and all private residences, and the hon. Member for Hornsey would include all wasting assets, I suppose of any kind. The right hon. Gentleman in 1945 said he would like to consider the matter further, but as events have turned out since then, obviously the case for this sort of relaxation on the very generous scale on which it is provided by the Income Tax Act, 1945, must be limited to those things which come high in the order of priority from the point of view of national necessity and usefulness in conducing to national prosperity. In the Finance Bill Debates in the autumn of 1945 limited proposals were made, and my right hon. Friend found himself not in a position to accept even those limited proposals which related to blacksmiths' shops and hotels. What is now proposed is not to make even any limited proposal for an innovation on the principles of the Act but to sweep them away wholesale. I have indicated the policy upon which that Act was passed. I submit that there is no reason now to depart from that very clear cut and well justified policy. I hope in view of the reasons I have given that the House will agree that no case has been made out for incurring an expenditure which can only be incurred to satisfy a very urgent public need.

Do I understand from what the Solicitor-General has just said that he is not contesting the principle but that, in view of the fact that he gave the House the figures of the loss of revenue which would occur, it is on a matter of finance rather than principle that he cannot accept the new Clause?

I thought I made it clear that I was not opposing this on any technical ground but solely on the question of principle.

The Solicitor-General does not accept the case although he admits this to be a wasting asset?

It is too wide.

I think the House should be very grateful to my hon. Friend the Member for Sutton Coldfield (Sir. J. Mellor) for raising this matter and also to my hon. Friend the Member for Hornsey (Mr. Gammans). I was not at all surprised at the reply which we received from the hon. and learned Solicitor-General. I thought that there was a great deal of reason in it. I have always thought that this was a matter which must be dealt with at some time in the future. I quite appreciate that the enormous cost which would be imposed upon the Revenue by making this concession now is a difficulty which we cannot be surprised that the Chancellor is not prepared to overcome this year. I am not at all sure that it is quite so low in the order of priority from the point of view of the community as a whole as the hon. and learned Solicitor-General suggested. We have suffered in this country for a long time from buildings which have become much too old. There are other countries which have more modern systems of taxation where there is much more encouragement to pull down and rebuild buildings when they have ceased to be modern and convenient. If one walks about London one will see a large number of very old fashioned flats and offices and hotels which, had there been reasonable allowances for obsolescence, would by now have been renewed. I think that would be very much in the public interest.

6.0 p.m.

The Victorians, who were a very great people, did not understand obsolescence. They understood depreciation, but they did not understand obsolescence, because they built in such very substantial style that they could not imagine that it would ever come to an end. Nor, in fact, have many of their buildings come to an end; they are still there, almost too much so. It did not occur to the Victorians that there might come, a time when their buildings might be out of date, although structurally very strong and able to stand for many years to come.

The point which the hon. Baronet has made is a good one. It is only right that there should be an allowance for obsolescence in relation to buildings, whether hotels, offices or flats, just as much as in the case of factories dealt with under a priority by the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) in the Finance Act of 1945. I am very glad that the learned Solicitor-General has not opposed this except on the grounds of cost. He told us that he does not think it has a high priority, and that the Chancellor of the Exchequer cannot be expected to introduce it this year. I hope the Chancellor, after listening to what has been said on both sides of the House, will think about this matter before another year, and that he will see, when allocating his priorities on some future occasion, whether this cannot have a higher place than the Solicitor-General indicated. I suggest that this is something which will benefit all classes of the community and will enable this country to keep up its reputation.

I would like it to go on record that the case of a leaseholder is the case of a landlord in nearly every case, because he has the lease of premises for a certain number of years, and any benefit which came about as a result of any future concession would, in the majority of cases, go to the actual occupiers of the premises concerned.

I do not feel that we have had a satisfactory answer, but I do not desire to take the matter to a Division in view of the fact that the terms of the new Clause could not really be operated. I would therefore beg to ask leave to withdraw the Motion.

I beg to move, "That the Clause be read a Second time."

This new Clause is similar to those which were put down to two previous Finance Bills, and the matter was further discussed on the Third Reading of the Finance Bill a year ago. It is designed to meet the undoubted and admitted hardship which falls upon retail traders when Purchase Tax is either reduced or abolished upon a particular class of article. When that occurs, the retailer has to reduce his prices to the public forthwith, although he has stocks upon his shelves of the articles concerned on which Purchase Tax has been paid. I think that this hardship is generally recognised, and, in fact, it has been, by implication, admitted by the Board of Customs and Excise, who advise the right hon. Gentleman upon these questions, because, on the Third Reading of the Finance Bill a year ago, the Financial Secretary—I think it was—in winding up the Debate said that this matter would be considered further to see whether any means could be found of meeting the hardship imposed upon the retail trader.

Soon after that date, I understand, discussions began between the National Chamber of Trade, on the one hand, and officials of the Board of Customs and Excise upon the other. These discussions went on all through the winter and various schemes were examined by which this hardship might he met. Finally, on 6th April, a few days before the right hon. Gentleman introduced his Budget, the National Chamber of Trade received a letter from the Board of Customs and Excise saying that it was impossible to devise a means of meeting the case which had been put forward. I think, therefore, that the fact that these discussions went on for many months, and that every effort was made to find a means of dealing with the position, shows that the hardship, at any rate, is admitted.

This new Clause is put down in order to get a statement from the Chancellor as to how these negotiations went and why they failed, but one new factor of great importance has emerged since the end of the discussions between the interested parties. On 15th April this year, by Ways and Means Resolution, increased Purchase Tax was imposed upon a wide variety of articles which consume gas and electricity. The Chancellor put up to 66 per cent. the Purchase Tax upon a wide variety of domestic appliances. When we came to the Committee stage of this Bill, these duties, which had been imposed on 15th April, were in many cases, taken off again. The electric kettle is a case in point. Polly put the kettle on, and Suky took it off again.

The Chancellor, in announcing that the tax was coming off these domestic appliances, said that he would devise a scheme to enable the purchaser to recover the excess price which he had paid through the increase of the Purchase Tax as from 15t11 April, and the House has, in fact, accepted on Report an ingenious new Clause to enable anybody who purchased an electric kettle after 15th April and paid the increased Purchase Tax upon it to obtain from the retailer concerned a rebate equivalent to the increase in the Purchase Tax. It does seem extremely strange to me, that if it is possible to devise a scheme whereby a purchaser of an electrical or gas appliance who has paid the additional sum owing to an increase in the Tax can, at the present time, or as soon as the Finance Bill has become law, obtain a rebate equivalent to the excess tax paid, the Chancellor's advisers have been unable to devise a precisely similar scheme as between retailers and manufacturers.

I, therefore, want to get from the Chancellor, if I can, some explanation of this, to me, astonishing discrepancy, and to say that this new Clause would meet a case of undoubted hardship, and that we are very surprised that, after such a prolonged examination, the Government have been unable to meet the case put forward.

This is not new, We have discussed this subject not only, I think, last year, but on previous occasions, and every effort was made, and with all good will, to find a practicable solution. I regret to say that all these efforts have failed, and I will seek to give the reasons why. There have been long discussions as were promised when the Finance Bill last year was being considered, and I gave a promise, or I think my right hon. Friend gave it on my behalf, that we would enter into the most full and frank considerations with the National Chamber of Trade, as speaking for a large number of those concerned, as to how we could perhaps safeguard the interests of such traders as, at any rate, for a short period—and I emphasise that phrase—were out of pocket by reason of the reduction of tax, and, at the same time, safeguard the public revenues.

I repeat that the discussions went on for some time, as the right hon. Gentle man says. I do not want to commit the National Chamber of Trade to any particular opinion on the details of the matter. They have been very co operative, as they always were. In ancient days, I belonged to their organisation. The late Mr. Howling was always co-operative and helpful, and his successor, I am sure, has been carrying on that same tradition. I do not know exactly how far they would agree with what I am going to say, but I think they would agree with that part of what I am going to say about the difficulty. The views to which my advisers came, and which I accept, is that it is practically impossible to check what stocks of the goods concerned, on which Purchase Tax had been reduced, many thousands of retailers might have at the date of the tax reduction. It is that which we have to ascertain if this thing is to be workable, and it was that, in particular, which we found extremely difficult.

In addition to that, asuming that we could determine these facts about stocks, and could check them up and be reasonably assured that they were accurate in this vast number of cases, there was no effective means of ensuring that the various retailers concerned would at once mark down their prices and so pass on the benefit to the public. In a certain limited field relating to proprietary articles, we could be sure, but, in the wider field, there was no way of being sure that the public would be given the benefit. I frankly say that I would like to get a solution of this problem, but it must be a solution which also safeguards the public revenue. The difficulty, as I see it, is that we might adopt a scheme which, on the face of it, looks well enough, but which might, in fact, mean that a good deal of public money, which was not designed to go there, would remain in the hands of a certain number of the traders concerned.

I asked for reports, and I would like to have found a way through the difficulty. I frankly confess to the House that I have not succeeded, and the advice which was tendered to me, and which I 2ccept and for which, of course, I take full responsibility, was that no workable scheme of rebates could be devised which would be equally fair to the trader and to the revenue. I think it is worth while saying again that it is easy to exaggerate the grievance from which the retailers suffer. After all, what has happened is that, on some of the things they sell, the tax has been reduced or remitted. It is only on those things that it is to their disadvantage. Under the law, traders are quite free to pass on the tax which they have borne on their tax paid stocks, even if they are subject to controls operated by the Board of Trade or any other Department. When a price control is operating, there is no obligation to lower the price of the goods on which tax has already been paid. Tax paid stocks may continue to carry the pre-tax remission price, and, therefore, there is no reason why they should pass it on prematurely to the consumer as a matter of law, although, of course, competition may make it better for them to do so.

Very soon they pass from a relatively short period, in which they may lose something on their tax paid stock, to a period where they will get the benefit of the reduction. Therefore it is quite possible to put this grievance a good deal higher than it should stand. I think that it I were to say to traders generally, "I am so much impressed with this difficulty that I will never reduce the Purchase Tax on anything again," I do not think the Chamber of Trade would think that was reasonable, and quite rightly so. It is to the advantage of traders that Purchase Tax should come down, but, in the course of its coming down, there is a short-term inconvenience which, I am sorry to say, we have found no means of overcoming.

It has been said that we have managed to do something which looks not unlike this with regard to appliances of different kinds. That is quite true. In a previous discussion, I pointed out how cautious one must be in doing good, because if one does something in a limited field, one is asked to do what looks like the same thing in a much wider field, where the case is really not the same. In the case of electric cookers, and so on, there is no question of refunding any public money, because the tax will never have been due, it having been remitted on those articles. Therefore, due to the change which we subsequently made, there is no question of any public money being endangered. No public money will have been collected by reason of the increased tax. The only question is, Who will get the advantage of the subsequent remission? There is no public money involved, because we are refunding as from the date when the tax was instituted,

6.15 p.m.

In the second place, it is comparatively easy, in this limited field, for the wholesaler to refund to his customer any monies collected by way of tax, because the whole amount so collected will be returned; there is no question of splitting it up. Finally, and this is the most important argument of all, there is no question of our having to get declarations as to what were retailers' stocks on some particular day, which is what has really proved to be the great stumbling block in the other case. We do not need to ensure the marking down of stocks; that is not necessary. Those were the two rocks on which we struck when we were discussing with the trade how the matter could be dealt with more generally.

This is, of course, a relatively limited deal. The number of cookers on which the tax was collected at the higher rate is small, because it is known that, when the tax was raised, most would-be pur- chasers thought again, and the amount of trade done in these articles bearing the higher tax was very small. My submission is that we cannot, in tact, do in the wider field what we have already done in the narrower field with regard to electrical and gas appliances. Therefore, I feel that I cannot accept either the new Clause as it stands, or the idea behind it, because they would, in fact, cause a considerable leakage of revenue, while not being, I think, quite effective even for the purpose which the right hon. Gentleman has in mind.

I hope that the Chancellor of the Exchequer has not said his last word on this matter, because I am quite certain that his ingenious mind, and the minds of his advisers, will be able to find a solution to this problem when the day comes on which it has to be faced. The Chancellor has been speaking as though the sellers' market is going on for ever. It will not go on for ever. I believe the day will come when we shall have to sell our goods in order to keep the people in work. We shall have to face a totally different set of conditions when that time comes. The Chancellor's remarks have referred almost entirely to what are known as rapidly moving consumer goods. What about the semi-durable consumer goods which last a long time and which are very heavily taxed? The Chancellor has recently increased the tax on motor cars from 33⅓ per cent. to 66⅔ per cent., and the tax runs into many hundreds of pounds. Supposing the day comes when we shall be trying to sell our goods. Let the Chancellor remember that circumstances change very rapidly. I can remember the 1919 motor car show when we could not get a motor car for love or money, and the 1920 motor car show when we could not give motor cars away. The circumstances changed in a year. The only way in which the industry got moving was when Lord Nuffield took his cars up to the Edinburgh show, took some hundreds of pounds off the price and found a market that would buy them.

What will happen when that day arrives and the Chancellor of the Exchequer is forced to remove the Purchase Tax in order to keep the people at work? I am certain he will have to do it. He will not like to see notices in the factories saying. We can and work for you it the Purchase Tax is removed. What chance will there be for people to stock up goods when hundreds of pounds have to go in Purchase Tax? Some scheme must be worked out. We may be a long way from the day when that will happen, but I am certain it will come. I hope, therefore, that the Chancellor and his advisers will not say, "We have finished with the job; file the document and put it away," because in due course the problem will be an urgent and a real one. The Chancellor and those clever people who advise him, should get on with the job and prepare for that day. We have had enough shocks and we do not want any more.

As I understood the Chancellor's argument, it dealt with two points; first, the difficulty of ascertaining stocks, and, second, the difficulty of ensuring that the stocks would be marked down and the benefit passed on to the public. If I may take the second argument first, it seemed to me to be.a contradiction, because half way through his speech he made much of the point that although the trader paid Purchase Tax, he need not bring his prices down, despite the fact that he may be subject to regulation under the Board of tirade. But, as my hon. Friend the Member for Edgbaston (Sir P. Bennett) has said, with competition one would be bound to bring the prices down.

It is part of the traders case that they want at once to reduce the prices, and it is in order to bring about a scheme of this sort that we have had these discussions. I have said that legally they were not compelled to reduce the prices, but in fact, the whole of hese discussions proceeded with the object of reducing the prices as soon as possible, whatever the legal position with regard to prices may be.

I am obliged to the right hon. Gentleman. That seems to me to emphasise the point I was trying to make. The Chancellor said that he could not ignore the fact that stocks would be marked down. I think he said that prices would be bound to be marked down. Not only because of competition, but also because the sellers' market will be finished, no trader will be able to sell the goods unless he sells them at a competitive price. Therefore, I think that part of his argument is open to a good deal of criticism.

As to the other part of the Chancellor's argument, with regard to the difficulty of ascertaining stocks, as far as I can make out, his point was that he did not want traders to send in affidavits or declarations. I cannot see the reason for that. The average trader is continually sending in declarations to many departments, particularly the Board of Trade. In this case, why should he not be permitted to send in one further declaration which would be helpful? It would be open to the Government to provide penalties when any declarations were broken, and I am certain that the Board of Trade and the Treasury between them would soon discover when a trader had done so. In this type of case, particularly in the case of traders selling many small lines, these variations in Purchase Tax are a great hardship. A trader may be selling a small item at 2d. or 3d. each, and if they are suddenly subject to 66⅔ per cent. Purchase Tax the whole of the line becomes unsaleable. That is a great financial burden on the small shopkeeper. Therefore, the Chancellor's arguments do not carry much weight when they are investigated. In the first place, it is essential for the trader to mark down his prices, and in the second place, I can see no reason why the trader should not be enabled to set off his loss.

I should explain why we shall find it necessary to divide on this Motion. We recognise not only that the Chancellor has today given us a courteous and a not unsympathetic answer, but that, no doubt, his officials in the Treasury worked sincerely for a considerable length of time to find a satisfactory answer to an admittedly difficult problem. We were extremely disappointed not only to hear that their efforts had failed, but also to gather the impression that the attempt had now been abandoned and

I beg to move, "That the Clause be read a Second time."

The new Clause in my name is of a somewhat technical character and of rather narrow ambit, but I hope that I shall be able to explain to the House its purpose, which is fairly simple, and to show that there is a matter of quite important principle involved. The House will remember that from 1st April, 1940, to 31st December, 1945, Excess Profits Tax stood at 100 per cent. That is to say, the whole of the profits of a trade or business above the standard revenue of the business was taken in tax. At the time that the tax was imposed, however, it was provided by the Finance Act in question that 20 per cent. of the total amount taken from a business during the 100 per cent, period should ultimately be repaid, subject to the condition that on repayment the amount repayable would be added to the capital of the business and not distributed by way of dividend or profit.

The pledge given in the Finance Act, 1940, was in fact implemented, and generously implemented, by the present Chancellor of the Exchequer in his first Budget—the Finance (No. 2) Act, 1945. That Act was passed on 20th December, 1945. Under it, a proportion of the profits of each business which has been paid away in E.P.T. during the too per cent. period became repayable to the business concerned, and it was provided by that Act that the sums were to be repaid as soon as may be after a final settlement of the total amount of tax in respect of which they were repayable. There was provision made for payment to be made on account in appropriate cases, but nothing was laid down as to the date of payment. I readily concede that it would have been impossible for the Government to have provided that payment should have been made on some particular date, but I think that it was of some considerable importance that the Finance (No. 2) Act, 1945, should have failed to provide that the sums repayable should be deemed to have been paid on a particular date I will explain the reason why.

These sums had to be added to the capital of the business concerned. That was part of the scheme. Every one has always entirely agreed with that in principle. By adding it to the capital of a business, that at once increases the amount which could be taken as the standard profits of the business. It would not be invariably the case because the standard profits could be assessed in different ways, but I think that it is probably true to say that in 1945 the majority of businesses were having their standard profits assessed on the basis of capita] employed, and when that capital was increased it at once increased the standard profits and, to that extent reduced the amount which could be charged in tax against the businesses for the following year. In this particular case the following year was the calendar year 1946, the tax being finally abolished at the end of 1946. It becomes apparent that it was of great concern to businesses, who were receiving very large sums by way of repayment, when they could bring those sums into account for assessing their standard profits, and so arrive at the amount of Excess Profits Tax which would be levied against them in the year 1946. What has happened in fact, I am told, is that businesses who have received repayment have been allowed to reckon those repayments as added to their capital as on the date where payment is actually made.

Only if they are using them.

I think that it will be generally agreed that very few businesses indeed will be employing a smaller capital than the amount they were allowed to reckon for the purposes of E.P.T. in 1946. But whether it is a small number of businesses or a large is immaterial. The point is that a number of businesses would have been able to get a considerable advantage if they could have brought into account the amount due to them under the repayment provided for in the Chancellor's Budget. If as I understand from the Financial Secretary's interruption, it is a fact that in a number of cases these sums were able to be brought into account as on the date of actual payment, it means that the amount of tax these businesses have been assessed on during 1946 has been entirely at the discretion of the Revenue.

indicated dissent.

That is as I understand it from conversations with those who had been subjected to this tax, and if that is not so, I would like to have some explanation from the Government. There are two reasons why this is entirely unfair. In the first place, when the boot was on the other leg, and it was a question of the Revenue wishing to take the amount paid by the company as E.P.T. into account, it was expressly and narrowly defined that the amount payable by the company should be deducted at the earliest possible date. Paragraph 2 of Part II of the First Schedule of the Finance Act, 1942, states that any E.P.T. in respect of businesses had to be deducted from the capital employed, and such E.P.T. had to be deemed to be deducted on the first date on which it was payable. That is to say on the first day of the next accounting year. In other words, when it suited the Revenue to do so, they regarded a company or business as making payment on the earliest possible date when it was physically impossible for any business to make a payment, because no assessment could be made in the half second that passed between the end of the preceding year and the first day of the next year. The present case is precisely the same in principle, only now it is the other way round.

In this case, it is the re-payment of E.P.T. which it is to the advantage of the business to take into account. I should have thought that if the original provision was fair, and I have no complaint about it, it would be equally fair to say that we should regard the repayment to be made on the first day it became due, that is to say, on 1st January, 1946. Therefore, as a matter of fair treatment as between the Government and business concerns, I submit that this is the proper date to take.

Would the hon. Member also explain to the House, if that argument holds, how a business can be said notionally to be using capital which, on its own showing, it has not yet received by way of refund in respect of E.P.T.?

I do not think I need weary the House with that. I need only refer the right hon. Gentleman to the Section he put in the same Finance Act, permitting repayment of E P.T. to be set off against arrears of E.P.T.due to the business concerned. If it were true that the company or business had not been using, as capital, the amount due to be repaid to them, then I should fully concede that the amount should not be taken into account. I do not think that any propriety could come about as a result of the Clause I am moving, but if that is so, I have no doubt that the Government will provide for it by making some suitable amendment. I put my case no higher than this: that where a business was, in fact, using as capital an amount as large or larger than the repayment due to them, it is fair and proper that as soon as that repayment becomes due they should be allowed to take it into account in reckoning their tax for the year in question.

I wish now to refer to the last sentence in the Clause, which deals with Income Tax. This is really a separate point, and I added this sentence merely to be in order in raising this point. The point is this: the amount repayable to a business by way of postwar repayment of E.P.T. is expressed to be subject to tax for the year 1946–47, and if that is so, then, strictly speaking, the amount deducted from any repayment should not be brought into account. The tax would not be strictly payable until 1st January, 1947—that is to say, after E.P.T. has ceased to be payable at all. If that is the position, the Government should acknowledge, although they will in some cases recover the amount of tax sooner than 1st January, 1947, that the deduction ought not to be taken into account before that date. I realise that this is a repayment out of a taxed sum, and there is, therefore, a good case for saying that only the net amount should be repaid to the business concern. The Government cannot have it both ways. Either this is an amount which should be taken into account as new profits for the year 1946, when the gross amount should be reckonable for E.P.T. purposes during the year, or it is repayment in respect of income for an earlier year, in which event 1 submit that the Government will have to accede to the propriety of the Clause I am moving. I do not know what attitude the Government will take, but if they can see their way to accept something on the lines of the first part of the Clause, I should be perfectly willing to withdraw the last lines, so as not to bring Income Tax into account.

I beg to second the Motion.

It seems to me that the Government have got to answer a major question, which is at what stage, and how, does an E.P.T. claim for refund become available as standard capital? As I understand it, it is purely a matter of hazard. If, during the year 1946, a company's claim receives approval and the money is paid in for the use of that company, in accordance with the Government's limitations the date on which that money is received is the date from which it may be taken into account as standard capital. If so, it means that if a company is lucky, it gets the benefit of the refund, but if another company is held up because some questions are asked, or because some correspondence is lost between one Government Department and another, it gets practically no benefit at all. That arbitrary decision seems to be entirely wrong.

If this Clause is accepted, it will mean that there will be the same treatment for all companies entitled to a refund, irrespective of any hazards which may beset an application. It seems to me that if E.P.T. is claimed by the Government as payable in each year, irrespective of the accounting period, the same policy should be pursued in regard to refunds. As the right hon. Gentleman knows, if a company failed to make the standard rate of income in one year, it did not mean that it could set off its previous E.P.T. against that loss, whatever E.P.T. it owed. A company had to pay in the money, irrespective of the actual balance of indebtedness. As I have said, the same policy should be pursued in regard to refunds, which should all become due together and should all be assumed to be paid together. Let the whole of industry be treated in the same way.

The Financial Secretary asked, during the speech of my hon. Friend the Member for South Hendon (Sir H Lucas-Tooth), how it could be said that the money was being employed by a firm until it had been paid. I think he has gone slightly wrong, because the only point in a firm trying to get a refund is that it wants to use the money, and can satisfy the Government that it does wish to use it. Only the other day, I had a case of an engineering firm which wanted one of these refunds. Directly the application was put in, an order was placed for the machinery it required. I am sure that the Financial Secretary would not say that the firm was committed from the time or date the order was placed, and not the date when the money was paid. What I wish to say is that the payment shall rank from the time when the capital is employed rather than when payment is made.

This Clause raise, a point in a narrow compass. If accepted, it would cost million gross, and bearing in mind that E.P.T. is a deduction for Income Tax purposes, it would cost f8 million. Therefore, it would be an extremely expensive proposal.

I would point out that I offered to withdraw the last sentence in regard to Income Tax, which, I think, would again roughly halve the total amount of the cost.

We carefully worked out the figure according to the new Clause. What the cost would be if we treated the net amount could be calculated, I suppose, according to Income Tax at 9s. in the£ but it would be expensive even if we made a rough calculation of that sort, and scaled it down accordingly. The hon. Baronet proposed that the gross amount should be treated as capital, whether received or not, from 1st January, 1946, with the result that it would scale up, by the statutory percentage, the capital computed in arriving at standard profit. Is there any precedent for that in Income Tax and Excess Profits Tax legislation? The hon. Gentleman referred to Paragraph 2 of Part II of the Seventh Schedule, and said that for that purpose the amount is due at the beginning of the accounting period. There is no precedent for the Government charging interest on overdue Income Tax.

What the hon. Baronet and his hon. and gallant Friend are asking is that if the Government delay in paying at the earliest moment this refund of Excess Profits Tax, they should pay interest on that at the rate of 8 or 10 per cent., according to whether the business is being carried on by a partnership or a company. But the converse does not hold good. Supposing the taxpayer does not pay the Excess Profits Tax or Income Tax which is due, the Revenue does not charge interest on that overdue payment, save in the sense which was indicated by the hon. Member for South Hendon (Sir H. Lucas-Tooth). It does not charge any interest on Income Tax. So the proposal to pay interest on what is notionally an overdue payment of Excess Profits Tax refund by the Government is entirely novel. There is no precedent fot that in tax legislation.

Apart from that, it seems to me that both hon. Members opposite proceeded upon a misunderstanding of the object of Section 38 of the Finance (No. 2) Act, 1945. The provision for interim payments is purely permissive, and the Section says that the refund, in order to comply with the undertaking in earlier Excess Profits Tax legislation, has to be paid after the final assessment of tax. It also states that if it should turn out to be possible to make an earlier interim payment, then, as a matter of concession and indulgence to the taxpayer, that concession will he extended to him. He will get it earlier than he is entitled to have it. The hon. Baronet has pressed the Government to go still further, and to say that if they do not pay as from 1st January, 1946. interest should be charged at 8 or 10 per cent. as from that date to the actual date of receipt.

In the converse case that is what the Government did.

Under present law it ranks as capital provided it is employed as capital as from the date of receipt; but it does not say that in the case of tax which is overdue interest is to be charged. The Excess Profits Tax which is quasi overdue, does not have interest charged upon it. Be that as it may, the main answer 1 make is that Section 38 of the Finance (No. 2) Act, 1945, provides for a concession which will be extended to the taxpayer if it can be done. He will get his tax refund earlier than he was entitled to expect it, and will only get it if it is practical to give it to him at that earlier stage. For those reasons, I ask the House to say that no case has been made out to show why the Government should go further in the direction of a concession than they have already done.

When the Solicitor-General talks about 8 to 10 per cent. interest, that applies to only one financial year, and only if the Excess Profits Tax is at the rate of 60 per cent., and not ion per cent.

It is true that it applies to one financial year, but the interim payments began to be paid in Marcn. 1946, and most taxpayers have received their interim refunds between that date and December, 1946. It is true that the interest charge relates to that period only, but hon. Members opposite are asking for a concession which will cost £8 million net, which is an extensive concession. It would amount to an extension of a concession already accorded to the taxpayer, and no case has been made out for it at all.

I intervene with diffidence in this battle of the experts, but, with respect to the Solicitor-General, I do not think it is fair to say that the new Clause means that this amount would be added to the capital for E.P.T. The Clause does not say so; it says that it shall be an asset of the concern. That is not necessarily capital for E.P.T. purposes. I have known cases where an inspector has said that cash at the bank was not capital for taxation purposes, so I presume that it may be competent for an inspector, where a company is adequately financed, to argue that the amount theoretically owing was merely an outside investment. If the concern was not "flush" with money, and had incurred overdrafts on the strength of that, it would seem proper that the inspector should treat the matter in that light. The cost to the Revenue, as stated by the Solicitor-General, was not based by him on completely sound facts. There is a further point The fact that there will be an increased cost to the Revenue in one year does not dispose of the matter if what is to be aimed at is fairness as between taxpayers. It is not satisfactory that one taxpayer should get a benefit which another does not

I beg to move, in page r, line i6, after the second "oils." to insert," or any kerosene."

Perhaps it would be convenient if, on this Amendment, I dealt with the consequential Amendments to page 2

It would be as well to take them all together.

We are here adding kerosene to the other oils which were exempted from duty by my right hon. Friend the Chancellor when he made his Budget statement. During the passage of the Resolution through the House, and later on during Committee, a good deal of pressure was brought to bear on my right hon. Friend, from every quarter of the House, to include kerosene, both because of its use in tractors on farms and because the oil lamp is still used in thousands of cottage homes. The cost of the concession will be 1½million. These Amendments put kerosene into the same category as other heavy oils.

As the initiator of the Debate which led to the undertaking which the Financial Secretary is now implementing, I should like to offer him my thanks. During Committee we sought to introduce words which were equal in effect to those of the present Amendment, but our drafting was not satisfactory. I think the present drafting is far simpler, and makes the position quite clear. The Chancellor is at least doing something for agriculture, which is our greatest dollar saver. The only thing it does not do is to supply the necessary kerosene. Still, I thank him.