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Clause 31—(Aggregation)

Volume 529: debated on Thursday 8 July 1954

The text on this page has been created from Hansard archive content, it may contain typographical errors.

I beg to move, in page 38, line 25, to leave out "on his behalf or."

I desire to press this Amendment once again in the hope that the Financial Secretary, who promised to consider the matter before the Report stage, will agree that these words would be better out than in. I have looked at the Sections to which he referred in his speech in Committee, namely, Section 24 of the 1936 Finance Act and Section 28 of the 1949 Finance Act. Where those words are used in those Acts, they deal with the charge of or exemption from Estate Duty upon property situated outside Great Britain. I am quite unable to understand what they mean in their context in those Acts, but that does not matter. The point is that they have been repeated in this Clause, which deals with quite a different subject matter.

In my view, the whole scheme of the Clause, as indicated by the Financial Secretary during the Committee stage, might be seriously infringed if these words are allowed to remain in. The Financial Secretary referred to certain logical divisions. He said that there ought to be aggregated the free estate of the deceased plus property settled by him, or settlements made out of property belonging to him, on the one side, and all other settled property on the other. That is the logical division at which the Clause is aiming, but if these words are left in it seems to me that settlements of property other than that belonging to the deceased could be brought in, and it would therefore be possible to tax a large block of property, aggregated with the free estate, which ought not to be so aggregated if the logical division is as I have stated.

Two examples have been suggested to me by learned friends of mine. If the deceased is a member of a class on behalf of which class some settlement is made, such as a settlement for blind persons, it cannot be intended that any benefit to the deceased under such a settlement should be aggregated with the man's free estate. The other example is one to which the Financial Secretary himself referred during the Committee stage. He suggested that property belonging to a company of which the deceased was a governing director might be settled by his direction. All I can say is that if it is property of the company it is not property of the deceased, and if the settlement is made by the company on behalf of the deceased—which I should think would be a most improper settlement, and probably completely invalid—I should not have thought that it would, in any event, be aggregated with the deceased's free estate. In those circumstances, I hope that the Financial Secretary will decide that these words are better out than in.

As my right hon. and learned Friend said, we had a short discussion upon this point in Committee. I am inclined to think that my right hon. and learned Friend exaggerates the importance and the effect of the words which he seeks to delete. I told him that the words were included because they had been used in—as it seemed to me—the somewhat similar circumstances of the two Sections to which he has referred. Upon looking at the words and trying to see what effect they would have, however, I am bound to admit that I cannot conceive of any circumstances in which they would in any way affect the matter. In those circumstances, if my right hon. and learned Friend desires to press the Amendment, I should not desire to thwart him.

Amendment agreed to.

I beg to move, in page 38, line 36, to leave out from "then," to the end of line 42, and to insert:

"the rate of estate duty to be paid on any such policy, money or interest so included (hereinafter referred to as 'a life insurance') shall be determined as follows:—
  • (a) in respect of the value of any life insurance or interest in a life insurance to which immediately after the death any one person is absolutely and indefeasibly entitled for his own benefit Otherwise than by virtue of a purchase for consideration in money or money's worth (whether of that life insurance or interest or of the policy or otherwise), the rate shall be that appropriate to the value or aggregate value of that life insurance or interest and of any other life insurance or interest in a life insurance to which he is so entitled;
  • (b) subject to the foregoing paragraph, the rate shall be that appropriate to the aggregate value of all the life insurances or, if there is only one, to the value of that life insurance:
  • Provided that for the purposes of this sub-section—
  • (i) there shall be left out of account any life insurance in respect of which estate duty neither is payable on the death nor would be if the duty were payable on estates of however small a principal value; and
  • (ii) where any life insurance or interest in a life insurance is immediately after the death subject to a mortgage or charge, the mortgage or charge shall be disregarded and the life insurance or interest shall be valued accordingly; and
  • (iii) in relation to life insurances and interests therein which then form part of the unadministered estate of a deceased person this subsection shall have effect as if that person had been then living and entitled to those life insurances and interests.
  • (3) For the purposes of paragraph (a) of the last foregoing subsection the value of any interest in a policy of assurance or moneys received under such a policy shall be arrived at by apportioning the total value of the policy or moneys according to the respective values of the interest in question and of the interest a person would have if, except for the interest in question, he were absolutely and indefeasibly entitled to the policy or moneys."
    This Amendment embodies the proposal in respect of which my right hon. Friend the Chancellor of the Exchequer authorised me to give an undertaking in Committee in connection with an Amendment moved by my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser). The House will recall that the Clause, as introduced, reversed the position which had existed for many years by providing for the aggregation of proceeds of policies of assurance with each other for the purpose of determining the rates of Estate Duty which would be applicable. As I explained during the Second reading debate, that proposal was brought forward to counter the abuse which had developed of persons taking out a number of small policies below the Estate Duty exemption limit in favour of the same person, and so completely evading Estate Duty on what might be a large sum of money.

    In the debate in Committee, after a full discussion, I undertook on my right hon. Friend's behalf to bring forward a proposal under which this new provision in the Bill would operate to aggregate separately only those moneys arising from policies of assurance in respect of identifiable beneficiaries, and I indicated that, so far as unidentifiable beneficiaries were concerned, I thought that the Clause would have to continue to stand as it then stood. The Amendment, in my submission, carries out that undertaking.

    The House will remember that I warned the Committee that there would be a considerable number of complications to be dealt with. Perhaps it would be of assistance to the House if I touched on the details of the Amendment which, I suggest, deals reasonably and sensibly with the points of difficulty, some of which I referred to during the debate in Committee. The broad effect of the proposal is, if I may use once again the metaphor I used in Committee of the ring fence, to treat as being within individual ring fences the proceeds of all the policies of insurance in favour of each named individual. We aggregate, that is to say, all the policy moneys that go to each particular identified individual and then retain the original provision of the Clause under which policy moneys were aggregated within one ring fence so far as unidentified beneficiaries are concerned. That is, broadly, the purpose and, I suggest, the effect of the Amendment.

    It is, of course, necessary to deal with the case of the identified beneficiaries—to give an obvious example, such of my children as attain the age of 21. It seems to us that the most satisfactory way of dealing with them, in view, apart from anything else, of the difficulties of dealing with them satisfactorily on any other basis, is to put them in one ring fence of their own, and I think it is proper to put them in a separate ring fence from the unidentifiable beneficiaries since it might otherwise be possible in certain cases to get round the effect of the Clause by leaving certain policies to named beneficiaries and to others who would be those beneficiaries, but, in a form of words, not expressly identifiable. I think we get round that by putting unidentifiable beneficiaries in a ring fence of their own.

    Paragraph (a) carries out this main intention. Hon. Members will observe the words
    "… otherwise than by virtue of a purchase for consideration in money or money's worth …"
    That provision is designed to deal with the difficulty, to which I referred in Committee, of the possibility of abuse arising in this way. The assured person might bequeath a large number of policies to one named beneficiary and during his life that named beneficiary might sell the policies to investment houses. At the moment, therefore, of the assured person's death the holders of the policies would be a number of investment houses. Therefore, if we did not insert this provision, none of those policies would be aggregated with another. That would be a method of abuse, and by excluding from the benefits of the Clause cases where policies have been sold I think we effectively prevent that possibility. That is the explanation of that exclusion.

    Paragraph (b) reproduces the substance of the original subsection as it stood in the Bill as introduced, and applies, as I have already indicated, where the beneficiaries are unidentifiable.

    The proviso deals with a number of smallish points of difficulty. Sub-paragraph (i) deals with a point I referred to in moving an Amendment in Committee. It is to make sure and quite clear that policies of less than £2,000—or, in future, less than £3,000—shall be aggregated with other policies. There was some doubt whether the Bill as it stood had that effect. Sub-paragraph (ii) of the proviso makes aggregable the amount that the insurance company pays out to the beneficiary on death without reduction the third sub-paragraph deals with the rather awkward problem of the case where the beneficiary dies before the insured person and the estate is not wound up but is still under administration at the time of the death of the assured person. To deal with that we have provided that the beneficiary shall be treated for this purpose as if he is still alive, and that artificial resuscitation of him for this purpose gets us out of the particular difficulty of the benefit of the policies going in the direction in which the beneficiary's estate might fall to be distributed.

    7.15 p.m.

    The last part of the Amendment secures for the purposes of valuation under the Clause that the life and reversionary interest in the policy shall together amount to its total value.

    The Clause is, I am afraid, a little complicated, but it is less complicated than I feared it would be when we discussed it in Committee, and will deal with the abuse mentioned on Second Reading. It will secure that, in the case I have described of an individual who takes out a large number of small policies in respect of the same beneficiary, aggregation of those policies with each other will continue to be applied. It therefore goes far enough to check the abuse, though it does not, as I have indicated, go as far as the original provision. The original provision, in our view, went too far, inasmuch as it aggregated policies the benefit of which was going to different named individuals.

    This is, of course, a difficult subject, on which opinions can, and no doubt do, legimately differ. Whichever alternative we adopt, the original alternative of aggregating all the insurance policies with each other but separate from the main estate, or the present proposal of aggregating policies in so far as they go to identifiable individuals or generally to unidentifiable, either course is, no doubt, subject to a certain degree of attack on the ground of logic. I think one could attack either. Whether, if one were constructing a system de novo, one could construct a system on these lines is, perhaps, an open question.

    However, we are dealing with a situation that in fact exists as a result of a state of affairs that has lasted now for 60 years, a state of affairs in which those policies of insurance were treated as a separate estate, and as we are dealing with this problem against that background it does seem sensible to modify it so far as is necessary to check the abuse—that we are doing—but not to carry it farther than necessary to check the abuse. In our judgment, the original proposal went farther than was necessary to check the abuse that had developed.

    Would the right hon. Gentleman elucidate one point for me? He referred to, the first sub-paragraph of the proviso in terms which I certainly did not understand. He said it was to deal with the case of small policies, and that where they were aggregated no duty would be payable, but what it appears to do is to leave out of account any policies of any size in respect of which Estate Duty is not payable on death, apart from any question of value.

    I think that the hon. and learned Gentleman's difficulty is that he probably was not in the Committee when we discussed an Amendment to which I have just referred. The Clause, as originally drafted, was intended to provide for the exclusion of policies in which the deceased had not had an interest. I am speaking from memory, but I think I gave an example of a case of a policy taken out on a deceased's life by his wife on premiums solely furnished by her. But we thought it would also exclude from aggregation estates which did not fall to pay Estate Duty because they were below the exemption limit, While maintaining the exclusion in respect of those cases, in my view this Amendment makes it clear that where Estate Duty is not payable merely by reason of the size of the estate being below the exemption limit, none the less those estates shall be aggregated for this purpose.

    I think it is clear, but if the hon. and learned Gentleman had not followed the previous debate I can understand that what I said might possibly have misled him. That is the provision which we make, and in our view it meets the difficulty which had arisen and with which, as I indicated, we regarded it as our duty to deal—namely, the abuse in respect of a large number of small policies. It does not carry the matter further than is necessary to deal with that abuse, and, in so doing, pays attention to what has been the practice for 60 years in this country under a variety of Governments.

    Will the right hon. Gentleman observe that I did follow the previous debate, but I am not at all sure that I have followed his proviso?

    It has been suggested to me that our proceedings might be expedited if a single discussion were to take place on this matter and upon the Amendments to this proposed Amendment. If the House were to agree that the words proposed to be left out should not stand part of the Bill, I would then put the Question "That those words be there inserted in the Bill"; and if on that a general discussion took place, and, if desired, it were carried to a Division, that would provide one way of dealing with the matter. But I should like to make it clear so that there is no misunderstanding that if the Question "That those words be there inserted in the Bill" is carried in the affirmative, it will inhibit me from calling any of the Amendments to the proposed Amendment. I say this in order that there shall be no misunderstanding whatsoever.

    I think I have got the matter clear, Mr. Speaker, and that what you have said is agreeable to my hon. Friends on this side of the House. We appreciate that this matter has been discussed before. We do not want to carry the proceedings too far or into too much detail, so long as we can state our points of view which are embodied in the Amendments to the Chancellor's proposed Amendment.

    We agree, Mr. Speaker In fact, the crystal clarity of your observations compares very well with the Amendment which we have moved.

    Question, "That the words proposed to be left out stand part of the Bill" put, and negatived.

    Motion made, and Question proposed, "That those words be there inserted in the Bill."

    We are dealing with an extremely complicated matter and a very compli- cated Amendment, but I think that, with the possible exception of the point which was raised by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), the Financial Secretary, as he usually does, explained the Amendment with great lucidity. It certainly appeared to me that it gives effect to what he said he would attempt to give effect to when he announced the concession in Committee.

    In spite of that, we do not like the Amendment. My right hon. and learned Friend the Member for Neepsend (Sir F. Soskice) made it clear in Committee that we did not like it, and we have not liked it any more as a result of thinking about it during the interval. We have put down the Amendments to which you have referred, Mr. Speaker, and which we are not at the moment moving, but which we are able to discuss at this stage, which seek to limit the extent of the concession.

    To use the right hon. Gentleman's metaphor of the ring fence, our proposals seek to do this. Instead of putting the estate into an indefinite number of parts, as the present Government Amendment proposes to do, and instead of leaving the estate in two parts as the Clause as originally drafted seeks to do, our Amendment seeks to put it into three parts, each of them with a ring fence around them. The first part would be the main part of the estate. The second part would be any money accruing, as a result of insurance policies, to the widow or, for the sake of sex equality, to the widower; and the third part would be any insurance policies accruing to any other people. That would limit substantially the extent of the concession which the Government have proposed.

    I must say that we would prefer not to have the concession at all, and that we have not heard either in Committee or in the lucid speech of the Financial Secretary any reasons to indicate why, if the Government thought it really necessary to bring forward this Clause at all and correct the admitted abuse, the effect of the Clause should be lessened as it is by this Amendment. It seems to me that the proposal which is put forward in this Amendment is open to fairly obvious and substantial abuse—indeed, a new form of abuse.

    Under the arrangements which are proposed, by which an individual may not get round the Estate Duty provisions by taking out an indefinite number of small policies in favour of one beneficiary, but may achieve the same result by taking out a number of policies in favour of a different beneficiary, it is difficult to see why it should not be possible for a number of people to arrange mutually compensating bargains by which they each make over sums in favour of each other's children, so that very much the same effect is obtained as would be obtained if we did not have this attempt to block up the loophole altogether. I would have thought that, from that point of view, this matter ought to be considered again.

    Despite what the right hon. Gentleman has said about the position during the last 60 years and the position which has existed in respect of the Married Women's Property Act, I do not think we are really convinced that there is a case for treating insurance policies in an entirely different way from the rest of the estate. I am not at all sure, from what he said in his extremely interesting speech in Committee, that we do not carry the hon. Member for Hall Green (Mr. Aubrey Jones) with us on this point. I know that he wants an entirely different approach to the whole question of Estate Duty. He wants the duty levied on the individual who receives it according to how much money has come in, and not on the individual who is leaving the money according to how much his estate is. That seems to me to be an arguable point of view, but I think he agrees that, until we can do that, there is no logical basis for saying that we should treat the estate of a man who carries a great deal of life insurance in an entirely different way from the way in which we treat an individual who, for various reasons, does not happen to do anything of the sort.

    It is not directly bearing on the point to say that this has been the position, as the Financial Secretary said, for 60 years. In fact, I think he slightly underestimates the period, because I believe the date of the Married Women's Property Act was 1880, so that it would be a period of 74 years.

    The right hon. Gentleman's intervention makes in advance the point that I was about to make, and that is that the Married Women's Property Act, from which stems this separation of these insurance policies from the rest of the estate, was introduced before Estate Duty was ever thought of. We have all heard a lot about Sir William Harcourt in these debates.

    7.30 p.m.

    My right hon. Friend the Member for Bishop Auckland (Mr. Dalton), in his speech yesterday, invited the Chancellor to join him and Sir William in a glorious trio of those who reduced the Estate Duties at the lower end. Sir William is reputed to have said. "We are all Socialists now." I think that remark was not true. There is one other remark by Sir William which seems to me more apposite to what we are discussing now and of which I would remind the Chancellor, because I think that it may have some application to occasions when he has to deal with the more recalcitrant and property-conscious among his own back benchers.

    One of Sir William Harcourt's friends complained that Sir William had no landed ideas, to which Sir William replied, "You have the land; leave the ideas to me." I think that the only difference about that is that I am not at all sure that the right hon. Gentleman has not the land as well as the ideas. However, it is quite clear what is the position here under the Married Women's Property Act, and I think that the Financial Secretary is straining a point when he attempts to say that we must, therefore, respect the position which has grown up over the last 60 years.

    He said that if he had been dealing with the matter de novo he might have arrived at a different solution. But surely we are to a large extent dealing with the matter de novo in this Bill. The only thing which, I understand, is not de novo is the Married Women's Property Act which was brought into being to deal with an entirely different set of circumstances when there was no Estate Duty 60 years ago.

    This is the first time that we have faced up to what we want to do about insurance policies in which the person taking out a policy has no interest. The Government have brought forward two solutions. While I think that the Government have a better solution in mind— the Financial Secretary hinted at it—we have to put up with the solution which he says is not a good one because the position which has existed over the last 60 years is not clear. It is a very unsatisfactory position in which we are left.

    During these rather long drawn-out and not altogether uninteresting debates on the Finance Bill, no issue has brought out greater disagreement between both sides of the House than on this question of Estate Duty. I think that one of the most significant remarks which the Chancellor has made in the course of his intervention in our debate was the one which he made yesterday when replying to a debate in which the right hon. Member for Blackburn, West (Mr. Assheton) came out with a very strong proposal for Estate Duties in almost any form. He indicated his position clearly by saying that the members of the Chamberlain family came of a very radical family so far as he was concerned.

    The Chancellor gave a very broad hint that if things were a little easier he would like to do away with the very heavy burden of Estate Duty on large estates.

    I think that the Chancellor is quite right. I did not imagine or think that he intended it to be imagined that estates were to be entirely free of Estate Duties. He did announce that he would go for a rate of Estate Duties which would be much less an equalising weapon than it is at present. Nothing has brought out the difference between the two sides of the House more than this question affecting property passing from a deceased person to an heir of one sort or another. That applies to this Amendment which we regard as quite unnecessary and with which we are thoroughly unsatisfied.

    I start by thanking my right hon. Friend for introducing this Amendment. I think that it is a very great improvement indeed on the Clause as it originally stood. It would be interesting to go into an historical discourse about the origin of the Married Women's Property Act and death duties generally, but I want only to look at the position as I understood it to be when the Finance Bill was introduced.

    The Married Women's Property Act has been made more and more use of during the recent years. It has been made use of by two quite different sets of people. It has been made use of by thousands of people of limited means who make provision for their widows and for their children, and in nearly all those cases they take out one policy for their widow and one policy for each child. There have been a small number of people who have found that by taking out a large number of policies in favour of their widow or their children they can get benefits for each particular party.

    The proposal which the Government originally brought in was, of course, a complete attack upon all the benefits of the Married Women's Property Act, and the people who would have been most hit by it were the people of more limited means. I have been perfectly amazed to listen to the speeches from the other side and the whole-hearted attack made on the Married Women's Property Act and the provisions which people of limited means, during the last 20 or 35 years, have been making for those among the very class which, I would have thought, hon. and right hon. Gentlemen opposite desire to represent in this House.

    What evidence has the right hon. and learned Gentleman of that? I was in the insurance industry for 20 years, and I never came across a single case of that in the whole of my experience.

    I do not know what estates the hon. Gentleman operated, but I can tell him that, so far as I know, there are many hundreds of policies under the Married Women's Property Act taken out every year by people of very limited means who, so far as I possibly can, I desire to protect.

    If we can clear up this point, the right hon. and learned Gentleman's speech will be more intelligible to all of us. Some of us are not quite sure what he means by a person of limited means. Does he mean people with £500, £750, £1,000, or more? I would remind him that it will now be possible for a person to take up single policies on anything up to £3,000.

    I was referring to people of small incomes rising up to junior executives in business of £500 to £1,500 a year. These are the people who very largely take out these policies. The proposal here, so far as the Government are concerned, is that a ringed fence goes round each lot. That seems to me right. Let me deal with the ringed fence round the widow or widower.

    It seems here extremely hard that a policy taken out in favour of children should be aggregated with other policies which there happen to be on a man's life. That seems to me to be pretty unkind when one thinks about it, and I should have thought the ringed fence ought to be round the widow and widower and the children.

    The reason why I think the Government plan is right is this. After all, policies are taken out, not only under the Married Women's Property Act, but also as ordinary life insurance policies for the benefit of dependants and employees and people of that sort. They are comparatively small policies—£500, £1,000. £1,500 or something of that sort. There may be, in addition, policies running into thousands taken out by the deceased on his life. If we aggregate them together, these small policies for individuals have to bear the full weight of Estate Duty on the aggregation of all the policies. That seems to me to be wrong. That is got rid of by the Government's plan of the aggregation—the ringed fence—being round each beneficiary who takes a policy upon death.

    This is a good Clause, and I have only one comment to make. Under the Married Women's Property Act a very common form of policy is a policy for the widow, if she survives, for life and afterwards to the children. Unfortunately, I gather that that type of policy would not come within paragraph (a) but would have to be under paragraph (b), because on the death there would be no person
    "absolutely and indefeasibly entitled for his own benefit.…"
    That may be unavoidable, but it is the one point in paragraph (a) which will hit a great number of these policies. I think that they are the best type of policy and should be encouraged in every possible way. Subject to this one comment, I congratulate my right hon. Friend and express my thanks and, I am sure, those of many of my hon. Friends for the Amendment.

    The right hon. and learned Member for Kensington, South (Sir P. Spens) has just found that some of the provisions about Estate Duty are unkind. Taxation is usually unkind in one sense of the word. Life is sometimes unkind, and death is almost invariably unkind.

    It seems to me that, on the Government side, there is only one really logical person, and that is the hon. Member for Hall Green (Mr. Aubrey Jones). He thought that the whole basis of Estate Duty was wrong, and that it ought to depend on the means of the person receiving and not on the size of the estate of the deceased. That is perfectly logical. But with this Clause we are getting into a quite hopeless state of confusion about the existing situation as a result of some sentimental reasons advanced in favour of a very limited class of person by hon. Members opposite. I say "very limited class of person" because there are very many people who have never been in a position to take out policies of this kind and who are never likely to be able to do so.

    My first comment on the Clause and the whole matter is that much the easiest way to deal with this question would have been to put the whole of the moneys coming from life insurance policies of this nature into the estate, to aggregate them and then, if it was desired to make special provision for the widow and children, to do it in the straightforward way by giving them a special concession in the rate of Estate Duty, such as they used to have under the legacy and succession duty. I doubt whether that is the right thing to do, but that, at any rate, is a simple and clear way of doing it.

    The present position is that not all widows benefit under this practice, but simply the widows and children of people who have taken out a particular form of provision for them—that is to say, a particular form of life insurance. Other provisions have not attracted the advantage that this provision has attracted by reason of a section in the Married Women's Property Act which was in all probability introduced for a quite different purpose.

    It is a very poor defence of an abuse, because it has, admittedly, been an abuse, to say that it is an old one and, therefore, when it is being altered we will make only a small alteration. Surely, once it is recognised that there has been abuse, the right thing to do is to reconsider the whole position and see what ought to be done and not hesitate to take fairly sweeping steps in order to do so. The essential things to aim at in a matter of this sort are, first, that the provisions that are put into the Bill should be as simple as possible and, secondly, that it should conform with ordinary ideas of fairness.

    7.45 p.m.

    I do not regard the Amendment or the Clause as in any way clear. The Clause is an excellent monument of obscurity and I shall not take up time by going through all the details of it. In the Amendment we begin by having a "policy, money or interest" referred to as "a life insurance," and a little further on we find an "interest in a life insurance." That, therefore, means an interest in an interest. I leave it to the Chancellor or whoever replies to tell us what that means and why it is there. We could go through the Clause and find point after point which the ordinary person and, indeed, the skilled person would find just as much difficulty in interpreting as I found myself in doing so. The more obscure we make fiscal legislation, in the long run the more likely we are to afford opportunities for evasion.

    Next, on the fundamental facts, let us see what is proposed. First, there is the ordinary estate. Next, there is to be, say, the provision far the widow. Next, if there are four children, there is to be a separate ringed fence round each of them. What is the common fairness in this? Why should this form of provision for children, if that is the way we regard it, be entitled to this special treatment. Suppose that the deceased had had, say, four houses, bits of property let out to people. The party opposite are rather in favour of a property-owning democracy, are they not? Surely the property is not merely to be confined to life insurances, however great some people's interest in them may be. It would include perhaps a house or two. Why not?

    Assume that there are five houses of the deceased person, and one goes to the widow and the other four to the children. I need not say to the House that that all forms part of the estate and gets no benefit. All the sob stuff that we have been hearing about providing for the widow and the children for some obscure reason is perfectly sound, so we are told, when it is applied to this particular form of life insurance; but when it is applied to any other provision—for instance, the houses in which many humble savings are invested—it is no longer a sound principle. It is nonsense to approach the matter in that way.

    I should have thought that the simplest thing with an estate is to confine ourselves to two obvious classes, one of which is the widow. It must be remembered that widows have had special treatment as, for example, in the case of intestacy. If we are to make a special benefit at all and to do it in this rather illogical and inconvenient way, there is a special case for giving it to the widower or to the widow. But once that is done, I see no reason whatever for drawing a separate ringed fence around all the other interests concerned. I am talking, of course, about the "absolutely and indefeasibly entitled" beneficiaries to whom the Financial Secretary was referring.

    Suppose, for instance, that a man has, say, five Children and makes provision for them by taking out a separate policy for each of them. What is the moral difference between his doing that and taking out one policy for the five children or the survivors of them? Where is the moral element? Why should those five people, because they have five separate policies, be entitled to a special advantage that would not accrue to a family as a whole, if the policy was taken out in general terms so that until the event happened one could not know to which person it would apply? What is the moral difference between that kind of case and the case of five children, each of them having a clean-cut special policy and who therefore are entitled to a specially reduced rate of duty?

    I cannot see it at all, and I suggest that here, by way of complication, we are getting into real injustice, and opening a door to evasion. I hope that the House will reject the whole Amendment. If we are to have it, I would prefer the limitation I have just been outlining, but I believe that the original clause did not go far enough. I believe that what is now proposed is far too complicated, has no real foundation in fairness and even within the narrow limits which the right hon. Gentleman has set himself, is quite the wrong way of doing it.

    It is only as a very last hope, as it were, that I should recommend the Amendments which we put down. They are one degree better than the Chancellor's Amendment, but by far the best thing is to reject the whole.

    The debate so far has been one between precedent and logic. My right hon. Friend the Financial Secretary has stood for precedent and hon. Members opposite stand for logic. As a good Conservative, I cannot be other than reverent towards precedent. Equally as a Welshman, I cannot close my ears to the claims of logic. It is true that the arrangement represented by this Amendment has existed for over 70 years and I am entirely in agreement with my right hon. Friend that we ought not to get away too quickly or too precipitately from something which has been sanctified by this long history.

    What worries me is whether the concession represented by this Amendment can, on the basis of precedent, be a permanent concession. I welcome the concession, but I think that I may claim for myself a greater degree of farsightedness than my hon. Friends. I wish to make the concession permanent, and it would seem to me that the only way to do so is to follow out the logic of the Amendment. Hon. Members opposite and I are, I think, at one in wishing to be logical. The difficulty is that our logic differs. Hon. Members opposite, or at any rate the hon. and learned Member for Kettering (Mr. Mitchison), wished to carry to its full conclusion the present logic of Estate Duty and to assimilate the Amendment to the present corpus of law. I wish to do the opposite. I wish to assimilate the present corpus of law to the Amendment. I wish to see the Amendment carried further. They must vote against it, and I must vote for it.

    One may well ask, if this illogic, this absence of logic, has existed for 70 years, why cannot it go on existing? The truth of the matter is, it seems to me, that the illogic has become apparent only within the last few years. It became apparent only when the exemption limit was raised from a nominal figure to £2,000. It then became profitable for a person to distribute his property in parcels of life assurance policies of under £2,000, and so avoid duty.

    That loophole is closed by the Clause, but a lesser loophole would remain under the Amendment. My hope is that people would not resort to this lesser loophole, but it would be very serious and disastrous if they did. If they were to do so—which is the last thing that the Financial Secretary would desire—the concession could not possibly last. At some time or other a Chancellor would come to this Chamber and say, "Advantage has been taken of this provision to secure mitigation of Estate Duty, and I cannot countenance it."

    Were that so, the argument of precedent would no longer avail. For that reason—and despite the obvious reluctance of the Financial Secretary—I wish once again to press upon him the claims of logic. I shall not enter again into the long and abstruse argument which I inflicted upon hon. Members during the Committee stage. I was interested in the disquisition which we heard yesterday from the right hon. Member for Bishop Auckland (Mr. Dalton). We were told that Estate Duty has retained its shape for 60 years. The right hon. Gentleman described it as the hest of taxes. Whatever may have been said of it in the past, I contend that current rates of taxation have altered the position completely.

    With current rates of taxation as they are, a living person can no longer provide for the duties which becomes payable on his death. They are in fact payable by his heirs, and those heirs pay duty relating not to what they receive or to their own circumstances, but to the circumstances of someone else altogether. 'That appears to me to be fundamentally unjust. For that reason I pleaded with the Committee for the inclusion in the corpus of death duties of an acquisition duty. It is the acquisition principle which is represented by the Amendment, but in a confused and inchoate way.

    I believe that the concession given by my right hon. Friend and represented by the Amendment may be made permanent if we reintroduce an acquisition duty settled on a proper basis of principle and applied to all forms of property, not only to property represented by life assurance policies. I do not ask for it straight away. I plead here, as I pleaded in Committee, for an inquiry into the matter; and while I understand the reluctance of my right hon. Friend to look into all these matters afresh, I urge on him that he, probably more than anyone else, has an interest in so doing.

    It seems to me that death duties, far more than duties on income or duties on profits, touch people in some of their very deepest instincts and affections. That being so, if the principle of the death duty seems unjust, then the statute in the long run will suffer. Indeed, I would contend from what we have heard in our debates on the subject that the statute on this matter is subject to considerable strain. My right hon. Friend has an interest in safeguarding the reputability of the statute, and in my judgment that can only be done in the long run by initiating an inquiry on the lines I suggested in Committee, and for which I would plead again today.

    8.0 p.m.

    I am sure that we are all agreed that the speeches we have heard have shown how much there is still to be learned about the philosophy and logic of Estate Duty. The more I heard the hon. Member for Hall Green (Mr. Aubrey Jones) speak, the more I believed that he is too pure in heart to belong to the Conservative Party. I am sure he will forgive me if I turn from his musings on Estate Duty to the more practical question raised by the right hon. and learned Member for Kensington, South (Sir P. Spens), who I am glad to see has remained in the Chamber.

    He reproached us on these benches for not taking care of people of limited means. He said that he was astonished to hear speeches from these benches which seemed to be so indifferent to the welfare of those of limited means and the provision which they were trying to make for their wives and families. When my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) asked the right hon. and learned Gentleman to define a person of limited means, he replied—and I took his words down—"Those who have risen to the position of executives on, say, £500 to £1,500 a year." That was his definition of persons of limited means. Presumably the right hon. and learned Gentleman supports the Chancellor and opposes my hon. Friends on the ground that the Chancellor is taking care of those of limited means whereas we are not.

    I want to ask the right hon. and learned Gentleman how much insurance of this kind he thinks people of limited means can afford. It would be possible for a person of limited means to take out a policy for £3,000 in the interests of his widow and three separate policies of £1,000 for each of his three children—a total of £6,000; and under the Amendment which we are discussing in relation to the Chancellor's Amendment, no Estate Duty would be payable on that £6,000. But the total cost of the insurance would be well over £300 a year in premiums. What person on £500 a year can afford to pay £300 a year in insurance premiums for this modest provision?

    The hon. Member has completely misunderstood me. Of course a man on £500 does not pay £300 a year in premiums. He pays a much smaller sum and does not insure for as much as £3,000. As he earns a higher income, so he takes out another policy.

    The right hon. and learned Gentleman has merely proved my point, which is that persons of limited means can afford only limited amounts of insurance—and those limited amounts of insurance would be exempt from Estate Duty anyway, and they would be still more exempt—

    No. What we are dealing with here is insurance taken out in the interest of the wife and family. These insurances will be separately calculated for Estate Duty and will be treated entirely distinctly from the free estate of the testator. It does not matter what he leaves in other forms of property. We are concerned only with the amount of insurance which he has left to his wife and family, which would be exempt from Estate Duty, for he would take advantage of the loopholes, some of which the Chancellor proposes to retain. I think the House will agree that a person of limited means between £500 and £1,500 a year is not at all concerned either with what the Chancellor proposes or with what we propose.

    Who is concerned with it? This surely must be realised: this is the field of operation of those with large incomes. It is not a scrap of good talking about persons of limited means. What does insurance cost per £1,000 for a man of 40 years of age? Surely it is at least £50 in premiums each year per £1,000 for a policy of this kind. One can work it out that if this sort of provision for the wife and children is to be undertaken, as it is undertaken, with a view to avoidance of Estate Duty, it will be done on a big scale, otherwise it is not worth doing at all.

    It is possible to take out two policies for £1,000 and obtain the benefit of each.

    At the present time it is possible for a person to take out 10 policies, one each year—not more than that because of the voluntary restrictions imposed by the life insurance offices—in the name of the same beneficiary, and each of those will be treated as a separate estate. The Chancellor proposes to stop that avoidance, even under the amended Clause—let us be quite fair to him.

    What we are suggesting is that he is retreating from the right and proper position which he adopted of aggregating all these policies for all beneficiaries and treating them as an estate separate from the free estate of the testator. Already a great concession is being made in treating these policies as separate estates, even if aggregated—a very big concession indeed. To lump the two things together would in many cases mean that they would attract a much heavier rate of Estate Duty.

    Let us acknowledge that, as the Chancellor proposes to meet the situation, he is stopping up one loophole, but he is allowing very large concessions to continue. I wonder whether he, or whoever is to reply, will tell us how much revenue he is giving away, making the comparison between his original Clause and his new proposal. It looks to me as if there is a considerable difference in the Estate Duty received, between the original proposal and the modified proposal which the Chancellor is now making, because of the treatment of each policy, or each set of policies for each beneficiary, as a separate estate.

    I do not see why the right hon. Gentleman is doing this. Consider the person who takes out policies of £4,000 for his wife and £4,000 for each of his two children—£12,000 in all. Why, under the modified proposal, does the Chancellor intend to make a gift of about £600 in relief from Estate Duty? What justification is there for doing that? As the figures go higher, of course, the concession becomes greater.

    Much has been said about the Married Women's Property Act. Under our proposal the sanctity of that Act is preserved. We would make special provision for the widow, but we do not propose that that advantage should be given to each of the other beneficiaries—and I am sure that that would strike any reasonable person as being quite fair.

    Undoubtedly this has been a large source of avoidance of Estate Duty and we on these benches regret that the Chancellor did not stick to his guns. Had he done so, we would have supported him. He has given inadequate reasons for the variation made by the proposal which he now puts forward. If it is suggested that it has been put forward in the interests of people with limited means, let us disabuse our minds of that before we proceed to the final stage of the Bill.

    I had hoped that the Chancellor would intervene at this point, but if he prefers to follow me I will, of course, speak now.

    The reason I did not rise was not through any desire not to speak, but because, as the Financial Secretary had opened the debate, I thought the right hon. Gentleman would like to speak at this stage.


    My hon. Friend the Member for Sowerby (Mr. Houghton) has really made my speech for me. He dealt with the only significant contribution which has been made to the debate from the other side of the House. It came from the right hon. and learned Member for Kensington, South (Sir P. Spens). I must say—and I think he is aware of this from what has been said by my hon. Friends —that his speech startled us, for it seemed to us, on all the facts, to be at variance with the position as we see it.

    I listened carefully to the Financial Secretary. I agree with one of my hon. Friends who remarked that the Financial Secretary, as usual, had explained the matter in a lucid and clear way. This is a most complicated Amendment. Part of our case is that we see no reason for the Amendment, complicated or otherwise. Undoubtedly, as was pointed out by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), this will cause a good deal of doubt in the minds of those who may be affected by it, and perhaps some work for the profession which my hon. and learned Friend adorns. However, if all that happens as a result is that we help, on the one side, very rich people, and on the other, well-to-do barristers, that is no reason why we should approve the Government's proposal.

    Even at this late hour, we should like to hear that the Chancellor has had second thoughts and that he has decided to accept the arguments deployed from this side of the House. I can only assume that, if the original Clause had not been good, it would not have been put into the Bill. If that is correct—the Clause was good and the Chancellor thought that it was wise and right, why is it now necessary for the Government to propose an Amendment to it? If after careful thought—and I know that careful thought is always given to the contents of the Finance Bill—the Clause was introduced, why is it that now in such a short space of time the Chancellor, and those associated with him should have had second thoughts?

    The Financial Secretary told us that the original Clause went too far. When was it discovered that it went too far? As far as we can see, it was only when pressure was brought to bear from the Government back benches. Perhaps we shall be told by the Chancellor that the matter has been debated by the 1922 Committee. It may be that that Committee informed the Chancellor that in this matter he had gone too far.

    This is one of the few radical proposals in the Bill yet, although in our view it does not go far enough, within a remarkably short space of time the Treasury Bench comes to the conclusion that the provision was too revolutionary. The fact is that the Clause as it now stands does not go far enough. We should have liked to see it tightened up, not loosened.

    I wish to make some brief observations on the speech of the right hon. and learned Member for Kensington, South (Sir P. Spens). As I have said, my hon. Friend the Member for Sowerby covered most of the points which he made, but I must say that, for my own part, it seems incredible that anyone in any part of the House should imagine that the proposed' Amendment will, in fact, help the small man—the man of whom the right hon. and learned Gentleman spoke as the person of moderate means. I intervened to ask him what he meant by this description and when he replied he laid down fairly wide limits. He said that moderate means meant from £500 to £1,500 a year.

    I understood further from what he said that such a man would be one who had reached the executive class. I understood the right hon. and learned Gentleman to mean by that somebody who was not starting at the beginning, but, in a sense, had reached the kind of position from which he would rise no higher. He had ceased to be in the lower grades of his profession or occupation.

    I meant a man who rises in the course of the years from £500 to £1,500 a year and takes out insurance as he gets better off.

    8.15 p.m.

    It is obvious that on an income of £500 a year most people would find that difficult. Their families would be young and most of their income would be earmarked for other purposes than this type of insurance. I therefore assume that the man concerned would have to be receiving at least £1,000 a year, and perhaps more, before he could begin to take out policies of this kind. Even then, it is obvious that by that stage he would no longer be young. In all probability he would be in his fifties.

    Everybody knows that when a man reaches that age the premiums he has to pay are pretty high. Such a person would have to pay a premium of some hundreds a year to take out a policy which would do him any good under the Clause. He would, I think, hesitate very long before, for this purpose and this purpose only, he would sink premiums to the extent of many hundreds of pounds in this way.

    The plain fact should be obvious in every part of the House, that whilst this provision will help people of substantial means, the small men and women—even those with an income of £1,500 a year—will not be helped very much, if at all. The right hon. and learned Gentleman seemed to forget, though I am sure that the Chancellor does not, the Amendment accepted yesterday. Although the actual Amendment accepted was moved from the opposite side of the House, all the running and the pressure came from this side of the House and was really moved in essence by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton).

    The Chancellor will recollect, if the right hon. and learned Member for Kensington, South does not, that now estates exceeding £3,000 and not exceeding £4,000 will only pay Duty of 1 per cent. That is a small sum. This provision must surely mean therefore that only people who have very high incomes or assets and substantial amounts at their command and who are willing to sink them in insurance policies of this kind will be those who will benefit.

    For that reason, we reject the proposals of the Chancellor. We think that they give to very rich people much more than they are entitled to in this direction. Instead of closing a gap and reducing what has become an abuse, the Government Amendment only helps that abuse to continue. Therefore, if the Chancellor cannot see his way to meet us in any way, I must advise my hon. and right hon. Friends to carry their opposition into the Division Lobby.

    I hope that my speech may conclude the debate on this important matter on which we have had a variety of useful speeches. The Amendments suggested by the Opposition are absolutely intelligible and quite clear. That is a very good way in which to end our debates. I should like to pay a tribute to the hon. and learned Member for Kettering (Mr. Mitchison) who serves in such a useful capacity to the Opposition in helping them with this difficult legal drafting We can understand the Amend- ments clearly, and the more we understand them the less we like them. I am afraid that my answer to the right hon. Member for Colne Valley (Mr. Glenvil Hall) is that we are unable to accept them. What they do is restore the position to the original Clause, with a slight expansion, as has been explained by Opposition speakers.

    The right hon. Gentleman said that I changed to the new Amendment on the Report stage under pressure from the 1922 Committee. During much of the course of the Finance Bill the theme song of the Opposition has been that the Government are so rigid that they are unable to move. Yet when the Government do move they are regarded as being under pressure from some revolutionary junta in the 1922 Committee. The Opposition cannot have it both ways. I am not conscious of ever having discussed the matter with the 1922 Committee, and if I did discuss it with them, I am doubtful if they would understand it any better than the hon. and learned Member for Kettering at present understands the drafting of the Amendment which we put on the Order Paper.

    It is true that some of my very learned and able right hon. and hon. Friends who have sat with assiduity through our Finance Bill debates have shown a particular interest in this matter. So have I and my right hon. Friend the Financial Secretary, who moved the Amendment with such clarity. The reason for the change is quite simple; we were impressed by the arguments put forward just as, strange to relate, I was impressed by the arguments which the right hon. Member for Bishop Auckland (Mr. Dalton) used yesterday.

    It shows that as we now draw rapidly to the conclusion of our debates on the Finance Bill we are being accommodating to both sides of the House, which is the right way in which to conclude our discussions. We have learned from these discussions to be even more accommodating than we were last year, and we have ended up with a concession to the Right today and a concession to the Left yesterday. I hope that our aim will prove that our attitude will in future be killing when we have a target in front of us.

    The right hon. Member for Colne Valley claimed that this was not a very desirable course of action. If it is not a very desirable course of action, why did not his Government tackle this abuse during their period of office? We dealt with this abuse when it was brought to our attention. We might have thought of it earlier, but the fact is that we dealt with the abuse in the original Bill as printed at the Committee stage.

    There are two simple answers to the right hon. Gentleman. The first is that the Labour Government could not do everything in one period of office. We did a great deal. I thought that right hon. and hon. Gentlemen opposite felt that we did too much. The second answer is that this abuse really became an abuse which ought to be attended to as a result of the action of my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) in 1946 in relieving estates up to £2,000. It was only then that it really became a substantial scandal, and it took some years to grow.

    Then the actions of the right hon. Member for Bishop Auckland were so nefarious that they created opportunities for evading a law which it then took the right hon. Gentleman and his colleagues five years to perceive. I do not think that the right hon. Gentleman added to the validity or strength of his argument by his intervention.

    The fact is that this position has existed, not to the extent of the abuse announced by the Financial Secretary in the earlier stages of our debates, but with the possibility of abuse, since 1894. When we came to consider the attitude adopted by some of my right hon. and hon. Friends, we thought it perfectly reasonable that, in the words of the Financial Secretary, a ring fence should be put round a policy of assurance taken out for a child. We think that that is a reasonable proposal for each individul child, and, according to the terms of the Clause, those whose titles can be absolutely claimed according to the terms of the Amendment which we put on the Order Paper. That is a perfectly reasonable restoration of the original position.

    Our main desire originally was to stop the abuse of an indefinite number of small policies being taken out in the interests of the same person. However, on reconsidering the matter with the care that we always devote to reconsideration, we thought it not unreasonable that the Amendment should be made. Indeed, I see great value in the Amendment, because I do not think it is illegitimate that in the case of a child, particularly in a case related to the Married Women's Property Act, a ring fence should be put round it. I can see nothing immoral in it, and I can see considerable advantages in it.

    One or two points have been raised by right hon. and hon. Gentlemen in their speeches. The hon. and learned Member for Kettering raised some very technical points. They are so detailed that I will have a little interview with him after the conclusion of the Finance Bill.

    The hon. Member for Sowerby (Mr. Houghton) asked how much we should lose on this Amendment compared with the original proposition. It is a case not of how much we shall lose but of how much less we shall claw back, because the object of the original draft was to stop an abuse, and, as I think we shall stop an abuse, it cannot be said that there is a necessity to claw back the amount which would have been saved by the original drafting but which will now be conceded in the case of a ring fence being put round a child's assurance policy. I have made inquiries and attempted to define the amount, but I cannot give an accurate assessment. I am, however, assured that the figures are not alarming. Certainly, I did not have to consider this as being an action in which I was making any great hole in the budgetary position as I envisaged it.

    I do not think I need take up the points made by my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens). It was from his speech that the argument started as to whether we were trying to help the rich or the poor. The right hon. Gentleman opposite said that the Clause was intended to help very rich people and well-to-do barristers. That is gross exaggeration. I hope that the people of this country, if they are following our discussions at the present moment—about which I am in some doubt—will, next time they consult their lawyers, ask them whether those who take out insurance policies under the Married Women's Property Act can all be classified as belonging to the two classes of very rich people or well-to-do barristers like the hon. and learned Member for Kettering. I do not believe that those are the only people who will profit by the Clause. If I thought that the hon. and learned Member for Kettering would make a packet out of it, it would give me all the more encouragement to proceed with the Amendment; but I do not believe that is the case.

    I believe that there are many people of reasonable and modest means, such as those referred to by the hon. Member for Sowerby in his illustration of the amount of the premium, for whom it will not be impossible to take out an insurance policy. I believe that many of those people will take advantage of this opportunity. However, I do not believe that those who went into this affair as a racket and took out 50 policies for the same person and thereby attempted to avoid Estate Duty, will find that the law as we leave it today makes it worth their while to perpetuate the racket. Therefore, in view of that, I ask the House to pass this Amendment, to reject the Amendments moved from the other side, and proceed to the conclusion of the discussions on the Finance Bill this year.

    8.30 p.m.

    While we appreciate the caustic reference to the 1922 Committee, which might even be described, to use a favourite phrase of the Chancellor himself, as wounding, and while we also appreciate his very friendly and appreciative remarks about my hon. and learned Friend the Member for Kettering (Mr. Mitchison), I must say that, as far as its substance is concerned, we thought his speech was utterly deplorable.

    I do not propose to rehearse the arguments again, except to say that I really

    Division No. 197.]


    [8.31 p.m.

    Aitken, W. T.Braine, B. R.Craddock, Beresford (Spelthorne)
    Allan, R. A. (Paddington, S.)Braithwaite, Sir Albert (Harrow, W.)Crookshank, Capt. Rt. Hon. H. F. C.
    Alport, C. J. M.Braithwaite, Sir GurneyCrosthwaite-Eyre, Col. O. E.
    Amery, Julian (Preston, N.)Brooke, Henry (Hampstead)Crowder, Sir John (Finchley)
    Amory, Rt. Hon. Heathcoat (Tiverton)Brooman-White, R. C.Crowder, Petre (Ruislip—Northwood)
    Anstruther-Gray, Major W. J.Buchan-Hepburn, Rt. Hon. P. G. T.Darling, Sir William (Edinburgh, S.)
    Arbuthnot, JohnBullard, D. G.Davidson, Viscountess
    Baldwin, A. E.Bullus, Wing Commander E. E.Deedes, W. F.
    Banks, Col. C.Burden, F. F. A.Digby, S. Wingfield
    Barber, AnthonyButcher, Sir HerbertDodds-parker, A. D.
    Barlow, Sir JohnButler, Rt. Hon. R. A. (Saffron Walden)Donaldson, Cmdr. C. E. McA
    Baxter, Sir BeverleyCampbell, Sir DavidDonner, Sir P. W.
    Beach, Maj. HicksCarr, RobertDoughty, C. J. A.
    Bell, Philip (Bolton, E.)Cary, Sir RobertDouglas-Hamilton, Lord Malcolm
    Bell, Ronald (Bucks, S.)Channon, H.Drayson, G. B.
    Bennett, Dr. Reginald (Gosport)Clarke, Col. Ralph (East Grinstead)Drewe, Sir C.
    Birch, NigelClarke, Brig. Terence (Portsmouth, W.)Dugdale, Rt. Hon. Sir T. (Richmond)
    Bishop, F. P.Cole, NormanDuncan, Capt. J. A. L.
    Black, C. W.Colegate, W. A.Duthie, W. S.
    Boyd-Carpenter, Rt. Hon. J. A.Conant, Maj. Sir RogerEden, Rt. Hon. A.
    Boyle, Sir EdwardCooper-Key, E. M.Eden, J. B. (Bournemouth. West)

    think he ought not to expect us to swallow the talk about people of limited means. I suppose it could be a question of what the Chancellor and the right hon. and learned Member for Kensington, South (Sir P. Spens) understand by that phrase, but the plain fact is that, with the scale of Estate Duty as it is now, nobody will make very much out of dividing up insurance policies among their children if the total estate is under £10,000. That is the plain fact of the matter. The duty on £10,000 is only 4 per cent., so that comes to £400.

    I agree that one can save part of it, but the really big savings are going to come out of the big estates, such as those of £100,000, in which case the Estate Duty is 45 per cent. You can reduce that to whatever figure you like, according to the number of beneficiaries, and, as I showed during the Committee stage, it could be reduced to nothing in the final stage. But these are the people who are to gain, and, whatever the Chancellor and the right hon. and learned Gentleman may say, these are the plain facts of the matter. Whether or not the right hon. Gentleman regards them as very rich or not, I do not know, but they certainly are rich.

    However, we have had a long debate, we have expressed our point of view with great clarity and vigour, and it only remains for us to express our views in the usual way, which we shall do with particularly strong feeling, when we go into the Division Lobby.

    Question put, "That those words be there inserted in the Bill."

    The House divided: Ayes. 251; Noes, 214.

    Finlay, GraemeLloyd, Maj. Sir Guy (Renfrew, E.)Robertson Sir David
    Fisher, NigelLockwood, Lt.-Col. J. C.Robinson, Sir Roland (Blackpool, S.)
    Fleetwood-Hesketh, R. FLongden, GilbertRodgers, John (Sevenoaks)
    Fletcher-Cooke, C.Low, A. R. W.Roper, Sir Harold
    Ford, Mrs. PatriciaLucas, Sir Jocelyn (Portsmouth, S.)Ropner, Col. Sir Leonard
    Fort, R.Lucas, P. B. (Brentford)Russell, R. S.
    Foster, JohnLucas-Tooth, Sir HughRyder, Capt. R. E. D.
    Fraser, Hon. Hugh (Stone)McCorquodale, Rt. Hon. M. SSavory, Prof. Sir Douglas
    Fraser, Sir Ian (Morecambe & Lonsdale)Macdonald, Sir PeterSchofield, Lt.-Col. W.
    Galbraith, Rt. Hon. T. D. (Pollok)Mackeson, Brig. Sir HarryScott, R. Donald
    Galbraith, T. G. D. (Hillhead)Mackie, J. H. (Galloway)Scott-Miller, Cmdr. R.
    George, Rt. Hon. Maj. G. LloydMaclay, Rt. Hon. JohnShepherd, William
    Glover, D.Maclean, FitzroySimon, J. E. S. (Middlesbrough, W.)
    Godber, J. B.Macleod, Rt. Hon. Iain (Enfield, W.)Smithers, Peter (Winchester)
    Gomme-Duncan, Col. AMacmillan, Rt. Hon. Harold (Bromley)Smithers, Sir Waldron (Orpington)
    Gough, C. F. H.MacPherson, Malcolm (Stirling)Snadden, W. McN.
    Gower, H. R.Macpherson, Niall (Dumfries)Spearman, A. C. M
    Grimston, Hon. John (St. Albans)Maitland, Patrick (Lanark)Speir, R. M.
    Grimston, Sir Robert (Westbury)Manningham-Buller, Rt. Hn. Sir ReginaldSpens, Rt. Hon. Sir P. (Kensington, S.)
    Hall, John (Wycombe)Markham, Major Sir FrankStanley, Capt. Hon Richard
    Hare, Hon. J. H.Marlowe, A. A. H.Stevens, Geoffrey
    Harris, Frederic (Croydon. N.)Marples, A. E.Steward, W. A. (Woolwich, W.)
    Harrison, Col. J. H. (Eye)Marshall, Douglas (Bodmin)Stewart, Henderson (Fife, E.)
    Harvey, Ian (Harrow, E.)Maude, AngusStoddart-Scott, Col. M
    Harvie-Watt, Sir GeorgeMaudling, R.Storey, S.
    Hay, JohnMaydon, Lt.-Comdr. S L CStrauss, Henry (Norwich, S.)
    Head, Rt. Hon. A. H.Medlicott, Brig. F.Stuart, Rt. Hon. James (Moray)
    Heald, Rt. Hon. Sir LionelMellor, Sir JohnSummers, G. S.
    Heath, EdwardMolson, A. H. E.Sutcliffe, Sir Harold
    Higgs, J. M. C.Moore, Sir ThomasTaylor, William (Bradford, N.)
    Hill, Dr. Charles (Luton)Morrison, John (Salisbury)Teeling, W.
    Hill, Mrs. E. (Wythenshawe)Nabarro, G. D. N.Thomas, Rt. Hon. J. P. L. (Hereford)
    Hinchingbrooke, ViscountNeave, AireyThomas, Leslie (Canterbury)
    Hirst, GeoffreyNicholls, HarmarThompson, Lt-Cdr. R. (Croydon, W.)
    Holland-Martin, C. J.Nicolson, Nigel (Bournemouth, E.)Thornton-Kemsley, Col. C. N.
    Hopkinson, Rt. Hon. HenryNield, Basil (Chester)Tilney, John
    Hornsby-Smith, Miss M. PNoble, Comdr. A. H. P.Touche, Sir Gordon
    Horobin, I. M.Nugent, G. R. H.Turner, H. F. L.
    Horsbrugh, Rt. Hon. FlorenceOakshott, H. D.Turton, R. H.
    Howard, Gerald (Cambridgeshire)Odey, G. W.Tweedsmuir, Lady
    Howard, Hon. Greville (St. Ives)O'Neill, Hon Phelim (Co. Antrim, N.)Vane, W. M. F.
    Hudson, Sir Austin (Lewisham N)Orr, Capt. L. P. S.Vaughan-Morgan, J. K.
    Hulbert, Wing Cdr. N. J.Orr-Ewing, Charles Ian (Hendon, N.)Vosper, D. F.
    Hurd, A. R.Orr-Ewing, Sir Ian (Weston-super-Mare)Wakefield, Edward (Derbyshire, W.)
    Hutchison, Sir Ian Clark (E'b'rgh. W.)Page, R. G.Wakefield, Sir Wavell (St. Marylebone)
    Hyde, Lt.-Col. H. M.Peake, Rt Hon. O.Walker-Smith, D. C.
    Hylton-Foster. H. B. HPeto, Brig. C. H. MWall, Major Patrick
    Iremongor, T. L.Peyton, J. W. W.Ward, Hon. George (Worcester)
    Jenkins, Robert (Dulwich)Pickthorn, K. W. M.Ward, Miss I. (Tynemouth)
    Johnson, Eric (Blackley)Pilkington, Capt. R. AWaterhouse, Capt. Rt. Hon. C.
    Johnson, Howard (Kemptown)Pitman, I. J.Watkinson, H. A.
    Jones, A. (Hall Green)Pitt, Miss E. M.Webbe, Sir H. (London & Westminster)
    Joynson-Hicks. Hon. L. WPowell, J. EnochWellwood, W.
    Kaberry, D.Price, Henry (Lewisham, W.)Williams, Gerald (Tonbridge)
    Kerby, Capt. H. B.Prior-Palmer, Brig. O. LWilliams, Sir Herbert (Croydon, E.)
    Kerr, H. W.Raikes, Sir VictorWilliams, Paul (Sunderland, S.)
    Lampton, ViscountRamsden, J. E.Williams, R. Dudley (Exeter)
    Lancaster, Col. C. GRayner, Brig. R.Wills, G.
    Langford-Holl, J. ARedmayne, M.Wilson, Geoffrey (Truro)
    Leather, E. H. C.Rees-Davies, W. RWood, Hon. R.
    Legge-Bourke Maj. E. A. H.Remnant, Hon. p.
    Lennox-Boyd, Rt Hon. A. T.Ronton, D. L. M.TELLERS FOR THE AYES:
    Lindsay, MartinRidsdale J. E.Mr. Studholme and Mr. Legh.
    Linstead, Sir H. N.Roberts Peter (Heeley)


    Acland, Sir RichardBoardman, H.Cove, W. G.
    Adams, RichardBottomley, Rt. Hon. A. G.Craddock, George (Bradford, S.)
    Allen, Arthur (Bosworth)Bowden, H. W.Crosland, C. A. R.
    Allen, Scholefield (Crewe)Bowles, F. G.Crossman, R. H. S.
    Anderson, Frank (Whitehaven)Braddock, Mrs. ElizabethDaines, P.
    Attlee, Rt. Hon. C. R.Brockway, A. F.Dalton, Rt. Hon. H.
    Awbery, S. S.Brook, Dryden (Halifax)Darling, George (Hillsborough)
    Bacon, Miss AliceBroughton, Dr. A. D. D.Davies, Rt. Hn. Clement (Montgomery)
    Beattie, J.Brown, Rt. Hon. George (Belper)Davies, Ernest (Enfield, E.)
    Bellenger, Rt. Hon. F. JBrown, Thomas (Ince)Davies, Harold (Leek)
    Bence, C. R.Burke, W. A.Davies, Stephen (Merthyr)
    Benn, Hon. WedgwoodBurton, Miss F. Freitas, Geoffrey
    Benson, G.Butler, Herbert (Hackney, S.)Deer, G.
    Bing, G. H. C.Castle, Mrs. B. A.Delargy, H. J.
    Blackburn, F.Champion, A. J.Dodds, N. N.
    Blenkinsop, A.Clunie, J.Dugdale, Rt. Hon John (W Bromwich)
    Blyton, W. R.Collick, P. HEde, Rt. Hon. J. C.

    Edwards, Rt. Hon. John (Brighouse)King, Dr. H. MRoberts Goronwy (Caernarvon)
    Edwards, W. J. (Stepney)Kinley, J.Robinson Kenneth (St. Pancras, N.)
    Evans, Albert (Islington, S.W.)Lawson, G. M.Rogers, George (Kensington, N.)
    Evans, Edward (Lowestoft)Lee, Frederick (Newton)Ross, William
    Evans, Stanley (Wednesbury)Lee, Miss Jennie (Cannock)Royle, C.
    Fienburgh, W.Lever, Harold (Cheetham)Shackleton, E. A. A.
    Fletcher, Eric (Islington, E.)Lever, Leslie (Ardwick)Short, E. W.
    Follick, M.Lindgren, G. S.Shurmer, P. L. E.
    Forman, J. C.Lipton, Lt.-Col. M.Silverman, Julius (Erdington)
    Fraser, Thomas (Hamilton)MacColl, J. E.Simmons, C. J. (Brierley Hill)
    Freeman, John (Watford)McInnes, J.Skeffington, A. M.
    Gaitskell, Rt. Hon. H. T. N.McLeavy, F.Slater, Mrs. H. (Stoke-on-Trent)
    Gibson, C. W.Mallalieu, E. L. (Brigg)Slater, J. (Durham, Sedgefield)
    Glanville, JamesMallalieu, J. P. W. (Huddersfield, E.)Smith, Ellis (Stoke, S.)
    Gordon Walker, Rt. Hon. P. C.Mann, Mrs. JeanSmith, Norman (Nottingham, S.)
    Greenwood, AnthonyManuel, A. C.Sorensen, R. W.
    Grey, C. F.Marquand, Rt. Hon. H. A.Soskice, Rt. Hon. Sir Frank
    Griffiths, Rt. Hon. James (Llanelly)Mason, RoySparks, J. A.
    Grimond, J.Mayhew, C. P.Steele, T.
    Hale, LeslieMellish, R. J.Stokes, Rt. Hon. R. R.
    Hall, Rt. Hon. Glenvil (Colne Valley)Messer, Sir F.Strauss, Rt. Hon. George (Vauxhall)
    Hall, John T. (Gateshead, W.)Mitchison, G. RSylvester, G. O.
    Hamilton, W. W.Monslow, W.Taylor, Bernard (Mansfield)
    Hannan, W.Moody, A. S.Taylor, John (West Lothian)
    Hargreaves, A.Morgan, Dr. H. B. W.Taylor, Rt. Hon. Robert (Morpeth)
    Hayman, F. H.Morley, R.Thomas, George (Cardiff)
    Healey, Denis (Leeds, S.E.)Morris, Percy (Swansea, W.)Thomas, Ivor Owen (Wrekin)
    Henderson, Rt. Hon. A. (Rowley Regis)Morrison, Rt. Hon. H. (Lewisham, S.)Thomson, George (Dundee, E.)
    Herbison, Miss M.Moyle, A.Thornton, E.
    Hewitson, Capt. M.Mulley, F. W.Tomney, F.
    Hobson, C. R.Noel-Baker, Rt. Hon. P. JUngoed-Thomas, Sir Lynn
    Holman, P.Oldfield, W. H.Wade, D. W.
    Holt, A. F.Oliver, G. H.Wallace, H. W.
    Houghton, DouglasOrbach, M.Warbey, W. N.
    Hoy, J. H.Oswald, T.Weitzman, D.
    Hubbard, T F.Padley, W. E.Wells, Percy (Faversham)
    Hudson, James (Ealing, N.)Paget, R. T.Wells, William (Walsall)
    Hughes, Emrys (S. Ayrshire)Palmer, A. M. F.Wheeldon, W. E.
    Hughes, Hector (Aberdeen, N.)Pannell, CharlesWhite, Mrs. Eirene (E. Flint)
    Hynd, H. (Accrington)Pargiter, G. A.Whiteley, Rt. Hon. W.
    Hynd, J. B. (Attercliffe)Parker, J.Wigg, George
    Irvine, A. J. (Edge Hill)Parkin, B. TWilkins, W. A.
    Irving, W.J. (Wood Green)Paten, J.Willey, F. T.
    Isaacs, Rt. Hon. G. A.Peart, T. F.Williams, Rt. Hon. Thomas (Don V'll'y)
    Janner, B.Plummer, Sir LeslieWilliams, W. R. (Droylsden)
    Jeger, George (Goole)Popplewell, E.Willis, E. G.
    Jeger, Mrs. LenaPorter, G.Wilson, Rt. Hon. Harold (Huyton)
    Jenkins, R. H. (Stechford)Price, Philips (Gloucestershire, W.)Winterbottom, Ian (Nottingham, C.)
    Johnson, James (Rugby)Proctor, W. T.Winterbottom, Richard (Brightside)
    Jones, David (Hartlepool)Pryde, D. J.Woodburn, Rt. Hon. A.
    Jones, Frederick Elwyn (West Ham, S.)Pursey, Cmdr. H.Wyatt, W. L.
    Jones, Jack (Rotherham)Reid, Thomas (Swindon)Yates, V. F.
    Keenan, W.Reid, William (Camlachie)Younger, Rt. Hon. K.
    Kenyon, C.Rhodes, H.
    Key, Rt. Hon. C W.Richards, R.TELLERS FOR THE NOES:
    Mr. Holmes and Mr. J. T. Price.