House of Commons debates

Tuesday, 6 April 1965

  • Preamble

    The House met at half-past Two o"clock

  • Prayers

    [Mr. SPEAKER in the Chair]

  • Private Business

  • BARCLAYS BANK D.C.O. BILL [Lords]

  • Oral Answers to Questions — Coal

    • Coal Industry (Policy)

      23 speeches

      asked the Minister of Power what is his policy on the protection of home producers of coal against imported oil.

    • Smokeless Zones (Ilford)

      2 speeches

      asked the Minister of Power what smokeless zones are now in operation in the Ilford area; and what information he has about the sufficiency of fuel supplies.

      Prices

      4 speeches

      Mr. J. E. B. Hill: asked the Minister of Power what consultations he had with the National Coal Board on the fixing of zone-delivered prices of rail-and road-borne domestic coal.

      Parliamentary Questions

      9 speeches

      asked the Minister of Power to what extent he is prepared to exercise his statutory power of requiring information from the National Coal Board so as to give information in answer to...

      Exports

      4 speeches

      asked the Minister of Power, in view of the fact that Polish coal is being sold abroad at prices that do not cover the freight from pit to port, if his consent was given to the National Coal...

      Absenteeism

      6 speeches

      asked the Minister of Power if he will give a general direction, in the public interest, to the National Coal Board to hold an inquiry into the increase of absenteeism in the industry.

  • Oral Answers to Questions — Ministry of Power

    • Earthing Systems (Plastic Water Pipes)

      4 speeches

      asked the Minister of Power whether he will give a general direction, in the public interest, to the electricity boards to provide proper earthing systems at no charge to the consumer in cases...

    • Nuclear Power Programme

      8 speeches

      asked the Minister of Power what decision has been reached about the second nuclear power programme.

      Fuel Industries (Capital Expenditure)

      4 speeches

      asked the Minister of Power what he estimates will be the capital requirements of the coal, gas and electrical industries over the next five years.

      Electricity Boards (Manufactures)

      6 speeches

      asked the Minister of Power if he will seek to amend the Electricity Act, 1957, so as to restore to the electricity boards, and particularly to the Central Electricity Generating Board, the right...

      Southern Electricity Board

      4 speeches

      asked the Minister of Power what gross profit was earned by the Southern Electricity Board in the year ended 31st March, 1964; and what is the estimated additional revenue likely to be obtained...

      North Sea Drilling Operations

      10 speeches

      asked the Minister of Power, in view of the fact that the project to drill for oil and gas in the North Sea, which is not private property, was granted under licence from the British Government...

      Eastern Electricity Area

      6 speeches

      asked the Minister of Power what estimate he made, when agreeing to the new electricity charge increases in the eastern electricity area, of the resulting increase in production costs of industry.

      Industrial Exhibitions

      4 speeches

      asked the Minister of Power whether he will issue general directions, in the national interest, to the National Coal Board, Wales Gas Board, and the Welsh Electricity Board instructing them to...

      Contractors (Employees' Wages)

      4 speeches

      asked the Minister of Power if he will issue a general direction to the Central Electricity Generating Board requiring that they only employ contractors for new power stations who pay their...

      Fuel Policy

      4 speeches

      asked the Minister of Power upon what estimates of the domestic consumption of solid fuel for each of the 10 years 1965 to 1975 his national fuel policy is based.

      Electricity (Research Expenditure)

      4 speeches

      asked the Minister of Power the total public expenditure on research for the electricity industry in 1964; and how much of this was undertaken by the Central Electricity Generating Board and how...

      Electricity Charges

      4 speeches

      asked the Minister of Power if he is aware that the pricing policy of the Central Electricity Generating Board discriminates unfairly against large industrial users of electricity; what, in...

      Smokeless Fuels

      6 speeches

      asked the Minister of Power what are the stocks of smokeless and premium fuels in the country at the present time; and how these figures compare with three months and six months ago.

      Heating Appliances (Costs)

      8 speeches

      asked the Minister of Power what information he has obtained, in his review of national fuel resources, on the capital and operational costs of various methods of heating municipal housing...

      Steel Industry

      9 speeches

      asked the Minister of Power what figures he has received from the Iron and Steel Board with regard to the net earnings of foreign exchange of the steel industry in the five years 1955 to 1959...

      Non-noxious Gas

      8 speeches

      asked the Minister of Power if, in view of the number of fatal accidents occurring due to gas leaks, he will state what information he received, in agreeing the general programme of the Scottish...

      Electric Cables (Installation Payment)

      8 speeches

      asked the Minister of Power if he will give a general direction, in the public interest, to the electricity boards not to require the total payment by private firms for the installation of...

      Prime Minister (Paris Visit)

      25 speeches

      asked the Prime Minister whether he will make a statement about his visit to the President of France.

      Oil Prospecting (Ministerial Responsibility)

      6 speeches

      asked the Prime Minister what are the responsibilities of the Minister of Land and Natural Resources for oil prospecting in the United Kingdom and what is the division of responsibility between...

      Commonwealth Countries (High Commissioners)

      6 speeches

      asked the Prime Minister if he is aware that in many newly independent Commonwealth countries the designation of the United Kingdom Government's representatives as High Commissioners often...

      Suez Operation (Book)

      10 speeches

      asked the Prime Minister what facilities were provided by Her Majesty's Government to Mr. Terence Robertson, the author of a recently published book on the Suez crisis of 1956.

      Cabinet Papers

      5 speeches

      asked the Prime Minister whether he will reconsider the operation of the 50-year rule governing the examination of Cabinet papers and comparative historical material; and whether he will propose...

  • Orders of the Day — Ways and Means

    Considered in Committee.

  • Orders of the Day — Budget Statement

    3 speeches

    On a point of order. May I seek your guidance, Dr. King? It has been announced outside the House that the Secretary of State for Defence will make an important intervention in the Budget debate...

  • Orders of the Day — The Budget Theme

    1 speech

    The strategy of this Budget is to achieve a state of balance on our combined current and long-term capital account. We have already made considerable progress. I aim to get most of the way...

  • Orders of the Day — Tax Reform-Fairness

    1 speech

    I shall use, as a Chancellor must, the instruments I have to hand. Among these are taxation and the control of public expenditure. These instruments will be used positively as well as negatively....

  • Orders of the Day — (i) Capital Gains Tax

    1 speech

    First, I begin with tax reform. The failure to tax capital gains is widely regarded, outside as well as inside the Labour Party, as the greatest blot on our existing system of direct taxation....

  • Orders of the Day — Companies and Shareholders

    1 speech

    It has been suggested that a double charge will arise, which ought to be relieved, if a company is taxed on its capital gains and its shareholders are also taxed on the gains which they make on...

  • Orders of the Day — Unit and Investment Trusts

    1 speech

    There is, however, a special case for relief for unit trusts and investment trusts. It would not be right, in my view, to exempt the trusts from the tax, and tax only the shareholder, for this...

  • Orders of the Day — Business Assets

    1 speech

    I have also considered the treatment of gains realised on the sale of business assets, such as a factory building, where the proceeds are re-invested in new assets of the same kind. Here, I...

  • Orders of the Day — Fixed-Interest Securities

    1 speech

    It has been suggested that gains realised on Government and other fixed-interest securities should be exempt. I would like to make clear again that there Will be no tax payable where the...

  • Orders of the Day — Wasting Assets and Settled Property

    1 speech

    The Finance Bill will contain special provisions in regard to wasting assets and settled property.

  • Orders of the Day — Valuation

    1 speech

    I now turn to the problem of valuation. As the Committee is aware, the tax will be imposed only on gains realised after today. It will apply irrespective of the date when the underlying assets...

  • Orders of the Day — U.K. Residents

    1 speech

    Before I come to the general structure of the tax I must mention one modification of my statement of 8th December. I said then that the tax would be chargeable in the case of persons, including...

  • Orders of the Day — Short-Term Gains

    1 speech

    Now, the main structure. I have decided that it is right to retain a distinction between short-term and long-term gains; and to this extent the new tax will be dovetailed into the tax introduced...

  • Orders of the Day — Long-Term Gains

    1 speech

    As for assets which are held for periods exceeding 12 months, I think that it would not be reasonable to subject a gain which may have accrued over a long period to the full rates of Income Tax...

  • Orders of the Day — (ii) Tax Avoidance

    1 speech

    Another way of bringing greater fairness into our tax system is to close the many loopholes which have been exploited for far too long. Those who take advantage of them make a gain for...

  • Orders of the Day — Business Entertainment

    1 speech

    Many firms are very scrupulous about business entertainment. But there has been widespread criticism for some years of the habit in some circles of lavish entertainment by businessmen of one...

  • Orders of the Day — Business Cars

    1 speech

    Next, business cars. The provision of business cars is, of course, in an entirely different category from what I have been talking about. Nevertheless, I consider that the present capital...

  • Orders of the Day — Deeds of Covenant

    1 speech

    I turn now from the business world to the very large question of avoidance of Surtax. There is a great deal to be done here; and this year I propose to make a start with covenants. Deeds of...

  • Orders of the Day — Stamp Duty Avoidance

    1 speech

    I have one other anti-avoidance proposal. Last month it was decided by the courts that the Stamp Duty on the transfer of property is avoided if the transfer is made in contemplation of a sale,...

  • Tax Reform — Efficiency

    • Corporation Tax: Domestic Aspects

    • Main Object

      1 speech

      I now turn to Corporation Tax. The Corporation Tax is the most fundamental of the tax reforms in this Budget. It is a new landmark in our fiscal history, such as we have rarely been able to...

      Rate

      1 speech

      First, the rate. I have said before that it is not my intention to throw new burdens upon industry, but rather to redistribute the existing burden in a way more likely to meet the economic needs...

      Investment Allowances

      1 speech

      Many of the representations I have received have pointed out that at a figure of 35 to 40 per cent. the reduction in the rate of tax charged on company profits will mean that the value of...

      Inter-Company Dividends: Franking

      1 speech

      I now turn to a question on which have received many representations, namely, the treatment of dividends received by one United Kingdom company from another. A company will be charged to...

      Charities

      1 speech

      Fears have been expressed that the introduction of the Corporation Tax will prejudice the position of charities. At present, contributions by companies to charities are not in general allowable...

      Dividends Paid Out of Past Profits

      1 speech

      Another problem to which many of the representations I have received have drawn attention is the payment of dividends out of past profits. In general, companies will be required to account for...

      Closely Controlled Companies

      1 speech

      As hon. Members will know, there are provisions in the existing tax system to deal with avoidance of Surtax through the retention of profits by closely controlled companies. The temptation to...

  • External Capital Account

    • (i) External Capital Account: General

      1 speech

      I now come to the external aspects of the corporation tax and to exchange control. Before I describe my proposals in detail I must break off and outline the situation of our external capital...

    • (ii)Corporation Tax: External Aspects

      1 speech

      With this as background, I now take up again the external aspects of the Corporation Tax.

      Underlying Tax

      1 speech

      I propose to limit the circumstances in which we give relief for underlying tax, that is, the tax charged by an overseas Government on the profits of an overseas company out of which the dividend...

      Overspill

      1 speech

      There is another piece of jargon, "overspill", that is, the treatment of dividends paid by United Kingdom companies out of overseas income. As I said in my statement in December last, it is a...

      Overseas Trade Corporation Scheme

      1 speech

      Finally, I propose to abolish, from April, 1966, the special tax treatment of the Overseas Trade Corporations. That treatment, under which they pay no Profits Tax and enjoy special Income Tax...

      Tax on Dividends Paid to Non-Residents

      1 speech

      Under the present system, Income Tax at the standard rate is deducted from all dividends paid to non-residents; but we have had no separate dividend tax. We have, therefore, never had to consider...

      (iii) Exchange Control

      1 speech

      Now for exchange control. The Committee knows that we have long had a comprehensive and effective system of exchange control covering both direct and portfolio investment in countries outside the...

      (iv) External Capital Account: Summary

      1 speech

      I said at the beginning of my statement that I intended to get an improvement in the external capital account of £100 million a year. I estimate that the reserves will benefit by £50...

  • Budget Accounts

    • (i) Form of the Financial Statement

      1 speech

      So much for the external capital account. I now turn to the Financial Statement. I have made a reform here. The right hon. Gentleman the Member for Barnet (Mr. Maudling) will recall that the...

    • (ii) Exchequer Outturn 1964–65

      1 speech

      In giving the Exchequer outturn for 1964–65, I use the new classification throughout. Total revenue at £8,157 million produced £155 million more than the Budget Estimates after...

      (iii) Exchequer Prospects 1965–66

      1 speech

      Next, the Exchequer prospects for 1965–66, again on the new classification. My estimates of revenue assume that the temporary import charge will yield £138 million. I have allowed here...

      (iv) Savings

      1 speech

      I now turn to the subject of savings. Nineteen sixty-six is the jubilee year of the Savings Movement; but this is in one sense a sad prelude to that occasion. Successive Chancellors, in their...

      Public Expenditure

      1 speech

      I now come to public expenditure. Both in my statement of 22nd February and in my opening remarks todays I have made it clear that it is our intention to plan the use of economic resources and to...

      The Longer-Term Plan

      5 speeches

      I must, therefore, say a word about the economic plan. I shall not trench on the speech of my right hon. Friend the First Secretary of State, who will be saying more tomorrow about the policies...

  • Economic Assessment

    • (i) Short-term Management of the Economy

      1 speech

      I come now to the immediate task of the Budget—the short-term management of the economy. This is the essential means of creating the conditions in which we can right the balance of...

    • (ii) The Budget Judgment

      1 speech

      In deciding what to do, it is necessary to recognise that budgetary action has a cumulative effect on demand, beginning gradually and then multiplying. Taking the early months of next year as my...

      Tax Changes

      1 speech

      In selecting my tax measures to raise the revenue I have kept three considerations in mind. First, it would be shortsighted to select industrial production for particular damping down as this...

      (i) Renewal of the Regulator

      1 speech

      I propose to extend for a further year, the power given to the Treasury to vary the Customs and Excise revenue duties and Purchase Tax, if the national economy should require it, by means of the...

      (ii) Purchase Tax Valuation

      1 speech

      I shall propose a minor amendment in the law relating to the value of goods for purchase tax purposes. Tax has always been charged on the full value of goods so that there has been no fiscal...

      (iii) Allowances for repairs

      1 speech

      I propose to correct a technical flaw in the transitional provisions about Case VIII of Schedule D, under which agricultural landowners can, in effect, get a double allowance for the same...

      (iv) Advances to Northern Ireland

      1 speech

      The Finance Bill will include a Clause increasing from £40 million to £70 million the limit on advances from the United Kingdom Consolidated Fund to the Northern Ireland Exchequer....

      (v) George Cross

      1 speech

      I am glad to propose an exemption from tax for the annuity which is now to be paid to holders of the George Cross.

      (vi) Vehicle Excise Duties

      1 speech

      I now come to a major tax proposal. I have seen many statements in the Press and elsewhere to the effect that I shall be increasing the Purchase Tax rates on motor cars. This is very productive...

      (vii) Renewal of Surtax

      1 speech

      It is necessary to renew the Surtax rates and I propose that Surtax for 1964–5, that is the tax payable on 1st January, 1966, shall be charged at the same rates as for 1963–64.

      (viii) Cost-Rent Housing Associations

      1 speech

      The Milner Holland Report has emphasised that non-profit-making housing associations could make a greater contribution than they do at present both to the building of new houses and to the...

      (ix) Age exemption limit and dependent relative allowance

      1 speech

      In my autumn Budget I promised to consider whether to raise the income limits for the Income Tax age exemption this year. At present, single people over 65 are exempt from Income Tax if their...

      (x) Abolition of National Insurance contribution allowance and increase in personal allowance

      1 speech

      The allowances given for a person's own National Insurance contributions relate primarily to the pension element in them. The effect is to make the National Insurance contribution regressive,...

      (xi) Tobacco and alcoholic drink

      1 speech

      Finally, I come back to indirect taxation. As I am anxious to avoid taxing necessities, I have decided that tobacco and alcoholic drinks should make a further contribution. I propose to raise...

      Summary

      1 speech

      The changes in taxation which I have just announced will have the effect in a full year, which for present purposes I take as 1966–67, of increasing revenue receipts by £217 million....

      Conclusion

      1 speech

      I will not try to sum up a Budget as wide-ranging as this. But I should like to express in a sentence or two the thinking behind it. I want to encourage industry to be more dynamic and...

      Spirits (Excise and Customs)

      Motion made,1. That as from 7th April, 1965 the duties of excise chargeable under section 1 of the Finance Act 1964 on spirits, and the duties of customs chargeable under that section on spirits...

      Beer (Excise and Customs)

      Motion made, and Question,2.That— (a) as from 7th April, 1965, the duties of excise and customs chargeable on beer under Section 2 of the Finance Act, 1964, shall respectively be at the...

      Wine (Customs)

      Motion made, and Question,3. That, as from 7th April, 1965, the duties of customs chargeable under Section 3 of the Finance Act, 1964, on wine, including the lees of wine, shall be at the rates...

      British Wine (Excise)

      Motion made, and Question,4. That, as from 7th April, 1965, the duty of excise chargeable under Section 3 of the Finance Act, 1964, on British wine shall be at the rates shown in the Table below,...

      Tobacco (Customs and Excise)

      Motion made, and Question,5. That— (a) as from 7th April 1965 the duties of customs and excise chargeable on tobacco under section 4 of the Finance Act 1964 shall be charged at rates...

      Purchase Tax (Valuation of Goods Containing Copyright Material)

      Motion made, and Question,6. That it is expedient to authorise any increased charge to purchase tax resulting from new provisions for valuing goods consisting of or containing matter in which...

      Surcharges and Rebates in Respect of Revenue Duties

      Motion made, and Question,7. That the period after which orders under section 9 of the Finance Act 1961 may not be made or continue in force shall be extended until the end of August...

      Vehicles Excise Duty (Increase)

      Motion made, and Question,8. That in the case of licences taken out after 6th April 1965— (a) the annual rates of duty for licences (other than trade licences) for vehicles chargeable in...

      Vehicles Excise Duty (Exemptions)

      Motion made, and Question, 9. That as from 7th April 1965— (a) no duty shall be chargeable under the Vehicles (Excise) Act 1962 in respect of local authority's watering vehicles (as defined...

      Income Tax (Surtax Rates for 1964–65)

      Motion made, and Question, 10. That income tax for the year 1964–65 shall be charged, in the case of an individual whose total income exceeded £2,000, at the same higher rates in...

      Income Tax (Alteration of Personal Reliefs)

      Motion made, and Question, 11. That— (a) the personal reliefs under section 210 of the Income Tax Act 1952 shall be increased by substituting £340 for £320 in subsection (1)(a)...

      Income Tax (Surtax on Certain Settlements)

      Motion made, and Question, 12. That provision shall be made, as respects any settlement on or after 7th April 1965— (a) for treating as the income of the settlor for the purposes of surtax...

      Income Tax (Business Entertaining)

      Motion made, and Question, 13.That, subject to an exception in the interests of the export trade, expenses incurred on or after 7th April 1965 in respect of business entertaining (including...

      Income Tax (Withdrawal of Initial Allowances for Motor Cars)

      Motion made, and Question, 14. That provision be made for withdrawing initial allowances in respect of expenditure incurred on or after 7th April 1965 on the provision of vehicles of a type...

      Income Tax (Case Vii of Schedule D)

      Motion made, and Question, 15. That amendments shall be made in Chapter II of Part II of the Finance Act 1962 (Case VII of Schedule D) and in particular— (a) amendments enlarging the...

      Income Tax (Cost of Maintenance, etc., of Agricultural Land)

      Motion made, and Question, 16. That relief in respect of the cost of maintenance, repairs, insurance and management under section 29(4) of the Finance Act 1963 and under paragraph 11 of Schedule...

      Profits Tax (Miscellaneous Charges)

      Motion made, and Question, 17. That it is expedient to authorise charges to the profits tax which arise from provisions for that tax corresponding with amendments of the law relating to income...

      Capital Gains

      Motion made, and Question, 18. That chargeable gains, defined and computed in such manner as may be prescribed, from any description of property in the United Kingdom or elsewhere, including...

      Taxation of Companies and Company Distributions

      Motion made, and Question, 19. That new provisions should be enacted for these purposes:— (a) for the introduction, at such rate as may be imposed by any later Act, of a new tax on the...

      Stamp Duties (Conveyances and Transfers)

      Motion made, and Question, 20. That provision be made for treating certain instruments as conveyances or transfers on sale or as conveyances or transfers operating as voluntary dispositions inter...

      Incidental and Consequential Charges

      Motion made, and Question, 21. That it is expedient to authorise any incidental or consequential charges to any duty or tax (including charges having retrospective effect) which may arise from...

      Amendment of the Law

      259 speeches

      Motion made, and Question proposed, 22. That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance,...

      Rent [Money]

      Resolution reported, That, for the purposes of any Act of the present Session to restore the right to retain possession of certain dwellings and to make further provision with respect to security...

      Safety at Sea

      5 speeches

      Motion made, and Question proposed, That this House do now adjourn.—[Mr. O'Malley.]

What is this?

Debates in the House of Commons are an opportunity for MPs from all parties to scrutinise government legislation and raise important local, national or topical issues.

And sometimes to shout at each other.

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