Clause 28. — (Transactions Designed to Avoid Liability to the Profits Tax.)

Part of the debate – in the House of Commons at 12:00 am on 11 June 1951.

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Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames 12:00, 11 June 1951

It follows from what the right hon. and learned Gentleman the Attorney-General has said in reply to my hon. Friend that the unfortunate person concerned is not going to have any real security, even when he has obtained the consent of the Treasury, because it will be open to the Inland Revenue to reopen the whole matter under this Clause, if, in the apparently unfettered opinion of the Inland Revenue, he has not given the full facts. For a moment it seemed as if the right hon. and learned Gentleman was making a concession of real value, but the more one considers it, the less value it has. The matter appears to be still back in the position that it is the unfettered discretion of the Inland Revenue which governs it.

I hope that the right hon. and learned Gentleman has not said his last word. In the first place he is assuming that if the applicant makes a misstatement, he may not be able to obtain consent. That seems to convey some reflection on the competence of the officials of the Treasury.

I notice that, perhaps by happy coincidence, there is no representative of the Treasury with the right hon. and learned Gentleman on the Front Bench, other than the technical presence of the Deputy Chief Whip. They certainly should not give their consent under Clause 32 until they have satisfied themselves that they have obtained the necessary information. It would be quite wrong for them to give that consent, vested in them by the Committee under Clause 32, if that Clause becomes law, without making it their business to obtain the full facts.

It seems that the right hon. and learned Gentleman, inadvertently perhaps, is casting some reflection on the Treasury, but the more important point is that it is surely essential in the conduct of any business that those conducting it should be able to obtain some secure and stable basis for their activities. Surely, when a firm has gone to the Treasury and has given them such facts as the Treasury seek to obtain, and has, as a result, obtained Treasury permission and has gone ahead with his plan—it should be quite intolerable that some considerable time afterwards, the Inland Revenue, as a result of the last Amendment, could say, "The Treasury has not obtained the full facts and we are going to re-adjust your affairs." The right hon. and learned Gentleman cannot expect a commercial community to conduct its business on a basis of such insecurity and instability and I think, in his scrupulous care for the interests of the revenue, he is a little inclined to overlook the practical necessities of those who conduct business and commercial affairs in this country.

It is very dangerous—I am sure he appreciates it—to those business enterprises upon which the country depends for its bread and butter to introduce all these instabilities and insecurities which cannot but induce those responsible for business not to indulge in the new enterprises and the new efforts which are in the national interest. I hope he has not said his last word.

I hope he is prepared to have a little more confidence in the competence of the Treasury and I hope he will be prepared to have a little more regard for the financial and commercial interests of this country. If he is, I am sure he will be willing to put something in the Bill which, without including fraud, none the less would give security to the honest man, who has given the Treasury what he thought they requested, against having the matter re-opened by a separate organ of the State years after the most important Department of the State has given him the permission which he sought.