Clause 32. — (Restriction of Certain Transactions Leading to Avoid Ance of Income Tax or Profits Tax.)

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 13 June 1951.

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Photo of Hon. Lancelot Joynson-Hicks Hon. Lancelot Joynson-Hicks , Chichester 12:00, 13 June 1951

I want to add a word to what my hon. and right hon. Friends have said, but from a slightly different point of view. My hon. Friends have spoken as to the effect of the Clause upon commerce and finance, but I want to put a question to the Chancellor from a far more general angle. I remind the Committee that this is not a tax evasion Clause. It is a Clause which makes illegal that which hitherto has been legal. Therefore, it is difficult to see why the Chancellor has come to the conclusion that there is such a probability of an attempt to evade the law under the Clause that he has found it necessary to put into it such very stringent penalties as it carries.

There is no experience to guide me upon the possibility of the Clause not being fulfilled as all other laws of the country normally are fulfilled. The question I want to ask the Chancellor is: What is the real reason he has found it necessary to put into this form whatever object he has in trying to put into law the principle of the Clause. In asking the right hon. Gentleman that question, I will tell him what the reason is believed to be by many perfectly sane and reasonable people in industry. They believe that there is only one object in the Clause which lies behind the Chancellor's mind: that is, that it is so to force them out of business that he will be able to nationalise their industries. I expected that that remark would raise derisive laughter from the Socialist benches. Nevertheless, I pass that information to the Chancellor because it is held widely by reasonable and sane people.