New Clause. — (Exemption from Duty of Amateur Entertainments.)

Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 17th June 1952.

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In the application of section ten of the Finance Act, 1949, to any entertainment which is held after the passing of this Act, the following proviso shall be added to subsection (2) of that section: — Provided that where an entertainment consists wholly or in part of a performance on a stage and all the performers whose words or action constitute the entertainment are actually present and performing, the entertainment shall be deemed to be an amateur one if both the following conditions are fulfilled—

  1. (a) no payment is made or reward given for the performance of any of the performers on the stage; and
  2. (b) no member of the society, institution or committee which provides the entertainment receives any payment or reward for services rendered in connection with the entertainment,
so however that under this proviso there shall be no increase in the amount of entertainment duty for which, but for this proviso, any person would pay.—[Mr. H. Rhodes.]

Brought up, and read the First time.

Photo of Mr Hervey Rhodes Mr Hervey Rhodes , Ashton-under-Lyne

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

This Clause is in the name of hon. Members on both sides of the House and I wish to explain the reason for moving it. We wish to re-define the definition which was inserted in the Finance Act of 1949, Section 10, by the late Sir Stafford Cripps. It was a great assistance to amateur societies throughout the country and was a step forward from the position which had previously existed. It read: For the purposes of this section an entertainment shall not be deemed to be an amateur one if any payment is made or reward given for the appearance of any of the performers whose words or actions constitute the entertainment or any part of it, or for any person's services in connection with the entertainment as instructor, producer, manager or conductor or in any advisory capacity. It will be seen that that definitely precludes an amateur society from having the benefit of the services of a producer or an instructor, of a manager or a conductor who receives payment in any way whatever.

9.0 p.m.

Before I come to my argument on the basis of which type of society will benefit from this new provision, I ought to state the forms of exemption which are possible now. There are five forms, according to the constitution of the society. The first is where the society is an integral part of an educational establishment. That is provided for under Section 12 of the Finance (New Duties) Act. 1916. Societies which get benefit under those provisions are associated perhaps with polytechnic institutes or evening classes of different kinds. They have the benefit of professional tuition and they can produce any type of show, whether musical or dramatic, without incurring the penalty of Entertainments Duty.

The second type is the society not conducted for profit, whose aims and objects are partly educational. That comes under Section 8 of the Finance Act, 1946. I understand that there are professional associations or companies which can also benefit under the provisions of this Act. In the case of the professional entertainment, the company or association is assessed by the Commissioners of Customs and Excise not on the material they play but on the assumption that in the long run more will be done towards the furthering of educational projects than otherwise. It was under this Act that we saw the production of "A Street Car Named Desire."

Photo of Mr Hervey Rhodes Mr Hervey Rhodes , Ashton-under-Lyne

My right hon. Friend says it was a very good play, but I should hardly call it educational. The difference under this form of exemption between the assessment and the amateur society is that the society is not assessed but the work that the society is proposing to do. So it can be that if the Commissioners of Customs and Excise are not well up in what should be done or what is good or what is educational, they can refuse to sanction exemption for a particular show. I understand that Gilbert and Sullivan operas, for instance, and things of that sort are permitted. It is, however, too speculative and too inconsistent for most amateur societies to try to gain exemption under the Act.

The third category is for a permanent body with solely or partly charitable and philanthropic objects which puts on shows. This, I believe, is under Section 6 (4) of the Finance Act, 1924. This is the only form of exemption with working rules, which are contained in Notice 96 of the Customs and Excise, Under the provisions of the Act, the whole of the net proceeds must be devoted to charity, and the net proceeds must exceed 20 per cent. of the gross takings.

The fourth category is societies in rural areas, where, as is well known, the popu- lation must not exceed 640 persons per square mile and the seating of the theatre, schoolroom or whatever the place in which the performer plays, is not more than 400. The fifth is the definition to which I alluded first, and which I do not need to repeat.

Take the case of a society which is doing musical shows. There is hardly a Member in the House whose constituents at some time or other do not put on musical shows either in schoolrooms, theatres or picture houses in their constituencies, and who wish to engage a professional producer and a professional orchestra. Which one of the forms of exemption can they take advantage of at the present time?

They cannot take advantage of the evening school provisions. They cannot take advantage of the tax exemption under the category "partly educational." They cannot take advantage of the provisions for rural areas, and if they are paying a producer and an orchestra neither can they take advantage of the provisions under the 1949 Act. The only way in which they can gain exemption is by applying under No. 3: that is, as a permanent body with solely or partly charitable and philanthropic objects.

Imagine what an enormous burden that puts on a society that is running a show in the local theatre, when the net proceeds must be devoted to charity and must exceed 20 per cent. of the gross takings. It might be said, "Do not have a professional producer, or make do with an amateur orchestra." I wonder whether the Financial Secretary to the Treasury has heard an amateur orchestra at work. Some of them are very good, but some of them are not quite so good. It was not a very large city to gather together enough amateurs who could play sufficiently well to take part in an amateur show at a theatre of this description, even if they were willing to do so.

I have had a lot of experience, not as a professional producer, but as one with a tremendous interest in the amateur theatrical movement. I spent 10 years of my leisure in this work and I want to impress on the Financial Secretary that there is a real social and human side of the appeal being made to him tonight. It is a creative work. It is not dependent on the gramophone record, television, wireless, or something turned on or off at will. This is something which needs the effort and work of people gathering together with a first-class object in view. This amateur theatrical movement is a wonderful social institution.

The amateur society with which I was connected did more towards bridging the gap between the employed and the unemployed than any other industry which I ever knew. There was an inferiority complex among men and women who were unemployed in the years between the wars. In many cases they could not be persuaded to associate with people in work, but my experience was that the form of society where people could mix together and realise that they were working for one common object, and eventually, perhaps, don costumes whereby they were transported to another worlds did remove a lot of the difference, the inverted snobbery, existing between unemployed and employed. Time and again I saw the tremendous benefit which accrued.

Societies are fortunate, and so are their members, if they can have the training of a professional producer. Much talent and good craftsmanship have been lost in the past simply because they have not been spotted. The society which does this kind of work in my constituency is continually finding new talent which goes forward from the amateur status to the professional. I could mention several well known names in the artistic world today, people who have gone through that school. I ask the Financial Secretary sympathetically to consider this redefinition of the status of an amateur performance so that societies throughout the country can develop and put on better shows without the fear that they will lose money, and so that they can work with a carry over from one season to another.

I know that the Financial Secretary will say that the Customs and Excise allow that now. They do in a small degree, but there has to be a reckoning when the society put on their next show, because there has to be an assessment to bring it into the previous year's accounts. I ask the Financial Secretary to consider sympathetically this new Clause, because by so doing I am sure that he will be rendering a great service to the amateur dramatic movement, which is such a first-class movement throughout the country.

9.15 p.m.

Photo of Mr James MacColl Mr James MacColl , Widnes

I beg to second the Motion.

Unlike my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) I speak without any kind of vested interest in this matter. I never have taken part in any kind of amateur performance and I need hardly say to the House that I am not likely to be asked to do so in the future. Although I agree with my hon. Friend that in amateur dramatics many people remain with their talent unnoticed, I think that applies not only in the field of amateur dramatics, but in other fields as well. In the field of amateur dramatics my talent has passed completely /unnoticed for many years.

This is a very reasonable proposal which will lead to an improvement in the quality of amateur performances, which are not only great fun for the people taking part in them but provide valuable and useful funds for charity; and, at the same time, provide an entertainment of real value in itself in a small community. It may be true that in larger towns where there is an adequate professional theatre that point of view is not as important as in smaller towns, as, for example, in my own constituency which is an average-sized Lancashire town. But I can personally bear witness that the quality of the amateur entertainment does provide the people with something which they could not otherwise get.

I think that quality should be maintained and I wish to emphasise in particular the point about the professional producer. After all, it would be rather foolish if the exemption from tax on the grounds that something was an educational class was lost because a professional teacher was employed. It does not make sense that people who want to learn any of the arts should not get the best possible person to teach them. That is not only in their interest, but also in the interest of the people who, either from reasons of duty or for other reasons, attend the performances. It is desirable that they should see that the quality is maintained and I hope, therefore, that the Government will accept this Clause.

Photo of Sir Rupert Speir Sir Rupert Speir , Hexham

I should like to support this new Clause. Like the hon. Member for Widnes (Mr. MacColl) I have had no experience of amateur dramatic societies but in a large and widespread rural constituency, such as mine, they play a large part in cultural community life. I should like to see them given the advantage of professional assistance which they are now largely denied.

I do not feel that we are asking the Government for very much and a professional producer could give great assistance and encouragement to small amateur dramatic societies. I sincerely hope, therefore, that the Government will be able to accept this Clause.

Photo of Mr Fred Blackburn Mr Fred Blackburn , Stalybridge and Hyde

I hope that this Clause will bring joy to the heart of the Financial Secretary. It must be boring for him to have to spend the day repeatedly saying, "No." It must be souring to the disposition. I hope that he will now be able to cast aside his mantle of Molotov and for a change say, "Yes." This is a minor change, not in the sense of its importance but in the sense of the amount of money involved. If this Clause is adopted I do not think that the whole structure of the Budget will be upset. I cannot believe that the amount of money involved is of great importance, but the principle behind the Clause is of the utmost importance. In the Finance Act, 1949, exemption of duty was granted to certain entertainments— where the Commissioners are satisfied that the entertainment is provided by a society, institution or committee which is not conducted or established for profit and that the entertainment is an amateur one. Section 10 of the 1949 Act sets out the types of entertainment: (a) a stage play; (b) a ballet (whether a stage play or not); (c) a performance of music (whether vocal or instrumental); (d) a lecture; (e)a recitation; (f) an eisteddfod"; I hope that my Welsh friends will forgive me if my pronunciation of the last word was not all that it might have been.

Photo of Mr Fred Blackburn Mr Fred Blackburn , Stalybridge and Hyde

Section 10 (2) explains what is meant by an amateur entertainment. It says: For the purposes of this section an entertainment shall not be deemed to be an amateur one if any payment is made or reward given for the appearance of any of the performers whose words or actions constitute the entertainment or any part of it, or for any person's services in connection with the entertainment as instructor, producer, manager or conductor or in any advisory capacity. Hon. and right hon. Members will see from the Clause that the point at issue is really a very small one. The question now arises, under the new definition, that the societies could pay an instructor, a producer or a manager. I am sure that every hon. Member could quote examples from his own constituency of excellent societies which do good work.

The provision of our own entertainment was at one time one of the features of our life. There is a danger now that we may be losing something which is of great value. Today, far too much of our entertainment is provided for us by the cinema, the wireless and the television, and there are even hon. Members opposite who want to provide us with sponsored television. So much of our entertain is provided for us today that it is our duty to foster anything whereby we provide our own entertainment. The cost to the Exchequer would not be very great: the help given to these societies would be most important.

If we are to have amateur performances, I think that the Financial Secretary will agree that it is of value that they should be as efficient as possible. I do not think that, by employing a professional producer or a professional conductor or trainer, a musical or operatic society is committing any sin whereby they should be penalised by having to pay Entertainments Duty. I certainly hope that in this case the Financial Secretary will not merely look upon this new Clause with a sympathetic eye, but that, for a very pleasant change, he will be able to say, "Yes, the Government accept it."

Photo of Mr Arthur Blenkinsop Mr Arthur Blenkinsop , Newcastle upon Tyne East

I think all of us will agree that we are very anxious to do all we can to help and encourage amateur operatic and dramatic societies, because we agree that they can do a very great deal to encourage the general community life of our country. It is one of the richnesses of the country that we have so many both small and large operatic and dramatic societies.

Unlike some of my hon. Friends, who have declared that they have no personal interest in this matter, I must confess that I have had a personal interest, although I strongly suspect that I am never likely to have any again. It is a matter of some interest that many of the provisions that were made during the last five years have been of very great benefit indeed to amateur dramatic societies in particular. There is one, in which I used to have a fair part and a fairly considerable interest, which undoubtedly gained a great deal by the provision for societies which took a fairly large part in educational activities.

In the particular society in which I was interested, we did not find it necessary to engage professional producers or have professional assistance of any kind. We were fortunate, and that is a rather exceptional example, and I know of very many other small societies whose work could be enormously improved if they could have the help of at least a professional producer. When we come to the small operatic and musical societies, of which everyone has a good deal of experience in every constituency, one knows how much difference it would make if they could have some professional advice and help.

I am not wedded to the idea that professional performances are necessarily automatically so much better than amateur performances, but I do know that in the case of some amateur performances that are put on for charity, it is something of a charity to attend them, and I think that a very great deal of good could be done to help to produce some of the raw elements of talent that are there by the use of some more experienced people who can do so much to help.

I can give one example of an operatic society that I know which has done some exceedingly useful work. In this case, the society used to take a large theatre for some of its performances, and, when it did so, it was usually required, as a term of the lease, to use the professional orchestra which was available in the theatre. That immediately ruled this particular society out of making any claim for exemption from Entertainments Duty. In spite of that fact, the value of this society's work was such as to give great pleasure to very many people in the north, and I am sure that other hon. Members could quote very many cases of this kind.

9.30 p.m.

Therefore, I am not claiming that professional advice and help are essential in all cases. There are, as I say, some cases where amateur societies can manage with their own talent, but in the majority of cases the addition of even a small amount of professional help can make all the difference in the world, not only to the quality of the performances given, which is sometimes, perhaps, only a secondary consideration, but in the value to the performers themselves in giving them a greater insight into the art which they are practising.

Sometimes, of course, as I have said, it is very difficult to recognise it as an art, but there is in every small society, however raw, however amateur, some talent which can in almost every case be brought forward. I feel that we are losing a great deal in this country by not being able to encourage it as much as we should like. We very much appreciate all the help that has been given up to now, but I think it would be of inestimable benefit if we could enrich our cultural life this little extra bit by making a very modest concession which would bring a great deal of happiness and benefit to the whole of our population.

Photo of Sir Austen Albu Sir Austen Albu , Edmonton

My hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn) mentioned the growing extent of entertainment by mechanical means in which there is no participation by those enjoying it. The growth of wireless, televison, the cinema, and so on, has undoubtedly had another effect which is that it has very largely cut into the live entertainments upon which our forefathers relied. There is probably a growing number of people in the country who would never see one but for the amateur bodies.

All these amateur bodies are not of the rather chronic character to which my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) referred. Many of them, like the one to which he referred and which I think I know very well, are of a very much higher quality and are, in fact, practically repertory theatres. I think my hon. Friend was referring to the People's Theatre at Newcastle-upon-Tyne where, for many years, I, like himself, played some part in it. That is a very exceptional body, and, as he said, has not had to employ professional producers, although I am not sure that on one or two occasions it did not employ professional musicians.

If we are to raise the standards of the very large number of amateur bodies throughout the country to the level of the People's Theatre and that of the unnamed players in Manchester and others of that sort, then we must certainly give them the opportunity and encouragement to have professional training and production. I am now, of course, referring to amateur theatrical companies, but the same also applies to an even greater degree to musical societies and to the ever more popular ballet societies.

I should have thought this was a very small concession to grant in this mechanical age when the constructive use of leisure is becoming more and more important and yet something which it would be very gracious of the Government to grant and which, I should have thought, they would very much like to encourage. In view of my personal experience of the extraordinary value of bodies of this sort in an age where the cinema and television are growing so fast, I sincerely hope that the Financial Secretary, who I see it eager to get up, will be helpful to us on this occasion.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

I fully share the views that the hon. Gentleman the Member for Ashton-under-Lyne (Mr. Rhodes) so admirably expressed as to the value of the amateur theatrical movement. Indeed, we can find an extremely good example in the case of a most flourishing society within the confines of Her Majesty's Treasury. As the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) knows, it is a really first-class society—and I am glad to have his endorsement of that.

The proposal put forward is for an extension of the concession granted in the Finance Act, 1949. I am glad to be able to tell the House that that concession has proved of very real value to the societies in general, who are, I understand, on the whole, in a very flourishing condition. It may be of interest to the House to know that some 1,200 of these societies who might have got exemption under one of the other headings have got it with greater ease under the amateur one; some 300 who probably could not have got it under any other method have got it under this. So we are dealing here with a cheerful subject—more cheerful than some we have been discussing—that produces no particular difficulties; with bodies that, in general, I am glad to say, and the House, I know, is glad to hear, are in pretty good condition.

What we are dealing with here is one rather narrow aspect of the matter. This new Clause, whose effect would be to widen the amateur concession by allowing payment to an orchestra and to performers provided they did not appear on the stage, as well as instructors, producers, managers, conductors, relates only to the amateur concession; that is to say, it relates only to the case of societies which do not find themselves able to obtain exemption under the other categories, in particular the charitable or partly educational category. Indeed, I think one hon. Member during the debate drew attention to the fact that it appeared not to be terribly difficult to get inside the partly educational category—at any rate, in a certain number of cases. So we are dealing here with a proposed extension of one of the categories, the amateur category, only. We are dealing only with a not very large corner of the problem.

The difficulty, quite frankly, posed by this new Clause, whose intentions we all recognise to be wholly admirable, is the fact that it seeks to draw the line beyond which exemption can be obtained in a very difficult position. The present position is quite easy—quite easy to administer, perfectly clear to the societies. They can pay such people as stage hands—the workmen employed, and so on—without forfeiting the concession; and that is a clear and comprehensible line of demarcation.

I have analysed how this new Clause would work, and it really would create a rather curious situation. The exemption would remain if a professional conducted a musical comedy provided he did not set foot on the stage. If he set foot on the stage the exemption would be lost. The same applies to an orchestra. A professional orchestra in a theatre that had the good fortune to have an orchestra pit would still not cause the society to forfeit its immunity. Transport that orchestra, perhaps inevitably, to the stage, and the immunity is forfeited.

Equally, in entertainments of some kinds some of the action takes place off the stage. Where that is so, the exemption would be given; but where any of them went on the stage—any of the professionals went on the stage—the exemption would be lost. The extreme case is that of the employment of a soloist. A soloist concealed in the background behind curtains would not forfeit exemption. A soloist more bravely displayed upon the stage would forfeit the exemption.

I think those examples—they can be multiplied—do show that the proposal contained in this new Clause would give rise to a good many difficulties. They are difficulties, I would stress, not so much from the point of view of the collection of the duty as for the societies themselves.

We are dealing here with a highly respectable series of organisations and bodies, most of whom have not the slightest wish to defraud the Revenue. They will be in some difficulty if their liability to duty in respect of any particular performance depends upon such narrow distinctions as those of which I have given illustrations to the House. I therefore very much doubt whether this proposal would be of as great assistance to the societies as perhaps hon. Members were at one time inclined to think.

Photo of Mr Fred Blackburn Mr Fred Blackburn , Stalybridge and Hyde

Do I understand that the hon. Gentleman would accept the proposal if the wording were different? That seems to be the substance of his remarks at present, that the wording is wrong but that, otherwise, he has every sympathy with the new Clause.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

It goes a good deal deeper than the wording, as the hon. Gentleman will appreciate.

This is a specific proposal for an Act of Parliament. It introduces—and this goes far deeper than wording, although the wording of course, affects it—a line of demarcation, on one side of which they will pay duty and on the other side of which they will not. In our view that would give rise to very real and practical difficulties, and that is a serious objection to it. On the other aspect of the matter, I would prefer, if I may, to confine what I have to say to the point on which I decided to introduce it at the end of my speech, on the point of view of our general attitude towards the matter. What I am at the moment dealing with is the Clause actually before the House.

Photo of Dr Horace King Dr Horace King , Southampton, Test

Would the hon. Gentleman examine the illustrations he has given? He has produced hypothetical cases of a society bringing a conductor or an orchestra on to the stage, and hiring professionals to sing in the wings while the amateurs themselves remain on the stage, and having done this fantastically unusual thing make themselves liable under this new Clause to pay Entertainments Duty.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

I am sure it is my fault, but the hon. Gentleman must have misapprehended my argument. If a professional soloist appears in the normal way upon a stage the immunity is lost. If, while perfectly audible to the audience, he or she is concealed behind a curtain at the back of the stage, the immunity proposed by this Clause would be given. That is the point. That really would produce a farcical situation into a good many of these productions, and give very great difficulty to those who have the job of producing them. That is the real difficulty behind this Clause, that in a sincere and genuine attempt to give further assistance to these admirable societies it would land them and the Customs in the difficulty of trying to administer a position riddled with anomalies.

As I said a moment ago, we are anxious to encourage these societies to the full, and we are not perturbed by the financial implications of the proposal. It is difficult to estimate what the amount would be; probably of the order of £10,000 a year. But we cannot accept a proposal which we cannot honestly say to the House we believe to be a workable one.

During the year my right hon. Friend is willing to consider the position of these societies and the working of the amateur concession. He is prepared to look at it sympathetically with a view to seeing, whether in the first place, it might be of real assistance to them to take the concession further. If he comes to the conclusion that it is, he would propose to bring forward proposals to that end.

My right hon. Friend is anxious that these societies should be encouraged. He would like to see during the coming year if there is a possible way of helping them, so that if further assistance really appeared to be of value he would then be able to consider bringing forward proposals. I think that is an indication that my right hon. Friend appreciates the spirit behind this Clause and behind the support which has been given to it.

Although for the reasons I have ventured to give to the House it is not practical to accept these proposals, we are not unsympathetic to the spirit behind them, and we look forward to the possibility of producing something in next year's Finance Bill which may be of assistance to these societies to the extent which they need.

9.45 p.m.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

When I saw my hon. Friends had put this new Clause on the Order Paper—and it was on the Order Paper during the Committee stage but was, unfortunately, not selected—I was a little doubtful whether it would be possible to draw the line exactly as they proposed, and I confess that I preferred to wait and listen to the arguments. I think that the arguments put up by my hon. Friends and by at least one hon. Member on the other side of the House were extremely powerful ones, and I certainly was not impressed in any way at all by the reply of the Financial Secretary.

All that he has said is, firstly, that this concession would cost virtually nothing, so we do not have to worry about finance; secondly, he has put up a series of highly specious arguments, with which I will deal in a moment; and, thirdly, he has promised that the Chancellor of the Exchequer will have a look at the whole problem before next year. My hon. Friends had this new Clause on the Order Paper right at the beginning of the Committee stage of the Bill. The hon. Gentleman has had plenty of time to consider the problem. He might, if he had any doubts about the value of this concession to amateur dramatic societies, have got in touch with the British Drama League or similar bodies between the beginning of the Committee stage and today.

I think that the vague promises which we have been given are a great disappointment and quite inadequate to the situation. There is a genuine enthusiasm in the House, which is evident, for amateur dramatics. It may be, of course, that Members of Parliament are naturally inclined to sympathise with amateur dramatics. Indeed, I see an hon. Member opposite drawing attention to the fact, I suppose, that this is in a sense an amateur entertainment. I use the word "entertainment," Mr. Speaker, in a cultural and educational sense.

I would add another argument which I think might appeal to the Chancellor of the Exchequer. There is considerable value from dollar earnings obtained by the services of British actors and actresses, and I think that most of us are very proud of the high standard of acting which exists in this country, yet those ladies and gentlemen began their careers as amateurs, even if it was at a very youthful age, and therefore there is every reason for encouraging amateur dramatic societies to the utmost possible extent.

The Financial Secretary very rightly drew attention to the high standard of acting of the Treasury Dramatic Society, and I am sure that if the Chancellor would take the advice of that particular society he would be strongly in favour of the Amendment. Can we, then, do more for these societies?

We have been told that this new Clause will really not help at all because if the conductor of an orchestra is off the stage all is well and the benefit of the new Clause is obtained, but if he is on the stage it is not obtained. Why on earth an amateur dramatic society should wish to have a conductor on the stage I do not know. After all, this is intended to encourage amateur dramatics. Similarly with noises off. I can hardly imagine that an amateur dramatic society wishes to employ a professional to make noises off. That is really quite an easy thing for amateurs to do, and perhaps it can be done by mechanical means if there is any difficulty.

The same argument applies to soloists. An amateur society does not wish to have paid professional soloists on the stage. All the arguments from the other side have been irrelevant. I am sure that my hon. Friends will agree with the arguments, but that does not make any difference to their case, and in view of the answer that we have had I should be disposed in the circumstances to press the matter.

Photo of Mr Charles Royle Mr Charles Royle , Salford West

I am sure that, after having listened to the arguments of my hon. and right hon. Friends, the whole House will feel that the Financial Secretary has not been forthcoming on this matter. My only experience of taking part in amateur dramatics was very many years ago, when I took part in Dickens's "Oliver Twist" and played the part of the Artful Dodger.

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent South

No wonder my hon. Friend was made a Whip.

Photo of Mr Charles Royle Mr Charles Royle , Salford West

When I listened to the Financial Secretary it seemed to me that the mantle of that character had fallen on his shoulders. Throughout his speech he was dodging. After the arguments put forward by my hon. Friends, to come along with the fatuous arguments which he used and then to say, "We will look at this before another 12 months have transpired," is completely shirking the issue.

I join my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) in saying that, in view of the way the Financial Secretary has dodged the issued, my hon. Friends will be fully justified in dividing the House and letting us try to put the mater right now at the cost of a mere £10,000 instead of waiting another 12 months.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I noticed with interest the alacrity with which the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) jumped on the band wagon. He thought that if a concession was made it would be extremely awkward if he had not been associated with the new Clause.

I believe that last year or the year before my hon. Friend the Member for Twickenham (Sir E. Keeling) had a similar Amendment on the Order Paper throughout the time the Finance Bill was under discussion, although it was not selected. I am very surprised that the right hon. Gentleman who now wishes to divide the House did not then consider the value of the Amendment put forward by my hon. Friend.

Photo of Mr James MacColl Mr James MacColl , Widnes

I must really come to the assistance of my right hon. Friend. My right hon. Friend made it clear that when he saw the proposal on the Order Paper he was doubtful about its wisdom and that it was only after he had had the privilege of hearing myself and one or two of my hon. Friends speak that he swung in favour of it. As he did not have that opportunity on the last occasion, surely that is a conclusive indication of his courage and sincerity.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I have no doubt that the right hon. Gentleman is delighted at his hon. Friend's intervention, but if an Amendment was on the Order Paper during the last Finance Bill the right hon. Gentleman could easily have sent for my hon. Friend and asked him what his arguments were in support of his Amendment. The hon. Gentleman's intervention is a very poor one.

I can very well realise the consternation that the Financial Secretary's intervention has caused among the ranks opposite, because I happen to come from a constituency where we have a large number of amateur societies of a very high quality and I have been asked by my constituents to support this Amendment. I can very well see what the right hon. Gentleman has in mind. He wishes, of course, to divide the House. It is quite obvious that the reception that my hon. Friend has given to this new Clause is not very welcome on the other side of the House.

I am quite sure when the Government introduce their next Finance Bill my hon. Friend will find a means of embodying in it the principle with which this House agrees. All I can say is that it does not commend itself to the right hon. Gentleman and his Friends. I realise that as soon as they have divided the House the troops will be out all over the country trying to explain that the Conservatives— [Laughter.] I always enjoy the laughter of hon. Gentlemen opposite. When they have got nothing else to do they laugh. Good luck to them.

The troops will travel around the country to explain to every amateur operatic, ballet and theatrical society that the Conservative Party would not accept this very small amendment of the law. All I can say is that there was more in the speech which has been made by the Financial Secretary tonight than there has ever been from hon. and right hon. Gentlemen opposite.

Photo of Mr Arthur Blenkinsop Mr Arthur Blenkinsop , Newcastle upon Tyne East

Surely the hon. Lady recalls that during the last five years more concessions have been made to amateur dramatic societies than they ever had in their experience?

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I am delighted to pay tribute to that. We are always delighted when we get a non-party approach to matters of this kind and I was delighted that my hon. Friend the Financial Secretary showed that he has got a broad mind and was willing to consider the terms of the Clause and the idea behind it. I am bound to say that the speech of the right hon. Gentleman was made entirely for political purposes. [HON. MEMBERS: "Oh."] Oh, indeed, yes. I am quite certain of that.

Photo of Mr Fred Blackburn Mr Fred Blackburn , Stalybridge and Hyde

Could the hon. Lady tell us whether she is speaking for or against the Clause?

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I am sorry that the hon. Gentleman has only just come to life. I am not difficult to hear and if he had been listening to what I was saying he would have heard what I said in support of the principle behind the Clause. I do not intend to detain the House any longer. [An HON. MEMBER: "Why not?"] An hon. Member asks, "Why not?" It is my choice, not his. If I wished to continue making a speech, I can assure my hon. Friends that I can speak for a very long time.

10.0 p.m.

I could not allow the approach which has been made by the Financial Secretary to this very important matter to pass uncommended and unwelcomed on this side of the House. I look forward to the introduction of the next Finance Bill, when my hon. Friend will, I hope, bring forward an Amendment which will achieve the objective which I am sure the whole House has in mind—to assist all these amateur societies to make the best contribution they can to the very interesting life which the country so appreciates and enjoys.

Photo of Mr Marcus Lipton Mr Marcus Lipton , Lambeth Brixton

The Financial Secretary will have heard with mixed feelings the unexpected reinforcement we have just had from the hon. Lady the Member for Tynemouth (Miss Ward). It will come as a sore blow to the many dramatic societies which exist in Tynemouth that the hon. Lady is quite willing that their future prospects of improvement should be delayed by 12 months and that she is not prepared to do anything at all about the matter now. That is an even greater disappointment to hon. Members on this side of the House, and I hope that in the few moments which remain before the Division takes place she may think better of what she has said and strike a blow for the dramatic societies of Tynemouth which should not be delayed for as long as 12 months.

I must declare an interest in this matter, because I happen to be the president of an amateur operatic society. Before becoming the honorary president of this society, in the dim and distant past I was also an amateur actor. The society with which I am particularly acquainted does a regular performance of Gilbert and Sullivan operas and for that purpose, in order to ensure their success, an orchestral accompaniment is required. It may come as a surprise to the hon. Lady and to other hon. Members that a Gilbert and Sullivan opera is difficult to produce without an orchestral accompaniment.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I wanted to let the hon. and gallant Gentleman know that I was an amateur actress.

Photo of Mr Marcus Lipton Mr Marcus Lipton , Lambeth Brixton

Before any more alarming revelations are made by the hon. Lady I should like to get to the point. The point is that no case whatever has been made out for the postponement of the operation of this Clause. The Financial Secretary has been below his usual level in this matter and has hardly treated the House with the respect to which it is entitled in discussing a matter of this kind.

I welcomed the statement made by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) that we shall take advantage of this opportunity to expose the lowbrow character of the Government we have at the present time, a Government which not only closes down museums and art galleries but which puts all kinds of niggling and meaningless difficulties in the way of a concession to amateur dramatic societies. I am quite sure that the Financial Secretary will, on reflection, agree that his speech tonight has done nothing to encourage such societies.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 235; Noes, 246.

Division No. 164.]AYES[6.46 p.m.
Acland, Sir RichardFoot, M. MMainwaring, W. H.
Adams, RichardForman, J. C.Mallalieu, J. P. W (Huddersfield, E)
Albu, A. H.Fraser, Thomas (Hamilton)Mann, Mrs. Jean
Allen, Arthur (Bosworth)Freeman, John (Watford)Manuel, A. C.
Allen, Scholefield (Crewe)Freeman, Peter (Newport)Marquand, Rt. Hon. H. A
Anderson, Alexander (Motherwell)Gaitskell, Rt. Hon. H. T. N.Mayhew, C. P.
Anderson, Frank (Whitehaven)Gibson, C. W.Mellish, R. J.
Attlee, Rt. Hon. C. R.Glanville, JamesMesser, F.
Awbery, S. S.Gordon Walker, Rt. Hon. P. CMitchison, G. R.
Ayles, W. H.Grenfell, Rt. Hon. D. R-Monslow, W.
Bacon, Miss AliceGrey, C. F.Moody, A. S.
Balfour, A.Griffiths, David (Rother Valley)Morgan, Dr. H. B. W.
Barnes, Rt. Hon. A. JGriffiths, Rt. Hon. James (Llanelly)Morley, R.
Bartley, P.Hale, Leslie (Oldham, W.)Morris, Percy (Swansea, W.)
Bellenger, Rt. Hon F. JHall, Rt. Hon. Glenvil (Colne Valley)Morrison, Rt. Hon. H. (Lewisham, S.)
Bence, C. R.Hall, John (Gateshead, W.)Mort, D. L.
Benn, WedgwoodHamilton, W. W.Moyle, A.
Benson, G.Hannan, W.Mulley, F. W.
Beswick, FHardy, E. A.Murray, J. D.
Bing, G. H. C.Hargreaves, A.Nally, W.
Blackburn, F.Harrison, J. (Nottingham, E.)Neal, Harold (Bolsover)
Blenkinsop, A.Hastings, S.Noel-Baker, Rt. Hon. P. J.
Blyton, W. R.Hayman, F. H.Oldfield, W. H.
Boardman, H.Healey, Denis (Leeds, S.E.)Oliver, G. H.
Bottomley, Rt. Hon. A. GHenderson, Rt. Hon. A (Rowley Regis)Orbach, M.
Braddock, Mrs. ElizabethHerbison, Miss M.Oswald, T.
Brockway, A. F.Hobson, C. R.Padley, W. E.
Brook, Dryden (Halifax)Holman, P.Paling, Rt. Hon. W. (Dearne Valley)
Broughton, Dr. A. D. D.Houghton, DouglasPaling, Will T. (Dewsbury)
Brown, Rt. Hon. George (Belper)Hoy, J. H.Panned, Charles
Brown, Thomas (Ince)Hudson, James (Ealing, N.)Pargiter, G. A.
Butler, Herbert (Hackney, S.)Hughes, Cledwyn (Anglesey)Parker, J.
Callaghan, L J.Hughes, Emrys (S. Ayrshire)Paton, J.
Carmichael, J.Hughes, Hector (Aberdeen, N.)Pearson, A.
Champion, A. JHynd, H. (Accrington)Peart, T. F.
Chapman, W DHynd, J. B. (Attercliffe)Plummer, Sir Leslie
Chetwynd, G. RIrvine, A. J. (Edge Hill)Poole, C. C.
Clunie, J.Irving, W. J. (Wood Green)Popplewell, E.
Cocks, F. S.Isaacs, Rt. Hon. G A.Porter, G.
Coldrick, W.Janner, B.Price, Joseph (Westhoughton)
Collick, P. HJay, Rt. Hon. D. P. T.Price. Philips (Gloucestershire, W.)
Cove, W. G.Jeger, Dr. Santo (St. Pancras, S)Proctor, W. T.
Craddock, George (Bradford, S.)Johnson, James (Rugby)Pursey, Cmdr. H.
Cullen, Mrs. A.Johnston, Douglas (Paisley)Rankin, John
Daines, P.Jones, Frederick Elwyn (West Ham, S)Reid, Thomas (Swindon)
Dalton, Rt. Hon. H.Jones, Jack (Rotherham)Reid, William (Camlachie)
Davies, A. Edward (Stoke, N.)Jones, T. W. (Merioneth)Rhodes, H.
Davies, Ernest (Enfield, E.)Keenan, W.Robens, Rt. Hon. A.
Davies, Stephen (Merthyr)Key, Rt. Hon. C. WRoberts, Albert (Normanton)
de Freitas, GeoffreyKing, Dr. H. M.Roberts, Goronwy (Caernarvonshire)
Delargy, H. J.Kinley, J.Rogers, George (Kensington, N.)
Dodds, N. N.Lee, Frederick (Newton)Ross, William
Donnelly, D. L.Lever, Harold (Cheetham)Royle, C.
Dugdale, Rt. Hon. John (W. Bromwich)Lever, Leslie (Ardwick)Schofield, S. (Barnsley)
Ede, Rt. Hon. J. C.Lewis, ArthurShinwell, Rt. Hon. E
Edelman, M.Lindgren, G. S.Short, E. W.
Edwards, Rt. Hon. Ness (Caerphilly)Lipton, Lt.-Col. MShurmer, P. L. E.
Edwards, W. J. (Stepney)Logan, D. G.Silverman, Julius (Erdrington)
Evans, Albert (Islington, S.W.)MaeColl, J. E.Silverman, Sydney (Nelson)
Evans, Stanley (Wednesbury)McGhee, H. G.Simmons, C. J. (Brierley Hill)
Ewart, R.McGovern, J.Slater, J.
Fernyhough, EMcKay, John (Wallsend)Smith, Ellis (Stoke, S.)
Field, W. J.McLeavy, F.Smith, Norman (Nottingham, S.)
Follick, M.MacPherson, Malcolm (Stirling)Snow, J. W
Sorensen, R. W.Turner-Samuels, M.Williams, Rev. Llywelyn (Abertillery)
Soskice, Rt. Hon. Sir FrankUngoed-Thomas, Sir LynnWilliams, Ronald (Wigan)
Sparks, J. A.Viant, S. P.Williams, Rt. Hon. Thomas (Don V'll'y)
Stewart, Michael (Fulham, E.)Wallace, H. W.Williams, W R. (Droylsden)
Strachey, Rt. Hon J.Watkins, T. E.Williams, W. T. (Hammersmith, S.)
Summerskill, Rt. Hon. E.Weitzman, D.Wilson, Rt. Hon. Harold (Huyton)
Sylvester, G. 0.Wells, Percy (Faversham)Winterbottom, Richard (Brightside)
Taylor, Bernard (Mansfield)West, D. GWoodburn, Rt. Hon. A.
Taylor, John (West Lothian)Wheatley, Rt. Hon. JohnWyatt, W. L.
Taylor, Rt. Hon. Robert (Morpeth)White, Henry (Derbyshire, N.E.)Yates, V. F.
Thomas, David (Aberdare)Whiteley, Rt. Hon. W.
Thomas, Iorwerth (Rhondda, W.)Wilcook, Group Capt. C. A. B.TELLERS FOR THE AYES:
Thomas, Ivor Owen (Wrekin)Wilkins, W. A.Mr. Bowden and
Thorneycroft, Harry (Clayton)Willey, Octavius (Cleveland)Mr. Kenneth Robinson.
Tomney, F.Williams, David (Neath)
NOES
Aitken, W T.Erroll, F. JLegh, P. R (Petersfield)
Allan, R. A (Paddington, S)Fell, A.Linstead, H. N.
Alport, C. J. M.Finlay, GraemeLloyd, Rt. Hon. G. (King's Norton)
Amery, Julian (Preston, N.)Fisher, NigelLloyd, Maj. Guy (Renfrew, E.)
Amory, Heathcoat (Tiverton)Fleetwood-Hesketh, R. PLockwood, Lt.-Col. J. C.
Anstruther-Gray, Major W. J.Fletcher-Cooke, C.Longden, Gilbert (Herts, SW.)
Arbuthnot, JohnFort, R.Low, A. R. W.
Ashton, H. (Chelmsford)Foster, JohnLucas, Sir Jocelyn (Portsmouth, S)
Assheton, Rt. Hon. R. (Blackburn, W.)Fraser, Hon. Hugh (Stone)Lucas, P. B. (Brentford)
Astor, Hon. J. J. (Plymouth, Sutton)Fraser, Sir Ian (Morecambe & Lonsdale)Lucas-Tooth, Sir Hugh
Baldock, Lt.-Cmdr J. M.Galbraith, Cmdr. T. D. (Pollok)McAdden, S. J.
Baldwin, A. E.Galbraith, T. G. D. (Hillhead)Macdonald, Sir Peter (I. of Wight)
Banks, Col. CGammans, L. D.McKibbin, A. J.
Barber, A. P. L.George, Rt. Hon. Maj. G. LloydMcKie, J. H. (Galloway)
Barlow, Sir JohnGodber, J. B.Maclean, Fitzroy
Baxter, A. B.Gomme-Duncan, Col. AMacLeod, Rt. Hon. Iain (Enfield, W.)
Beach, Maj. HicksGough, C. F. HMacLeod, John (Ross and Cromarty)
Beamish, Maj. TuftonGower, H. R.Macmillan, Rt. Hon. Harold (Bromley)
Bell, Philip (Bolton, E.)Graham, Sir FergusMacpherson, Maj. Niall (Dumfries)
Bell, Ronald (Bucks, S.)Gridley, Sir ArnoldMaitland, Patrick (Lanark)
Bennett, F. M. (Reading, N.)Grimond, J.Manningham-Buller, Sir R. E.
Bennett, Sir Peter (Edgbaston)Grimston, Hon. John (St. Albans)Markham, Major S. F
Bennett, Dr. Reginald (Gosport)Grimston, Sir Robert (Westbury)Marshall, Douglas (Bodmin)
Bennett, William (Woodside)Hare, Hon. J. H.Marshall, Sir Sidney (Sutton)
Bevins, J. R. (Toxteth)Harris, Frederic (Croydon, N.)Maudling, R.
Birch, NigelHarris, Reader (Heston)Medlicott, Brig. F.
Bishop, F. P.Harrison, Col. J. H. (Eye)Mellor, Sir John
Black, C. W.Harvey, Air Cdre. A. V. (Macclesfield)Molson, A. H. E
Boothby, R. J. GHarvey, Ian (Harrow, E.)Mott-Radclyffe, C E
Bowen, E. R.Harvie-Watt, Sir GeorgeNabarro, G. D. N
Boyd-Carpenter, J. A.Hay, JohnNicholls, Harmar
Boyle, Sir EdwardHeald, Sir LionelNicholson, Godfrey (Farnham)
Braine, B. R.Heath, EdwardNicolson, Nigel (Bournemouth, E.)
Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)Henderson, John (Cathcart)Nield, Basil (Chester)
Bromley-Davenport, Lt.-Col. W. H.Higgs, J. M. C.Noble, Cmdr. A. H. P.
Brooke, Henry (Hampstead)Hill, Mrs. E. (Wythenshawe)Nugent, G. R. H
Browne, Jack (Govan)Hinchingbrooke, ViscountNutting, Anthony
Buchan-Hepburn, Rt Hon P. G THirst, GeoffreyOdey, G. W.
Bullard, D. G.Holland-Martin, C JO'Neill, Rt. Hon. Sir H. (Antrim, N.)
Bullock, Capt. M.Hollis, M. C.Orr, Capt, L. P. S.
Bullus, Wing Commander E. E.Holmes, Sir Stanley (Harwich)Orr-Ewing, Charles Ian (Hendon, N.)
Burden, F. F. AHolt, A. FOsborne, C.
Butcher, H. W.Hope, Lord JohnPartridge, E.
Butler, Rt Hon. R A. (Saffron Walden)Hornsby-Smith, Miss M. P.Peake, Rt. Hon. O
Carson, Hon. E.Horobin, I. M.Peto, Brig. C. H. M.
Cary, Sir RobertHorsbrugh, Rt. Hon. FlorencePickthorn, K. W M.
Clarke, Col. Ralph (East Grinstead)Howard, Greville (St. Ives)Pilkington, Capt. R. A
Cole, NormanHudson, Sir Austin (Lewisham, N)Pitman, I. J.
Conant, Maj. R. J. E.Hudson, W. R. A. (Hull, N.)Powell, J. Enoch
Cooper, Sqn. Ldr. AlbertHurd, A. R.Price, Henry (Lewisham, W)
Craddock, Beresford (Spelthorne)Hutchinson, Sir Geoffrey (Ilford, N.)Prior-Palmer, Brig. O. L.
Cranborne, ViscountHutchison, Lt.-Com. Clark (E'b'grh W.)Profumo, J. D.
Crookshank, Capt. Rt. Hon. H. F c.Hyde, Lt.-Col. H. M.Raikes, H. V.
Crosthwaite-Eyre, Col. 0. EHylton-Foster, H B. HRedmayne, M.
Crouch, R. F.Jenkins, Robert (Dulwich)Remnant, Hon. P.
Crowder, Sir John (Finchley)Jennings, R.Renton, D. L. M.
Crowder, Petre (Ruislip—Northwood)Johnson, Eric (Blackley)Robertson, Sir David
Darling, Sir William (Edinburgh, S.)Johnson, Howard (Kemptown)Robson-Brown, W
Deedes, W F.Jones, A. (Hall Green)Rodgers, John (Sevenoaks)
Dodds-Parker, A. D.Joynson-Hicks, Hon. L WRoper, Sir Harold
Doughty, C. J. A.Kaberry, D.Ropner, Col. Sir Leonard
Drewe, C.Kerr, H. W. (Cambridge)Ryder, Capt. R. E. D.
Dugdale, Maj. Rt. Hn. Sir T.(Richmond)Lambert, Hon. G.Salter, Rt. Hon. Sir Arthur
Duncan, Capt. J. A. LLambton, ViscountSandys, Rt. Hon. D.
Duthie, W. S.Lancaster, Col. C. G.Savory, Prof. Sir Douglas
Eccles, Rt. Hon. D MLegge-Bourke, Maj. E. A. HSchofield, Lt.-Col. W. (Rochdale)
Scott, R. DonaldTaylor, Charles (Eastbourne)Wakefield, Sir Wavell (Marylebone)
Scott-Miller, Cmdr. R.Taylor, William (Bradford, N.)Walker-Smith, D. C.
Shepherd, WilliamTeeling, W.Ward, Hon. George (Worcester)
Simon, J. E. S. (Middlesbrough, W.)Thomas, P. J. M. (Conway)Ward, Miss I. (Tynemouth)
Smiles, Lt.-Col. Sir WalterThompson, Kenneth (Walton)Watkinson, H. A.
Smithers, Peter (Winchester)Thompson, Lt.-Cdr. R. (Croydon, W.)Webbe, Sir H. (London & Westminster)
Smithers, Sir Waldron (Orpington)Thorneycroft, Rt. Hn. Peter (Monmouth)Wellwood, W.
Soames, Capt. C.Thornton-Kemsley, Col. C. N.White, Baker (Canterbury)
Spearman, A. C. M.Tilney, JohnWilliams, Rt. Hon. Charles (Torquay)
Spence, H. R. (Aberdeenshire, W.)Touche, Sir GordonWiliams, Gerald (Tonbridge)
Spens, Sir Patrick (Kensington, S.)Turner, H. F. L.Williams, Sir Herbert (Croydon, E.)
Stevens, G. P.Turton, R. H.Williams, R. Dudley (Exeter)
Stottdart-Scott, Col. MTweedsmuir, LadyWills, G.
Storey, S.Vane, W. M. F.Wilson, Geoffrey (Truro)
Strauss, Henry (Norwich, S.)Vaughan-Morgan, J. K.Wood, Hon. R.
Stuart, Rt. Hon. James (Moray)Vosper, D. F.
Summers, G. S.Wade, D. W.TELLERS FOR THE NOES:
Sutcliffe, H.Wakefield, Edward (Derbyshire, W.)Mr. Studholme and Mr. Oakshott.
Division No. 165.]AYES[10.7 p.m.
Acland, Sir RichardGriffiths, Rt Hon James (Llanelly)Paling, Will T. (Dewsbury)
Adams, RichardGrimond, J.Pannell, Charles
Albu, A. H.Hall, Rt. Hon. Glenvil (Coins Valley)Pargiter, G A.
Allen, Arthur (Bosworth)Hall, John (Gateshead, W.)Parker, J
Allen, Scholefield (Crewe)Hamilton, W WPaton, J.
Anderson, Alexander (Motherwell)Hannan, W.Peart, T. F.
Attlee, Rt. Hon. C. ftHardy, E A.Plummer, Sir Leslie
Awbery, S. S.Hargreaves, A.Porter, G.
Bacon, Miss AliceHarrison, J. (Nottingham, E)Price, Joseph T. (Westhoughton)
Balfour, A.Hayman, F. H.Price, Philips (Gloucestershire, W.)
Barnes, Rt. Hon. A. JHealey, Denis (Leeds, S.E.)Proctor, W. T.
Bellenger, Rt. Hon. F. JHenderson, Rt. Hon. A (Rowley Regis)Pursey, Cmdr. H
Bence, C. R.Herbison, Miss M.Rankin, John
Benn, WedgwoodHobson, C. R.Reid, Thomas (Swindon)
Benson, G.Holman, P.Rhodes, H.
Beswick, F.Holt, A. FRobens, Rt. Hon A.
Bing, G. H. C.Houghton, DouglasRoberts, Albert (Normanton)
Blackburn, F.Hoy, J. H.Roberts, Goronwy (Caernarvonshire)
Blenkinsop, AHudson, James (Ealing, N.)Robinson, Kenneth (St. Pancras, N.)
Blyton, W. R.Hughes, Emrys (S, Ayrshire)Rogers, George (Kensington, N.)
Boardman, H.Hughes, Hector (Aberdeen, N.)Ross, William
Bottomley, Rt. Hon. A. GHynd, H. (Accrington)Royle, C.
Bowden, H. W.Hynd, J. B. (Attercliffe)Schofield, S (Barnsley)
Bowen, E. R.Irvine, A. J. (Edge Hill)Shinwell, Rl. Hon E
Braddock, Mrs. ElizabethIrving, W. J. (Wood Green)Short, E. W.
Brockway, A. F.Isaacs, Rt. Hon. G. AShurmer, P. L. E
Brook, Dryden (Halifax)Janner, B.Silverman, Julius (Erdington)
Broughton, Dr. A. D. D.Jay, Rt. Hon. D. P. T.Simmons, C. J (Brierley Hill)
Brown, Thomas (Ince)Jeger, George (Goole)Slater, J.
Burton, Miss F. EJeger, Dr. Santo (St. Pancras, S.)Smith, Ellis (Stoke, S)
Butler, Herbert (Hackney, S.)Johnson, James (Rugby)Smith, Norman (Nottingham, S)
Callaghan, L. J.Johnston, Douglas (Paisley)Snow, J. W
Carmichael, J.Jones, David (Hartlepool)Sorsnsen, R. W
Castle, Mrs. B. A.Jones, Frederick Elwyn (West Ham, S.)Soskice, Rt. Hon Sir Frank
Champion, A. J.Jones, Jack (Rotherham)Sparks, J. A.
Chapman, W D.Jones, T. W. (Merioneth)Stewart, Michael (Fulham, E.)
Chetwynd, G. RKeenan, WStrachey, Rt. Hon J.
Clunie, J.Kenyon, C.Strauss, Rt. Hon George (Vauxhall)
Coldrick, WKey, Rt. Hon. C. W.Summerskill, Rt. Hon. E
Collick, P. H.King, Dr. H. M.Sylvester, G. O.
Cove, W. G.Kinley, J.Taylor, Bernard (Mansfield)
Craddock, George (Bradford, S)Lee, Frederick (Newton)Taylor, John (West Lothian)
Cullen, Mrs. ALever, Leslie (Ardwick)Taylor, Rt. Hon. Robert (Morpeth)
Daines, P.Lewis, ArthurThomas, David (Aberdare)
Dalton, Rt. Hon H.Lindgren, G. S.Thomas, George (Cardiff)
Darling, George (Hillsborough)Lipton, Lt.-Col. MThomas, Iorwerth (Rhondda, W)
Davies, A. Edward (Stoke, N.)Logan, D. G.Thomas, Ivor Owen (Wrekin)
Davies, Ernest (Enfield, E.)MacColl, J. E.Tomney, F.
Davies, Harold (Leek)McGhee, H. G.Turner-Samuels, M.
Davies, Stephen (Merthyr)McGovern, J.Ungoed-Thomas, Sir Lynn
de Freitas, GeoffreyMcKay, John (Wallsend)Viant, S. P.
Delargy, H. J.McLeavy, F.Wade, D. W.
Dodds, N. N.McNeil, Rt. Hon. H.Wallace, H. W
Donnelly, D. L.MacPherson, Malcolm (Stirling)Watkins, T. E
Dugdale, Rt. Hon. John (W. Bromwich)Mainwaring, W. H.Weitzman, D.
Ede, Rt. Hon. J. CMallalieu, J. P. W. (Huddersfield, E.)Wells, William (Walsall)
Edelman, M.Mann, Mrs. JeanWest, D. G.
Edwards, John (Brighouse)Manuel, A. C.Wheatley, Rt. Hon John
Edwards, fit. Hon. Ness (Caerphilly)Marquand, Rt. Hon. H. AWhite, Henry (Derbyshire, N.E)
Edwards, W. J. (Stepney)Mayhew, C. P.Whiteley, Rt. Hon W
Evans, Albert (Islington, S.W.)Mitchison, G. R.Wigg, George
Evans, Edward (Lowestoft)Monslow, W.Wilcock, Group Capt. C.A.B
Evans, Stanley (Wednesbury)Moody, A. S.Wilkins, W. A.
Ewart, R.Morgan, Dr. H. B WWilley, Frederick (Sunderland, N.)
Fernyhough, E.Morley, R.Willey, Octavius (Cleveland)
Field, W. J.Morris, Percy (Swansea, W.)Williams, David (Neath)
Finch, H. J.Morrison, Rt. Hon. H. (Lewisham, S)Williams, Rev. Llywelyn (Abertillery)
Follick, M.Mort, D. L.Williams, Ronald (Wigan)
Foot, M. M.Moyle, A.Williams, Rt. Hon. Thomas (Don V'll'y)
Forman, J, C.Mulley, F. W.Williams, W. R. (Droylsden)
Fraser, Thomas (Hamilton)Murray, J. D.Williams, W. T. (Hammersmith, S.)
Freeman, John (Watford)Nally, W.Wilson, Rt. Hon. Harold (Huyton)
Freeman, Peter (Newport)Neal, Harold (Bolsover)Winterbottom, Richard (Brightside)
Gaitskell, Rt. Hon. H. T. N.Oldfield, W H.Woodburn, Rt. Hon A
Gibson, C. W.Oliver, G. H.Wyatt, W. L.
Gordon Walker, Rt. Hon. P. COrbach, M.Yates, V. F.
Grenfell, Rt. Hon. D. R.Oswald, T.Younger, Rt. Hon. K.
Grey, C. F.Padley, W. E.
Griffiths, David (Rother Valley)Paling, Rt. Hon W. (Dearne Valley)TELLERS FOR THE AYES:
Mr. Pearson and Mr. Popplewell.
NOES
Aitken, W. T.Graham, Sir FergusOakshott, H. D.
Allan, R. A. (Paddington, S.)Gridley, Sir ArnoldOdey, G. W.
Amery, Julian (Preston, N.)Grimston, Hon. John (St. Albans)O'Neill, Rt. Hon. Sir H (Antrim, N.)
Amory, Heathcoat (Tiverton)Grimston, Sir Robert (Westbury)Ormsby-Gore, Hon. W. D.
Anstruther-Gray, Major W. JHarris, Frederic (Croydon, N.)Orr, Capt. L. P. S.
Arbuthnot, JohnHarris, Reader (Heston)Orr-Ewing, Chares Ian (Hendon, N)
Ashton, H. (Chelmsford)Harrison, Col. J. H. (Eye)Osborne, C.
Assheton, Rt. Hon. R. (Blackburn, W.)Harvey, Air Cdre. A. V. (Macclesfield)Partridge, E.
Astor, Hon. J. J. (Plymouth, Sutton)Harvey, Ian (Harrow, E)Peake, Rt. Hon. O
Astor, Hon. W. W. (Bucks, Wycombe)Hay, JohnPeto, Brig. C. H. M.
Baldwin, A. E.Heald, Sir LionelPeyton, J. W. W.
Banks, Col. C.Heath, EdwardPickthorn, K. W. M.
Barber, A. P. L.Henderson, John (Cathcart)Pilkington, Capt. R A
Barlow, Sir JohnHiggs, J. M. C.Pitman, I. J.
Baxter, A. B.Hill, Dr. Charles (Luton)Powell, J. Enoch
Beach, Maj. HicksHill, Mrs. E. (Wythenshawe)Price, Henry (Lewisham, W)
Beamish, Maj. TuftonHinchingbrooke, ViscountPrior-Palmer, Brig, 0. L.
Bell, Philip (Bolton, E.)Hirst, GeoffreyProfumo, J. D.
Bell, Ronald (Bucks, S.)Holland-Martin, C. J.Raikes, H. V.
Bennett, F. M. (Reading, N.)Hollis, M. C.Redmayne, E.
Bennett, Sir Peter (Edgbaston)Hope, Lord JohnRemnant, Hon. P.
Bennett, Dr. Reginald (Gosport)Hopkinson, HenryRenton, D. L. M.
Bennett, William (Woodside)Hornsby-Smith, Miss M. P.Roberts, Peter (Heeley)
Bevins, J. R. (Toxteth)Horobin, I. M.Robertson, Sir David
Birch, NigelHorsbrugh, Rt. Hon. FlorenceRodgers, John (Sevenoaks)
Bishop, F. P.Howard, Greville (St. Ives)Roper, Sir Harold
Black, C. W.Hudson, Sir Austin (Lewisham, N)Ropner, Col. Sir Leonard
Bossom, A. C.Hudson, W. R. A. (Hull, N.)Russell, R. S.
Boyd-Carpenter, J. A.Hurd, A. R.Ryder, Capt. R. E. D.
Boyle, Sir EdwardHutchinson, Sir Geoffrey (Ilford, N.)Salter, Rt. Hon. Sir Arthur
Braine, B. R.Hutchison, Lt.-Com. Clark (E'b'rgh W.)Savory, Prof. Sir Douglas
Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)Hyde, Lt.-Col. H. M.Scholfield, Lt.-Col. W. (Rochdale)
Bromley-Davenport, Lt.-Col. W. H.Hylton-Foster, H. B. M,Scott, R. Donald
Brooke, Henry (Hampstead)Jenkins, Robert (Dulwich)Scott-Miller, Cmdr. R.
Brooman-White, R C.Johnson, Eric (Blackley)Simon, J. E. S. (Middlesbrough, W.)
Buchan-Hepburn, Rt. Hon. P. G. I.Johnson, Howard (Kemptown)Smithers, Peter (Winchester)
Bullard, D. G.Jones, A. (Hall Green)Smithers, Sir Waldron (Orpington)
Bullock, Capt. M.Joynson-Hicks, Hon. L. WSoames, Capt. C
Bullus, Wing Commander E. E.Kaberry, DSpearman, A. C. M.
Burden, F. F. A.Kerr, H. W. (Cambridge)Speir, R. M.
Butcher, H. W.Lambert, Hon. G.Spence, H. R. (Aberdeenshire, W.)
Butler, Rt. Hon. R A. (Saffron Walden)Lambton, ViscountSpens, Sir Patrick (Kensington, S.)
Carson, Hon. E.Lancaster, Col. C. G.Stevens, G. P.
Cary, Sir RobertLangford-Holt, J. A.Stoddart-Scott, Col M
Channon, H.Legge-Bourke, Maj E. A. H.Storey, S.
Churchill, Rt. Hon. W. S.Legh, P. R. (Petersfield)Strauss, Henry (Norwich, S.)
Clarke, Col. Ralph (East Grinstead)Lennox-Boyd, Rt. Hon. A. T.Stuart, Rt. Hon. James (Moray)
Cole, NormanLindsay, MartinSummers, G. S.
Conant, Maj. R. J. E.Linstead, H. NSutcliffe, H.
Cooper, Sqn. Ldr. AlbertLloyd, Maj. Guy (Renfrew, E.)Taylor, Charles (Eastbourne)
Craddock, Beresford (Spelthorne)Lockwood, Lt.-Col. J. CTaylor, William (Bradford, N.)
Cranborne, ViscountLongden, Gilbert (Herts, S.W.)Teeling, W.
Crookshank, Capt Rt. Hon. H. F. C.Low, A. R. W.Thomas, P. J. M. (Conway)
Crosthwaite-Eyre, Col. O. ELucas, Sir Jocelyn (Portsmouth, S)Thompson, Kenneth (Walton)
Crouch, R. F.Lucas, P. B. (Brentford)Thompson, Lt.-Cdr. R. (Croydon, W.)
Crowder, Petre (Ruislip—Northwood)Lucas-Tooth, Sir HughThorneycroft, Rt. Hn. Peter (Monmouth)
Darling, Sir William (Edinburgh, S.)McAdden, S. J.Thornton-Kemsley, Col. C. N.
Deedes, W. F.Macdonald, Sir Peter (I. of Wight)Tilney, John
Dodds-Parker, A. DMcKibbin, A. J.Touche, Sir Gordon
Doughty, C. J. A.McKie, J. H. (Gailoway)Turner, H. F. L
Drayson, G. B.Maclean, FitzroyTurton, R. H.
Dugdale, Maj. Rt. Hn. Sir T (Richmond)MacLeod, Rt. Hon Iain (Enfield, W.)Tweedsmuir, Lady
Duncan, Capt. J. A. L.Macmillan, Rt. Hon. Harold (Bromley)Vane, W. M. F.
Duthie, W. S.Macpherson, Maj. Niall (Dumfries)Vaughan-Morgan, J. K.
Eccles, Rt. Hon. D. MMaitland, Patrick (Lanark)Vosper, D. F.
Erroll, F. J.Manningham-Buller, Sir R. E.Wakefield, Edward (Derbyshire, W.)
Fell, A.Markham, Major S. F.Wakefield, Sir Wavell (Marylebone)
Finlay, GraemeMarshall, Douglas (Bodmin)Walker-Smith, D. C.
Fisher, NigelMarshall, Sir Sidney (Sutton)Ward, Hon. George (Worcester)
Fleetwood-Hesketh, R F.Maudling, R.Ward, Miss I. (Tynemouth)
Fletcher-Cooke, C.Maydon, Lt -Comdr S L. CWaterhouse, Capt. Rt. Hon. C.
Fort, R.Medlicott, Brig. FWebbe, Sir H (London & Westminster)
Fraser, Hon. Hugh (Stone)Mellor, Sir JohnWellwood, W.
Fraser, Sir Ian (Morecambe & Lonsdale)Molson, A. H. EWhite, Baker (Canterbury)
Galbraith, T. G. D. (Hillhead)Morrison, John (Salisbury)Williams, Rt. Hon Charles (Torquay)
Gammans, L. D.Molt-Radclyffe, C EWilliams, Sir Herbert (Croydon, E)
Garner-Evans, E. HNabarro, G. D. N.Williams, R. Dudley (Exeter)
George, Rt. Hon. Maj. G. LloydNicholls, HarmarWills, G.
Glyn, Sir RalphNicholson, Godfrey (Farnham)Wilson, Geoffrey (Truro)
Godber, J. B.Nicolson, Nigel (Bournemouth, E)Wood, Hon. R.
Gomme-Duncan, Col. A.Nield, Basil (Chester)
Gough, C. F H.Noble, Comdr, A. H PTELLERS FOR THE NOES:
Gower, H. R,Nugent, G. R. HMr. Drewe and Mr. Studholme

(1) Subject to the provisions of subsection (4) hereof if any claimant has borrowed money on mortgage from a local authority or building society, the principal whereof is repayable by periodical instalments extending over a term of not less than ten years, he shall be entitled upon proof of payment of any instalment to a deduction from the amount of income tax with which he is chargeable equal to tax at two-fifths of the standard rate on the amount of the instalment.

(2) The instalment referred to in subsection (1) of this section is any instalment of capital repaid by the claimant in respect of the said mortgage.

(3) Where an instalment is paid by a wife out of her separate estate in respect of money borrowed by her on mortgage, the same relief shall be given as if the instalment were an instalment paid by her husband in respect of money borrowed by him on mortgage and this section shall apply accordingly.

(4)Any reference to an amount, tax on which falls to be deducted under this section, hall in relation to an instalment in which by virtue of this section a deduction falls to be made at two-fifths of the standard rate, be construed as a reference to two-fifths of the amount of the instalment.

(5)This section shall only apply to a mortgage where it has been shown to the satisfaction of the Commissioners that the money borrowed has been or is being used by the borrower for the purchase or erection of a house for his occupation thereof.—[Mr. Erroll.]

Brought up, and read the First time.

Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale

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

This Clause seeks to provide a modest relief to those who are making payments to local authorities and to building societies in respect of house purchase. Many classes of home occupiers are receiving a benefit in the matter of their dwelling. Those who are fortunate enough to live in rent-restricted properties are getting all the benefits of the restriction of their rents to the pre-war level.

Those who live in council houses, particularly those council houses which were built after the war, are given the benefit not only of certain subsidies from the local rates but, of course, the equally important Treasury subsidy supplied for the construction of their houses—a subsidy which has recently been increased so as to offset the increased burden of the higher money rates.

There is one very important class of home occupier who is receiving no such benefit, namely, the would-be home owner. The person who wishes to own his own house has to carry personally the full extra burden of the increased money rates now in force. In fact, it is clearly becoming very difficult indeed for younger married couples to be able to afford to own a home of their own because the charges involved are so considerable. They alone will receive no relief at all from the Treasury or the Exchequer.

I feel that this new Clause, which is, as I shall explain in a little more detail, designed to give them a measure of relief, should be welcomed by my hon. Friends on this side of the House since we are such fanatical believers in a property-owning democracy. We should live up to our aims and help where possible those who are trying and are anxious to own homes of their own.

It is rightly accepted that all forms of transfer of income to capital shall only be out of income after it has been taxed. It might therefore be argued that the repayments of a local authority loan or a building society advance should be made wholly out of the taxed income. But there is one most important exception in this field—in the matter of assurance policies. One may get an important tax relief on endowment assurance policies, which is, in fact, a means of giving income relief to all those who wish to save a capital sum.

One even hears it said that the only possible way to save is by means of an assurance policy because of the tax relief which one gets on the insurance premiums. My Clause seeks to extend this relief to an extent equal only to the capital portions of the repayments of building society advances and local authority loans. That is putting a person who wishes to accumulate capital in the form of a home of his own on exactly the same footing as a person who wishes to accumulate a capital sum by means of an endowment assurance policy.

Each building society repayment comprises two elements—an interest payment and a portion of capital repayment. Although the annual sum may be the same throughout the period of the arrangement with the building society, the amount of the interest payment naturally diminishes each year as the amount of the capital repayment increases. The fact, however, that the proportions vary from year to year need not and, indeed, does not alter the principle behind my Clause, which is to make the capital portion of the repayments eligible for tax relief on the same basis as that at present allowed in respect of life assurance premiums.

The interest portion of the payment is, of course, already tax relieved by a system of accounting which will be familiar to my right hon. Friend or to my hon. Friend who is to reply. Indeed, in certain cases it already pays an individual to purchase a house by instalments by the purchase of an endowment assurance policy, which he pays over a period of years, the tax relief being sufficient to give him an advantage over purchasing the house in the ordinary direct way, by means of a building society advance or a local authority loan.

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

That depends on the rate of tax which he is liable to pay.

Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale

I fully appreciate that, and while I do not propose to burden the House with detailed examples I have worked out my examples on the basis that a person is paying the standard rate or a lower rate. I am not proposing in this Clause to give any additional relief to a Surtax payer, for example, nor to give anyone a relief greater than he would get if he was putting aside each month or year the same sum to accumulate in an endowment assurance policy.

7.0 p.m.

Mr. Glenvil Hall:

But the hon. Gentleman's new Clause does not place that same limit on someone who gets this relief. There is no limit here, as there is in the case of endowment policies.

Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale

I think it will be found that the limit is adequately covered by subsection (4). That was certainly my intention, and if it is not adequately covered, and if the new Clause is accepted by the Government, I am quite sure that the Government draftsmen will so modify the subsection as to take care of that point.

I want to refer in particular to subsection (5) because I am anxious that this Clause, if it is accepted, should not apply to other forms of building society transactions, namely, those covering commercial and industrial property. I intend the Clause to apply only to those who wish to own homes of their own and who seek to do so by taking advantage of local authority loans or building society advances.

I hope that my hon. Friend can accept the Clause and thus afford a real measure of relief to those who wish to own their own homes, and so help to bring about a further stage in the property-owning democracy which we all so much desire.

Photo of Sir Cyril Black Sir Cyril Black , Wimbledon

I beg to second the Motion.

I want at the outset to declare an interest in as much as I am a director of a building society and also a director of an insurance company. As my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) has pointed out, the purpose of this Clause is to provide an incentive for saving and for the specialised form of saving which I suggest is a type which the House ought to encourage— namely, the saving which is represented by the purchase of a home by a family for its own occupation.

It is not my intention to develop the general argument, because my hon. Friend has done that admirably already, and I want to detain the House for only a few minutes to give two examples to illustrate the extraordinary results which arise from the fact that, under the present law, this tax concession is granted in the case of insurance company premiums but no similar or corresponding concession is made in the case of capital sums repaid on building society or local authority loans.

I assume, for the purpose of the example which I shall give to the House, what I think would be agreed is a typical case—that of a man, 30 years of age, who wishes to borrow £2,000 for the purchase of a home. The current rate of interest is 4½ per cent., and he has to choose between taking out a mortgage repayable by an endowment policy on his life or, alternatively, taking out a normal building society mortgage with repayments periodically of capital and interest. In each case I assume the life of the mortgage as being 20 years.

In the case of a mortgage which is to be repaid by means of an endowment policy on the purchaser's life, in the circumstances which I have indicated the total payments that he would make over the life of the mortgage, both as interest on the principal money and the insurance premiums which he would pay, would amount to £3,615, but the Income Tax relief on the interest factor is £855 and the Income Tax relief on the insurance premium factor is £345, making a total Income Tax relief of £1,200. If that is deducted from the gross payments of £3,615 it leaves a net cost of £2,415. That is the net cost in the case of an endowment mortgage.

If he chooses the other alternative of a normal building society mortgage, repayable by instalments which include interest and capital, these are the corresponding figures. The total gross payments which he makes are £3,080—a smaller amount than in the case of the first example. The tax relief which he is allowed on the interest content of the repayments is £514, so that his net payments, after tax relief is allowed, amount to £2,566.

Thus we have what I seriously suggest is the ludicrous position that a man who forgoes the advantage of life insurance in connection with his mortgage, and who repays his mortgage over a period of 20 years by the conventional building society or local authority method, pays, over the period of 20 years, £2,566, or exactly £151 more than the man who buys the next door house through an endowment policy and who has all the advantages of the first man, with the additional advantage that if he dies after the first instalment has been paid the whole debt is cleared by means of the insurance policy and the property, unencumbered and freed from debt, remains for the benefit of his wife and family.

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby

In that case, perhaps the hon. Gentleman will tell us how his building society gets any business.

Photo of Sir Cyril Black Sir Cyril Black , Wimbledon

I think it would be wholly inappropriate to endeavour to answer that intervention, although I should be very glad to see the hon. Member, for Sowerby (Mr. Houghton) on another occasion elsewhere, when I will endeavour to enlighten him about it.

Quite seriously, if I may return to the argument which I was developing—and I am about to conclude—it is ludicrous that the operation of the present system, whereby a tax concession is granted in the case of the endowment mortgage on the life insurance premiums, but no tax concession is granted in the case of the repayments of capital on a normal mortgage, should bring about the result that the man who insures his life, in connection with the purchase of his home, has the benefit of the life insurance and, in addition, pays a very much smaller sum in order to have that benefit.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I think the hon. Gentleman is making a very attractive case indeed, but there are two questions I want to ask. Could not the matter be put right without legislation if only the people who borrowed money from building societies took out endowment policies as well? Secondly, and while I am on my feet, if the Government were to accept his proposal would not the effect be to discourage people from taking out endowment policies?

Photo of Sir Cyril Black Sir Cyril Black , Wimbledon

The answer, quite briefly, is that there are a great many people who, on account of age or ill-health, cannot secure life cover, so that the penalty for their ill-health is the fact that not only can they not get life cover, and not only do they forgo the benefit of the life cover, but, in the illustration I have given, it costs them £151 more to buy their home than in the case of the other man.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

The hon. Gentleman took as his illustration a young man aged 30. Age and infirmity would not prevent him from paying life cover.

Photo of Sir Cyril Black Sir Cyril Black , Wimbledon

There are a great many men of 30 who cannot get cover for life purposes because of some incapacity, perhaps arising from war service. I submit that the main theme which I am putting before the House remains unshaken, that it is ludicrous that there should be this disadvantage to a man who buys his home by one method which does not pertain in the case of a similar and corresponding transaction carried out by means of an endowment policy. The only way in which this obvious justice— as I contend it is—can be rectified is by acceptance of the formula contained in the new Clause, or some similar formula —namely, to extend to the case of the other type of mortgage the tax concession which is extended in the case of the endowment mortgage.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

My hon. Friend the Member for Altrincham and Sale (Mr. Erroll) put down this proposal on the Committee stage when he did not have the good fortune, on which I congratulate him today, of having to find favour in the eyes of the Chair. He has also been good enough to write to my right hon. Friend the Chancellor and give him the advantage of his views upon this somewhat difficult subject. Thanks, therefore, to that concatenation of events, my right hon. Friend has had rather more opportunity than is sometimes the case with these Clauses to go carefully into the merits of what I think most hon. Members will agree is a matter that is not wholly free from difficulty.

With the general purposes of this Clause I hope I do not need to say that I am wholly in accord. It is desirable, on the highest social grounds, that no undue difficulty should be put in the way of those who desire to have a house of their own. That is a purpose which certainly appeals to hon. Members on this side of the House. However, the matter goes a good deal further than that, and some of the proposals of my hon. Friends give rise to considerable practical difficulties.

The hon. Member for Wimbledon (Mr. Black), in an agreeable speech, drew an analogy between the position in respect of mortgages and in respect of life insurance premiums. It is the case I think, from a study of the terms of this Clause, that my hon. Friends have attempted to model the draft of it upon, mutatis mutandis, the life insurance provisions.

It is true that there is some degree of anomaly where an attempt is made to purchase a house through the machinery of life insurance. However, I do not know that the analogy between the two forms of saving is, in general, quite as close as my hon. Friends were suggesting. In the first place, there is the fact that the life insurance provision is a very old one. I am inclined to think 'that in strict principle it is probably anomalous to attach a particular kind of tax concession to a particular kind of saving. Be that as it may, it is the fact that insurance in this context is a permanent form of saving. Indeed, there must be, to attract the concession at all, some provision in the policy for a payment to be made on death.

Therefore, though it may sound paradoxical to describe as permanent something which comes to an end with the end of life, there is an element of long duration about life insurance which is quite clearly not to the same extent true in the case of mortgage payments. Though I am not inclined to argue that there is not, where life insurance machinery is used to finance the purchase of a house, some degree of anomaly, I do not think that my hon. Friends can push the argument quite as far as they did, and suggest that there is a very strong case for putting those two forms of saving upon all fours.

Now I come to the precise provisions of the Clause. My hon. Friends have attempted, most laudably, by subsection (5) to prevent this concession going beyond the actual cost of purchase of a house. But I am advised that, neither as they have drafted it nor as it would be possible with expert assistance to draft it, is it possible along these lines so to limit the advantage of the concession which they seek to give. In practice, it would not be easy to ensure that a taxpayer did not borrow more than he really needed for the purpose of the construction of a house. He would be able then to use the balance for the purchase of such agreeable items as, shall we say, a television set.

7.15 p.m.

Both this evening, and in the letter which my hon. Friend the Member for Altrincham and Sale was good enough to send to my right hon. Friend, an argument was adduced in favour of this concession on the grounds of the increased subsidies in respect of council houses. Again, that is a superficially attractive argument, but if one looks at it, it is subject to two or three difficulties. In the first place, if this House decides that there is to be a subsidy to private house building, it would not be in accordance with what is well understood tax practice to give it by way of Income Tax concession. If there were to be any question of such subsidy it would be much more in accordance with the general custom followed in this country to make it an overt subsidy.

However, it is subject to far more difficulty than that. This would assist the person who buys a house on mortgage, but it would give no assistance to the equally admirable citizen who buys a house by realising his savings. I am glad to say that there are still quite a number in this country who save through National Savings, or in any other way, a sufficient sum to buy a house. Those persons would receive no advantage.

Therefore, in remedying some degree of anomaly to which my hon. Friend has referred, as between those who buy on mortgage and those who buy through the machinery of life insurance, he would be creating an even more severe anomaly between those who buy on mortgage and those who first save and then buy a house out of the produce of their savings. That is a serious difficulty and it would create a serious discrimination between citizens who buy their houses. It would of itself be an overwhelming objection to the proposal in this Clause.

Then there is the effect that this Clause would have in the present economic situation. Clearly, it would have an inflationary tendency. We would be giving a very strong inducement to almost anybody who contemplated buying a house to borrow for that purpose the maximum sum he could get on mortgage instead of using other forms of finance. That is inflationary in tendency, and the House will appreciate that in our present economic situation it is a serious objection.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

Why is it more inflationary than realising savings to buy a house?

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

Because it involves the release of some degree of further credit and, therefore, the manufacture of further purchasing power. I do not wish to enter into an argument with the hon. Gentleman on this point, nor indeed to encourage the realisation of savings, but the manufacture of additional purchasing power in this way is distinctly more inflationary in effect than the realisation of savings.

For that reason it would be difficult to take the action recommended in this Clause at a time when my right hon. Friend is anxious not to set loose excessive inflationary pressures. I am sure hon. Members on both sides of the House will realise that that is an aspect of the matter which again requires to be approached with a good deal of caution.

I cannot tell the House what would be the cost of this new Clause. It is clear from what I have submitted that the effect of its adoption would be greatly to increase new mortgage business. To the extent that the process developed, so much greater would be the loss in taxation. However, I can tell the House that the amount involved would be substantial. That is a further difficulty which we see in accepting this proposal. In the present economic position of the country, it is, unfortunately, the gloomy duty of the Member to whom it falls to speak from this Box to urge again and again upon the House the undesirability of proposals which, however attractive in themselves, would involve appreciable reductions in revenue.

Therefore, although, I hope, I do not need to emphasise my sympathy and the sympathy of the Government with the intentions which have moved my hon. Friends to put forward this proposal, we are far from happy about the difficulties which face those who desire to set out on a course of home ownership. We realise that there are difficulties in their way, and we should very much like to help them, but for the reasons I have given, if they are to be helped, we are convinced that this is not the right way, that it would create more anomalies, perhaps, than it would remedy, and that it would be a substantial cost to the Revenue and inflationary in effect.

Nothing that I have said indicates any lack of understanding of the problem and of a desire to assist home ownership. It may well be that more effective methods than an Income Tax concession of this sort might be possible to be evolved, but after detailed consideration, which my hon. Friend's courtesy has enabled us to make of his proposals, I am sorry to have to say that I shall have to ask the House not to accept this proposal, which has been put forward with so much care and moderation.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

The Financial Secretary has made a most astonishing speech. I did not think that there was a great deal of positive merit in the new Clause, because it seemed to me that the anomaly it was sought to cure could, in the great majority of cases, have been cured by the taking out of an endowment policy, which would meet the situation and cure most of the evil that was aimed at—not all of it, because I appreciate that there was some force in the hon. Gentleman's reply to my intervention that there were cases in which even a younger man might not be able to get the appropriate cover.

But I do not think that if that were the only evil to be cured the hon. Gentlemen opposite would have put down the Clause. Most of the mischief could be cured by individuals being properly advised how to raise the finance to make the purchase of small or medium sized dwelling houses.

What brought me to my feet was the extraordinary lengths to which the Government have gone in giving away a large part of the rest of their case in order to meet this very small case that was put to them for curing an obviously anomaly. I gather now that the Government are saying, through the mouth of the Financial Secretary to the Treasury, that they are not in favour at the moment of encouraging people to buy houses on mortgage.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

Then I have not understood the hon. Gentleman. Let me say what was the foundation of my misapprehension. I thought that the Financial Secretary was saying that if we were to adopt this proposal, we would be encouraging people to borrow oftener than they now do, on mortgage, moneys with which to buy houses and that that was inflationary; and that since that would encourage them to do an inflationary thing, the Government ought not to do it.

Photo of Sir Ian Horobin Sir Ian Horobin , Oldham East

My hon. Friend did not say that they would borrow more often, but that they would borrow larger sums than they would otherwise need.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

No; that is a separate point, and I am coming to it. The Financial Secretary said that, but not in this connection. What he said, quite clearly, was that it would be anomalous to encourage people to borrow on mortgage rather than to sell their savings and to buy houses that way, which is another part of the same argument.

Both those arguments only make sense if the Government are saying that it is an inflationary thing, to be discouraged, that people should borrow money to buy their houses. I gather that the Financial Secretary is as surprised as I am at the implications of his argument, but it was his argument and not mine. It does not make any sense unless that is what he means. All that part of his argument was directed to saying that if we did this we would encourage people to borrow money on mortgage to buy houses, but that we do not want them to do that because it would be inflationary.

How, then, would the hon. Gentleman defend the proposals to sell council houses? To whom does he propose to sell them? To people who have savings that they can liquidate in order to buy them, or to people who have enough ready cash to buy them and who do not need to go to building societies to raise money on mortgage which they would have to repay by instalments?

It is most curious how the Treasury, in order to resist a very small point, give away, without even knowing that they have given it, so large a part of the policy which my right hon. and hon. Friends on this side have been opposing ever since the Chancellor of the Exchequer made his statement at the beginning of this Parliament after the last General Election.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

The hon. Member appears clearly to have misapprehended my argument. On the point to which, I think, he has been trying to refer, my argument was that it was unfair and anomalous to confer a substantial benefit on the person who used one method of financing the purchase of his house—to wit, mortgage—while no compensating provision gave equal assistance to the person who financed it in the other way by the realisation of savings. My argument was no more than that.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

It is quite true that the Financial Secretary said what he has just intervened to say, but when he adds "no more than that" I beg him to read HANSARD tomorrow morning, when he will find that he said a great deal more than that; and it was that great deal more that prompted me to make this intervention.

The only other point that he made was that this would encourage people to borrow more than they need. I do not know what experience he has, either himself or through friends or clients, of borrowing money from building societies with which to buy small dwelling houses. It would be difficult to persuade building societies to lend more than the security was worth. I know that that is not what was said; what was said was "more than was needed." My experience, I think, is the experience of everybody who has ever advised people in the handling of these matters: that the difficulty of the ordinary middle-class and lower-class people is that their security is usually worth very much less than they need, rather than the other way round.

Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale

We have had the benefit of a most closely reasoned and courteous reply from my hon. Friend the Financial Secretary, for which I thank him. As I should like to have the opportunity of studying his reply in greater detail, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.