Clause 24. — (Sale of Shares in Investment Company to Associated Dealing Company.)

Part of Order of the Day – in the House of Commons at 12:00 am on 24th May 1960.

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Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby 12:00 am, 24th May 1960

We are ready to part with the Clause, although my confidence in what we are doing is waning hour by hour. We started off thinking we had really got something in this and other Clauses; then we found a crop of Amendments put down by the Chancellor of the Exchequer, with the object of improving those Clauses, and now we are threatened with another grilling on Report, because time and again in the last hour or two points have been raised which the Solicitor-General has said will be considered before Report —there is a doubt in his mind about this, and there may be a snag about that. The whole thing is becoming a bit of a shambles.

What lies in the background, in the matter of administration, I do not know, but this has lifted the veil of security on the antics of these boys in the City. What are they up to? What are they contributing to the national well-being? It used to be said that a man cannot make a profit out of himself, but it is possible. If a person has control of an investment company he can make a profit if he sells to a holding company which is also controlled by him. It is that transaction which the Clause is designed to catch.

The Solicitor-General may be quite right to chide my hon. Friend the Member for Gloucester (Mr. Diamond) by saying that a capital gains tax would not solve all these problems. It probably would not, but the Committee is confronting the country with a grave crisis in the principles and the basis of our taxation. The public does not realise how much tax avoidance is going on, and what manipulations can be deployed by people to avoid taxation. It is a pity that this debate is taking place at a very late hour, when the whole of the aggrieved taxpayers in the community are resting quietly in their beds, unaware of the attempts we are making to safeguard their interests; but it will be our duty at some time before the Bill is passed to make our protest while the public is still awake.