Capital Gains (Mergers and Take-over Bids)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 13th February 1962.

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Photo of Mr Emrys Hughes Mr Emrys Hughes , South Ayrshire 12:00 am, 13th February 1962

asked the Chancellor of the Exchequer to what extent his appeal for continued restraint in profits and dividends in paragraph 14 of the White Paper, Incomes Policy: The Next Step, includes restraint on the part of individuals and others in the matter of capital gains and increases in share values arising from mergers and takeover bids.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

The White Paper deals with the question of restraint in the growth of all forms of incomes. The question of capital gains is a separate one. I have already expressed the intention to submit to the House proposals for taxing certain types of short-term gains now free of tax.

Photo of Mr Emrys Hughes Mr Emrys Hughes , South Ayrshire

Does that Answer mean that the Chancellor is keeping a very careful eye on what is happening in the affairs of Courtaulds and I.C.I.? Is he keeping an eye on this sort of activity as a possible source of revenue?

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

I am keeping a careful eye on all sorts of things at the present time.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

Since he has stated so carefully Mr. Khrushchev's policy, can the Chancellor tell us what Mr. Khruschchev does about capital gains?

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

What he said in his speech was this: If we raise wages and the wages funds are higher than the funds of goods, what happens then? You will have a lot of money, but you will not buy meat and milk in the shops, because the output of produce will fall still further behind the population's purchasing power. In such a situation the speculator is the only one to gain.

Photo of Mr James Callaghan Mr James Callaghan Shadow Chancellor of the Exchequer, Member, Labour Party National Executive Committee

Is the Chancellor aware that he could galvanise this nation into a similar effort to that being made in the U.S.S.R. if there were fair dealing among all sections of the population? Does he not realise that it is precisely because there is this discrimination in favour of shareholders and against those who earn their living that he is dividing the nation and failing to get the response he wants?

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

I certainly agree that it is very necessary to convey to the people the sense of fair dealing. When hon. Members opposite talk about shareholders they never refer to cases where shareholders lose their money.

Photo of Mr Henry Hynd Mr Henry Hynd , Accrington

On a point of order. As you have frequently ruled that it is out of order to give quotations in supplementary questions, Mr. Speaker, are we to understand that it is in order to give quotations in supplementary answers?