I beg to move, in page 19, line 26, at the end to insert:
Provided that in the application of this section to a disposal of shares acquired as legatee on a death a company shall be treated as not chargeable to tax under Case VII by reference to any acquisition of land made before the death.
The Amendment provides that in calculating the charge under the Clause on a legatee in respect of a disposal of inherited shares in a land-owning company, there shall be left out of account land acquired before the death giving rise to the legacy. This arises out of a discussion we had in Committee at the earlier stage of the Bill when my hon. Friend the Member for Crosby (Mr. Graham Page) moved an Amendment which had as its object the exclusion from the scope of the Clause of shares acquired as a legatee.
On that occasion my hon. Friend said in the short discussion that we had on this subject that a legatee may dispose of inherited shares purely for Estate Duty purposes and might find himself left with a legacy on which he had to pay both Estate Duty and tax under the Clause. On that occasion the hon. Member for Crosby was, I think, under some misapprehension. The payment of Estate Duty is the responsibility of the executors of the estate, who are exempt from Case VII liability in respect of the property of the deceased, and the executors would not normally pass over assets to the beneficiaries until the Estate Duty liability had been settled.
I think that it is unlikely, therefore, that a legatee would have to sell shares he has inherited in order to meet an Estate Duty liability. At the earlier Committee stage I said that it would be wrong to take inherited shares out of the Clause altogether, but I undertook to consider before the next stage of the Bill, whether, in computing the charge on inherited shares that were sold, there should be an exclusion of land acquired by the company before the legatee acquired them.
We have looked at the matter again and, on reflection, it seems that the limitation under Clause 13 is justified. The effect of the Amendment is, therefore, to confine the charge on a legatee in respect of a disposal of shares in a land-awning company which came to him as legatee—I am deliberately using technical language because this is a narrow point—to confine the charge to the due proportion of the accretion in value at the time of the sale of any land then held by the company for less than three years which had been acquired after the death which gave rise to the legacy.
This is a narrow point and there is no question of going back on the general principle of the Clause nor could there possibly be any question of altogether taking inherited shares out of the Clause. The point raised by the hon. Member for Crosby was a reasonable one and I therefore advise the Committee to accept the Amendment.
I should like to express my gratitude to the Financial Secretary for tabling the Amendment. It covers the point I raised during the earlier Committee stage. However, I still think that I was correct, especially if one considers a residuary and not a specific legatee. He may be paying Estate Duty on the value of the shares by reason of the company owning the land, but when he sells the shares he pays the short-term gains tax under the Bill. I should say that he would have done as the Bill stood. Now the tax applies only if the land or the security is purchased after the death and the shares disposed of within six months or three years, as the case may be. The Amendment meets my point absolutely and I am grateful to my hon. Friend for having introduced it.
Might I pursue this matter a little further to make sure that I understood what the Financial Secretary has in mind? If it is what I think it is, I am against the Amendment. Perhaps I could put it in a way different from that put by the Financial Secretary to see how far I understood his argument. Under the proposed Amendment, if shares are handed on to a legatee as a result of a death, then the land which has been purchased before the death would not be liable to the speculative gains tax. Is that correct?
It is nearly right. I will speak more slowly this time so that the hon. Member for Cardiff, South-East (Mr. Callaghan) might more easily understand the argument. We all appreciate the difficulty we are in, particularly those, like myself, who are not members of the legal profession. When one is calculating under the Clause the charge on a legatee which arises out of a disposal of inherited shares in a landowning company—which is what we are considering by the Amendment—the purpose of the Amendment is to leave out of account any land acquired by a company before the death which gave rise to the legacy.
I think I was about 80 per cent. right. But why is the Financial Secretary's argument correct? Why should not land which has been purchased and sold in this way—within a period of three years—bear the speculative gains tax in exactly the same way as any other parcel of land purchased and sold? It has attracted a profit. I am not arguing whether that it good or bad. No one is going to argue that the recipient of the shares is worse off. He is obviously better off. Why should he not make his contribution? In the absence of an explanation as distinct from a definition, I am opposed to the Amendment.
Surely the unfairness of the transaction in this case is that the value of the land purchased before the death would be reflected in the value of the shares which the legatee inherits. He therefore pays Estate Duty on that value. He may then dispose of the shares after the death. He is then paying the capital gains tax on something on which he has already paid Estate Duty. That is the unfairness as it would be if this Clause were to remain as it is.
It comes out of his share if he is residuary legatee. It is paid out of the estate. That is why I think I am right in saying that it is unfair when the legatee is a residuary legatee. It may have no effect when he is a specific legatee.
It is not so limited. My answer would be this. To some extent I think that I disagree with both the hon. Member for Cardiff, South-East and my hon. Friend the Member for Crosby. On the one hand, I must say to my hon. Friend the Member for Crosby that I think this is a very unlikely case to arise. It is unlikely that a legatee would have to sell shares which he had inherited in order to meet an Estate Duty problem. On the other hand, there is the narrow point which the hon. Member for Cardiff, South-East raised.
In my view, the Amendment which the Government are suggesting here, while it is not likely to affect more than a minimum number of cases, meets my hon. Friend's point to the extent to which his argument was valid. I agree that this is a narrow point. I will not pretend that the Amendment makes a great deal of difference to Clause 13, or bites in a large number of cases.
I do not think so, either. I think that it is useful to probe one or two of these Amendments which seem incomprehensible to begin with. I take issue with the hon. Member about the specific legatee. Why should he not pay a speculative gains tax? He bears nothing at all. Perhaps in the case of the residuary legatee it is more arguable; I do not know. I think that I could sustain a case here that the residuary legatee has a liability to contribute to the public purse; but, so far as the specific legatee is concerned, it seems to me there is a clear case why he should bear his proportion of the duty. With respect to the Financial Secretary, lucid though he has been, I do not think that he has been convincing.
|Division No. 225.]||AYES||[7.44 p.m.|
|Agnew, Sir Peter||Grosvenor, Lt.-Col. R. G.||Percival, Ian|
|Arnery, Rt. Hon. Julian||Gurden, Harold||Peyton, John|
|Arbuthnot, John||Hamilton, Michael (Wellingborough)||Pickthorn, Sir Kenneth|
|Ashton, Sir Hubert||Harris, Frederic (Croydon, N.W.)||Pitman, Sir James|
|Atkins, Humphrey||Harvey, Sir Arthur Vere (Macclesf'd)||Prior, J. M. L.|
|Balniel, Lord||Harvey, John (Walthamstow, E.)||Profumo, Rt. Hon. John|
|Barber, Anthony||Hastings, Stephen||Proudfoot, Wilfred|
|Barlow, Sir John||Hay, John||Pym, Francis|
|Barter, John||Heald, Rt. Hon. Sir Lionel||Quennell, Miss J. M.|
|Baxter, Sir Beverley (Southgate)||Henderson, John (Cathcart)||Redmayne, Rt. Hon. Martin|
|Beamish, Col. Sir Tufton||Hendry, Forbes||Bees, Hugh|
|Bell, Ronald||Hicks Beach, Maj. W.||Renton, David|
|Bennett, F. M. (Torquay)||Hiley, Joseph||Ridley, Hon. Nicholas|
|Bidgood, John C.||Hill, Dr. Rt. Hon. Charles (Luton)||Rippon, Geoffrey|
|Biffen, John||Hirst, Geoffrey||Roberts, Sir Peter (Hecley)|
|Bishop, F. P.||Hobson, Sir John||Robson Brown, Sir William|
|Black, Sir Cyril||Hocking, Philip N.||Rodgers, John (Sevenoaks)|
|Bossom, Olive||Holland, Philip||Roots, William|
|Bourne Arton, A.||Hollingworth, John||Ropner, Col. Sir Leonard|
|Bowen, Roderic (Cardigan)||Hooson, H. E.||St. Clair, M.|
|Boyle, Sir Edward||Hopkins, Alan||Scott-Hopkins, James|
|Brewis, John||Hornby, R. P.||Seymour, Leslie|
|Brooke, Rt. Hon. Henry||Howard, Hon. G. R. (St. Ives)||Sharpies, Richard|
|Brown, Alan (Tottenham)||Hughes Hallett, Vice-Admiral John||Shaw, M.|
|Browne, Percy (Torrington)||Hughes-Young, Michael||Shepherd, William|
|Buck, Antony||Hulbert, Sir Norman||Smith, Dudley (Br'ntf'd & Chiswick)|
|Bullus, Wing Commander Eric||Iremonger, T. L.||Smithers, Peter|
|Burden, F. A.||Irvine, Bryant Godman (Rye)||Spearman, Sir Alexander|
|Campbell, Gordon (Moray & Nairn)||James, David||Stevens, Geoffrey|
|Carr, Compton (Barons Court)||Jennings, J. C.||Stewart Harold (Stockport, S.)|
|Carr, Rohert (Mitcham)||Johnson, Eric (Blackley)||Stoddart-Scott, Cot. Sir Malcolm|
|Cary, Sir Robert||Kerans, Ctlr. J. S.||Storey, Sir Samuel|
|Chataway, Christopher||Kerby, Capt. Henry||Studholme, Sir Henry|
|Chichester-Clark, R.||Kirk, Peter||Summers, Sir Spencer|
|Clark, Henry (Antrim, N.)||Lancaster, Col- C. G.||Talbot, John E.|
|Cole, Norman||Legge-Bourke, Sir Harry||Tapsell, Peter|
|Collard, Richard||Lewis, Kenneth (Rutland)||Taylor, Edwin (Bolton, E.)|
|Cooper, A. E.||Linstead, Sir Hugh||Taylor, Frank (M'ch's't'r, Moss Side)|
|Cooper-Key, Sir Neill||Litchfield, Capt. John||Taylor, W. J. (Bradford, N.)|
|Cordeaux, Lt.-Col. J. K.||Lloyd Rt. Hon. Selwyn (Wirral)||Teeling, Sir William|
|Cordle, John||Longbottom, Charles||Thatcher, Mrs. Margaret|
|Corfield, F. V.||Longden, Gilbert||Thomas, Leslie (Canterbury)|
|Costain, A. P.||Loveys, Walter H.||Thompson, Richard (Croydon, S.)|
|Coulson, Michael||Lubbock, Eric||Thornton-Kemsley, Sir Colin|
|Critchley, Julian||Mc Adden Sir Stenhen||Tiley, Arthur (Bradford, W.)|
|Crowder, F. P.||McLaren, Martin||Touche, Rt. Hon. sir Gordon|
|Curran, Charles||McLean, Neil (Inverness)||Turner, Colin|
|Currie, C B. H.||Macleod, Rt. Hn. Iain (Enfield, W.)||Turton, Rt. Hon. R, H.|
|Dance, James||McMaster, Stanley R.||Tweedsmuir, Lady|
|d'Avigdor-Goldsmid, Sir Henry||Maddan, Martin||Vane, W. M. F.|
|Deedes, W. F.||Maginnis, John E.||Vaughan-Morgan, Rt. Hon. Sir John|
|de Ferranti, Basil||Manningham-Buller, Rt. Hn. Sir R.||Vickers, Miss Joan|
|Digby, Simon Wingfield||Markham, Major Sir Frank||Wade, Donald|
|Donaldson, Cmdr. C. E. M.||Marlowe, Anthony||Wakefield, Sir Wavell|
|Doughty, Charles||Marshall, Douglas||Walder, David|
|Drayson, G. B.||Marten, Neil||Walker, Peter|
|du Cann, Edward||Mathew, Robert (Honiton)||Walker-Smith, Rt. Hon. Sir Derek|
|Duncan, Sir James||Matthews, Gordon (Meriden)||Wall, Patrick|
|Elliot, Capt. Walter (Carshalton)||Mawby, Ray||Ward, Dame Irene|
|Emmet, Hon. Mrs. Evelyn||Maxwell-Hyslop, R. J.||Webster, David|
|Errington, Sir Eric||Maydon, Lt.-Cmdr. S. L. C.||Wells, John (Maidstone)|
|Erroll, Rt. Hon. F. J.||Mills, Stratton||Williams, Dudley (Exeter)|
|Farey-Jones, F. W.||Morgan, William||Williams, Paul (Sunderland, S.)|
|Farr, John||Mott-Radclyffe, Sir Charles||Wills, Sir Gerald (Bridgwater)|
|Finlay, Graeme||Nabarro, Gerald||Wilson, Geoffrey (Truro)|
|Forrest, George||Neave, Airey||Wise, A. R.|
|Fraser, Ian (Plymouth, Sutton)||Noble, Michael||Wolrige-Gordon, Patrick|
|Gardner, Edward||Nugent, Rt. Hon. Sir Richard||Woodhouse, C. M.|
|Glover, Sir Douglas||Oakshott, Sir Hendrie||Woodnutt, Mark|
|Glyn, Dr. Alan (Clapham)||Orr, Capt. L. P. S.||Woollam, John|
|Goodhart, Philip||Osborn, John (Hallam)||Worsley, Marcus|
|Goodhew, Victor||Page, Graham (Crosby)|
|Gower, Raymond||Page, John (Harrow, West)||TELLERS FOR THE AYES:|
|Green, Alan||Pannell, Norman (Kirkdale)||Mr. J. E. B. Hill and Mr. Batsford.|
|Pearson, Frank (Clitheroe)|
|Ainsley, William||Hilton, A. V.||Parker, John|
|Allaun, Frank (Salford, E.)||Holman, Percy||Paton, John|
|Allen, Scholefield (Crewe)||Houghton, Douglas||Pearson, Arthur (Pontypridd)|
|Awbery, Stan||Howell, Charles A. (Perry Barr)||Peart, Frederick|
|Bacon, Miss Alice||Howell, Denis (Small Heath)||Pentland, Norman|
|Baxter, William ((Stirlingshire, W.)||Hughes, Emrys (S. Ayrshire)||Prentice, R. E.|
|Bence, Cyril||Hughes, Hector (Aberdeen, N.)||Price, J. T. (Westhoughton)|
|Bennett, J. (Glasgow, Bridgeton)||Hunter, A. E.||Probert, Arthur|
|Benson, Sir George||Hynd, H. (Accrington)||Proctor, W. T.|
|Blackburn, F.||Hynd, John (Attercliffe)||Pursey, Cmdr. Harry|
|Boardman, H.||Irvine, A. J. (Edge Hill)||Randall, Harry|
|Bowden, Rt. Hn H. W.(Leics, S.W.)||Irving, Sydney (Dartford)||Redhead, E. C.|
|Boyden, James||Janner, Sir Barnett||Roberts, Albert (Normanton)|
|Braddock, Mrs. E. M.||Jay, Rt. Hon. Douglas||Robertson, John (Paisley)|
|Bray, J. W.||Jeger, George||Robinson, Kenneth(St. Pancras, N.)|
|Broughton, Dr. A. D. D.||Johnson, Carol (Lewisham, S.)||Rodgers, W. T. (Stockton)|
|Butler, Herbert (Hackney, C.)||Jones, Dan (Burnley)||Rogers, G. H. R. (Kensington, N.)|
|Callaghan, James||Jones, Elwyn (West Ham, S.)||Ross, William|
|Castle, Mrs. Barbara||Jones, J. Idwal (Wrexham)||Royle, Charles (Salford, West)|
|Chapman, Donald||Kelley, Richard||Silverman, Sydney (Nelson)|
|Collick Percv||Key, Rt. Hon. C. W.||Skeffington, Arthur|
|Corbet, Mrs. Freda||King, Dr. Horace||Slater, Joseph (Sedgefield)|
|Craddock, George (Bradford. S.)||Lawson, George||Small, William|
|Cronin, John||Ledger, Ron||Smith, Ellis (Stoke, S.)|
|Crosland, Anthony||Lever, L. M. (Ardwick)||Sorensen, R. W.|
|Cullen, Mrs. Alice||Loughlin, Charles||Soskice, Rt. Hon. Sir Frank|
|Davies, G. Elfed (Rhontlda, E.)||Mabon, Dr. J. Dickson||Spriggs, Leslie|
|Delargy Huch||McCann, John||Stewart, Michael (Fulham)|
|Diamond, John||MacColl, James||Stonehouse, John|
|Dodds Norman||McKay, John (Wallsend)||Stones, William|
|Driberg Tom||Mackle, John (Enfield, East)||Taverne, D.|
|Dugdale, Rt. Hon. John||McLeavy, Frank||Taylor, Bernard (Mansfield)|
|Ede, Rt. Hon. G.||MacPhereon, Malcolm (Stirling)||Thompson, Dr. Alan (Dunfermline)|
|Edeiman, Maurice||Mallalleu, E. L. (Brigg)||Thornton, Ernest|
|Edwards, Rt. Hon. Ness (Caerphilly)||Manuel, Archie||Tomney, Frank|
|Edwards, Robert (Bliston)||Mapp Charles||Warbey, William|
|Edwards, Walter (Stepney)||Marsh, Richard||Weitzman, David|
|Fernyhough, E.||Mason, Roy||Wells, Percy (Faversham)|
|Fitch, Alan||Mendelson, J. J.||Wells, William (Walsall, N.)|
|Fletcher, Eric||Millan, Bruce||White, Mrs. Eirene|
|Foot, Michael (Ebliw Vale)||Milne Edward||Wilkins, W. A.|
|Fraser, Thomas (Hamilton)||Mitchison, G. R.||Willey, Frederick|
|Ginsburg, David||Monslow, Walter||Williams, D. J. (Neath)|
|Gordon Walker, Rt. Hon. P. C.||Moody, A. S.||Williams, LI. (Abertillery)|
|Griffiths, W. (Exchange)||Morris, John||Williams, W. R. (Openshaw)|
|Hale, Leslie (Oldham, W.)||Moyle, Arthur||Williams, W. T. (Warrington)|
|Hall, Rt. Hn. Glenvil (Colne Valley)||Mulley, Frederick||Willis, E. G. (Edinburgh, E.)|
|Hamilton, William (West Fife)||Neal, Harold||Wilson, Rt. Hon. Harold (Huyton)|
|Hannan, William||Noel-Baker, Francis (Swindon)||Winterbottom, R. E.|
|Harper, Joseph||Noel-Baker,Rt.Hn.Philip(Derby,S.)||Woof, Robert|
|Hayman, F. H.||Oliver, G. H.||Vates, Victor (Ladywood)|
|Henderson,Rt.Hn.Arthur(Rwly Regis)||Owen, Will|
|Herbison, Miss Margaret||Paget, R. T.||TELLERS FOR THE NOES:|
|Pannell, Charles (Leeds, W.)||Mr. Grey and Mr. Ifor Davies|
I beg to move, in page 20, line 14, at the end to insert:
For the purposes of this subsection "value" in relation to a company's land means market value, and the net value of a company's assets is the net value they would have on a sale in the open market of the company's business as a going concern.
This is practically a drafting Amendment, but I will explain it briefly. Under Clause 13 (6) a land-owning company is defined for the purpose of the Clause as a company which is entitled to land to a value equal to or exceeding one-fifth of the net value of all its assets. It has been suggested that the meaning given to the word "value" in subsection (6) is uncertain. It is suggested that it could be said to be book value, or it
might be the value for taxation purposes, or it might be market value. The Amendment accordingly provides that value in relation to a company's land is to mean market value and that the net value of a company's assets is to be the net value which they would have on a sale in the open market of the company's business as a going concern.
The Amendment does not alter the Clause in the slightest nor what everyone has taken to be the plain meaning of the Clause. Its purpose is to make certain that there is no doubt at all as to its meaning.
This is a meretricious, deceptive, muddled, inconsistent and generally hopeless Government. In
1958, they introduced a Bill which dealt with the market value of land. The then Minister of Housing and Local Government, talking about some Clauses which had been put into the Bill for the purpose of defining market value, said:
Curiously little has been said in the debate about Clauses 3 to 6. These were referred to in a letter in The Times, which some hon. Members have mentioned. The suggestion there was they were altogether too complicated, and that we might cut out the complexities and rely simply on prevailing use value. My hon. Friend the Member for Norwich. South perceived that there were defects in that proposal. The value of land in the open market"—
That seems to be the question here—
depends almost entirely on what can be done with the land. The market, therefore, is concerned more with prevailing future use than with prevailing existing use. If the suggestion in the letter were adopted"—
That, I think, was to keep down the complexities and rely simply on prevailing use value—
it seems to me that if one had a case where land was being bought in an area at present entirely agricultural, but allocated in the development plan for housing, then the prevailing use would be agricultural. If the suggestion in the letter were adopted, the 1947 Act formula would give only agricultural value. That seemed to the Government to be unfair, and the provisions in the Bill would secure housing value. Indeed, these complicated provisions are designed not to put more power into the hands of the Minister, as the letter alleged, but to make as sure as possible that justice is clone to the individual."—[OFFICIAL REPORT, 13th November, 1958; Vol. 595, c. 689.]
Those pregnant words were spoken by the present Chief Secretary to the Treasury on six highly complicated Clauses which he introduced and which took up a great deal of time both in the House and in Committee. They were simply devoted to getting down to what is the market value of land. Now we have the same right hon. Gentleman, with the assistance of other Treasury Ministers, supporting an Amendment which simply says that value in relation to a company's land means market value.
What, therefore, was all this "hot air" about when we were kept day after day talking about the market value of land and planning assumptions? Why could the Government not have said then what is said in this Amendment, that the value of land is market value? I think now, as I thought then, that is was sufficient to the purpose. Is there some difference between the attitude of the Treasury and that of the Ministry of Housing and Local Government? Have the Government changed their minds? Do planning assumptions no longer matter? Why are they so lucid and clear when it comes to statements of what value means in relation to company land when we had all that wasted time and fuss and bother when we were defining land value for the purpose of compensation for compulsory purchase? As I say, this is a somewhat fraudulent, meretricious, confused and incompetent Government.
While agreeing with my hon. and learned Friend the Member for Kettering (Mr. Mitchison), I should like to point out that at last the Government have come down on the side of defining something which they resisted doing for a considerable time. The Financial Secretary to the Treasury was not here when we had that discussion in which the right hon. and learned Attorney-General played a major and distinguished part. Could the Attorney-General tell me why it is easier and appropriate to define the market value of land than it is to define those things which we were discussing earlier this evening? It is quite clear that my hon. and learned Friend the Member for Kettering has correctly sized up the many iniquities of the Government, but for one evening at least they might have arranged to be consistent.
Does this mean that we are not to have a reply? It would be a great shame if we all had to get up in turn in order to try to extract a response from the Government. We are quite ready to give the Financial Secretary time to think of his reply, but I hope that he will give one.
I am glad to see that there is a definition of value in Clause 15, to which we shall come in due course, which says that in relation to any property market value means
the price which the property might reasonably be expected to fetch on a sale in the open market".
I hear one of my hon. Friends mutter behind me that that is what he always thought it meant. I think that he is probably right; that is what most of us thought it meant. However, according to previous Statutes, it does not mean anything quite so simple and definite as that. It means something which has to be wrapped up in about six Sections of an Act.
On balance, I prefer what is in the Finance Bill. I think that it is clear and simple and, although I do not wish to cross swords with the courts, since we are always very careful about that, I think that not even the courts would misconstrue it. But how can the Financial Secretary be so clear in drafting this piece of legislation when such difficulty is found in defining the same thing in other legislation?
I was not here for all the earlier discussions, but I can say this now in reply. I do not profess to be an expert philosopher, though perhaps something of an amateur enthusiast for the subject, but I know that the word "value" has very many uses and usages in one form or another and exactly what the word "value" means and what job it does in a particular sentence are questions about which many learned men have disputed for generations. I do not think that quite the same is true of the words "commodities" and "futures markets". I will leave it at that.
This is an important matter. The Financial Secretary tries to ride off on a felicitous answer, but he has not, in fact, answered the point raised by my hon. and learned Friend the Member for Kettering (Mr. Mitchison).
In the Town and Country Planning Act, 1958, we took about six Sections to define value for the purposes of compensation, whereas here, apparently, we need only one. I served a long time on the Committee which dealt with the Act when it was going through Parliament, and I remember that we had long discussions about this matter with learned dissertations on land tenure in Scotland and other factors which had to be taken into account in determining market value.
The question is whether or not these factors have to be taken into account when considering value in connection with Clause 13. Have all these factors which were enumerated in the many provisions of the earlier Act to be taken into account when determining what market value is? We were told then that market value required a great deal of consideration and definition because we were providing for compensation to landowners. This is the point, of course. To ensure that the landowner would be fairly treated, a considerable part of the earlier Act was devoted to the subject.
There is an obligation here, to ensure that we are not being cheated, to see that the same definition and provisos should apply. This is the point which has not been answered. What is the difference? Why are we now confronted with this different definition of the expression "market value"?
Mr. J. T. Price:
I am sorry that I had to leave the Chamber for a few minutes in order to eat to sustain my patience in face of so much negative response from the Government on earlier Amendments. I am familiar with the point at issue on this Amendment. I shall not weary the Committee by going into the philosophical implications of the word "value", though the Financial Secretary has tempted me to do so. I might even call in aid Karl Marx, who wrote a very learned book about value, surplus value and all the rest.
What we do know is that land is one of the counters most commonly used by speculators. Land is a more certain winner in the long run than equity shares. When everything is wobbling up and down, land continues on its straight course upwards, and the social consequences of the ever-increasing value of land pain and intrigue many of us, making us long for the day when we can adopt a more rational approach to it than has ever been taken by this Administration or, I may add, even by previous Labour Governments.
The value of land has often been disputed in the House of Commons in more simple connotations than this. For instance, a few years ago, Her Majesty's Government introduced legislation to make local authorities pay the market value for land irrespective of whether it was to be used for housing, for public development or for the social needs of the community. In considering this piece of legislation, we want to know whether we shall have the same safeguards applied to the proper value of land in the taxation on estates and companies as were applied to land sought by public authorities for housing the people.
In this morass of terminology, as I am able to read it, the thing is very vague and indeterminate. For instance, considering the value of land on realisation of an estate, we have to take other things into account, apart from the market value of the land, to make a properly balanced equitable solution. I will put to the hon. Gentleman a question he should answer. He is fair minded enough to answer it if he can or, at least, to make an attempt. There may be parcels of land in an estate which is being subjected to taxation in the way intended by the Clause which have been refused a development certificate by a planning authority. Because they have been refused a development certificate, the planning authority has had to pay compensation to the owners of the land. This is built into the property of the people owning the land, irrespective of what the market value of the land is at the time of break-up.
It is not good enough to palm off the Amendment in a casual way. The hon. Gentleman should not try to persuade some of us, who are fairly hard-headed, that there is nothing much in it and that it is all innocuous. The one sacred form of property in Britain and most other developed countries is land. People interested in property are more interested in the inviolability of land than in other forms of property. I make no apology for being perhaps a bit old-fashioned about this, after the style of some of our worthy forefathers who always regarded land as basic to all, human considerations, value and everything else.
The Mikado? I am speaking of my ancestors, not those of Sun Yat-Sen. [Laughter.] Hon. Members are being most provocative. I am making a perfectly reasonable, short intervention, trying to have these things put right. We are not satisfied to be brushed off with the sort of explanation of value which we have been given because the value of land is very important.
Although the hon. Gentleman was not here for our earlier discussion, and he may feel some embarrassment in trying to deal with the question put to him, I must insist that it is a question which requires a more adequate answer than we have had so far. I feel that the Chancellor of the Exchequer's Amendments should not command support because he has not justified them. He has not put forward an adequate argument to dispose of my hon. Friend's criticism. I hope that we shall record our displeasure at being given this very partial and unsatisfactory explanation of something which is fundamental to the future well-being, of the country.
The hon. Member for Westhoughton (Mr. J. T. Price), not quite catching the reference to David Ricardo from the Opposition Front. Bench, reminded me a little of the story of Mrs. Hudson, wife of the railway magnate, who, on being shown a bust of Marcus Aurelius, said. "It is not the present marquis, is it?"
The preoccupation of the hon. Member for Edinburgh, East (Mr. Willis) with the definition of market value, with what was said in the Town and Country Planning Act and with what is said in this Bill is making the philosophical error about the essentialist theory of definition. I can refer the hon. Gentleman to a book in the Library which deals with that matter fully.
We all know what is meant. There is surely no ambiguity about what is meant by a sale in the open market of a company's business as a going concern. Those words, which are perfectly clear and straightforward, define what is meant in this Amendment by the "net value of a company's assets". They are not in any way ambiguous. I do not think that there is anything wrong in the word doing a slightly different job in this Amendment from the job which it did in a major piece of town and country planning legislation.
I hope that, with that explanation, the Committee will feel able to come to a decision on this Amendment.
I beg to move, in page 20, line 16, to leave out "one-twentieth" and insert "one-tenth".
We are in the curious position on this Clause of having three consecutive Amendments all dealing with very different subjects, which does not often happen. This Amendment deals with a different matter from the matters with which we have just been dealing. It increases from one-twentieth to one-tenth the proportion of shares in a landowning company which a person has to hold in order to have a substantial interest in the company for the purposes of Clause 13.
Clause 13 charges a person with a substantial interest in a land-owning company under the control of not more than five persons who disposes of shares in the company on the lesser of two things—either the actual profit on the sale of shares, or the due proportion of the chargeable gains which the company would have made on disposing of land acquired by it within three years of the sale of shares.
During the Committee stage, my hon. Friend the Member for Worcester (Mr. Walker) moved an Amendment the object of which was to take out of the scope of Clause 13 a public company whose shares are officially quoted on the Stock Exchange in the United Kingdom and 25 per cent. of which are held by the public. My hon. Friend made the point that if public companies remained within Clause 13 a shareholder who happened to have 5 per cent. of the shares might be liable on a sale of shares even though he did not know that the company was controlled by five or fewer persons. There was the further point that, since shares held by a person's relatives have to be aggregated with his own holding in applying the 5 per cent. tax, the holder of a quite small block of shares might find himself caught unexpectedly by the Clause.
I said in reply that I thought that it would not be possible to exclude public companies from Clause 13, but that we would look at the Clause from the general policy angle and from the administrative point of view to see whether it had too wide an ambit. There is some force in the view that the Clause as it stands has too wide an ambit and that with the 5 per cent. shareholding test it might catch—again I think that this would happen on only rare occasions—people who had no say in or even knowledge of the conduct of a landowning company's shares.
My right hon. and learned Friend the Chancellor of the Exchequer has therefore decided that it would be better to substitute a 10 per cent. share-holding test. This would clearly exclude members of the public who merely happen to hold some shares in a closely controlled land-owning company. But I do not think that it will give rise to any real risk of letting out operators who are there to exploit the device of selling what is, in effect, an interest in land through the medium of the company. We felt throughout that we did not in any way wish to weaken the main purpose of the Clause. Whatever may be the difference in the Committee as to what the scope of the test should be, I am sure that a Clause of this kind is necessary, and we do not want to weaken its purpose. However, I think that there was something in my hon. Friend's point that the ambit of the Clause was too wide in its original form, and that is why we have tabled the Amendment.
I am grateful to my hon. Friend the Financial Secretary for in some way improving the provisions of the Clause, but I should like to repeat what I said in Committee, namely, that, while in favour of using the Clause to catch the person who decides to dispose of property and land by means of shares and thus avoid the provisions of the speculative gains tax as they apply to land, I do not think that any hon. Member wishes to introduce a Clause which results in a difficult administrative position concerning public companies with a London Stock Exchange quotation and people selling shares in the normal way.
Even with the Amendment, it is impossible for an individual to know two things about the company. The first is whether the company is in the control of five persons and the second is whether he, together with relatives, associates and friends, has 10 per cent. or more of the shares. For example, if a person's brother, mother or father purchased some shares separately, there is no way by which an individual can ascertain whether 10 per cent. of the shares are owned in this way. What is more, I cannot see how the Treasury can ascertain this fact. It is not possible to look at the share register of a company to discover whether five people have more than 50 per cent. of the equity nor whether one person, together with friends and relatives, has 10 per cent. of the equity. Frequently, the shares will be in the name of a nominee company or in the name of a bank.
I would point out this further complication. If we discover that a person has 11 per cent. of the shares in such a company, how are we to apply the test? Are we to say in respect of one of the larger companies with a Stock Exchange quotation that we want to know whenever a person sells some shares and that we shall check exactly what is the percentage shareholding of that person? Having checked on that and having discovered that that person owns more than 10 per cent., we shall then presumably ask the company to value its assets and any land which it has purchased in the past three years and work out the proportion of the sale which is taxable under the Clause. This would be almost an administrative impossibility.
I should like my hon. Friend to tell me what will be the position of a person owning 11 per cent. of the equity of such a company who decides on a certain date to sell 2 per cent. of his shares, thus leaving him with 9 per cent., and who a month later decides to dispose of 9 per cent. of the whole. Will he be taxed on the 2 per cent. and not on the 9 per cent., or will he be taxed on the 11 per cent. if he makes a sale in any one year? If so, people will decide to sell 9 per cent. of their shares in one year and to wait a month or two until the next financial year and then dispose of another 9 per cent.
If we endeavour to capture the operator who uses this method of the sale of shares to make a profit on land, I suggest that a percentage such as 10 per cent. in a public company with a Stock Exchange quotation, with all the complexities which I have mentioned, will not have the effect of catching such an operator.
If a person has purchased a large amount of land within the medium of a public company with a Stock Exchange quotation and he wants to make a profit by selling those shares and he is, therefore, a substantial holder, under a provision by which he is allowed, for example, 30 per cent., if he disposed of that amount and made a profit on it this provision would not apply to the other 70 per cent. of the property deal. It would obviously not be worth his while. It would be much more worth his while to hold on to the entire deal for three years and then to have it completely free of taxation rather than to dispose of the 10 per cent. in this way. Thus an operator will be driven to do a three-year deal in another company in which he owns 100 per cent. of the shares.
I should like to know the position regarding this percentage in respect of a shareholding in the form of a debenture. I ask this in the interest of the institutions. Many insurance companies and pension funds have substantial debentures which they have issued against property companies. Some of these are convertible debentures. Therefore, the price of a convertible debenture at any one time reflects the amount of property transactions which have taken place during the past three years.
If a property development company has during the last three years embarked upon a substantial purchase of land, the price of the convertible debenture will reflect these purchases. Is the convertible debenture taken as part of the entire equity of the company in calculating the 11 per cent.? How will the difference between the ordinary shares and the convertible debenture be apportioned?
I am grateful for the improvement which the Amendment makes, but my criticism of the Clause as amended is that it taxes people in a way which they could never discover——
I apologise, Sir William. I conclude by suggesting that it would have been far better, rather than move the Amendment to increase the percentage to 10 per cent., if some provision had been made whereby the Stock Exchange would regulate the companies with a Stock Exchange quotation so that they could have been left out of this provision.
I wish to put one question to my hon. Friend the Financial Secretary on which, perhaps, he can give the Committee an answer when he replies. The Amendment relates to Clause 13, which is part of a much larger scheme. Does the reference to the holder of the one-tenth interest in a company as provided by the Amendment cover merely persons and companies resident in the United Kingdom or does the exclusion, which I believe to be a general exclusion, in Clause 9 (1) in favour of persons and companies not resident or ordinarily resident in the United Kingdom also apply to the Amendment?
I know quite well that my hon. Friend the Member for Worcester (Mr. Walker) and a number of my hon. Friends who, if time had permitted, would have liked to take part in the debate are anxious about the working of the Clause. If one looks at our tax law, I think that there will be found a number of provisions that are to some extent analogous to the Clause as we now have it and which work well. We shall, of course, watch the administration of this procedure and if by chance we find that certain provisions in this or any other Clause are not working satisfactorily, naturally we should regard ourselves as bound to bring fresh legislation before the House another year.
It would be unrealistic to suppose that we can get this new speculative gains tax 100 per cent. right in the very first Finance Bill in which it is introduced. The most we can do is to keep a fair balance as far as we can, as we conceive it to be, between individuals and the general public interest. In answer further to my hon. Friend, I am told that a person's liability under Clause 13 is based on his holding of shares in the company, and not debentures.
My hon. Friend the Member for Wimbledon (Sir C. Black) is perfectly right in what he has said about the relevance of residence in connection with the point which he has rasied. If he is not right, I will write to him afterwards. At first sight, however, I should have thought that what he said was correct. As you have said, Sir William, we are dealing with a narrow point and a specific Amendment. Although I recognise the anxieties that my hon. Friend the Member for Worcester and others feel on this matter, I hope that my hon. Friend will at least feel that the Amendment has gone some way towards meeting the points which he raised in Committee.
I hope that the hon. Member for Worcester (Mr. Walker) is satisfied with the reply which he has received. I have a sincere admiration for the Financial Secretary, but when, in three speeches, I hear him fall back upon his philosophical arguments twice, I know that he is not much at home with the Clauses that we are discussing. Having heard the hon. Gentleman in his brilliant moods, I know very well this evening that he is scratching for runs.
The hon. Member for Worcester made an almost unanswerable case, to which he has had no answer, concerning the administrative complications which he could foresee. To pick up the simplest of them—the case of a man with an 11 per cent. holding who, presumably, can evade the whole of this procedure, as the hon. Member for Worcester said, by selling 2 per cent. one year and 9 per cent. later on—why should he not, as the hon. Member said, so enfold the transaction that it is done in a period beyond three years?
I agree that with a new tax like this one, we cannot get it 100 per cent, right, but that is no reason to write legislative rubbish into the Statute. The Financial Secretary has a duty to give the Committee an indication that the Board of Inland Revenue believes that this arrangement is administratively feasible. He owes that to the hon. Member who raised the matter as well as to the Committee as a whole. I am quite ready to see that he has the opportunity of telling us whether the Board of Inland Revenue thinks that it can administer this provision. I do not see why the Committee should part with the Amendment until we are certain that there are answers, even if not completely watertight, to the questions asked by the hon. Member for Worcester.
When I looked at the Amendment, I went in the other direction from the hon. Member for Worcester. I said that it was easing the situation. If the Board of Inland Revenue, in the first place, thought that 5 per cent. was right, why should it now seek to make it 10 per cent., which, presumably, allows more people to escape the speculative gains tax net? Goodness knows, it is full enough of holes without making it easier. Therefore, when I read the Amendment, my inclination was to oppose it purely on the ground that even more people would slip through.
Whilst I accept the administrative criticisms by the hon. Member for Worcester about the way that the tax will be collected, if there is a landowning company or a company which controls a land-owning company, which must by definition be within the control of five people or less, it seems to me extremely unlikely that one of the shareholders will not know what the other four people are doing.
I follow that. I suppose, therefore, that a case could arise in which that person did not know what was happening. On the other hand, if we legislate for what is likely to take place, most of the land-owning companies are not in that category but consist of groups of people who own the shares. I take it that mostly the directors are the shareholders and the shareholders are the directors. Is that not so?
I am completely in favour of the Clause in respect of the normal land-owning company operating in this way. But this is not true of the large public companies with a Stock Exchange quotation. In that case there may well be a person who originally floated the company and had 55 per cent. of the shares, over the years disposed of 10 per cent. and was left with 45 per cent., and then started buying some more. Then none of the institutions which invest in the company will know at any particular moment whether the man and his friends own more than 50 per cent. and come within this tax provision.
I see the point. What figure, then, would be right? Where does one come to the point where it is reasonable to say on the basis of the hon. Member's argument that one ought to be chargeable?
My argument was that the Treasury should endeavour to obtain an agreement with the London Stock Exchange that any property company operating in that way and selling shares in order to realise land purchased within a three-year period should lose their quotation on the Stock Exchange. In that way we could stop it.
I wish to raise a point about the reply given by the Financial Secretary to the hon. Member for Wimbledon (Sir C. Black). The Financial Secretary said that if he found he had given his hon. Friend an answer that was not quite correct he would write to him.
Is this a Money Bill or not? I do not know whether the Attorney-General would be willing to advise us on that point at this moment without consideration. A good many Finance Bills have not been Money Bills; a Money Bill is one that is certified by Mr. Speaker when it passes from this House to another place as being a Money Bill. Very often there is so much machinery in the Finance Bill that the certificate is not given. If this is a Money Bill, no matter how wrong the Financial Secretary may have been in his answer to the hon. Member for Wimbledon, after tonight he can do nothing about it, because when the Bill goes from this House to another place it has to be passed by the other place within a month from the date it received it. Whether the certificate is given or not, it has been general practice for the other place to regard it as a Money Bill and pass it within the month.
Let us suppose—I ask even the Financial Secretary to suppose—that the reply given by the hon. Gentleman to the hon. Member for Wimbledon is not completely accurate. If, when he consults someone else who has to advise him, the Financial Secretary finds that his answer was not completely accurate, what steps does he propose to take to put the matter right? We have talked light-heartedly about revising this legislation in future years if we find that it does not entirely fit. If, tonight, the Financial Secretary is not sure that he has given the right answer to his hon. Friend, what steps can he take to ensure that we shall have on the Statute Book an Act of Parliament which meets the point raised by the hon. Member for Wimbledon?
I should like to answer one or two of the further points which have been raised. First, I am sorry that I did not deal with one matter raised by my hon. Friend the Member for Worcester (Mr. Walker) in his opening speech. Clause 13 applies where a person disposes of shares in a company and immediately before the disposal—this is the answer to my hon. Friend—that company is one in which he has a substantial interest as defined in subsection (7) of the Clause.
If that is correct, surely I am right in saying that a person who owns 11 per cent. of the shares can one day sell 2 per cent. of them and pay tax on that and next day sell the other 9 per cent. and not pay tax on that?
The test is what the person's interest was in the company immediately before disposal.
In further amplification of what I said about the administrative aspect, it is the belief of the Government—and they are responsible for the Clause—that it will operate. Nothing I said in my earlier remarks was intended to imply that the Clause would not be administratively possible. What I was saying was that because of the anxiety which I know is felt by some of my hon. Friends on this point, we will, naturally, watch it with particular care. I said that when one is bringing in a new form of taxation, one clearly has to consider with especial care how it works out from the administrative point of view during the year. I meant no more than that.
The Financial Secretary has now been asked three times—twice by his hon. Friend the Member for Worcester (Mr. Walker) and once by me —what the answer is to the question about the holder of the shares.
I may have been occasionally obscure to the Committee, but I think that my answer showed clearly that my hon. Friend's interpretation was right, because the test is what the interest of the person concerned was in the company immediately before the disposal.
I really cannot see that the Clause should not be workable, granted the interpretation of subsection (7) which I have given the Committee.
On the point as to whether the Amendment is not going too far in mitigating the effect of the Clause, I would say that we have here to keep a balance between two things. On the one hand, we do not want the Clause to be drafted in such a way that it would catch—even if it happened only very rarely—people who had no say in or knowledge of the conduct of a land-owing company's affairs. On the other, it would equally be a bad thing if we relaxed the Clause and the subsection in such a way as to give a real risk of letting out those who were out to exploit the device of selling what is, in effect, an interest in land simply through the medium of the company. It must be a matter of judgment as to whether the Amendment from this point of view improves the Clause.
It is my belief that we have got the Clause in a better form than it was before and we have moved in this respect a shade nearer my hon. Friend the Member for Worcester, though the fact that both the hon. Member for Cardiff, South-East (Mr. Callaghan) and my hon. Friend the Member for Worcester to some extent are still dissenters from the legislation as we have it now might conceivably suggest that the Government have not got it altogether wrong and that we have found something like a middle position.
I should like to follow up the consequences of that remark. Does it follow that the more dissatisfaction the Government can arouse among their own supporters the more right they will be?
No. I would not necessarily commit myself to that. What I would say is that an Amendment which strikes the hon. Member for Cardiff, South-East as too generous, and which improves the Clause from the point of view of my hon. Friend the Member for Worcester, though still leaving both dissatisfied with it, is a combination of circumstances which suggests to me that the Government might possibly have got the Clause not too wrong, possibly got it about right.
In reply to the right hon. Member for South Shields (Mr. Ede), my hon. Friend the Member for Wimbledon (Sir C. Black) asked me a question which related not merely to this Clause but to another. I gave what I thought was the correct
answer on the spur of the moment. I think that it has been known for that to be done during Committee stages before. If I am proved to be wrong, I will notify not only my hon. Friend, but will take the first opportunity of notifying the House. But I am bound to say that I have known Ministers asked questions and using that form of words.
Mr. J. T. Price:
Before the Financial Secretary gets on to an easier pitch than this, perhaps I can assist him to make a dignified withdrawal if he will answer this question. How will he deal administratively with the hybrid company, the company with assets partly in land and partly in industrial interests? How will he deal with the 10 per cent. in that case? If this is provided for in the Bill, I will put up my hands, but at the moment I cannot understand how this principle is to be applied to the hybrid company.
|Division No. 226.]||AYES||[8.43 p.m.|
|Ainsley, William||Edelman, Maurice||Janner, Sir Barnett|
|Allaun, Frank (Salford, E.)||Edwards, Rt. Hon. Ness (Caerphilly)||Jay, Rt. Hon. Douglas|
|Allen, Scholefield (Crewe)||Edwards, Robert (Bilston)||Jeger, George|
|Awbory, Stan||Edwards, Walter (Stepney)||Jenkins, Roy (Stechford)|
|Bacon, Miss Alice||Evans, Albert||Johnson, Carol (Lewisham, S.)|
|Baxter,William (Stirlingshire, W.)||Fernyhough, E.||Jones, Dan (Burnley)|
|Bence, Cyril||Fitch, Alan||Jones, Elwyn (West Ham, S.)|
|Bennett, J. (Glasgow, Bridgeton)||Fletcher, Eric||Jones, J. Idwal (Wrexham)|
|Benson, Sir George||Foot, Michael (Ebbw Vale)||Jones, T. W, (Merioneth)|
|Blackburn, F.||Fraser, Thomas (Hamilton)||Kelley, Richard|
|Blyton, William||Ginsburg, David||Key, Rt. Hon. C. W.|
|Boardman, H.||Gordon Walker, Rt. Hon. P. C.||King, Dr. Horace|
|Bowden, Rt. Hn. H. W. (Leics.S.W.)||Greenwood, Anthony||Lawson, George|
|Bowen, Roderic (Cardigan)||Grey, Charles||Ledger, Ron|
|Boyden, James||Griffiths, David (Rother Valley)||Lever, L. M. (Ardwick)|
|Braddock, Mrs. E. M.||Griffiths, W. (Exchange)||Lewis, Arthur (West Ham, N.)|
|Bray, J. W.||Hale, Leslie (Oldham, W.)||Loughlin, Charles|
|Butler, Herbert (Hackney, C.)||Hall, Rt.Hn, Glenvil (Colne Valley)||Mabon, Dr. J. Dickson|
|Callaghan, James||Hamilton, William (West Fife)||MacColl, James|
|Castle, Mrs. Barbara||Hannan, William||McKay, John (Wallsend)|
|Chapman, Donald||Harper, Joseph||McLeavy, Frank|
|Collick Percy||Hayman, F. H.||MacPherson, Malcolm (Stirling)|
|Corbet, Mrs. Freda||Henderson, Rt.Hn.Arthur(Rwly Regis)||Mallalleu, E. L. (Brigg)|
|Craddock, George (Bradford, S.)||Herbison, Miss Margaret||Manuel, Archie|
|Cronin, John||Hilton, A. V.||Mapp, Charles|
|Crosland, Anthony||Holman, Percy||Marsh, Richard|
|Cullen, Mrs. Alice||Hooson, H. E.||Mason, Roy|
|Darling, George||Houghton, Douglas||Mendelson, J. J.|
|Davies, G. EllccI (Rhondda, E.)||Howell, Denis (Small Heath)||Millan, Bruce|
|Davies, Ifor (Gower)||Hughes, Emrys (S. Ayrshire)||Milne, Edward|
|Delargy, Hugh||Hughes, Hector (Aberdeen, N.)||Mitchison, G. R.|
|Diamond, John||Hunter, A. E.||Monslow, Walter|
|Dodds, Norman||Hynd, H. (Accrington)||Moody, A. S.|
|Ougdale, Rt. Hon. John||Hynd, John (Attercliffe)||Morris, John|
|Ede, Rt. Hon. C.||Irvine, A. J. (Edge Hill)||Moyle, Arthur|
|Irving, Sydney (Dartford)||Mulley, Frederick|
|Neal, Harold||Robertson, John (Paisley)||Thornton, Ernest|
|Noel-Baker, Francis (Swlndon)||Robinson, Kenneth (St. Pancras, N.)||Tomney, Frank|
|Noel-Baker,Rt.Hn.Philip(Derby,S.)||Rodgers, W. T. (Stockton)||Wade, Donald|
|Oliver, G. H.||Rogers, C. H. R. (Kensington, N.)||Warbey, William|
|Owen, Will||Ross, William||Weitzman, David|
|Paget, B. T.||Royle, Charles (Salford, West)||Wells, Percy (Faversham)|
|Pannell, Charles (Leeds, W.)||Short, Edward||Wells, William (Walsall, N.)|
|Pargiter, G. A.||Silverman, Sydney (Nelson)||White, Mrs. Eirene|
|Parker, John||Skeffington, Arthur||Wllkins, W. A.|
|Paton, John||Slater, Joseph (Sedgetield)||Willey, Frederick|
|Pearson, Arthur (Pontypridd)||Small, William||Williams, D. J. (Neath)|
|Peart, Frederick||Smith, Ellis (Stoke, S.)||Williams, LI. (Abertillery)|
|Pentland, Norman||Sorensen, R. W.||Williams, W. R. (Openshaw)|
|Prentice, R. E.||Soskice, Rt. Hon. Sir Frank||Williams, W. T. (Warrington)|
|Price, J. T. (Westhoughton)||Spriggs, Leslie||Willis, E. G. (Edinburgh, E.)|
|Probert, Arthur||Stewart, Michael (Fulham)||Winterbottom, R. E.|
|Pursey, Cmdr. Harry||Stonehouse, John||Woof, Robert|
|Randall, Harry||Stones, William||Yates, Victor (Ladywood)|
|Rankin, John||Taverne, D.|
|Redhead, E. C.||Taylor, Bernard (Mansfield)||TELLERS FOR THE AYES:|
|Roberts, Albert (Normanton)||Thompson, Dr. Alan (Dunfermline)||Mr. Charles A. Howell and|
|Agnew, Sir Peter||Errington, Sir Eric||Lloyd, Rt. Hon. Selwyn (Wirral)|
|Arbuthnot, John||Erroll, Rt. Hon. F. J.||Longbottom, Charles|
|Atkins, Humphrey||Farey-Jones, F. W.||Longden, Gilbert|
|Balniel, Lord||Farr, John||Loveys, Walter H.|
|Barber, Anthony||Finlay, Graeme||Lucas-Tooth, Sir Hugh|
|Barlow, sir John||Fisher, Nigel||McAdden, Sir Stephen|
|Barter, John||Forrest, George||Maclean, Sir Fitzroy(Bute&N.Ayre.)|
|Batsford, Brian||Fraser, Hn. Hugh (Stafford & Stone)||Macleod, Rt. Hn. Iain (Enfield, W.)|
|Baxter, Sir Beverley (Southgate)||Fraser, Ian (Plymouth, Sutton)||McMaster, Stanley R.|
|Bell, Ronald||Gammans, Lady||Macmillan, Maurice (Halifax)|
|Bennett, F. M. (Torquay)||Gardner, Edward||Macpherson, Niall (Dumfries)|
|Bidgood, John C.||Gilmour, Sir John||Maddan, Martin|
|Biffen, John||Glover, Sir Douglas||Maginnis, John E.|
|Bishop. F P.||Glyn, Dr. Alan (Clapham)||Manningham-Buller, Rt. Hn. Sir R.|
|Black, Sir Cyril||Goodhart, Philip||Markham, Major Sir Frank|
|Bossom Clive||Goodhew, Victor||Marshall, Douglas|
|Bourne-Arton, A.||Gower, Raymond||Marten, Neil|
|Boyle Sir Edward||Green, Alan||Mathew, Robert (Honiton)|
|Brewis John||Grosvenor, Lt.-Col. R. G.||Matthews, Gordon (Meriden)|
|Brooke, Rt. Hon. Henry||Gurden, Harold||Mawby, Ray|
|Brown Alan (Tottenham)||Hall, John (Wycombe)||Maxwell-Hyslop, R. J.|
|Browne Percy (Torrington)||Hamilton, Michael (Wellingborough)||Maydon, Lt.-Cmdr. S. L. C.|
|Buck, Antony||Harris, Frederic (Croydon, N.W.)||Mills, Stratton|
|Bullard, Denys||Harris, Reader (Heston)||Morgan, William|
|Bullus, Wing Commander Eric||Harrison, Brian (Maldon)||Mott-Radclyffe, Sir Charles|
|Burden, F. A.||Harrison, Col. Sir Harwood (Eye)||Nabarro, Gerald|
|Campbell, Gordon (Moray & Nairn)||Harvey, Sir Arthur Vere (Macclesf'd)||Neave, Airey|
|Carr, Compton (Barons Court)||Harvey, John (Walthamstow, E.)||Noble, Michael|
|Carr, Robert (Mitcham)||Hastings, Stephen||Nugent, Rt. Hon. Sir Richard|
|Cary Sir Robert||Hay, John||Oakshott, Sir Hendrie|
|Chataway, Christopher||Heald, Rt. Hon. Sir Lionel||Orr-Ewing, C. Ian|
|Chichester-Clark, R.||Henderson, John (Cathcart)||Osbom, John (Hallam)|
|Clark, Hendry (Antrim, N.)||Hendry, Forbes||Page, Graham (Crosby)|
|Cole, Norman||Hiley, Joseph||Page, John (Harrow, West)|
|Collard, Richard||Hill, Dr. Rt. Hon. Charles (Luton)||Pannell, Norman (Kirkdale)|
|Cooke, Robert||Hirst, Geoffrey||Pearson, Frank (Clitheroe)|
|Cooper, A. E.||Hobson, Sir John||Percival, Ian|
|Cordeaux, Lt.-Col. J. K.||Hocking, Philip N.||Peyton, John|
|Cordle, John||Holland, Philip||Pickthorn, Sir Kenneth|
|Corfield, F. V.||Hollingworth, John||Pitman, Sir James|
|Costain, A. P.||Hopkins, Alan||Pitt, Miss Edith|
|Coulson, Michael||Hornby, R. P.||Pott, Percivall|
|Crawley, A. M.||Howard, Hon. G. R. (St. Ives)||Price, David (Eastleigh)|
|Critchley, Julian||Hughes Hallett, Vice-Admiral John||Prior, J. M. L.|
|Crowder, F. P.||Hughes-Young, Michael||Profumo, Rt. Hon. John|
|Curran, Charles||Hulbert, Sir Norman||Proudfood, Wilfred|
|Currie, G. B. H,||Iremonger, T. L.||Pym, Francis|
|Dance, James||Irvine, Bryant Godtnan (Rye)||Redmayne, Rt. Hon. Martin|
|d'Avigdor-Coldsmid, Sir Henry||James, David||Renton, David|
|Deedes, W. F.||Jennings, J. C.||Ridley, Hon. Nicholas|
|de Ferranti, Basil||Johnson, Eric (Blackley)||Rippon, Geoffrey|
|Digby, Simon Wingfield||Kerans, Cdr. J. S.||Roberts, Sir Peter (Heeley)|
|Donaldson, Cmdr. C. E. M.||Kerby, Capt. Henry||Robson Brown, Sir William|
|Doughty, Charles||Kershaw, Anthony||Rodgers, John (Sevenoaks)|
|Drayson, C. B.||Kirk, Peter||Roots, William|
|du Cann, Edward||Lancaster, Col. C. G.||Ropner, Col. Sir Leonard|
|Duncan, Sir James||Legge-Bourke, Sir Harry||Royle, Anthony (Richmond, Surrey)|
|Eccles, Rt. Hon. Sir David||Lewis, Kenneth (Rutland)||St. Clair, M.|
|Elliot, Capt. Walter (Carshalton)||Lilley, F. J. P.||Scott-Hopkins, James|
|Emmett, Hon. Mrs. Evelyn||Linstead, Sir Hugh||Seymour, Leslie|
|Litchfield, Capt. John||Shaw, M.|
|Shepherd, William||Thomas, Leslie (Canterbury)||Webster, David|
|Smith, Dudley (Br'ntf'd & Chiswick)||Thompson, Richard (Croytlon, S.)||Wells, John (Maidstone)|
|Spearman, Sir Alexander||Thornton-Kemsley, Sir Colin||Williams, Dudley (Exeter)|
|Stanley, Hon. Richard||Tiley, Arthur (Bradford, W.)||Williams, Paul (Sunderland, S.)|
|Stevens, Geoffrey||Touche, Rt. Hon. Sir Gordon||Wills, Sir Gerald (Bridgwater)|
|Steward, Harold (Stockport, S.)||Turner, Colin||Wilson, Geoffrey (Truro)|
|Stoddart-Scott, Col. Sir Malcolm||Turton, Rt. Hon. R. H.||Wise, A. R.|
|Storey, Sir Samuel||Tweedsmuir, Lady||Wolrige-Gordon, Patrick|
|Studholme, Sir Henry||Vane, W. M. F.||Woodhouse, C. M.|
|Summers, Sir Spencer||Vaughan-Morgan, Rt. Hon. Sir John||Woodnutt, Mark|
|Talbot, John E.||Vickers, Miss Joan||Woollam, John|
|Tapsell, Peter||Wakefield, Sir Waved||Worsley, Marcus|
|Taylor, Eldwin (Bolton, E.)||Walder, David||Yates, William (The Wrekin)|
|Taylor, Frank (M'ch'st'r, Moss Side)||Walker, Peter|
|Taylor, W. J. (Bradford, N.)||Walker-Smith, Rt. Hon. Sir Derek||TELLERS FOR THE NOES:|
|Teeling, Sir William||Wall, Patrick||Mr. McLaren and Mr. Rees.|
|Thatcher, Mrs. Margaret||Ward, Dame Irene|