Clause 29. — (Stamping of Foreign Bills of Exchange.)

Part of Orders of the Day — FINANCE (No. 2) BILL – in the House of Commons at 12:00 am on 12th June 1967.

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Photo of Mr John Smith Mr John Smith , Cities of London and Westminster 12:00 am, 12th June 1967

To the best of my knowledge, they used to be stamped ad valorem, but that requirement was repealed and they are now stamped on a fixed duty.

I was saying that any ordinary customer of a bank who asks for a book of bill of exchange forms, that is, cheque forms in this case, will have his account debited with the value of the stamps and another account in the bank will be credited with that amount of money. The cost of putting an entry through the books of a bank now is about 4s. So the issue of a cheque book costs at least 8s., and the effect of buying a cheque book, with stamp duty on the cheques amounting to less than 8s., is equivalent to tearing up the nation's money. Even ignoring the rest of this operation, that one part of it costs more than the duty raised.

There are other disadvantages to this trifling duty. Another example is the dividend warrant. Many small companies still have the trouble of sending dividend warrants to the Stamp Office for embossing, and, in my experience, the embossing machine occasionally tears them all up so that one has to start again. Irritations of that kind occur.

Not all countries have this tax. It is noteworthy—not that we should copy foreign countries—that good old Sweden does not have this tax and neither does China, though South Africa does. There is a division of opinion in the world on whether a trifling tax on bills of exchange is worth having at all.

We must watch the growing trend of the Revenue to get the taxpayer to do its work for it. It is not sufficient for the Revenue to say that the cost of collection of the tax is small compared with what it brings in. This is a very good example of what I mean. It costs the Revenue practically nothing to collect this tax—it simply receives large sums from a small number of banks—but the Revenue should not be blind to the cost to the economy of collecting these taxes. The revenue raised by this 2d. tax is just as much lost to the country, owing to the cost of collecting it, as if the money had been torn up.