Speeches, Interviews & Other Statements

Complete list of 8,000+ Thatcher statements & texts of many of them

1966 Jul 12 Tu
Margaret Thatcher

HC S Report [Finance Bill] (1st Thatcher Amendment)

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [731/1249-68]
Editorial comments: c1635-1732. MT spoke at cc1249-52, and 1263. The whole of the debate on this amendment is included on the disc.
Importance ranking: Minor
Word count: 6672
Themes: Monetary policy, Taxation
[column 1249]

New Clause.—(Revised Rates of Estate Duties for Small Estates.)

As respects deaths occurring on or after 3rd May 1966, the scale of rates of estate duty set out in the Seventh Schedule to the Finance Act 1949, as amended by section 32(1) of the Finance Act 1954, section 27(1) of the Finance Act 1962 and section 52 of the Finance Act 1963 shall have effect with the substitution for the entries relating to estates of a principal value not exceeding ten thousand pounds of the following entries:—

Brought up, and read the First time.

Mrs. Margaret Thatcher (Finchley)

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

I am glad that Niall Macdermotthe Financial Secretary is in a sympathetic mood and I hope that he will not have exhausted his sympathy at this early stage. This is a very modest proposal. Had it not been for the economic situation, I should like to have proposed a much more far-reaching Amendment on Estate Duty. We cannot alter the entire structure of Estate Duty or alter the rates to a great extent, but I hope that we shall be able to bring [column 1250]some small measure of relief in respect of those who when they die will leave comparatively small estates.

At present if a man or woman dies leaving an estate which has a total value of less than £5,000 no Estate Duty is payable. Above £5,000 Estate Duty is attracted in increasing amounts. From time to time the exemption limit has been changed, and it has been changed on a number of occasions since the war. It was brought up to £2,000 in April, 1946, when other considerable changes were also made to Estate Duty rates. In looking back, it is noteworthy that [column 1251]the top rate of Estate Duty was increased after the end of the war. During the war it was only 65 per cent. In 1946 the top rate was increased to 75 per cent.

Other changes were made in 1949, but the exemption limit was not changed. The changes then made only increased the Estate Duty payable on larger estates. It was left to successive Conservative Governments to raise the exemption limit further. In 1954 it was raised to £3,000; in 1962 to £4,000; and in 1963 to £5,000.

That was some three years ago, and I note that between May, 1963, and May of this year the retail prices index rose by about 13 points. That is, perhaps, not always material in considering the value of estates. What is more significant is that during this period the value of houses in built-up areas went up at a very much faster rate even than the retail prices index.

The value of the owner-occupied house is often the major component of the value of these smaller estates. It is to that aspect that I shall now address my remarks. Many hon. Members will be aware of the sharp rises that have taken place in house prices in constituencies in built-up areas, and of the difficulty in which the widow is often placed if she wants to go on living in the house but has to find a small amount of Estate Duty in ready cash, when the estate may not have any ready cash available.

The Amendment is modest. It raises the exemption limit only from £5,000 to £6,000, but in a constituency such as my own that would take in quite a large number of houses, where small, three-bedroomed houses, without even a garage now sell for about £6,000. If that is the only asset of the estate, it is often difficult for those left behind to find even a small amount of Estate Duty at a time when their great need is for ready cash.

In addition to raising the exemption limit to £6,000, the Clause would modify the rates chargeable on estates up to a value of £10,000. From £10,000 onwards, they would be left as they are under existing legislation. I should like to have had a crack at rates of Estate Duty on estates of higher value, but I would not try to extend the Financial Secretary's sympathy too far this year. [column 1252]The changes proposed should help all the dependants of those who die leaving less than £10,000.

I am not aware of the cost of the Amendment, but, as the Financial Secretary knows, if he had taken the advice of my right hon. and hon. Friends about the premiums for manufacturers under the Selective Employment Tax, he would have plenty of money to play about with. One would hope and suggest that this is the kind of Amendment that he might usefully accept, thereby helping a large number of widows and other dependents of those who die leaving small estates.

A final point is that on marriage a man usually says “With all my worldly goods I thee endow” . That is not strictly true because during his life the Chancellor will have the first crack, and after he dies the Chancellor will not have finished with the person but will also have the first slice. I should like to see Estate Duty changed in such a way that the widow had priority over the Chancellor. A man should be able to make adequate provision for his wife before the Treasury comes in for its own cut. I cannot achieve that today, but I hope that the Financial Secretary will agree that what I have suggested is possible, and that it is possible this year.

Mr. Joel Barnett (Heywood and Royton)

First, I apologise for not having heard the start of the speech of the hon. Member for Finchley (Mrs. Thatcher). One point arising out of what she said towards the end of her speech about widows is that there are opportunities under existing legislation to help widows. The insurance policies written under the Married Women's Property Act help considerably. However, I have some sympathy for the idea of helping small Estate Duty payers, if only for the reason that they pay, whereas many owners of larger estates do not.

We all know that many owners of the larger estates are able to avoid paying Estate Duty through devices, which I do not in any way deplore, but it does mean that, for these people, it is a sort of voluntary tax. This is open to owners of the larger estates to a very much greater extent than it is to owners of the smaller ones, largely because very often the [column 1253]smaller estate owners do not have the sort of advice that is available to owners of larger estates.

I have no complaint against the taxpayers who own those larger estates so organising their affairs as to pay the least possible amount of Estate Duty. Indeed, I do not apologise for the fact that I have at times advised on the best methods to adopt, but in giving relief one must look at the whole range of taxpayers and of non-taxpayers.

I did not understand the objections voiced at another stage in our debate on the Bill when there were great objections from hon. Members opposite to my right hon. Friend the Chief Secretary having said that when we gave reliefs we should also take into account those who are not paying tax at all. One can see a great deal of worthiness in the Clause, when one considers price rises that are affecting old-age pensioners without any offset through the Bill; when one looks at the increase in house building that was mentioned today at Question Time, and when one looks at the increase in mortgage increase rates, without any compensation in the Bill. In a year like this, when we are contemplating any reliefs, no matter how worthy they might be on another occasion, all these things must be taken into account.

I shall be interested to hear how much the Clause would cost. I cannot imagine that the cost would be very great, but, even if it were very small, this is hardly the time to be thinking of giving relief to one section as opposed to giving nothing to the rest of the people.

Mr. Percy Grieve (Solihull)

I am very grateful for the opportunity of supporting my hon. Friend the Member for Finchley (Mrs. Thatcher). I do so on a slightly different basis from that which she adopted. The new Clause would give some very slight mitigation of the catastrophic effect which present levels of Estate Duty have on families when the breadwinner dies in middle life. One of the worst effects of present levels of Estate Duty is felt not when people die when their families are emancipated and provided for but when the breadwinner dies in middle age. Then not only do the family find themselves cut off from his earning power but, at the very time of worst possible crisis for them, the Revenue [column 1254]comes along and takes a very substantial cut.

I agree with my hon. Friend in saying that this is a modest proposal, almost too modest, but I concede that, in the present state of this country's affairs it may be difficult to make any greater concession. But Britain is probably the country where estate duties are higher and more penal than anywhere else in the world, and we are certainly the country in which the family is most sharply affected. In France, for instance, where not Estate Duty but a form of legacy duty prevails, the needs of the family are protected by law. The first 100,000 francs, nearly £7,500, out of the estate which is left by a deceased person to, or which goes under the law to, each of his heirs, when these are his widow or children, is free of any duty, and it is only after each of these has received his or her share amounting to approximately £7,500 for each of them that the Revenue comes in at all.

In my submission, the French order these things very much better than we do and much more fairly, with far greater justice. To use a cliché sometimes heard nowadays, it is time we took a long, cool look at our own law on the taxation of inheritances and the estates of deceased persons with a view to protecting the integrity of the family and protecting it in the hour of its greatest need. Because the Clause would go a small way towards this end, I strongly support it.

The hon. Member for Heywood and Royton (Mr. Barnett) said, and everyone knows it, that there are many ways by which a man can provide for his family, by insurance policies and so forth in separate estates, overcoming the difficulties which families often have. But not all do. Not all, perhaps, can afford the hon. Gentleman's fees when he is consulted about it.

One comes back to the plain fact that, when a man dies in his 40s or 50s, having set aside a small capital but leaving a widow and young children to be provided for, the greater part of that capital, as my hon. Friend the Member for Finchley said, is represented by the family house. The widow and children are deprived of the resources of the breadwinner while at the same time his small savings are cut away by the Revenue. I want the Financial Secretary to give this proposal earnest consideration. It would [column 1255]be a small measure to mitigate the lot of many unfortunate people.

Mr. Gower

Far from overstating the case, my hon. Friend the Member for Finchley (Mrs. Thatcher) put it with studied moderation. It is a very strong case. One knows that estates of this kind are, roughly speaking, of two kinds, and it must be the experience of many of us that in an enormous number of instances most of the estate is comprised of the family dwelling-house, that being virtually the only asset. There are some estates in which, in addition to the house, there are other assets, but this other element, so far as there has been any appreciation, will have been looked after by some form of Capital Gains Tax, so that our case on this new Clause is, in fact, strengthened.

The hon. Member for Heywood and Royton (Mr. Barnett) said that there are methods of insuring against these difficulties, but it is my experience and, I am sure, that of most others that widows and children are usually the last people in the world likely to have entered into such arrangements. The hon. Gentleman said also that, in considering giving relief, we must look at the whole range of taxpayers and bear in mind those who do not pay tax. Surely, the better principle is that, in giving relief, we should try to find the most deserving persons in the range of taxpayers and——

Mr. Barnett

The hon. Gentleman will accept that we ought to look at the whole range of people whom we should be helping, whether they pay tax or not.

Mr. Gower

Let me take the first point, that we should look at the whole range of people whom we should be helping. Within the limit of tax concessions, it is extraordinarily difficult to help those who do not pay tax at all.

Mr. Barnett

Increases or decreases in the Purchase Tax affect people who do not pay Income Tax.

Mr. Gower

But I am talking about a particular form of tax. If someone does not pay any form of tax, he is jolly lucky. [Interruption.] If there is any form of tax that somebody does not pay, he is either lucky or he has opted out, as in the case of the tobacco duty. But I must not be diverted too far from the point at issue. [column 1256]Far better than the hon. Gentleman proposal is the principle that we should look for deserving cases for relief. There are few better cases for relief of this modest kind than the one proposed in the Clause. The hon. Member for Heywood and Royton himself accepted that it would not be an extravagantly expensive concession, and I agree.

The proposal has another merit. If it was reasonable some years ago to exempt estates of up to £5,000, according to the value of money now there is a case for exemption up to £6,000. If it was right then to make an exemption up to a limit more or less equivalent to what we are now proposing, the case we make is further substantiated.

Mr. Robert Sheldon (Ashton-under-Lyne)

I am not altogether happy about the rôle of Estate Duty and, in particular, its incidence on small estates. The general principle is that taxation is or should be levied according to the ability of the person to pay. Unfortunately, it is not quite as simple as that in Estate Duty. The incidence of Estate Duty depends very much on the circumstances of those who have left estates. It depends on whether they die when young, having made no prior arrangement, or whether they were old and had an opportunity to anticipate their demise, using some of the opportunities open to them under the law. It varies also according to the type of family left behind, whether the children are grown up and making their own way in the world or are young, still having to be looked after by the widowed mother. It varies also according to the kind of plans which were made, insurance plans and so forth, and on whether the family were able to take advantage of the various trust arrangements which can be of help in such circumstances.

Because of all these varying factors, Estate Duty strikes people in very different ways, and it is manifestly not as straightforward as is Income Tax and other forms of taxation which bear rather more in proportion to the ability of the person to pay. There is a great variation between, on the one hand, those who regard a deceased's estate as a bonus, as a lump sum which they receive, caring little as to the amount which has to be paid in tax, to those who, at the other extreme, have great difficulty and who [column 1257]have to use the residue to bring up a family for a number of years after the death of the salary or wage earner.

Most important of all, it depends on the type of avoiding action taken. Because of this, I agree with the hon. and learned Member for Solihull (Mr. Grieve) that it is time for a cool look at this to see if we can get some measure of equity in these arrangements for small estates. However, this is hardly the time for such concessions. Because of this, I cannot support the Clause.

Mr. Geoffrey Hirst (Shipley)

I have sat through the debates on many Finance Bills and, even when the conditions were right, I have heard the argument that it is not the right time for amendments to the law advanced on countless occasions. It is one of the standard arguments put forward by Governments. It is one of the ways in which a Government back bencher, with friendly feelings towards a proposition made by the Opposition, gets himself out the quandary of supporting it, as I and other hon. Members know only too well.

The root of the problem, as my hon. and learned Friend the Member for Solihull (Mr. Grieve) pointed out, is that this country should long ago have introduced a legacy duty system on the lines of the French system. Both sides of the House bear some responsibility for not having introduced such a system before. Such a system would probably have obviated the necessity of people conniving and finding ways of avoiding duty, because under such a system family connections would be considered and the rate would be reasonable and would be seen to be fair. I have always argued that, given those conditions, people will pay—not readily, I admit, but they will pay their taxes and dues. When a duty decomes monstrously high and disproportionately high in relation to small estates, people will do all they can to avoid paying it.

The force of the argument advanced by my hon. Friend the Member for Finchley (Mrs. Thatcher) is that the option is not available to most people. The various arrangements of resort to the Married Women's Property Act and insurance schemes involve pretty large premiums over a fairly long time if any [column 1258]real value is to be derived from them. They are not applicable in the case of smaller estates, especially where the estate largely consists of property, namely, one dwellinghouse.

My constituency is no different from any other in this regard, in that a large number of people have houses of the sort of value which is represented by the slightly increased exemption rate provided in the Clause. This is the main virtue of the Clause. I look upon this as a reasonable step forward. It does not satisfy me. I must inform the Financial Secretary that the Clause does not go far enough for me. I must also tell him that I am a gunner and, even though I have moved my position in the House, I can predict the range from here to the Treasury bench as well as I predicted the distance from the position I previously occupied to the Treasury bench. In short, I am telling the hon. and learned Gentleman that he will not gain anything from my transfer.

The Clause does not go far enough. However, it is a worthy step forward. The argument that this concession cannot be met revenue-wise in view of all the other things happening in the Finance Bill is nonsense. It is about time that Government back benchers sided with us in our efforts to ensure that small estates are given some alleviation in view of the inflation which is growing all the time.

Sir Gerald Nabarro (Worcestershire, South)

I rise to support the Clause. I congratulate my hon. Friend the Member for Finchley (Mrs. Thatcher) on the very moderate terms in which she proposed it. I thought that she was rather less strong in her advocacy than I would have been in similar circumstances, for I have always regarded Estate Duty as a curse, an affliction, and a brake upon enterprise throughout the normal working lives of men and women.

I want to put to the House the position of Estate Duty in relation to our total revenues.

Mr. Sheldon


Sir G. Nabarro

I will give way in a moment.

Mr. Barnett

The hon. Gentleman should give way now.

[column 1259]

Sir G. Nabarro

The hon. Member for Heywood and Royton (Mr. Barnett) should not interrupt from a sedentary position. It is against the rules of order. I will give way, if only to get some peace and quietness and to stop the hon. Member for Heywood and Royton from “yapping” .

Mr. Sheldon

The hon. Gentleman said that Estate Duty was a brake on enterprise. Will he give the House some instances of people who do not work quite so hard because they are frightened of the Estate Duty which will have to be paid when they die?

Sir G. Nabarro

In due course. So far I have uttered only a few sentences. The hon. Gentleman is so premature in his interruption. I will give an example in due course. I am at present embarking on the task of putting the yield of Estate Duty into its proper context against the yield of the whole of our revenues. This year we raised approximately £10,000 million. In 1965–66 the Treasury estimated that the yield from Estate Duty in total would be £280 million. In the event, the yield in 1965–66 was £293 million. The Treasury made an error of £13 million. For 1966–67 the Treasury has increased its estimate to £310 million. There is an increase of £17 million anticipated in the yield from Estate Duty.

I do not believe that this is on account of a Treasury's supposition that a greater number of men and women will die this year than died last year, or that a greater number of rich people had their deaths anticipated by the Treasury in this year than last year. It is an expression of the dedication of the Treasury estimators to the principle of continuous inflation. The rise in the yield from Estate Duty from £293 million last year to £310 million this year—an increase of £17 million—is of the order of 5 per cent. That is the level of inflation expected by the Treasury. This inflationary process has been going on, though under Tory Governments to a much lesser extent, for many years past. The alleviation of duty on small estates has not kept pace with the rate of inflation. I believe that to be the objective of the Clause. It is to create a proper relationship between the erosion in the value of money, and therefore in the value of estates, on the [column 1260]one hand, and rates of Estate Duty on the other hand.

My hon. Friend the Member for Finchley sits for an urban constituency of London which, she has kindly informed me, has about 25,000 houses in it. That is a much greater number of houses than in a rural constituency, because my hon. Friend's constituency is an urban constituency. I have nothing like that number of houses in my constituency, because there are thousands and thousands of acres of open farmland and horticultural land.

That raises the question which is the parallel of what my hon. Friend the Member for Finchley said. It raises the question of the liability to Estate Duty of the small farmer and the horticultural grower. Although the Financial Secretary would respond to my point straight away and say that benevolent Tory Administrations of earlier years alleviated Estate Duty on agricultural and horticultural holdings and on woodland by 45 per cent.—and the hon. and learned Gentleman would be correct in paying a tribute to my Tory predecessors in the House—still the effect of Estate Duty on a small farm or on a smallholding may be devastating at the present rates and may cause the break-up of that small farm or smallholding or a grave loss of viability due to the necessity of the heir to sell a part of the farm to meet Estate Duty. This is aggravated by the very high price of farmland and horticultural holdings. Grade A farmland today commands the astronomical figure of £300 an acre.

Mr. W. R. Rees-Davies (Isle of Thanet)


Sir G. Nabarro

My hon. Friend says “more” . It may indeed be valued more highly in the Isle of Thanet and in the lush pastures of Worcestershire. The inflation since the war has been steady and has been reflected in the price of farmland.

I want to reinforce the point put by my hon. Friend the Member for Finchley about the difficult position in which a widow finds herself, with Estate Duty to pay, when her sole asset is very often her house. I give the parallel case of a small farmer or horticulturist who has to break up the holding, left to him, on account of liability to Estate Duty, which must [column 1261]be paid in cash. A certain amount has been done about this over the years, but the principle I plead for today is that there should be greater relief on a scale, increasing year by year, commensurate to the erosion in the value of money caused by inflation.

Now I turn to the intervention of the hon. Member for Ashton-under-Lyne (Mr. Sheldon). Of course there is great diminution of effort during working life on account of the prospects of liability to Estate Duty.

Mr. Barnett

That is what I said.

Sir G. Nabarro

The hon. Member for Ashton-under-Lyne contested it. Evidently there is another split on the benches opposite. The fact is that every person faced with any substantial prospective liability for Estate Duty spends hundreds of hours during his working life calculating for himself how to avoid paying Estate Duties.

Mr. Barnett


Sir G. Nabarro

It is no good scoffing at it. Practically every——

Mr. Barnett

Will the hon. Gentleman give way?

Sir G. Nabarro

At the end of my sentence. Practically all small investors in unit trusts, linked perhaps with life assurance, in the type of bonds we were discussing earlier in the Finance Bill—M and G bonds and Tyndall bonds were called in aid then—have liability not only to taxation during their working life but to assessment of their estates to death duties and this is a cogent and it is always an important factor in assessing the accumulation of money today. There are hundreds of thousands of such investors.

Mr. Barnett

The hon. Gentleman's sentence was rather long. He has given an example. He has conjured up the picture of millions of workers at the factory bench, who are not paying Estate Duty at all. He said that he would give examples. He gave examples not of workers who will be affected by the tax on incentives but of small investors. But the small investors are not the sort of people paying this kind of Estate Duty.

[column 1262]

Sir G. Nabarro

This is incredible. The hon. Gentleman——

Mr. Barnett

The small investor——

Sir G. Nabarro

We are not in Committee.

Mr. Barnett

The small investor the hon. Gentleman is talking about would not be paying it.

Sir G. Nabarro

The hon. Member sits for Heywood and Royton, an industrial constituency. His abysmal ignorance of the habits, knowledge and earning capacity of the men on the shop floor should be demonstrated to his constituents at the next General Election. He knows so little about the habits of industrial workers that he is unfit to represent them. There are about 4 million small investors in this country and the overwhelming majority are industrial workers. Hundreds of thousands of small estates are assessed to Estate Duty every year and a high percentage of them are industrial workers. The hon. Member belongs to the Keir Hardie era of Socialism.

I believe that this would be a valuable Clause. It will be a precursor of requests for larger, and more substantial, concessions next year if an advance is not conceded this year. I hope that the Financial Secretary, in replying to what has been in the last few moments a somewhat ragged debate—caused by the irrelevant interventions of his hon. Friend the Member for Heywood and Royton—will have some special regard to the importance of the small farmer and the small horticulturist and the impact that Estate Duty is making on their affairs.

Mr. J. M. L. Prior (Lowestoft)

Hear, hear.

Sir G. Nabarro

I am glad to see my hon. Friend the Member for Lowestoft (Mr. Prior) here giving me powerful support from the back benches, for he has great knowledge of agricultural matters.

Mr. MacDermot

Perhaps I should begin by congratulating the hon. Member for Shipley (Mr. Hirst) upon his maiden speech from below the Gangway. As one who has always listened to him with great pleasure for many years in these debates, it is surprising to think that he [column 1263]has not been sitting below the Gangway all the time. I think that he has found his spiritual home. We all look forward to hearing what salvoes he has to fire from his artillery in many debates to come.

This has been what is politely called a wide-ranging debate, although the Clause is fairly narrow in its objective. I congratulate the hon. Lady the Member for Finchley (Mrs. Thatcher) on the moderate way in which she moved its Second Reading. Obviously, the proposal in itself has attractions, but I have the difficult task of advising the House not to accept it, not on grounds which reject the idea, but because, as was made plain by my right hon. Friend in his Budget speech, this is not a year in which he is able to grant reliefs and concessions.

The hon. Lady pointed out, quite fairly, that if we accepted the Opposition's proposal to abolish the premium provisions in the Selective Employment Tax, we would have what she described as plenty of money to play about with. As she knows, my right hon. Friend is not disposed to accept that advice and I, unfortunately, find myself in the position of not having plenty of money to play about with.

My hon. Friend the Member for Heywood and Royton (Mr. Barnett) made the very fair point that, when one is considering proposals of this kind which attract sympathy, one has to compare them with many other similar proposals which could be made. In Committee, we discussed, for example, a proposal for raising the limit of the old-age exemption reliefs. That was another thing I had to advise the Committee to reject while having no objection in principle to what was proposed.

The hon. Lady correctly told the House the history since the war of this exemption, as it is, for the smallest estates. The surprising fact—it certainly surprised me—is that, from 1894 until 1946, there was no change in the figure, which was as small as £100.

Mrs. Thatcher

The value of money was different.

Mr. MacDermot

It was not that different. The value of money was stable when the Labour Government, after the war, raised the level to £2,000. That was [column 1264]a real increase in every sense over 1894. The hon. Lady correctly told the House of the changes made since 1946.

The proposal contained in this Clause is deserving and must be considered and take its turn with other claims for tax relief when my right hon. Friend is in a position to direct his mind to them.

A number of hon. Members supported their argument for the new Clause by reference to the example where the whole, or almost the whole, of the estate was a dwelling house, perhaps a dwelling house in which the widow continued to live. The existing exemption will still cover that kind of example in nearly all cases. Hon. Members may have seen some interesting figures recently published by the Co-operative Permanent Building Society showing the results of regional analysis of the cost of houses today. Whereas, on average, the cost is approaching the £5,000 mark in the South-East, in other parts of the country the price is very much lower. I cannot remember the precise figure, but I think that the average for the whole of the country was about £3,800.

If that is the sole asset, the widow would be completely exempt. If there were other assets and the value of the estate went a little above the £5,000 figure, a small amount of duty would be payable; but with land or property, including, of course, the dwelling house there are considerable spreading provisions, so that the payments could be spread over eight years forward. This would also apply to smallholders to whom the hon. Member for Worcestershire South (Sir G. Nabarro) referred.

Mr. Gower

I appreciate what the hon. and learned Gentleman has said, but does he not agree that it may be misleading in this connection to refer to average figures? It is true that house prices in the South-East may average about £5,000 and about £3,800 in other parts of the country, but these days there are many dwellings which have now topped £5,000 and which were formerly worth perhaps only £1,500.

Mr. MacDermot

I accept that and I was not trying to suggest anything to the contrary.

A number of hon. Members, led by the hon. and learned Member for [column 1265]Solihull (Mr. Grieve), urged us to take a long, cool look at the whole subject of Estate Duty. This is something which my right hon. Friend was urged to do by a number of hon. Friends last year. I said then that no doubt in the fullness of time this was a subject to which my right hon. Friend would be able to turn his reforming zeal. I think that there is a general feeling throughout the House that when time can be found to do it, this is a part of our tax system in which great improvements could be made. But that is not something which can be done this year.

The estimated cost of the new Clause would be £1 million in the first year and £1 million in a full year.

Mr. John Peyton (Yeovil)

I was extremely disappointed when the Financial Secretary rose to speak before I had been able to catch your eye, Mr. Deputy Speaker, but I am now exceedingly glad, because I now have the opportunity to comment on what he has had to say.

I was impressed, although not at all surprised, by the modesty of the proposal of my hon. Friend the Member for Finchley (Mrs. Thatcher) and the moderation with which she put it forward, which is not to say that my hon. Friends and I would not like to see the proposal accepted. I am very disappointed by the arid nature of the Financial Secretary's reply. He did his best to dress it up and he put it in the most courteous and pleasant manner, but nothing was offered to the House on this important proposal.

I am always interested in interventions by members of the accountancy profession, particularly from the Government back benches, on Finance Bill matters, and when the two rôles coincide, they become even more interesting, because Government back benchers are particularly concerned to build up a certain amount of good will by supporting their Government, bad as they may be. They relieve their consciences and make way for their subsequent very polite criticism of the Government by every now and again giving them a harmless pat on the back and saying that they are quite right, and then we have a wishy-washy argument about looking over the whole field and not thinking too much about one item. [column 1266]

I was interested, therefore, in the speech of the hon. Member for Heywood and Royton (Mr. Barnett), who seemed to be speaking not so much to the brief on the Clause, as to the brief of the accountancy profession. In other words, he was saying that nobody who did not have enough money to avail himself of expensive advice was worth any consideration. I cannot help suspecting that there are many people with estates greater than——

Mr. Barnett


Mr. Peyton

No, I will not give way; the hon. Gentleman's intervention earlier was very long.

Mr. R. T. Paget (Northampton)

Give way.

Mr. Peyton

I am in the middle of a sentence. My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) was very patient and his patience was ill-rewarded by the length of the hon. Gentleman's intervention.

I was in the middle of asking how many people in the hon. Gentleman's constituency left with an estate of £5,000 were intimately acquainted with the provisions of the Married Womens Property Acts and the advantages to be gained from a knowledge thereof. I suspect that there are very few.

I have long thought death duties to be a particularly cruel form of taxation. They come at a time of grief and unhappiness and with small estates, when provision has not been made for a widow, they come at a very bad time, indeed. Those people covered by the new Clause are particularly deserving of more serious treatment than was suggested by the hon. Member for Heywood and Royton, or the hon. Member for Ashton-under-Lyne (Mr. Sheldon).

The Financial Secretary commented that this has been a wide-ranging debate. I am sure that he did not intend that as any criticism of you, Mr. Deputy Speaker, But this is a subject which is bound to range very widely. I am surprised at the shortness of the debate and the fact that it has not gone a good deal wider than it has. My hon. Friend the Member for Worcestershire, South was perfectly right and well within the terms of the [column 1267]new Clause to raise the issue of small businesses, smallholdings, horticultural or otherwise, which are very much affected and which we should now be carefully considering.

This is a matter which must always be pressed on a Government of a party many of whose supporters believe taxation to be a good thing with useful social functions to perform. What my hon. Friend the Member for Shipley (Mr. Hirst) said about taxation being fair is something of which particularly a Socialist Government must be constantly reminded.

I am sorry that the debate did not draw anything very much from the Financial Secretary. The hon. and learned Gentleman ended with a promise at least to the extent of being able to have a long, cool look. As far as I am concerned, a long, cool look from the present Government must be like a stare from the Medusa and almost certain to have a petrifying effect. I am sure that my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) will do so with all his customary force and ability, but in the limited and lame vocabulary with which I am endowed, I express my profound disappointment that the Financial Secretary found his hands so tied by his absent master that he was unable to make any more friendlier noises.

The cause of small people was one which the Labour Party affected to fight from these benches for many years, but, given the chance to make a minor concession, it has turned it down in the most vapid way as though it were a matter of no importance. I look forward to hearing my right hon. Friend expressing his disappointment and I hope that we shall be able to follow him into the Lobby in the face of the Government's rejection of the Clause.

Mr. Iain Macleod

My hon. Friend the Member for Yeovil (Mr. Peyton) has ex[column 1268]pressed what I feel. We have received a very arid answer from the Financial Secretary. If there is one doctrine which is intellectually disreputable it is because we cannot help everyone we should help no one. I do not care whether such an argument comes from the Front Benches or the back benches, from the opposite side of the House or from this side, it is not a doctrine to which the House should pay any heed.

The position is quite simple. We have a useful minor new Clause. The cost is £1 million this year and £2 million in a full year. The Financial Secretary says that the Chancellor, in his wisdom, feels that this is not a year in which this sort of money can be found. That is a question of how one judges priorities. At the beginning of public business today the First Secretary presented the Industrial Reorganisation Corporation Bill—involving £150 million worth of public money. This is the merest fraction of that.

It is a question of judgment of priorities between the opposite side of the House and this side, and whether the priorities which my hon. Friend the Member for Finchley (Mrs. Thatcher) has advocated in this and a number of other new Clauses and Amendments should prevail, or whether we should spend money on such things as the I.R.C., the Land Commission, or allow the Civil Service to multiply like rabbits, as it is doing under this present Administration.

There is a clear distinction on priorities in this matter. This Clause would bring help to comparatively few people but it is something that I feel sure we ought to agree to and because of the answer that we have been given by the Financial Secretary I hope that my hon. and right hon. Friends will join me in the Division Lobby.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 155, Noes 217.