§ (1) No stamp duty shall be chargeable under the heading "Receipt" (which as amended by section 34 of the Finance Act 1920 imposed a duty of twopence upon a receipt for £2 or upwards) in Schedule 1 to the Stamp Act 1891.
§ (2) Subsection (2) of section 101 (which provided for cancellation of the adhesive stamp by the person giving the receipt), section 102, which provided the terms upon which receipts might be stamped after execution) and paragraphs (1) and (3) of section 103 (which provided a penalty for offences in reference to receipts) of the Stamp Act 1891 and section 34 of the Finance Act 1920 shall be repealed.—[Mr. Graham Page.]
§ Brought up, and read the First time.
§ The Deputy-Chairman (Sir R. Grimston)
With this proposed new Clause can be discussed new Clause No. 52—(Stamp duty on receipts)—and Amendments Nos. 38, 39 and 40.
§ Mr. Page
I suggest that this new Clause is far more important than the one which we have been discussing up till now because if the Committee were to accept this Clause it would achieve what it sets out to do, that is to abolish the 2d. stamp on receipts. When I mentioned 1652 to an hon. Member my pleasure that this Clause was to be selected, he said, "I thought stamps on receipts had already been abolished." That, I think, shows in what disregard receipts are held at present and, indeed, the disrepute into which the law in relation to receipts has fallen.
May I state what is the law at present with regard to 2d. stamps on receipts? If ever a receipt or an acknowledgment is given, it must bear a 2d. stamp. If it does not do so, the maximum penalty is a fine of £10. The Stamp Act, 1891, which imposed this penalty and which made it an offence if a receipt did not bear a 2d. stamp, refers not only to a receipt but to an acknowledgment as well. Therefore, any form of acknowledgment that a sum of money has been paid requires a 2d. stamp. The Stamp Act also refers to a receipt or an acknowledgment for any cash or security, so that the acknowledgment not only of cash but of a cheque also requires a 2d. stamp. I suppose the answer might be, "Do not give a receipt at all." But the Stamp Act makes it an offence not to give a receipt if one is asked to give it.
How has it come about that receipts are now so seldom given? I find that I am not getting very much attention 1653 from the Treasury Bench. I am getting great attention from right hon. and hon. Members opposite but not from my own Treasury Bench.
§ Mr. Page
I am not getting any attention from the Liberal Party because they are not here. I ask my right hon. Friend the Chief Secretary to the Treasury to listen to what I am saying because I think it is important.
We have got to the stage now where very few people give any receipt at all, and if they give a receipt they do not put a 2d. stamp on it. How has this come about? It started to come about in 1957 with the Cheques Act which abolished the need for endorsement of cheques. In making it necessary that an unendorsed cheque should have the same effect that an endorsed cheque had previously had, it was necessary to state in the Cheques Act that an unendorsed cheque, if it were a paid cheque, should be an acknowledgment of payment. But in the course of the debates on that Measure I myself had to call attention to a very old case in 1800, the case of Egg v. Barnett in which it was held that a paid cheque was evidence of payment; that is, it had the same effect as a receipt.
Section 3 of the Cheques Act, 1957, provided that an unendorsed cheque which appears to have been paid by the banker on whom it is drawn is evidence of a receipt by the payee of the sum payable by that cheque. Therefore, that Act, although it made no change in the law relating to receipts, made people realise that receipts were unnecessary if the payment was made by cheque. Generally speaking, the public then made no distinction between a payment by cheque and a payment by cash, and it was thought that stamped receipts were no longer necessary. Stamped receipts are still necessary. If a receipt is given, it should be stamped. A receipt cannot be refused if the payer asks for it. Yet the law is not flouted in this respect. I think that we should not cling doggedly to a law which is in disrepute and is not enforced.
Does the Chancellor of the Exchequer hang on to the law for any reason of revenue? Is it producing any funds for the Exchequer? At the time of the 1957 1654 Act the 2d. stamp on receipts was producing £5 million in revenue; in the year 1957–58 the revenue dropped to £38 million; in 1958–59 to £2.3 million; and now it has dropped to £1.6 million. These are estimated figures. They are estimated because the 2d. receipt stamp is collected mainly by postage stamp and the Post Office pays over to the Commissioners of Inland Revenue what it estimates has been used by way of 2d. stamps on receipts. So the £1.6 million is an estimate by the Post Office of the use of 2d. stamps by way of receipt.
I think that the figure is a little suspect. I notice that the figure for 1959–60 was £1.8 million and for the three following years it has remained static at £1.6 million a year. I wonder whether the Exchequer did not really want to admit what is obvious to everybody, that fewer and fewer receipts are being given and fewer and fewer are being stamped with 2d. Every year the stamping of receipts obviously becomes less and less. Calculating from the figure of £1.6 million, the estimated revenue, I very much doubt whether as many as something over 190 million receipts a year are given.
§ Mr. Page
I have not a clue, but at the foot of the accounts in the Report of the Commissioners of Her Majesty's Inland Revenue for the year ended 31st March, 1963, there is a note stating that the duty on receipts is collected mainly by means of adhesive postage stamps which the law allows to be used for either postal or Revenue purposes, and that the Post Office receives in the first instance the whole of the amount realised by the sale of such stamps and subsequently pays over to that Department the estimated value of the stamps used for Inland Revenue as distinct from postal purposes. That is the only clue which we have of how the Post Office estimates how many 2d. stamps are used for receipts. That is why I say that it is suspect when that figure remains statistic for three years.
I have a feeling that the Commissioners of Inland Revenue are not prepared to admit what is obvious to everyone, 1655 namely, that receipts are dwindling in number, and that they want to argue that there are still 190 million receipts given each year. If that is so, surely a large proportion of those are given by conscientious bodies such as Government Departments, nationalised industries, and so on? And, if that is so, it is merely a matter of passing money from one pocket to another.
Would the Chancellor lose very much if he gave up this farcical collection of 2d on receipts? I should have thought that he ought to lose it so far as he is taking it away from public bodies who may be conscientiously going on giving receipts, and that he ought to lose it so far as it comes from private interests, from commerce, and from the professions, because he would get the tax in another way if he gave up trying to collect it by 2d. stamps on receipts.
Receipts and all that is involved in giving them are, of course, an allowance against taxable income. The cost of giving a receipt can be calculated. I would calculate it as follows. Taking the printed forms of receipt which have to be made out, or typing the receipt, or writing it, completing those forms, perhaps having forms embossed with the stamp, or licking the 2d. stamp and putting it on the receipt form, addressing the envelope in which to send off the receipt, folding the receipt and putting it in the envelope, I should have thought that a reasonable estimate of the value of the time spent on sending out receipts was between 8d. and 1s. for each receipt. To that of course one must add the cost of the stationery, and so on. That is a charge against taxable income, so that my right hon. Friend the Chancellor in collecting his 190 million receipts a year is losing the tax on about 10d. in each case and collecting only 2d. in return.
§ Mr. Douglas Houghton (Sowerby)
The Clause does not abolish receipts. It proposes to abolish the stamp on receipts, so presumably receipts could still be given, and would be desired by many people.
§ Mr. Page
They could still be given, and if they were asked for, no doubt they would be given, but, as the law stands at present, if they are given, a 2d. stamp has to be placed on them.
1656 Never was there so much time wasted in so many offices to collect so few pennies. It is no wonder that so many sensible people refuse to take part in this farce any longer, and that so many people have ceased to give receipts, and ceased to stamp even those acknowledgements which they give.
§ The Economic Secretary to the Treasury (Mr. Maurice Macmillan)
I readily admit that the revenue from this duty is not a very large or significant amount in the context of any Budget, but before I come to the details of the Clause I would point out that there are a number of minor revenue points of this nature and that it is not unreasonable for the Chancellor in a Budget which is increasing taxation to decide that none of them has sufficient priority over the others to be dealt with in his Budget. It is for this reason that I hope that my hon. Friend the Member for Crosby (Mr. Graham Page) will not press the Clause. It is not that we are clinging doggedly to this duty, to use his phrase. In general terms it is perhaps not the time to make this concession when similar and other minor taxes are still in existence.
There is another objection to the Clause. That is the effect which it has on the obligation to give a receipt on request. New Clause No. 33 attempts to retain the obligation to give a receipt on request by leaving in force part of Section 103 of the Stamp Act, 1891, in respect of the necessity to give a receipt where the receipt would be liable to Stamp Duty under the present law. The difficulty is that the terms of the Clause would mean that there would be no receipts liable to Stamp Duty under the present law. My hon. Friend has unintentionally succeeded in drafting his Clause so as to abolish the obligation to give a receipt on demand.
It works like this. If he looks at the effect on Section 103 he will see that the Clause leaves the following words:If any person … in any case where a receipt would be liable to duty refuses to give that receipt duly stamped … he shall incur a fine of ten pounds.There would be no case under the Clause in which a receipt would be liable to duty and there would be no obligation to give a receipt.
§ Mr. Graham Page
I provided for that in a previous year in a Clause which I tabled and I was told that the Clause was out of order for that very reason. That is why I have drafted the Clause in this way this year.
§ Mr. Macmillan
My hon. Friend seems in successive years to have been on the horns of a particular unfortunate dilemma; either he is out of order or he goes further than he intends. I cannot, of course, deal with the former Clause, but on the latter I assure him that in drafting the Clause he has removed this obligation.
The total amount of revenue is not very large. My figures are slightly different from those given by my hon. Friend. I am advised that receipts from the duty were £2½ million in 1963–64 and that the loss to the Exchequer would be about £1½ million in the first year. But I do not think that we need to let £1 million separate us in this case when it is not part of my argument that the duty brings in a significant revenue, nor do I deny that receipts are being given less and less. No one with any practical experience would try to counter that part of my hon. Friend's argument.
§ Mr. Page
According to the Report of the Commissioners of Inland Revenue the revenue from receipts for three consecutive years was £1.6 million, £1.6 million and £1.6 million. It is astonishing that for the one following year, 1963–64, if my hon. Friend quoted that year, it has suddenly leapt up by £1 million. This seems extraordinary and needs a little more explanation.
§ Mr. Macmillan
I will look into the matter, but I can only repeat that I am advised that the receipts for 1963–64 are estimated at about £2½ million. Part of the payment is collected by means of the Inland Revenue in impressed stamps as well as the 2d. adhesive stamps bought from the Post Office,
I urge my hon. Friend not to press his Clause. I think he will accept that this is not a great burden, although it is a nuisance. I accept that it is one of those taxes which should be kept under review and which, with the progress we have been making in simplifying business procedures, should be watched carefully. Nobody would stand on the strict principle that the whole revenue would 1658 be vitiated by the abolition of this duty. Perhaps as the use of cheques becomes more frequent we shall need to bring in more safeguards with its abolition, if in future it should be decided to repeal this duty. It would be necessary to consider whether a provision should be made in regard to the legal obligation to give receipts, stamped or otherwise, on request, and that is one point which is entirely omitted from the new Clause entitled "Stamp duty on receipts" and accidentally omitted from the new Clause entitled "Abolition of stamp duty on receipts".
§ Mr. Houghton
I am sure that the hon. Member for Crosby (Mr. Graham Page) will rot press this Clause, because he can see that there are not enough of my hon. Friends present to enable him to make a demonstration.
That this is a silly little tax there is no doubt. I object to taxes which are not enforced. I do not so much care whether they are fair or unfair, but let us have them enforced. One just cannot get this tax enforced. How on earth the Post Office estimates the number of stamped receipts given I simply do not know. How can anyone even make a guess at the revenue from this tax? I agree that this matter should be kept under review. Note of it has been taken on this side of the Committee and it may be one of the many things the Labour Government will do.
§ Question put and negatived.