§ Amendments made:
§
No. 23, in page 42, line 9, at end insert
'and the relief referred to in the words so substituted in paragraph 1(c) of that Schedule shall include any relief by virtue of section 15(4) of this Act'.—[Mr. Gilbert.]
§ Dr. GilbertI beg to move Amendment No. 24, in page 42, line 36, leave out from 'date' to 'or' in line 38.
§ Mr. Deputy Speaker (Mr. Oscar Murton)With this it will be convenient to take Government Amendments Nos. 25, 26, 27, 29. 30 and 31.
§ Dr. GilbertIt might be for the convenience of the House if I group these amendments in four separate groups. Amendments Nos. 24 and 26 are Government amendments. These amendments arise from the need to put into full effect Amendment No. 25 which was moved by the hon. Member for Croydon, South (Mr. Clark) in the Standing Committee. His amendment would have given the Board of Inland Revenue discretion to allow income relief where occupation of a new residence was reasonably delayed for more than 12 months. For reasons I then explained, the amendment did not achieve the effect he sought. This somewhat lengthy reconstruction gives effect to his purpose.
11.0 p.m.
Amendments Nos. 25 and 27 fulfil undertakings I gave in Committee to ease the conditions where relief is claimed on interest on a loan to purchase or improve a property intended for commercial letting. I think that the amendments are clear, but if hon. Members want more detail I shall be happy to give it.
Amendment No. 29 gives the Board of Inland Revenue the same discretion to extend the 12 months period of grace for bridging loans as applies when occupation of a new residence is delayed for 607 more than 12 months. This too is consequential on our acceptance of the amendment of the hon. Member for Croydon, South in Committee.
Amendments Nos. 30 and 31 honour a further undertaking I gave in Committee. As the Bill stands, paragraph 6 of Schedule 1 allows relief for interest on a loan to purchase or improve a property for letting to be given only against rental income from that property. The amendment widens the provision to give relief on rental income on any other property owned by the borrower. Rather more extensive amendments along these lines were moved in Committee by the hon. Member for Croydon, South and the hon. and learned Member for Dover and Deal (Mr. Rees). I could not go all the way with their suggestion, but the amendments fulfil the commitments I gave then.
§ Mr. John Page (Harrow, West)The Financial Secretary kindly said that he would elucidate further on some of the amendments for the benefit of those who were not on the Standing Committee Could he give the grounds for the extension of the period of grace by Amendment No. 24? A shorthand report might be difficult, but if it is possible it might help.
§ Dr. GilbertI am happy to do so. I hope that the hon. Gentleman did not think me discourteous; I was just trying to save the time of the House.
In normal cases, relief is allowed for the first 12 months following the date of the loan, provided the property in question is being used as his main residence by the borrower by the end of that period. The amendment would allow the board discretion to extend the permissible period before occupation where the circumstances are reasonable. It is intended to deal with force majeure situations, when the intending occupier cannot get in within 12 months, through no fault of his own.
§ Amendment agreed to.
§ Amendments made:
§
No. 25, in page 42, line 39, leave out paragraph (b) and insert—
'(b) is in any period of fifty-two weeks comprising the time at which the interest is payable and falling wholly or partly within the year of assesssment, let at a commercial rent for more than twenty-six weeks and, when not so
608
let, either available for letting at such a rent or used as mentioned in paragraph (a) above or prevented from being so available or used by any works of construction or repair'.
§
No. 26, in page 42, line 46, at end insert—
'(2) If it appears to the Board reasonable to do so, having regard to all the circumstances of a particular case, they may direct that in relation to that case sub-paragraph (1) above shall have effect as if for the references to twelve months there were substituted references to such longer period as meets the circumstances of that case'.
§ No. 27, in page 42, line 53, leave out sub-paragraph (3).—[Dr. Gilbert.]
§ Mr. CarrI beg to move Amendment No. 207, in page 43, line 2, after '£25,000', insert ' for 1974–75'.
When we came to consider the Government's proposal setting an upper limit of £25,000 on the value of a mortgage which would qualify for interest relief, we felt very strongly that this must not be allowed to become a fixed figure for, if not all time, at least some unknown and indefinite period, because if inflation were, unfortunately, to continue, this could well mean that the real value of the house on which mortgage interest was allowed would be declining from year to year. We therefore passed an amendment in Standing Committee which involved an automatic indexing.
In commenting in Standing Committee at that time, I said on behalf of the Opposition—although I also said at the time that I might not carry all my hon. Friends with me—that while I and the Opposition Front Bench felt strongly determined to make sure that this £25,000 was not just lost in limbo, I felt that the retail price index was of at least doubtful merit as to automatic index linking. I said that unless or until we could find some automatic index which would be more satisfactory for this purpose, I would seek to move an amendment on Report which would remove the automatic linkage to the RPI but would ensure that the Government of the day, as with corporation tax, for example, would have to come forward every year in the Finance Bill saying what the value should be for that year. That would, therefore, ensure that every year this consideration took place in public in the House of Commons and that the figure could be amended if it were the desire of the House.
609 This seems to have the added advantage that unless or until we find some index which seems to be more satisfactory than the RPI, it should be possible for the House of Commons every year to take account of not only the movement in the value of money generally but the movement in other things, such as property values, obviously, and even earnings, and this sort of consideration.
Therefore, I believe that this is the sounder way for us to proceed. It does ensure what above all we started to seek to ensure—namely, that this figure of £25,000 will have to be openly reviewed by Parliament every year and Parliament will have the opportunity to change it. That is the reason for the amendment.
§ Dr. GilbertAs the right hon. Gentleman will recall, we made it perfectly clear in Standing Committee that it was never our intention that the £25,000 figure should stand for all time in the Bill. It would be unrealistic ever to intend that. I agree that the amendment—which in turn gives rise to the amendment we shall be debating next—is a less than satisfactory way of dealing with the matter.
As to the £25,000 limit, I have no difficulty in accepting the right hon. Gentleman's amendment, No. 207. I made it clear to him in Standing Committee that the Government would renew it and look at it every year, of course, as part of the budgetary process. I think that I also made it clear to him that there was no diminution of parliamentary control in the way we had it in the Bill because it was always open to Parliament on every Finance Bill to seek to change the figure, which would have had the effect of reducing taxation. I do not seek to debate this minor point with the right hon. Gentleman. I am happy to accept the amendment.
§ Mr. Nigel Lawson (Blaby)The hon. Gentleman has said that it is not the Government's intention that this figure or anything like it should stand for all time. That is an important statement. Will he confirm that there has been a change in the Government's position since the Budget Statement, when the Chancellor specifically and explicitly said that it was his intention that the £25,000 should stay fixed for a considerable period?
§ Dr. GilbertThere is the world of difference between "a considerable period" and "all time". I should have thought that that was obvious.
§ Mr. RidleyI am not terribly happy about the social compact which has been arrived at between the two Front Benches. There was a feeling in Standing Committee that it was not entirely wise to trust Governments to review a limit such as this every year and that they might not be prepared to come up with a new figure every year which would be more realistic in terms of the change in the value of money.
Nobody will say that £25,000 is necessarily the right limit to start with. It might be said that it should be higher or that it should be lower. Granted that we have that figure, we should build into our legislation measures for reviewing it annually and bringing it up to its old value in real terms.
The question which the House must consider is whether the more effective way of updating the value from £25,000 to whatever it should be in the future depending upon the rate of inflation is to link it to some index or to leave it to the Government. If we were talking about pensions or unemployment pay, I have no doubt that the Government would not only bring it up to the new value but would increase it still further, because there are votes in doing that. However, there are no votes in increasing the £25,000.
One of the troubles about inflation is that those who carry the least voting power tend to get the worst treatment. I am certain that the amendment is no guarantee that the limit will ever be looked at again. It is frightening how the limits in taxation—the figures built into our fiscal legislation—have been allowed to stand as money values fall and the currency is eroded and how people are increasingly being taxed and treated badly through inflation because they have not got the popular steam to engender the political power to have the limits changed.
This was the first instance of indexing which was ever put into any Bill. I was glad that the amendment I moved in Committee was accepted to index the figure to £25,000. That seemed to be a precedent that perhaps those who suffer 611 from the fact that they do not have great political power and influence would be protected by further indexing measures of this sort.
I find it difficult to rest my trust in the word of future Treasury Ministers that they will review the figure at later periods. They could review it and say, "We have reviewed it and it should go up from £25,000 to £26,000." That is not the same thing as accepting the principle that figures such as this should be automatically inflation-proofed, should be protected against the erosion in the value of money, not through the benevolence of Treasury Ministers, but through the automatic operation of some clause.
Although I understand the technical difficulties about the retail price index and other problems, it is the best index we have. Indeed, it is the only index we have. It is wrong for the House to withdraw the indexation of the £25,000 without there being some further probing of the Government, and the Financial Secretary saying what he means by an annual review. It is not as if he has offered Amendment No. 79. It is an Opposition amendment that he has graciously accepted, but what would be his attitude if he were Financial Secretary a year from now? Would he uprate the £25,000 to take account of the fall in the value of money? Is the obligation to review in the next Budget in his estimation an obligation to substitute for £25,000 a figure which would fully compensate for the fall in the value of money at that time? If he intends merely to have a look at the matter but to care nothing for the people who can afford a £25,000 mortgage and to do nothing about it, then the amendment is meaningless. If the review means trying to devise a figure which takes account of the change in the value of money, the rate of inflation and the movement in house prices, a realistic figure, then we can at least argue whether he has reached the correct figure. That would be meaningful.
11.15 p.m.
We want to be assured that in the conditions ahead, which will be chaotic, and in which hyper-inflation is now all too likely because of Government policy, there will be some protection for the silent minority who will get trampled 612 underfoot by the fall in the value of money unless we take precautions. Therefore I am not prepared to rest on the short speech the Financial Secretary made in accepting the amendment. I want to know what he intends by "review". Does he intend to try to bring the figure back to its full true value, or does he intend to go through a meaningless, formal process under which he says that he has reviewed it and has decided to do nothing?
§ Mr. PardoeThe hon. Member for Cirencester and Tewkesbury (Mr. Ridley) and I put our names jointly to the amendment which the Committee in its wisdom passed. It dealt with indexation, and I am not arguing here for a total commitment to indexation at every stage of the economy. We must, however, begin to make progress on indexation and we should start with taxation. I was therefore glad that the Committee accepted and passed the amendment.
§ Mr. Nigel LawsonOn a point of order, Mr. Deputy Speaker. Which amendment are we debating?
§ Mr. Deputy SpeakerAmendment No. 207.
§ Mr. PardoeThe Opposition amendment which the Government have now accepted is palpably an attempt to get the Opposition Front Bench off the hook on which they impaled themselves in Committee—perhaps unintentionally—and they do not seem to have been very successful. I am sorry that the Opposition have resorted to this proposal because they would have done better to have stuck to the original amendment.
I do not understand the reasons put forward by the right hon. Member for Carshalton (Mr. Carr) for opposing the RPI, because unless we use something like the RPI we have no means of distributing resources within the economy. The hon. Member for Luton, West (Mr. Sedgemore) stated in a debate on an earlier amendment what he believed would happen if the price of houses fell and the retail price index rose. That is one reason for using the RPI because if house prices fell it would signify that houses had become more plentiful in relation to other things to which we would have to allocate resources. Therefore, I do not know what alternative we 613 have to using the RPI. I do not believe that gold bars, SDRs or even the price of bricks would do. It would be far better to stick to the amendment we passed in Committee and not have this subterfuge to get the Conservative Front Bench off the hook.
I hope that eventually one Government or the other will accept the principle of full-scale indexation, and then there will be no need for what is palpably a device, because the House can always review a tax rate in any Session. Therefore, I do not think that the amendment says anything, but I accept that it is a good excuse to avoid a vote tonight.
§ Mr. CarrI am grateful to the Financial Secretary for accepting the amendment. I would say to the hon. Member for Cornwall, North (Mr. Pardoe) that if it had not been necessary for Governments every year to deal with the rate of income tax, for example, to say nothing of corporation tax, I cannot help thinking that there would have been fewer reductions of tax. The fact that a value must be set every year and come before the House ensures that it is not reviewed behind closed doors. The chance to amend is real.
If by some malchance the present Chancellor and his hon. Friends should find themselves dealing with the Finance Bill next year, it will not be good enough for them to refer back to what the right hon. Gentleman said in his Budget speech on 26th March. It will not be good enough to say that he hoped he had fixed the value at £25,000 for at least a considerable time. If we are unfortunately in Opposition, we shall bring the pressure of Parliament to bear to see that the value is changed to meet changes in the value of property and of money.
§ Dr. GilbertI am grateful for what the right hon. Gentleman has said.
I feel that I should respond to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), although some of his remarks were directed to the next debate. Obviously, considerations involved would be movements in the level of house prices and incomes, and would include the overall structure of tax reliefs for house purchase, taken in the whole context of assistance to the public in the acquisition of housing, whether rented or otherwise.
614 The hon. Gentleman said that if there were a change in the figure the new figure could be subject to scrutiny by the House and the Committee if they considered that appropriate. Equally, if there is no change that can be considered. House prices could fall. I am told that they have levelled off, and that there have been slight falls of 1 per cent. or so in certain parts of the country. I do not think that the figure is likely to fall, but it is theoretically conceivable.
§ Mr. RidleyIt is not a question of house prices; it is a question of the value of money. Is the hon. Gentleman honestly suggesting that the value of money could be stable or could even increase in the foreseeable future? Such a suggestion would clearly be rubbish. If we are to go on the indexing principle, we shall have to have a change next year, probably to about £30,000 at the rate the Government are presently inflating the economy.
This is a serious and important point. For the hon. Gentleman to say that if there is no change in the figure the House can debate the matter is for him to say "I am preparing to mislead the House in this debate. I have no intention of doing anything about the figure next year, because I have decided that I do not want to do anything about it."
We want the hon. Gentleman to acknowledge that rampant inflation exists and to say that he will put the figure right every year. Otherwise, I shall have to insist on voting against the next amendment to remove sub-paragraph (2).
§ Dr. GilbertI was talking in terms not of next year but of a whole series of years, in regard to the general principle of review in the Budgetary process. The hon. Gentleman is well aware of what I was saying. I do not want to bring the debate to the level of scoring points on who is responsible for inflation, although the hon. Gentleman tempts me. The hon. Gentleman should bear in mind some of the antics of his right hon. and hon. Friends, particularly those of yesterday relating to the public sector borrowing requirements, before making remarks of that sort.
It is clear from what I have said that my right hon. Friend will consider the whole gamut of economic factors connected with relative house prices and the value of money. A change in house prices 615 is normally a most significant factor. I should have thought that that would be self-evident.
§ Amendment agreed to.
§ Dr. GilbertI beg to move Amendment No. 28, in page 43, line 15, leave out sub-paragraph (2).
This amendment is designed to remove from the Bill the requirement inserted by Amendment No. 45 of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) in Standing Committee, the effect of which was to increase the value of the £25,000 ceiling every six months in line with the Retail Price Index—
§ Mr. Nigel Lawsonrose—
§ Dr. GilbertI will not give way.
§ Mr. Nigel LawsonOn a point of order, Mr. Deputy Speaker. The Bill is printed, in a manner of speaking, and the hon. Gentleman has misquoted it.
§ Mr. Deputy SpeakerThe Financial Secretary must be allowed to move his amendment. Dr. Gilbert.
§ Dr. GilbertI am always generous in giving way to hon. Members, but occasionally the hon. Gentleman must be patient. I will give way in due course. Amendment No. 45 stated:
If at any time the official retail price index shall rise above that obtaining on 5th April 1974 the Treasury shall, by order, substitute for the amounts specified in subparagraph (1) above (£25,000) such higher amounts as shall then have the same purchasing power (calculated by reference to that index) as the corresponding amount in the above sub-paragraph had on 5th April 1974:Provided that no order under this section shall be made before 5th October 1974 or thereafter at less than six-monthly intervals".I should have thought that the intervals proposed in that amendment were perfectly clear.
§ Mr. Nigel LawsonThe amendment which the Financial Secretary has read out at no place states that there should be a review at six-monthly intervals. It refers to not less than six-monthly inter-
§ vals. It was not the intention of those of us on this side who supported that amendment that the period should be one of six-monthly intervals. We would consider annual intervals more appropriate.
§ Dr. GilbertIf the hon. Gentleman concedes that an annual review is more appropriate it is extraordinary that that suggestion did not appear in the amendment or in the reports of debates in Committee.
§ Mr. PardoeThe whole point about the six months is that if an annual review had been suggested it would have been out of order because we do review things annually anyway. Has the hon. Gentleman not taken that on board?
§ 11.30 p.m.
§ Dr. GilbertOf course we review things annually. That was why I accepted Amendment No. 207. The hon. Gentleman was not listening very closely to the last debate. I am glad to have it confirmed that the hon. Member for Blaby (Mr. Lawson) is no longer seeking to rest upon a six-monthly review. [Interruption.] The hon. Gentleman disagrees? It is very confusing knowing what the hon. Gentleman has in mind. I will leave it to the hon. Gentleman to explain to the House. I have no intention of putting words into his mouth. No doubt he will do so at his usual length and with his usual eloquence.
For reasons we went into in considerable detail in Committee I am unable to recommend the House to accept the effect of the amendment moved in Committee by the hon. Member for Cirencester and Tewkesbury. We went into the reasons a few minutes ago when debating Amendment No. 207. The right hon. Member for Carshalton (Mr. Carr) agreed then that that was the better way of doing things and the hon. Member's way was inappropriate.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 102, Noes 29.
617| Division No. 91.] | AYES | [11.32 p.m. |
| Abse, Leo | Bishop, E. S. | Cohen, Stanley |
| Ashton, Joe | Boardman, H. | Coleman, Donald |
| Atkinson, Norman | Broughton, Sir Alfred | Conlan, Bernard |
| Bagier, Gordon, A. T. | Brown, Bob (Newcastle upon Tyne, W.) | Cook, Robert F. (Edinburgh, C.) |
| Barnett, Joel (Heywood & Royton) | Carter-Jones, Lewis | Cox, Thomas |
| Bates, Alf | Castle, Rt. Hn. Barbara | Davidson, Arthur |
| Benn, Rt. Hn. Anthony Wedgwood | Cocks, Michael | Davies Ifor (Gower) |
| Dean, Joseph (Leeds, W.) | Kerr, Russell | Pendry, Tom |
| Douglas-Mann, Bruce | Kinnock, Neil | Perry, Ernest G. |
| Duffy, A. E. P. | Lambie, David | Prescott, John |
| Dunn, James A. | Lestor, Miss Joan (Eton & Slough) | Price, William (Rugby) |
| English, Michael | Loyden, Eddie | Rodgers, George (Chorley) |
| Ennals, David | Lyons, Edward (Bradford, W.) | Rodgers, William (Teesside, St'ckton) |
| Evans, Fred (Caerphilly) | Mabon, Dr. J. Dickson | Ross, Rt. Hn. William (Kilmarnock) |
| Evans, John (Newton) | McCartney, Hugh | Sandelson, Neville |
| Fernyhough, Rt. Hn. E. | MacFarquhar, Roderick | Short, Rt. Hn. E. (N'ctle-u-Tyne) |
| Fletcher, Raymond (Ilkeston) | McGuire, Michael | Skinner, Dennis |
| Ford, Ben | McMillan, Tom (Glasgow, C.) | Smith, John (Lanarkshire, N.) |
| Fowler, Gerry (The Wrekin) | Madden, M. O. F. | Snape, Peter |
| Freeson, Reginald | Magee, Bryan | Stoddart, David (Swindon) |
| George, Bruce | Mahon, Simon | Stott, Roger |
| Gilbert, Dr. John | Mallalieu, J. P. W. | Summerskill, Rt. Hn. Shirley |
| Grant, George (Morpeth) | Mellish, Rt. Hn. Robert | Swain, Thomas |
| Grant, John (Islington, C.) | Millan, Bruce | Urwin, T. W. |
| Hamling, William | Miller, Dr. M. S. (E. Kilbride) | Wainwright, Edwin (Dearne Valley) |
| Hardy, Peter | Milne, Edward | Wellbeloved, James |
| Harper, Joseph | Mitchell, R. C. (S'hampton, Itchen) | Williams, Alan (Swansea, W.) |
| Harrison, Walter (Wakefield) | Molloy, William | Wise, Mrs. Audrey |
| Howell, Denis (B'ham, Small Heath) | Mulley, Rt. Hn. Frederick | Woodall, Alec |
| Huckfield, Leslie | Oakes, Gordon | Woof, Robert |
| Hughes, Rt. Hn. Cledwyn (Anglesey) | O'Halloran, Michael | Wrigglesworth, Ian |
| Hughes, Mark (Durham) | Palmer, Arthur | Young, David (Bolton, E.) |
| Johnson, James (K'ston upon Hull, W) | Parker, John (Dagenham) | TELLERS FOR THE AYES: |
| Jones, Gwynoro (Carmarthen) | Parry, Robert | Mr. John Golding and |
| Judd, Frank | Peart, Rt. Hn. Fred | Mr. J. D. Dormand. |
| NOES | ||
| Body, Richard | Lester, Jim (Beeston) | Ross, Stephen (Isle of Wig[...]) |
| Carson, John | Lloyd, Ian (Havant & Waterloo) | Scott-Hopkins, James |
| Churchill, W. S. | MacGregor, John | Smith, Cyril (Rochdale) |
| Cooke, Robert (Bristol, W.) | Mitchell, David (Basingstoke) | Thorpe, Rt. Hn. Jeremy |
| Cope, John | Newton, Tony (Braintree) | Wiggin, Jerry |
| du Cann, Rt. Hn. Edward | Nicholls, Sir Harmar | Winstanley, Dr. Michael |
| Durant, Tony | Normanton, Tom | Winterton, Nicholas |
| Hannam, John | Page, Rt. Hn. Graham (Crosby) | |
| Howells, Geraint (Cardigan) | Page, John (Harrow, W.) | TELLERS FOR THE NOES: |
| King, Tom (Bridgwater) | Pardoe, John | Mr. Normao Lamont and |
| Lawrence, Ivan | Ridley, Hn. Nicholas | Mr. Nigel Lawson. |
§ Question accordingly agreed to.
§
Amendments made: No. 29, in page 44, line 22, at end insert:
'(2) If it appears to the Board reasonable to do so, having regard to all the circumstances of a particular case, they may direct that in relation to that case sub-paragraph (1) above shall have effect as if for the reference to twelve months there were substituted a reference to such longer period as meets the circumstances of that case'.
§ No. 30, in page 44, line 28, after 'that', insert 'or any other'.
§ No. 31, in page 44, line 31, after second 'the', insert 'first-mentioned'.
§
No. 32, in page 44, line 33, at end insert:
'8.—(1) Where any interest paid by persons as the personal representatives of a deceased person or as trustees of a settlement made by his will would, on the assumptions required by sub-paragraph (2) below, be eligible for relief under section 75 of the Finance Act 1972 by virtue of Part I of Schedule 9 to that Act and, in a case where the condition stated in that sub-paragraph applies, that condition is satisfied, that interest shall be so eligible notwithstanding the preceding provisions of this Part of this Schedule.
(2) For the purposes of sub-paragraph (1) above it shall be assumed that the deceased
618
would have survived and been the borrower; and if, at his death, the land, caravan or house boat concerned was used as his only or main residence, it shall be further assumed that he would have continued so to use it and the following condition shall then apply, namely, that the land, caravan or house boat is, at the time the interest is paid, used as the only or main residence of the deceased's widow or widower or of any dependent relative of the deceased.
(3) In this paragraph "personal representatives" has the meaning assigned to it by section 432 of the Taxes Act'.
§
No. 33, in page 44, line 52, at end insert:
'(2) The relief referred to in sub-paragraph (1)(c) above includes any relief by virtue of section 15(4) of this Act'.
§
No. 34, in page 45, line 23, at the end insert:
'(2) The relief referred to in sub-paragraph (1)(c) above includes any relief by virtue of section 15(4) of this Act'.
§
No. 35, in page 46, line 42, at end insert:
'(2) The reference in sub-paragraph (1)(b) above to relief by virtue of this paragraph shall be construed as including any relief by virtue of section 15(4) of this Act'.
§ No. 105, in page 47, line 37, at end insert:
§ 'Loan to purchase life annuity
§ 23.—(1) Subject to the following provisions of this paragraph, interest is eligible for relief under section 75 of the Finance Act 1972 if it is interest on a loan in respect of which the following conditions are satisfied—
- (a) that the loan was made as part of a scheme under which not less than nine-tenths of the proceeds of the loan were applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons (in this paragraph referred to as "the annuitants") who include the person to whom the loan was made;
- (b) that at the time the loan was made the person to whom it was made or each of the annuitants had attained the age of sixty-five years;
- (c) that the loan was secured on land in the United Kingdom or the Republic of Ireland and the person to whom it was made or one of the annuitants owns an estate or interest in that land; and
- (d) that, if the loan was made after 26th March 1974, the person to whom it was made or each of the annuitants uses the land on which it was secured as his only or main residence at the time the interest is paid.
§ (2) Interest is not eligible for relief by virtue of this paragraph unless it is payable by the person to whom the loan was made or by one of the annuitants.
§ (3) If the loan was made after 26th March 1974, interest on it is eligible for relief by virtue of this paragraph only to the extent that the amount on which it is payable does not exceed £25,000; and if the interest is payable by two or more persons the interest payable by each of them is so eligible only to the extent that the amount on which it is payable does not exceed such amount as bears to £25,000 the same proportion as the interest payable by him bears to the interest payable by both or all of them'.
§ No. 104, in page 47, line 36, at end insert 'of the preceding provisions'.—[Dr. Gilbert.]
§
Amendment proposed: No. 36, in page 48, line 10, at end insert:
'at the rate at which interest on that balance was chargeable on 26th March 1974'.—[Dr. Gilbert.]
§ Mr. HigginsWe should be grateful if the Financial Secetary could give us some explanation of this amendment. It seems to raise a separate point of principle. I do not think that there is another amendment which relates to the actual rate of interest. It may be that I have misunderstood this rather technical point. It seems to be an innovation. I 620 should be grateful if the Financial Secretary could tell us exactly what it does.
§ Dr. GilbertI must admit that I am in a state of some confusion. I thought that we had taken Amendment No. 36 along with Amendment No. 11, the amendments of the right hon. Member for Carshalton (Mr. Carr), and Amendments Nos. 81, 82, 12 to 15, 23 and 33 to 37. I was under the impression that we were now to consider Amendments Nos. 34, 104 and 106. I think that you, Mr. Deputy Speaker, put Amendments Nos. 32, 105 and 104. I understood you to say that you were taking all the remaining Government amendments to Schedule I. That left outstanding Amendment No. 106 to which I was prepared to speak. I thought that we had dealt with Amendment No. 36 some time ago.
§ Mr. HigginsI am not seeking to delay the House. My understanding was that you took a bunch of amendments, Mr. Deputy Speaker, which the House agreed. I understood that you suggested that Amendment No. 36 might be taken separately. If the amendment is connected with a group I would ask the Financial Secretary to refresh our memories as to precisely which group Amendment No. 36 relates. Obviously we do not want to make a mistake at this stage. A mistake could not be put right in another place. Perhaps the Financial Secretary will tell us to which group the amendment relates and what it actually does.
§ Dr. GilbertI thought that Amendment No. 36 was linked with Amendment No. 37, which was taken with the group of amendments starting with Amendment No. 11. I am now hunting for that amendment. I tend to get my papers in rather a mess—
§ Mr. Tom King (Bridgwater)On a point of order, Mr. Deputy Speaker. As there is some confusion and as we are to have an extremely important Adjournment debate, would it not be for the convenience of the House to have the Adjournment debate now while the Financial Secretary sorts out his papers?
§ Mr. Deputy Speaker (Mr. George Thomas)That is a very good idea, but it is impracticable.
§ Dr. GilbertI can assure you, Mr. Deputy Speaker, that my colleagues and 621 I have had our papers properly organised for the matters that we have had to debate. We have debated Amendments Nos. 36 and 37. I spoke to them at the proper time.
§ Mr. Deputy SpeakerAs the House will know, there have been changes in the Chair. However, I understand that Amendment No. 36 has been taken. It was read out earlier.
§ Mr. Higginsrose—
§ Mr. Deputy SpeakerOrder. I know that both sides are anxious to meet each other. Perhaps a simple, quick statement would satisfy.
§ 11.45 p.m.
§ Mr. HigginsNow that the Financial Secretary has spelt out clearly to which group Amendment No. 36 is linked, I am perfectly satisfied. I was merely anxious that the House should not make a mistake which could not be corrected in another place. I fully accept what the Financial Secretary says.
§ Dr. GilbertI am most appreciative of what the hon. Gentleman says. I recognise the difficulties under which he has to work, as indeed we all do. Have you included Amendment No. 106, Mr. Deputy Speaker, with those to Schedule 1 which it would be convenient for the House to take together?
§ Mr. Deputy SpeakerI understand that Amendments Nos. 36, 37 and 106 have been discussed, but will have to be moved formally.
§
Amendments made: No. 36, in page 48, line 10, at end insert:
'at the rate at which interest on that balance was chargeable on 26th March 1974'.
§
No. 37, in line 11, leave out paragraph (c) and insert:
'(c) so much of the interest paid in the year of assessment for which the claim is made as was payable after 26th March 1974 and before 6th April 1975'.
§
No. 106, in page 50, line 16, column 2, leave out from beginning to end of line 22 and insert:
In subsection (6) the following shall be substituted for paragraph (d):
(d) the payment of interest would, on the assumptions made below, be eligible for relief under section 75 of the Finance Act 1972 by virtue of Part I of Schedule 9 to that Act if it were made by an individual". and after that paragraph there shall be in
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serted the words "For the purposes of paragraph (d) above it shall be assumed that if the land concerned is occupied by the company the conditions of paragraph 4(1) of Schedule 1 to the Finance Act 1974 are satisfied if the land either—
§ but the limit imposed by paragraph 5 of that Schedule shall apply only in a case falling within paragraph (ii) above and shall then apply without regard to any loan made in connection with any other land.—[Dr. Gilbert.]
§ Further consideration of the Bill, as amended, adjourned.—[Mr. Joel Barnett.]
§ Bill, as amended in Committee and in Standing Committee, to be further considered tomorrow.
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- ADJOURNMENT 12 words