§ Mr. Stephen RossI beg to move Amendment No. 15, in page 5, line 26, leave out from 'acquisition' to 'and' in line 27.
I am well aware that the matter was debated at some length in the Standing Committee, of which I was not a member. Perhaps I may crib from what was aptly said by the right hon. Member for Crosby (Mr. Page):
The absence of a complete record is no reason why one should not endeavour to assess the value of the property as at the time it was acquired."—[Official Report, Standing Committee J, 6th April 1976; c. 343.]Why must we still stick to the April 1965 date? I know that that was the date when capital gains tax was introduced, but those records are suspect, as I know as a valuer.I have argued long and hard with district valuers over, for instance, the value of farmland at April 1965. There was a decline in the four years to 1969, but then it started to rise again. The records are questionable. The Bill would be better 1761 if we stopped referring back to April 1965. I see no reason why we should not stop doing so.
It is purely for the convenience of the Government and the Inland Revenue that the words are there. I ask the Minister to agree that the Bill would be better if those words were removed.
§ Mr. Denzil DaviesI am sorry, since the hon. Gentleman moved the amendment in such modest tones, that I must disappoint him. The date is chosen partly for convenience. One must find out the value of the land as at 6th April 1965. If it were necessary to go back further, it would become more difficult to find the current use value. We had long debates in Committee about the difficulty of valuation.
Some hon. Members said in Committee that we were talking about hypothetical values. If we had to go back further than 1965, we should be in a more and more hypothetical situation. The hon. Gentleman, who is a valuer and has far more experience than I have, will know that the further one goes back, the more difficult it is to find the current use value. That might not have been the cost of acquisition.
We are concerned with the current use value of land. The further back one goes the more difficult it is to find reliable estimates of current use value. That is why 1965 was chosen. It was not chosen principally because it was the year that capital gains tax was introduced, although that was partly the reason. If we went back further, we should make it more difficult for valuers and add to the complexities of existing legislation. For those reasons I cannot accept the amendment.
§ Mr. Stephen RossI shall not delay the House. I do not altogether accept the Minister's argument. Certain calculations and tables could be used to get a more accurate figure than basic values at April 1965, but I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 11.45 p.m.
§ Mr. Graham PageI beg to move Amendment No. 16, in page 6, line 1, leave out 'wholly and exclusively'.
Clause 5 deals with relevant base value, in connection with which one has 1762 to discover the sum paid for the property when it was acquired by the person who is selling. In the previous debate we were concerned with the date in terms of the cost of acquisition. In this debate we are also concerned with the cost of acquisition, but we must have regard to the definition that is provided—namely,
the consideration given by him or on his behalf wholly and exclusively for the acquisition of the interest".It seems that the words "wholly and exclusively" are superfluous. Either it is the consideration paid for the acquisition, or it is not. If other properties are acquired at the same time—for example, if one is buying a property with goodwill or fixtures and fittings and the sum includes property that is not the interest in land—is it not confusing to have the words "wholly and exclusively"? If the consideration includes some payment for goods or something that is not an interest in land, the words are misleading. If one has to apportion the consideration to find out, again, the words are superfluous.
§ Mr. Denzil DaviesWe had a fairly long debate in Committee on these words. The right hon. Gentleman has reiterated some of the arguments that he advanced to suggest that they are not necessary.
I explained in Committee that they are used quite freely in fiscal legislation but that I should consult the parliamentary draftsmen to ascertain whether they are absolutely necessary. Those consultations have taken place and I am advised—these are extremely technical matters—that if these words were left out, the omission would create more uncertainty. As this is fiscal legislation, it is undesirable to create uncertainty, especially in property matters where it is necessary to rely on a definite form of words. The words are well known and well used in fiscal legislation, and understood. There are cases involving their meaning in other aspects of tax law. I am advised that these words are better left in, otherwise we might find greater uncertainty. That would be undesirable in fiscal legislation dealing with property matters.
§ Mr. FairbairnThe Minister has confirmed our worst fears in Committee 1763 about these words. However, the Minister's approach is attractive in that he keeps admitting his own doubts. He tells us that we should create more uncertainty if the words were left out. Therefore, he now concedes, as we argued in Committee but as he then denied, that they create uncertainty by their presence. If he is now saying that they create more uncertainty if left out, I hope that he will now admit that the argument we advanced that they create uncertainty was sound.
§ Mr. CopeWill the Minister of State answer the question asked by my right hon. Friend the Member for Crosby (Mr. Page)? He asked "What happens if one buys an interest in a piece of property or land which includes fixtures and fittings?". Supposing one pays one sum which is in the contract and includes not only the interest in the land but the carpets and curtains, as is frequently done with houses, flats, offices, and so on; clearly, that consideration will not have been wholly and exclusively for the acquisition of the interest. It will have been in part for the acquisition of those other matters. This is the nub of the uncertainty in the clause. As a result of the Minister's consultations since Committee, can he tell us the answer to that question?
§ Mr. Denzil DaviesThe hon. Gentleman has posed a specific question. Even if the words "wholly and exclusively" were left out, his problem remains. If the words were "for the acquisition of land", his problem with regard to one price for fixtures and fittings and the land would remain. In most contracts there is a split between consideration for the land and the chattels. The problem is not solved by removing the words "wholly and exclusively". It is felt that the words should be in the clause in order to create greater certainty, and I should have thought that that reason would commend itself to hon. Members opposite.
Mr. Deputy SpeakerThe Question is, That the amendment be made. All those in favour say "Aye"; to the contrary "No". I think the "Noes" have it. [Interruption.]
§ Mr. Graham PageOn a point of order, Mr. Deputy Speaker. You put the Question quite clearly whether the amendment should be accepted, and it was accepted. [HON. MEMBERS: "No."] Oh, yes. I heard an "Aye" from the Government side.
§ Mr. Graham PageIf there is any doubt, I agree that you should put the Question again, Mr. Deputy Speaker, but I cannot imagine how there can be any doubt when the voices distinctly came from the Government side in favour of the amendment. Clearly on the Government Front Bench "Aye" was said.
§ Mr. FairbairnOn a point of order, Mr. Deputy Speaker. Since the noises came wholly and exclusively from the Government side and they wholly and exclusively said "Aye", I cannot understand that there could be whole or exclusive doubt in any form.
Mr. Deputy SpeakerThe Question is, That the amendment be made. As many as are of that opinion say "Aye"; to the contrary "No". I think the "Noes" have it.
§ The House proceeded to a Division; but no Member being willing to act as Teller for the Ayes, Mr. DEPUTY SPEAKER declared that the Noes had it.
§ Mr. Denzil DaviesI beg to move Amendment No. 17, in page 6, line 36, leave out from '(iv)' to 'were' in line 37.
This is purely a drafting correction to Clause 5(1)(a) which results from the various changes made in Committee. It does not affect the substance of the Bill and I commend it to the House.
§ Amendment agreed to.
§ Mr. DaviesIn view of the rapid progress that we have made today, I beg to move, That further consideration of the Bill, as amended, be now adjourned.
§ Question put:—
1765§ The House divided: Ayes 229, Noes 64.
1767| Division No. 197.] | AYES | [12 midnight |
| Allaun, Frank | George, Bruce | Park, George |
| Archer, Peter | Gilbert, Dr John | Parry, Robert |
| Armstrong, Ernest | Golding, John | Pavitt, Laurie |
| Ashton, Joe | Gould, Bryan | Peart, Rt Hon Fred |
| Atkinson, Norman | Graham, Ted | Pendry, Tom |
| Barnett, Guy (Greenwich) | Grant, George (Morpeth) | Perry, Ernest |
| Barnett, Rt Hon Joel (Heywood) | Grant, John (Islington C) | Phipps, Dr Colin |
| Bates, Alf | Grocott, Bruce | Prentice, Rt Hon Reg |
| Bean, R. E. | Hamilton, James (Bothwell) | Prescott, John |
| Benn, Rt Hon Anthony Wedgwood | Hardy, Peter | Price, C. (Lewisham W) |
| Bennett, Andrew (Stockport N) | Harrison, Walter (Wakefield) | Price, William (Rugby) |
| Bidwell, Sydney | Hart, Rt Hon Judith | Radice, Giles |
| Bishop, E. S. | Hatton, Frank | Rees, Rt Hon Merlyn (Leeds S) |
| Blenkinsop, Arthur | Heffer, Eric S. | Reid, George |
| Boardman, H. | Hooley, Frank | Richardson, Miss Jo |
| Booth, Rt Hon Albert | Howell, Rt Hon Denis | Roberts, Gwilym (Cannock) |
| Boyden, James (Bish Auck) | Hoyle, Doug (Nelson) | Robinson, Geoffrey |
| Bray, Dr Jeremy | Hughes, Mark (Durham) | Roderick, Caerwyn |
| Brown, Hugh D. (Provan) | Hughes, Robert (Aberdeen N) | Rodgers, George (Chorley) |
| Brown, Robert C. (Newcastle W) | Hunter, Adam | Rodgers, William (Stockton) |
| Brown, Ronald (Hackney S) | Irvine, Rt Hon Sir A. (Edge Hill) | Rooker. J. W. |
| Buchan, Norman | Jaskson, Colin (Brighouse) | Ross, Rt. Hon W. (Kilmarnock) |
| Buchanan, Richard | Jackson, Miss Margaret (Lincoln) | Rowlands, Ted |
| Butler, Mrs Joyce (Wood Green) | Janner, Greville | Sedgemore, Brian |
| Callaghan, Jim (Middleton & P) | John, Brynmor | Selby, Harry |
| Campbell, Ian | Johnson, James (Hull West) | Shaw, Arnold (Ilford South) |
| Canavan, Dennis | Jones, Dan (Burnley) | Shore, Rt Hon Peter |
| Cant, R. B. | Judd, Frank | Short, Rt Hon E. (Newcastle C) |
| Carmichael, Neil | Kaufman, Gerald | Short, Mrs Renée (Wolv NE) |
| Carter-Jones, Lewis | Kelley, Richard | Silkin, Rt Hon John (Deptford) |
| Cartwright, John | Kerr, Russell | Silkin, Rt Hon S. C. (Dulwich) |
| Clemitson, Ivor | Kilroy-Silk, Robert | Silverman, Julius |
| Cocks, Michael (Bristol S) | Kinnock, Neil | Skinner, Dennis |
| Cohen, Stanley | Lambie, David | Small, William |
| Coleman, Donald | Lamond, James | Smith, John (N Lanarkshire) |
| Colquhoun, Ms Maureen | Latham, Arthur (Paddington) | Snape, Peter |
| Cook, Robin F. (Edin C) | Lestor, Miss Joan (Eton & Slough) | Spearing, Nigel |
| Corbett, Robin | Lipton, Marcus | Stallard, A. W. |
| Cox, Thomas (Tooting) | Litterick, Tom | Stewart, Rt Hon M. (Fulham) |
| Craigen, J. M. (Maryhill) | Lomas, Kenneth | Stoddart, David |
| Cryer, Bob | Loyden, Eddie | Strang, Gavin |
| Cunningham, G. (Islington S) | Lyons, Edward (Bradford W) | Strauss, Rt Hon G. R. |
| Cunningham, Dr J. (Whiteh) | McCartney, Hugh | Swain, Thomas |
| Dalyell, Tam | McElhone, Frank | Thomas, Ron (Bristol NW) |
| Davidson, Arthur | MacFarquhar, Roderick | Tomlinson, John |
| Davies, Bryan (Enfield N) | Mackenzie, Gregor | Torney, Tom |
| Davies, Denzil (Llanelli) | Mackintosh, John p. | Tuck, Raphael |
| Davies, Ifor (Gower) | Maclennan, Robert | Urwin, T. W. |
| Davis, Clinton (Hackney C) | McMillan, Tom (Glasgow C) | Varley, Rt Hon Eric G. |
| Deakins, Eric | Madden, Max | Wainwright, Edwin (Dearne V) |
| Dean, Joseph (Leeds West) | Magee, Bryan | Walker, Terry (Kingswood) |
| de Freitas, Rt Hon Sir Geoffrey | Mahon, Simon | Ward, Michael |
| Dell, Rt Hon Edmund | Marks, Kenneth | Watkins, David |
| Dempsey, James | Marquand, David | Watkinson, John |
| Doig, Peter | Marshall, Dr Edmund (Goole) | Wellbeloved, James |
| Dormand, J. D. | Maynard, Miss Joan | White, Frank R. (Bury) |
| Douglas-Mann, Bruce | Meacher, Michael | White, James (Pollok) |
| Duffy, A. E. P. | Mellish, Rt Hon Robert | Whitehead, Phillip |
| Dunn, James A. | Mendelson, John | Whitlock, William |
| Dunnett, Jack | Mikardo, Ian | Wigley, Dafydd |
| Dunwoody, Mrs Gwyneth | Millan, Bruce | Willey, Rt Hon Frederick |
| Eadie, Alex | Miller, Mrs Millie (Ilford N) | Williams, Alan (Swansea W) |
| Ellis, John (Brigg & Scun) | Mitchell, R. C. (Soton, Itchen) | Williams, Alan Lee (Hornch'ch) |
| Ellis, Tom (Wrexham) | Molloy, William | Williams, Rt Hon Shirley (Hertford) |
| English, Michael | Moonman, Eric | Williams, Sir Thomas |
| Ewing, Harry (Stirling) | Morris, Alfred (Wythenshawe) | Wilson, Alexander (Hamilton) |
| Fernyhough, Rt Hon E. | Morris, Charles R. (Openshaw) | Wilson, Rt Hon H. (Huyton) |
| Flannery, Martin | Mulley, Rt Hon Frederick | Wilson, William (Coventry SE) |
| Fletcher, Raymond (Ilkeston) | Newens, Stanley | Wise, Mrs Audrey |
| Fletcher, Ted (Darlington) | Noble, Mike | Woodall, Alec |
| Foot, Rt Hon Michael | Oakes, Gordon | Woof, Robert |
| Ford, Ben | Ogden, Eric | Wrigglesworth, Ian |
| Forrester, John | O'Halloran, Michael | Young, David (Bolton E) |
| Fowler, Gerald (The Wrekin) | Orbach, Maurice | |
| Fraser, John (Lambeth, N'w'd) | Orme, Rt Hon Stanley | TELLERS FOR THE AYES: |
| Freeson, Reginald | Ovenden, John | Mr. James Tinn and |
| Garrett, John (Norwich S) | Owen, Dr David | Mr. Joseph Harper. |
| Garrett, W. E. (Wallsend) | Palmer, Arthur |
| NOES | ||
| Atkins, Rt Hon H. (Spelthorne) | Higgins, Terence L. | Rost, Peter (SE Derbyshire) |
| Banks, Robert | Hooson, Emlyn | Sainsbury, Tim |
| Beith, A. J. | James, David | Scott-Hopkins, James |
| Berry, Hon Anthony | Jessel, Toby | Shaw, Giles (Pudsey) |
| Blaker, Peter | Jopling, Michael | Shepherd, Colin |
| Boscawen, Hon Robert | Langford-Holt, Sir John | Silvester, Fred |
| Bottomley, Peter | Lawrence, Ivan | Smith, Cyril (Rochdale) |
| Bowden, A. (Brighton, Kemptown) | Le Marchant, Spencer | Spicer, Michael (S Worcester) |
| Budgen, Nick | Lester, Jim (Beeston) | Stainton, Keith |
| Bulmer, Esmond | McCusker, H. | Stanbrook, Ivor |
| Carlisle, Mark | Mather, Carol | Steel, David (Roxburgh) |
| Carson, John | Monro, Hector | Stradling Thomas, J. |
| Chalker, Mrs Lynda | Montgomery, Fergus | Tebbit, Norman |
| Cooke, Robert (Bristol W) | Morrison, Hon Peter (Chester) | Trotter, Neville |
| Cope, John | Osborn, John | Vaughan, Dr Gerard |
| Cormack, Patrick | Penhaligon, David | Weatherill, Bernard |
| Corrie, John | Rees, Peter (Dover & Deal) | Winterton, Nicholas |
| Durant, Tony | Ridley, Hon Nicholas | Young, Sir G. (Ealing, Acton) |
| Fairgrieve, Russell | Rippon, Rt. Hon Geoffrey | |
| Fox, Marcus | Roberts, Michael (Cardiff NW) | TELLERS FOR THE NOES: |
| Glyn, Dr Alan | Rodgers, Sir John (Sevenoaks) | Mr. Nicholas Fairbairn and |
| Goodhart, Philip | Ross, Stephen (Isle of Wight) | Mr. Robin Maxwell-Hyslop. |
| Hawkins, Paul | Ross, William (Londonderry) |
§ Question accordingly agreed to.
§ Bill, as amended (in the Standing Committee, to be further considered this day.