HC Deb 05 July 1917 vol 95 cc1363-7

Section sixty-nine of the Finance (1909-10) Act, 1910 (which relates to the extension of relief for maintenance, etc., of land and houses from Income Tax under Schedule A) shall be further extended as follows:—

After the word "houses," wherever it occurs, shall be inserted the words "farm houses, farm buildings, glass houses, and all other buildings and works for the furtherance of agriculture, horticulture, and the keeping of live stock."

After the word "maintenance," wherever it occurs, shall be inserted the words "replacement, extension, new building, improvement."

In Sub-section (1) of that Section the words "to which this Act applies" and the provisio at the end of that Subsection are repealed.

Sub-section (2) of that Section and in Section eight of the Finance Act, 1914, the words after the word "year," where it first occurs, are repealed, and the limitations contained therein shall cease to apply as respects Income Tax for the year beginning the sixth day of April, nineteen hundred and seventeen.— [Mr. D. White.]

Brought up, and read the first time.


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

I would commend this Clause to the Committee on the ground that it is a further extension of relief from Income Tax under Schedule A in favour of various improvements for agriculture, for intensive cultivation and the keeping of live stock. It extends the relief that was granted in Section 69 of the Finance Act, 1910, which was passed when the present Prime Minister was Chancellor of the Exchequer. The relief was extended then to land and houses and certain other buildings in these terms: If the owner of any land or house to which this Section applies shows that the cost to him of maintenance, repairs, insurance and management, according to the average of the preceding five years, has exceeded a certain standard he should be entitled to certain relief from Income Tax, and he went on to explain: For the purposes of this Section the term ' maintenance' shall include the replacement of farmhouses, farm buildings, cottages, fences, and other works where the replacement is necessary to maintain the existing rent. The relief that was given under that Clause was somewhat further extended by Section 8 of the Finance Act, 1914. The proposal that I have to make it that; it should be still further extended. The ground for this further extension is very simple, namely, that not only at the present time, but immediately at the close of the War, when capital becomes more available, we ought to let that capital flow as freely as it possibly can to the development of the natural resources of our country. I am taking the case of glasshouses, and the Chancellor of the Exchequer will bear in mind that this deals with Income Tax, not under Schedule B but under Schedule A. It seems to me that the relief that has already been given, as far as it goes, to cottages and farm buildings, ought to be extended to glasshouses and to all other buildings and works for the furtherance of agriculture, horticulture, and the keeping of live stock.

The extension of relief which is proposed by this Clause is in two directions In the first place, it covers a larger number of improvements connected with agriculture and intensive cultivation. In the second place, it proposes to extend the ambit of relief. At present the ambit of relief is strictly limited by those Sections to which I have referred, and the general rule of working is to make, I think, a general deduction of one-sixth in charging Income Tax. The object that I have in view is to exempt these further improvements from Income Tax under Schedule A altogether in such a way that we may be able to say to anyone who embarks his capital in improvements of the kind to which I have referred, "Whatever you do in the way of developing the country in this respect, you will not have to pay in respect of that excellent work a higher Income Tax under Schedule A." I know it may seem ambitious. It certainly is ambitious, but I hope, if the Chancellor of the Exchequer does not see his way to accept it all, he will go some distance, because the object seems to me most desirable. I may say that the ambit is intended to be extended not merely to those agricultural works, but also to cottages and small houses that are already in a limited way within the relief already granted. I quite appreciate, if the Chancellor of the Exchequer will allow me to say so, the need of the appeal he made to the Committee. I do not want to take up any more time than is necessary, but I do seriously put this to the Chancellor as a matter deserving very careful attention.


I do not know whether my hon. Friend is moving this Clause as jam to convey the pill of the second Clause.


I would like to say I am really moving it on its merits alone, and, of course, independently of the second Clause, and more so as the Deputy-Chairman has ruled the second Clause out of order.


I quite appreciate what the hon. Member has said. I am afraid we cannot accept this Clause. I do not wish to take up the time of the Committee in entering into any lengthy discussion about it, but it is quite obvious that this proposal would make a considerable change in the method of collecting Income Tax with regard to property of this nature. I feel myself that, however desirable any advance in the direction advocated by the hon. Member may be, it is a subject that must wait for settlement when we take into consideration the whole of the Income Tax question, as we propose to do at the end of the War. I think to introduce a Clause like this into a Finance Bill at this time would be only tinkering with a very wide and large subject which we have to tackle later on.

Commander WEDGWOOD

I am sorry the Treasury have not been able to give this new Clause a more sympathetic reception. It seems to me that when, as is the case with this particular Clause, the Radicals in this House happen to join hands with what is called the agricultural interest, that happy union might receive a little more sympathetic attention. Here you have an Amendment which is honestly intended to encourage agriculture by relieving the person "who actually works the-land and develops his property from the penalising burden of Income Tax upon the capital he sinks in those improvements. If the Government is honest in its desire really to benefit agriculture as apart from landowning, it ought to support mi Amendment such as this. Our Income Tax is now 5s. in the £ that is to say, it is a 25 per cent, tax upon the interest of all money which is invested in any particular line of business. Now capital is likely to be expensive in any case after the War, just at the time it is most wanted for developing the soil of our own country. Why, then, should we not, in order to encourage the development of the soil, make such a trivial change as this, which merely exempts from Income Tax the farm buildings and glasshouses—the two lines on which development is most desired. I do strongly urge on my Conservative Friends who represent more particularly the agricultural interest the merits of this reform. I am sure in this direction the real progress of agriculture in this country must come. The exemption of improvements from taxation is the basis of all real development of agricultural land in this country. I do not conceal from the Committee—it would be quite useless for me to do so—that this is only the beginning, and that every argument which can be used in favour of exempting capital invested in agriculture from the penalising burden of taxation can be, and will be, equally applied to exempting capital invested in any other business in this country. We do not wish to penalise improvements, whether they are agricultural improvements or whether they are industrial improvements— whether they are factories or farm buildings—but what we ask in this Amendment is nothing wide-sweeping, such as general exemption from Income Tax, but merely a short beginning in the right direction by exempting such improvements as farm buildings and glasshouses. I am aware that it is a bad time in the middle of the War to advocate any change, even a change which would be of the greatest possible benefit to the investment of money in this country. If my hon. Friend opposite will allow me to say so, I do not think it is worth while pressing this matter at the present time. The most important thing is that we should make the Government, as we have already made the people of the country, aware that any real progress in matters of taxation must be accompanied by a relief on improvements of all sorts—improvements which mean the investment of capital in Britain itself—from the penalising burden of taxation under Schedule A.

Question put, and negatived.