§ Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution"
§ Sir John Mellor (Sutton Coldfield)
Could an explanation of the purpose of this Resolution be given and, coupled with that explanation, could we have an assurance that it is not the intention to place the National Coal Board in any privileged position with regard to taxation?
§ The Solicitor-General (Sir Frank Soskice)
The object of this Resolution is to give effect in the Finance Bill to an agreement which has been arrived at between the Mining Association and the Ministry of Fuel and Power, which is designed to cut out a great deal of unnecessary investigation for the purpose of settling compensation in so far as depreciation is concerned. Briefly the position is that the Income Tax Act of 1945 provided, for initial allowances and annual allowances, and also brought into being rather complicated machinery by which balancing payments and balancing charges were made. If that system operated in relation to the collieries transferred to the Coal Board an immense amount of work would be necessary, which it is hoped by the agreement which has been arrived at to avoid. What, therefore, it is proposed to do is this—it is proposed to treat the collieries on the transfer of the assets of the Coal Board as if they were not within the scope of the 1945 Income Tax Act for the purpose of depreciation and allowances, but were still 1106 governed by the legislation which existed before the Income Tax Act of 1945 was passed.
It will probably be remembered that there are a number of enactments which deal with depreciation and allowances. There is Rule 6, cases 1 and 2 of Schedule D, of the Income Tax Act, 1918, and then there is Section 19, the Finance Act, 1941. There are already various statutory provisions which were in force before the Act of 1945 was passed. Both parties, the Mining Association and the collieries, on the one hand, and the Coal Board, on the other, agreed that if it were necessary to apply the provisions of the Income Tax Act, 1945, the consequence would be that there would be a great deal of investigation into past figures in relation to each and every asset in order to assess under the terms of the Act of 1945 what appropriate compensation would be payable in respect of each asset, and what should go to the colliery undertaking and what should go to the Coal Board. It is agreed to revert to the pre-existing legislation in order to determine the collieries' depreciation allowance.
Hon. Gentlemen will want to know the net result. The net result is that the effect on the Revenue will be negligible. It cannot be stated, a priori, exactly how much would come out of it and whether the collieries or the Coal Board will benefit. There will not be much in it, and the object of the Resolution, as I have said, is to cut out a whole lot of unnecessary investigation, the cutting out of which, as far as can be foreseen, will not really affect the pounds, shillings and pence of either the collieries, on the one side, or the Coal Board on the other. The proposed arrangement is one which is agreeable both to the industry and to the Coal Board and, therefore, I ask the House to say that it is in the general interests that it should be adopted.
§ Sir Arnold Gridley (Stockport)
The Solicitor-General's remarks have brought back to my mind the fact that I took part in discussions on this particular topic on a previous occasion. The right hone Gentleman the Member for the Scottish Universities (Sir J. Anderson) was then Chancellor of the Exchequer, and while we got some distance with him, we did not get quite the length along the road which we had hoped we would travel. This in- 1107 tention of the Government, with which I am in agreement, is confined to the Coal Industry Nationalisation Act. Could the Government see their way, or have they any objection, to changing the words of this Resolution to this effect:or any enactment passed in the present Session for the nationalisation of any industry.I feel that if the arguments used by the Solicitor-General are applicable in the case of the coal industry, they apply also to any other industry which may be nationalised.
§ Mr. Speaker
A very interesting point, no doubt, but the Resolution deals with coal and coal only, and I do not think we can here discuss transport, electricity or any of the other industries which may be nationalised.
§ Sir A. Gridley
I may be quite out of Order, but might I just ask the hon. and learned Gentleman this question? We are here dealing with a principle affecting industries which have been or are to be nationalised. The House is at present considering two Bills for the nationalisation of transport and electricity and I am anxious to know whether, in dealing with these matters, the Government would consider favourably applying the same principle?
§ Mr. Speaker
That is a matter which could be very suitably raised on the Second Reading of the Finance Bill, but it is not relevant to a Resolution which deals only with coal.
§ Captain Crookshank
This is only leading up to the Committee Clauses to be introduced in the Finance Bill, and we shall have to try to understand in considerable detail later on just what is involved. I must admit that I was not quite clear when the hon. and learned Gentleman was talking about apportioning valuations between the Coal Board and the industry whether he meant the valuations of assets, computing the relative charge for Income Tax purposes—
§ Captain Crookshank
—or whether he meant the balancing charges. Those were different possibilities in a very practical field. We have nothing further to 1108 add now, however, but we will read what the hon. and learned Gentleman has said and will look forward to the Clauses.