HC Deb 10 June 1947 vol 438 cc974-9

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Viscount Hinchingbrooke

It might be thought that because I have an Amendment down to omit this Clause, I am in favour of withdrawing a very useful allowance operating to the benefit of small landlords and tenants who are entitled to it. I assure the Committee that that is not the case. If hon. Members will look at the Order Paper, they will see that I have put down an alternative Clause. I cannot now formally move it for technical reasons, but I can refer to it in the course of what I have to say. I would remind hon. Members that this history goes back to the Finance Act, 1918, where, in the famous Schedule A, in Paragraph 7, there is set out for the first time in Income Tax law the statutory allowances which are given for repairs of house property. Paragraph 7, which I will not quote in full, states: Where the tax is charged on annual value estimated otherwise than by relation to profit then the following provisions shall have effect:

  1. (a)…..
  2. (b) In the case of assessment upon any house or building the amount of the assessment shall for the purposes of collection be reduced—
  1. (i) where the owner is the occupier. … by a sum equal to one-sixth part of that amount.
  2. (ii) where the tenant is the occupier. … by a sum not exceeding one-sixth part of the amount as may be necessary to reduce it to the amount of rent payable by him."
That enactment went on until the end of the first world war, and the subsequent period of inflation, such as that which we are now going through—

Mr. Dalton

It was much worse then.

Viscount Hinchingbrooke

I am a little nervous of that remark, because it may mean that the Chancellor does not intend to look with a friendly eye on my new Clause. Then came the Finance Act, 1923, Section 28 of which amended Schedule A in one important respect. It excluded the one-sixth to which I have referred, and put in what was called an authorised reduction. Previously, it was one-sixth. The 1923 Act substituted an authorised reduction which varied the amount of the allowance according to the size of the property. It reads: (3) The authorised reduction.. shall be:

(a) Where the amount of the assessment does not exceed forty pounds. A sum equal to one-fourth part of the amount of the assessment.
(b) Where the amount of the assessment exceeds forty pounds but does not exceed one hundred pounds. A sum equal to one-fifth part of the amount of the assessment.
(c) Where the amount of the assessment exceeds one hundred pounds. Twenty pounds, together with a sum equal to one-sixth part of the amount by which the assessment exceeds one hundred pounds."

That has ruled until today. Clause 12 of this Bill seeks to perpetuate that situation. I suggest that just as there was a period of inflation after the first world war—and in the Finance Act, 1923, it was recognised that the former allowance was insufficient—so the same situation prevails now. Small property owners and tenants are finding it increasingly difficult today to get their holdings repaired, and to pay for them out of the amount of the allowances. What do these allowances amount to? In the case of the under £40 assessment, it is £10; in the case of the £40 to £100 assessment, it is £8 to £20; in the case of the over £100 assessment it is £20, plus the one-sixth to which I have referred. I am not tied to the actual words of the Clause I wish to move later, but it makes an attempt to improve all round on the scale. The assessment should be £45 instead of £40, and on that there should be an allowance of £15. On the £45 to £120 assessment, there should be an allowance of £11 to £30. On the over £120 assessment there should be an allowance of £30, plus one-fifth instead of one-sixth as before.

What was fair in 1923 is really not fair today. It is true that house owners and tenants who had the right to put in for these repair allowances can make a maintenance claim, under paragraph 8, which follows the paragraph in Schedule A to which I have referred. The point is that in these days when there are so many complex forms for people to fill in, and send to Government Departments, anything that can be done to alleviate the burden on small people ought to be done. What have we done in our own case? We have said that the first £100 of our

salary shall go in automatically for expenses. We have recognised that it is not worth the trouble of estimating expenses up to £100. The Finance Act, 1923, does the same thing. It gives the allowance which is clear of the maintenance claim, and a person has to prove repair expenses above that allowance if he wants to get it.

The Deputy-Chairman

The noble Lord cannot deal with personal incomes. That would be out of Order.

Viscount Hinchingbrooke

I was talking about the maintenance claim for house property repairs. I used the income of Members of Parliament by way of illustration.

The Deputy-Chairman

So long as it is an illustration, it is in Order.

Viscount Hinchingbrooke

I have passed from it, and I hope hon. Members see the analogy between the two. I am trying to save people the trouble of putting in a maintenance claim, just as we ourselves are saved the trouble of putting in an expenses claim. We have suffered some diminution in the value of money since 1923, and I believe that the time has come to improve the house repairing allowance for all owners of property and all tenants who have the right to make the claim.

Mr. Callaghan

The noble Lord has mentioned two categories, the case of the owner-occupier and the case of property which is let. I should have thought that there was not much case for doing what he wants to do for the owner-occupier, because the assessment itself has not been increased since 1935 or 1936. Had the assessment been increased, there might have been some case for arguing as the noble Lord did, but he will know that in the provinces the owner-occupier usually occupies a house which is assessed at something far below its annual value. I can recall cases where houses that could be let for £80 or £100 per annum were assessed at an annual value of £20 or £25. It follows automatically that the repairs allowance which is based on the allowances is so much lower. If they were assessed at £100, they would be getting a much higher repairs allowance. Where properties are let and the annual value more frequently is represented by the assessment it is about eight years since any substantial repairs were done to a number of these properties. That means that they ought to be repaired now, and should have been repaired some time ago. It also means that for eight years owners have been drawing the repairs allowance which they have not expended. He cannot have it both ways. If they have not done the repairs, they have not expended the repairs allowance which is automatically given under the assessment. In those cases, it means that many people have drawn up to twice at least the annual value of the property in repairs allowance which has not been spent, and which is a reserve which they could have accumulated over that period. For those reasons, I would say that the noble Lord's case falls short, and is not a very strong one.

9.0 p.m.

Mr. Glenvil Hall

This Clause which the noble Lord seeks to delete in its entirety continues, as he said, the present scale of allowances for repairs under Schedule A. I think that he gave to the Committee the scale which is laid down, and which we seek to continue. It was first introduced in 1923–24 in substitution for a previous uniform scale of one-sixth, and, as the hon. and learned Member for East Leicester (Mr. Donovan) said, even that was not the beginning of the story. The Finance Act, 1923, laid down a scale over a period of five years, and since then it has been renewed for varying periods, the last occasion being, I think, in 1942 when it was renewed for five years. It, therefore, comes to an end now, unless we make provision in this Act for its continuance, and we are doing that for an indefinite period—that is until Parliament otherwise determines.

As the hon. Member for South Cardiff (Mr. Callaghan) sail, the people have been getting this allowance automatically, and through no fault of their own the great majority of them, because of the fact that few if any repairs have been possible during the war, have been getting it for at least seven years, and they have had no repairs to set off against it. It is true that possibly when they come to do their repairs, the cost of them will be very heavy, and we must not forget that; but I think it would be true to say that in the old days the scale, such as it was, did on the whole err on the generous side—people took it and quite a lot of them did not do much in the way of repairs for the allow- ance which they got. I would remind the noble Lord and the Committee that where an owner could show that, over an average period of five years, the amount expended was greater than the scale allowance to which he was entitled and which he got, he could put in a maintenance claim and get it.

I cannot deal with the new Clause which the noble Lord hopes to move when we reach that part of the proceedings, but I would say to him and to the Committee that my right hon. Friend cannot accept the deletion of this Clause now, although he realises, as I think the Committee realises, that this is a matter that has to be looked at at some time, as it may well be that these allowances do not fit the situation today. We are 20 years on from the time when they were elaborated, and many values have changed, but we cannot spare the time to go into that now. It is quite impossible for my right hon. Friend to accept this Amendment to delete this Clause. Further than that, at this juncture, I will not go, because much the same ground will undoubtedly be covered when we come to deal with the noble Lord's Clause which will be taken later in the proceedings of the Finance Bill.

The Deputy-Chairman

If the right hon. Gentleman desires he can deal with the points contained in the new Clause which have been referred to by the noble Lord.

Viscount Hinchingbrooke

The Clause may not be called later.

Mr. Glenvil Hall

In that case, if you are intimating, Mr. Beaumont, that it is not your intention, or the intention of Major Milner to call this new Clause when we reach that stage, all I can say is that my right hon. Friend cannot accept it even if it is called and we resist the proposal to delete this Clause. We want to retain the present position at any rate for some time until Parliament may look at this.

Viscount Hinchingbrooke

I appreciate the right hon. Gentleman resisting my proposal to leave out this Clause as it only appeared on the Order Paper this morning and for that I apologise. He was good enough to say that this whole matter would have to be looked into some time, and can I take it that "some time" will be between now and the Report stage?

Mr. Dalton indicated dissent.

Viscount Hinchingbrooke

Then before next year will it be possible to have a departmental committee sitting on the subject and looking into it? If I could have the Chancellor's assurance that this matter will be considered between now and next year, I should be willing to withdraw.

Mr. Dalton

I will give that assurance with pleasure. Ever since I held my present office I have always given instructions that these matters which are raised during the course of a Debate should be a matter of careful inquiry during the ensuing year, and often we have been able to accept something which has been put up before us. Without any commitment to accept I will give a commitment to examine this between now and next year.

Clause ordered to stand part of the Bill.