CLAUSE 23.—(Transfer of assets under Coal Industry Nationalisation Act, 1946.) (Hansard, 11 June 1947)

§ Captain Crookshank
I think we should like an explanation about this Clause.

§ Mr. Glenvil Hall
The object of the Clause is to simplify the Income Tax adjustments which will be necessitated by the transfer of the collieries from the present undertakers to the National Coal Board. The proposal contained in this Clause has been agreed to by the Ministry of Fuel and Power on behalf of the National Coal Board and the Mining Association and it does not prejudice the revenue in any way. Under the Income Tax Act, 1945, the collieries concerned became entitled to a new allowance for capital expenditure on certain industrial buildings. Unless the Committee, so desire, I will not recapitulate what those allowances were, nor the type of building and machinery on which they were approved; but on the transfer of those assets to the National Coal Board certain charges under the 1945 Act would become payable if on transfer the residue—that is the difference between the written-off 1078 value and the value of the assets transferred—were higher or lower than the written-off value. In that event a balancing charge became payable either to the colliery concerned or to the Revenue.
As the collieries were transferred on 1st January, 1947, and these balancing charges under the 1945 Act came into operation on 6th April, 1946, there was a gap of nine months, and it was felt by all concerned—in fact, the first move was made by the Mining Association—that something should be done to prevent the collieries concerned having to do a tremendous amount of work in order to arrive at the various figures. Therefore they decided—and that decision is embodied in this Clause—to assume that the Act of 1945 should come into force as at the vesting date. These balancing charges for or against the Revenue will accrue to, or become a liability against, the National Coal Board instead of the collieries concerned. I hope with that brief explanation that the Committee will let us have this Clause.

§ Sir Hugh Lucas-Tooth (Hendon, South)
On page 21, line 4, these words are used: such adjustments may be made by way of additional assessment or otherwise … I should like to draw attention to the use of that word "may." As I understand it, the provisions of the Sixth Schedule of the Bill are mandatory, and one would have thought that this word should have properly been "shall." I am a little surprised that there is some discretion in the matter, and I should like to have some explanation.

§ Mr. Glenvil Hall
This Subsection refers to an adjustment. I have been dealing with the principle on which this Clause is based, and it is quite obvious that when we deal with it in detail, there will have to be a certain amount of adjustment as between the Inland Revenue and the National Coal Board. As a matter of fact, this Clause is rather in favour of the colliery concerns, because it means they can go back over a period of years and take the whole of the war years together when assessing the balancing charge or the allowance as the case may be.

§ Sir H. Lucas-Tooth
The right hon. Gentleman has told us that this Subsection is in favour of the collieries concerned, and for that reason I am disappointed at 1079 the use of the word "may," because, as I understand it, it would be possible to refuse the benefits of the Clause as the Subsection stands. I should have thought the more appropriate word was "shall," and if the right hon. Gentleman cannot give an undertaking in regard to this adjustment now, perhaps he will look at it between now and a later stage of the Bill.

§ Mr. Glenvil Hall
Most certainly, but I should add that, as I said earlier, this has been agreed with the Mining Association who are quite satisfied. We will, however, look at it again to see if what the hon. Gentleman says has anything in it.