HC Deb 17 June 1952 vol 502 cc1039-40

(1) Subject to the following subsections, the Income Tax Act, 1952, shall have effect as if in subsection (1) of section two hundred and seventy-one (which defines "industrial building or structure" to mean a building or structure in use for the purposes listed in paragraphs (a) to (f) of the subsection for the words" or hydraulic power undertaking," in paragraph (b) there were substituted the words "hydraulic power or tunnel undertaking."

(2) No allowance or charge shall be made by virtue of this section for any year of assessment earlier than the year 1952–53, and in any case in which, on the day immediately preceding any such year of assessment, a building or structure is to be treated as an industrial building or structure by virtue only of this section, subsection (5) of section two hundred and sixty-eight of the Income Tax Act, 1952 (which provides for treating part of the expenditure on a building or structure as written off in years in which no annual allowance or scientific research allowance is made in respect of it), shall apply with the omission of proviso (a) (which excludes the operation of the subsection in the case of industrial buildings and structures).

(3) This section shall not affect any allowance or charge which would have been made under Part X of the Income Tax Act, 1952, if this section had not been passed, and where by virtue of this section a balancing charge is made on a person in respect of any expenditure, the amount on which it is made shall not exceed the amount of the allowances made to him in respect of that expenditure by virtue of this section.—[Sir A. Salter.]

Brought up and read the First time.

5.30 p.m.

The Minister of State for Economic Affairs (Sir Arthur Salter)

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

The object of the Clause is to extend the scope of allowances for industrial buildings and structures under Chapter 1, Part X of the Income Tax Act, 1952, to include buildings or structures used for purposes of a tunnel undertaking. The general effect of the Clause, as it is now before the House, will be that qualifying capital expenditure on such undertakings will rank for allowance at 2 per cent. per annum from 1952–53, but that no allowance will be made for amounts attributable from the time the tunnel opened until the year 1952.

The House will remember that my hon. Friend the Member for Toxteth (Mr. Bevins) introduced a new Clause on the Committee stage which was supported by hon. Members on both sides of the Committee. We were unable to accept the Clause in the form in which he then introduced it for various technical reasons, but also because he had proposed that it should have a retrospective effect and we did not feel that that was appropriate or right. The Clause at that time was otherwise very strongly supported and universally recognised by both sides of the Committee to have an overwhelming case. It had been recommended by the Millard Tucker Committee, though not of course with the retrospective point. I then undertook that, while for that reason we could not accept the Clause as proposed, I would see that a new Clause was put before the House on the Report stage.

Mr. Charles Williams (Torquay)

Can my right hon. Friend say precisely what tunnel undertakings are referred to? Does he mean tunnels in connection with power works, water works and things of that kind?

Sir A. Salter

Any tunnel undertaking falling within the definition here included. At present I do not know any other case that satisfies the conditions except the Mersey Tunnel. But the Clause is in general terms and would apply to any other undertakings that satisfy the same conditions.

Mr. J. R. Bevins (Liverpool, Toxteth)

My hon. Friends associated with me in suggesting a Clause on these lines on the Committee stage are very grateful indeed to my right hon. Friend for the new Clause now proposed.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.