§ Brought up, and read the First time.
§ Mr. Arbuthnot
I beg to move, That the Clause be read a Second time.
The purpose of the new Clause is to extend for a further period the allowance for mills and factories. When the new code of depreciation allowances for buildings was introduced, the existing mills and factories allowance was continued for a temporary period to meet the case of those factories which had been in existence for so long that they could not benefit from the new allowance and had received the mills and factories allowance for too short a period to permit them to be fully written off. Therefore, the Income Tax Act, 1945, permitted the taxpayers owning such factories to choose to continue under the mills and factories allowance for a further four years.
In the Finance Act, 1950, this permission was extended for a further five years, and the new Clause suggests that a further five years is now required. Many of these mills and factories exist in the cotton industry and were built about 50 years 220 ago, or perhaps a little more, and therefore got no allowance under the industrial buildings allowance which provided for 2 per cent. on the cost price, as reduced. They have not had the opportunity to set aside a tax-free fund sufficient for renewals because the old mills and factories allowance did not operate for a sufficient period and the new allowance is not applicable. We therefore propose in this new Clause to extend the old allowance at the option of the taxpayer for a further five years.
§ 1.0 a.m.
§ Sir E. Boyle
I think I shall be able to save the Committee a little time. I find myself in a little difficulty in view of what the right hon. Member for Huyton (Mr. H. Wilson) has just said. It obviously would be imprudent of me, in view of his remarks, to accept this new Clause. On the other hand, I recall that the last time this allowance was extended, it was extended by the late Sir Stafford Cripps for five years, and I have no doubt that that might give the right hon. Member for Huyton some slight bias in favour of extending this allowance.
However, I will tonight, perhaps prudently—and my right hon. Friend the Chancellor of the Exchequer has asked me to do this—steer a middle course and say that this is a point that my right hon. Friend would like to look into and give further consideration to before Report. Perhaps on that understanding my hon. Friend would agree to withdraw the new Clause.
§ Mr. Arbuthnot
I am grateful to my hon. Friend for the favourable reception that he has given to the Clause and, in view of his assurance, I beg to ask leave to withdraw the Motion.
§ Motion and Clause, by leave, withdrawn.