§ 4.0 p.m.
§ The Solicitor-General (Sir Harry Hylton-Foster)
I beg to move, in page 10, line 32, at the end to insert "or may".
The House knows that under the existing law initial or investment allowances are given in respect of the capital element of payments under a hire-purchase contract. The Clause is designed to prevent double investment or capital allowances, and does so in subsection (1) by making ownership of the machinery or plant at a material time a condition of entitlement to the allowance.
It follows that a hire-purchase payment, pursuant to a hire-purchase contract, would not found a claim to entitlement to an allowance unless it was saved by a later subsection, and the subsection which deals with contracts where instalments are paid for machinery or plant—subsection (2)—defines the contract with which it is dealing asa contract providing that he shall become the owner of the machinery or plant…so that as the Clause now stands entitlement in respect of payments under hire-purchase contracts would not be possible. The object of the Amendment is to put that right.
§ Mr. G. R. Mitchison (Kettering)
I suggest to the House that the Amendment is much too wide. If it is intended to cover only hire-purchase contracts it would be possible to frame it accordingly, but let us suppose that there is a contract which confers a bare option and no more. It seems to me that that would be a contract under Which a person—provided that he might become the owner of the machinery or plant—he would get the benefit of the allowance until the time when he ceased to be entitled to the benefit of the contract. I therefore suggest to the hon. and learned Member that in attempting to cover hire-purchase contracts the Government have covered something which goes far beyond that. If it is intended only to cover hire-purchase 1156 contracts proper and appropriate words ought to be used for that purpose and for that purpose only.
§ The Solicitor-General
If I may speak again with the leave of the House, I should like to look at the point which the hon. and learned Member has raised with more care than I could at this moment. I cannot do it now, although I would desire to do so. Making a snap answer, as I must, I do not think that any peril arises as a result of including something like an option, because in that event, under the further provisions of the Clause and the appropriate Schedule, if the entitlement were not a proper one—a proper expenditure to secure the machinery and plant which would not reimburse the spender—it would be possible to withdraw the allowance under the relevant procedure.
§ Mr. Mitchison
If I may speak again by leave of the House, this is a comparatively small matter but I feel certain that when the hon. and learned Member has time to consider it he will see that there are possibilities that an option—with or without other conditions attaching to it —which is not a hire-purchase contract, would entitle to the benefit of the concession people who really ought not to be entitled to it and who might be entitled to it for a much longer period than that covered by a hire-purchase contract.
As the hon. and learned Member knows, there are limitations upon the period of hire-purchase contracts—some legal and others practical—and this, in my view, presents an opportunity for evasion which ought to be considered. At the same time, I appreciate the difficulty involved in raising this sort of matter at this stage. I would point out to my right hon. and hon. Friends that we have raised the point; we trust that it will have the serious attention of the Government and that, if necessary, it will be met by further legislation another year. At the moment, we should hardly feel justified in dividing upon it.
§ Amendment agreed to.
§ The Solicitor-General
I beg to move, in page 11, line 19, after "expenditure", to insert:the claim, if not determined at that date, shall be determined without regard to this section, and".1157 This Amendment deals with a different point. I was one that arose in our discussion in Committee. Because the Clause is one conforming to existing practice it involves an element of retrospection, and because it would not have been fair, in those circumstances, not to exempt claims that had been allowed before Budget day or were under appeal at that time, such claims were exempted from the retrospective operation of the Clause by the proviso to subsection (5).
There ought to be included in that exemption—because it is indistinguishable on its merits—a claim which has been bona fide made before Budget day but which has not been determined one way or the other because there has not been time for those concerned to deal with it. The object of the Amendment is to include that type of case within the proviso.
§ Amendment agreed to.