§ The Financial Secretary to the Treasury (Sir Edward Boyle)
I beg to move, in page 13, line 38, after "incurred", to insert:by a local authority (within the meaning of section one hundred and seventy-one of the Act of 1952) or by any person".This is a small, tidying-up Amendment which I can explain briefly. If hon. Members will look at the proviso to subsection (1) of this Clause, they will see that the proviso as at present drafted lets out losses incurredin the exercise of functions conferred by or under any enactment …and thus, among other things, exempts from the Clause local authorities generally.
Since the Committee stage of the Bill it has come to the notice of my right hon. Friend that the City of London is exceptional as a local authority, because its general functions are not conferred under any enactment, so that it does not 538 come, as the Bill is at present drafted, within the proviso to subsection (1).
This question is important to the City of London because it carries on certain activities of a trading nature in the public interest and, when losses are incurred, secures tax relief against other income. It will be common ground that all local authorities ought to be in the same position as one another, and, in order to secure this, the Amendment extends the proviso to cover losses incurred by local authorities within the meaning of Section 171 of the Income Tax Act, 1952.
Fortunately, the Income Tax Act, 1952, in Section 171 (4), gives a pretty clear definition of what is meant by "local authority", and we are therefore using that subsection for that purpose.
As I said, this is simply a tidying-up Amendment in order to ensure that all local authorities will be in the same position, and does not in any way alter the original purpose of the Clause or the proviso to the subsection.
§ Mr. Mitchison
As I understand the Amendment, the object is to bring in the City of London. I regret that the Conservative Party forgot the City of London, but I am glad that they have discovered their error.
§ Mr. Ede
I commend the language of the Financial Secretary about all local authorities being in the same position in these matters, but I am surprised to hear that the City of London, which escaped the Municipal Corporations Act, 1835, should uphold that principle and ask the Government to assert it.
§ Amendment agreed to.