HC Deb 13 April 1961 vol 638 cc464-5
9. Sir J. Duncan

asked the Chancellor of the Exchequer if he will give an assurance that the capital of the Potato Market Support Fund proposed in the Price Review will not be liable to tax, that farmers' contributions to the fund will be regarded as business expenses, and that any income arising from the temporary investment of the fund capital should not be liable to tax.

Sir E. Boyle

I could not give my hon. Friend the assurance for which he asks. Under Section 29, Finance Act, 1952, a marketing board can, subject to certain conditions, build up a reserve fund out of its trading profits free of tax, but until the fund is established I cannot say whether the Section will apply. As regards contributions by farmers, such contributions to marketing boards are normally allowable as business expenses.

Sir J. Duncan

While thanking my hon. Friend for the second part of that reply, may I ask him if he will bear in mind that, if farmers have to contribute, it is no good contributing to a fund which is milked by the Treasury, because it ceases to have the effect it should have?

Sir E. Boyle

I appreciate that, but I hope that the hon. Baronet will remember that the liability to pay taxes on marketing boards is governed by the ordinary rules applying to taxpayers generally. There is special provision in Section 29 of the 1952 Finance Act, under which certain reserve funds of marketing boards can be built up free of tax, and this provision will be available for the Potato Market Support Fund if the conditions of Section 29, which are quite clear and specific, are satisfied.

Sir H. Legge-Bourke

Will my hon. Friend bear in mind that, so far as the use of this fund is concerned, a great deal will depend on whether or not the import policy is right, and will he get into touch with his right hon. Friend the President of the Board of Trade and see that some sense is made of this, which does not exist at the moment?

Sir E. Boyle

I should be unwise to speak about import policy or encroach on the preserves of my right hon. Friend the President of the Board of Trade, or attempt to debate it with my hon. and gallant Friend.