Clause 19 (Hansard, 27 May 1970)

§ Mr. Terence L. Higgins (Worthing)
The exact meaning of the Clause is not immediately apparent and I should be grateful if the Chief Secretary would make it clear. It may be an academic 1863 provision, because, as was clearly said in our debates last year, the Conservative Party will repeal the changes which the Government made in the tax allowance for interest on loans.
Last year, we pressed many Amendments on the Chief Secretary, and we were grateful to him for being able to undertake that he would do something to improve the Government's proposals. The breaking point, if I may describe it as that, was an Amendment moved by my right hon. Friend the Member for Grantham (Mr. Godber), when he asked for particular consideration to be given to relief on interest on money borrowed for the improvement of agricultural land.
As I understand it, this Clause implements all my right hon. Friend's proposals. If I understand it correctly, it will have retrospective effect. Therefore, regardless of what changes may take place in future, this provision will go back to the original date of the change to the restriction of three years for tax relief on interest on money borrowed on overdraft for improving agricultural land and the provision will go back to running indefinitely, so long as the person paying the interest continues to own the land. We should be grateful for confirmation of that understanding.

§ Mr. Diamond
There seems to be a difference of opinion between the two sides of the Committee as to what may happen after the next General Election, but there is no difference between the two sides about what I am about to say on behalf of the whole Committee.
It is, Sir Beresford, to offer the thanks of the whole House of Commons for the gracious way in which you have occupied the Chair during these many years. As I fear that this may be the last occasion on which you will be so honouring us, on behalf of the whole House of Commons, I should like to offer our appreciation.
With gratitude to you, Sir Beresford, for not pulling me up for that slight irrelevancy, I should like to turn to the immediate issue and confirm the understanding of the hon. Member for Worthing (Mr. Higgins). The Clause arises out of my undertaking a year ago to consider the problem posed by the right hon. Member for Grantham (Mr. Godber) with regard to the length of the 1864 period taken to pay off a loan relating to the improvement of agricultural land.
There was previously a limitation of the benefit of the loan interest for three years and that was thought to be adequate. However, we have had further consultations. The representations were soundly based and we take the view that the three years ought no longer to apply. I confirm that the Clause will have retrospective effect, as I indicated when I undertook to reconsider the matter that is would have.
The hon. Gentleman asked me to confirm that it covered everything which his right hon. Friend mentioned. I do not have the whole of the right hon. Gentleman's speech before me; and other hon. Members took part in that discussion. So that there is no misunderstanding, I want to make it clear that this deals with interest on a loan for the improvement and not for the maintenance of land. I made it absolutely clear last time that I could not possibly consider a request for loan interest on maintenance, because there was no distinction which could readily be drawn between maintaining an agricultural estate and an urban estate.
We should immediately have the situation in which every householder would be able to claim loan interest for repairs to his house. There would be no means of distinguishing whether a loan had been incurred for repairs to a house, and we would be back to the situation in which everybody could claim loan interest and the whole of the proposals would be utterly torpedoed, to use the word I used last year.
In fairness to the hon. Member and the Committee I make clear that this carries out the undertaking I gave to omit the time limitation of three years for loan interest on a loan incurred to improve land.

§ Mr. Higgins
I thank the Chief Secretary for what he has said. We have the intention as we had last year of torpedoing this and to add to the limit.

§ The Temporary Chairman (Sir Beres-ford Craddock)
The Chief Secretary was somewhat out of order, so I shall go out of order myself so that I may thank him for his gracious remarks and thank other 1865 hon. and right hon. Members, also, for what they have said. It has been a great pleasure to preside over Committees in this House and upstairs and I am grateful for the consideration that has always been extended to me.