Lords Amendment: No. 342, in page 150, line 44, at end insert:
and in section 16(1) of the Finance Act 1970 (exclusion of amounts precepted under section 13 of the Transport Act 1968 and certain grants in computing profits chargeable to corporation tax of a Passenger Transport Executive or the London Transport Executive) at the end of paragraph (a) there shall be added the words "and, in any case where that section has effect as set out in Part II of Schedule 24 to the Local Government Act 1972, any grants made to such Executives under that section".
§ Mr. Speed
I beg to move, That this House doth agree with the Lords in the said Amendment.
This is a rather interesting little Amendment and I ought to tell the House what it is about. Section 13 of the Transport Act, 1968, gives power to a passenger transport authority to issue precepts on its constituent councils, which in turn must pay the amount due from them to the passenger transport executive. Section 16(1) of the Finance Act, 1970, provides that such precept income shall not be chargeable to corporation tax in the hands of the passenger transport executive.
Under Clause 195 the four existing and two new passenger transport areas will all be coterminous with the relevant metropolitan county. The power to precept will, therefore, be inappropriate as the metropolitan county council is the only constituent authority and is itself the passenger transport authority. Therefore, paragraph 12 in Part II of Schedule 24 provides a new Section 13 in these circumstances which replaces the precepting power by giving the authority power to make grants to the passenger transport executive. This is precisely the same power as was provided in the Transport (London) Act, 1969, for the Greater London Council/London Transport Executive situation; but whereas those grants were specifically exempted under Section 16(1) of the Finance Act, 1970, the ones which the new metropolitan county councils will be making to the passenger transport executive are not, and that would be wrong. The Amendment therefore brings the new grants into line with the London situation by excluding them from profits chargeable to corporation tax.
§ Question put and agreed to.