HC Deb 28 April 1977 vol 930 cc1461-2
1. Mr. MacGregor

asked the Chancellor of the Exchequer what recent representations he has received recommending that farmers should be allowed to average out their fluctuating incomes over a period of three years for tax purposes.

The Financial Secretary to the Treasury (Mr. Robert Sheldon)

My right hon. Friend has received a number of letters supporting this recommendation from national and local organisations representing farmers.

Mr. MacGregor

May I ask the Financial Secretary two questions? First, is he aware that the Minister of Agriculture told farmers in December that he was seriously considering this proposal because of his anxiety about investment in the industry? What representations has the Minister received from that source? Second, would he not agree that, with the now seriously fluctuating incomes for farmers, because, for example, of last year's drought and the present concern about the pig industry, this proposal would help to give farmers stability and confidence and so secure the expansion we all want?

Mr. Sheldon

I understand the point, which a number of farmers have made on this matter, but it has, of course, already been looked at over a number of years. The problem is that, although everyone is in favour of this proposal at a time of rising incomes and profits, there are obvious disadvantages at a time of declining profits and incomes when the tax bill coming some time later can, perhaps, be something of a shock of those who had made calculations on a contrary assumption.

Mr. Beith

Is it not true that the farming industry has consistently made this case in bad and good years? Should not the Minister come forward with a rather more sympathetic response on the lines of that given by his right hon. Friend the Minister of Agriculture, instead of the Government appearing to speak with two voices on this matter?

Mr. Sheldon

I understand the problems facing farmers and a number of other professions and occupations as a result of widely fluctuating incomes. Our minds are never closed on any of these matters.

At one stage a Royal Commission said that it was administratively impossible to average out fluctuating incomes in the way suggested. I do not make my stand on that. I mention it merely to show some of the difficulties and problems that arise.

Mr. Watt

Does the Minister recognise that this is just one more example of the British farmer finding himself out of step with his European partners? Is it not time that in this matter as well as many others some parity was brought into the situation? Will the Minister look at this again with some sense of urgency?

Mr. Sheldon

The hon. Gentleman should be aware of the dangers of comparing tax systems which are so fundamentally different in their structures. If he goes into the matter, I think that he will find that the kind of comparisons that he may wish to make do not have a firm foundation. On the general matter, my mind is always open to ways of helping farmers and industry whenever possible. Naturally, I bear in mind the needs of collection of the revenue.