§ Mr. Graham PageI beg to move amendment no. 181, in page 22, line 43, leave out from 'within' to 'and' in line 44 and insert:
'three years after the date upon which the original lessee was first entitled to possession under the lease'.The clause deals with capital allowances and particularly their allocation where there are long leases. The basis of the granting of capital allowances for building or structure is that they are granted to the person holding the relevant interest, which is defined in chapter I of part I of the Capital Allowances Act 1968.It often occurs—indeed, I know of instances—that the lessee under a proposed long lease carries out some of the 1753 work which would attract the capital allowances. It is doubtful in those circumstances whether it is the lessee or the lessor who is entitled to take the grant. This is particularly important, perhaps, if the lessor is not entitled to claim it, because of a particular status of the lessor. Therefore, the clause, which gives an election whether the relevant interest shall be treated as being in the lessor or the lessee, is a very valuable relief to those concerned with the grant of long leases which involve building and structure.
The matter is set in motion by an election by the two parties concerned as to who shall have the benefit of the allowance. As we have seen time and time again in the provisions of the Bill and in other taxation matters, an election must be made in a certain time. Subsection (3) says:
Any election under this section shall be by notice in writing to the inspector given within two years after the date on which the lease takes effect".In Committee we briefly discussed the two points which arise in that phrase. The first is the time within which the election is to be made—as it is provided here, a period of two years—and the time at which it is to start to take effect. Here it is said:the date on which the lease takes effect".In Committee my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) raised the question as to what is the date when a lease takes effect. There certainly is some doubt about that.I should like first to return to the timing. Normally, such transactions are fairly complicated where there may be agreements for building lease and negotiations throughout, perhaps, the commencement of the building between the two parties. A period of two years may go by pretty quickly when large construction is concerned. Therefore, I should have liked to see a full period of six years, but, appreciating that it is important in such cases to get a settlement of the matter as soon as possible and to know who is entitled to these capital allowances, I have suggested in the amendment that a compromise would be three years. I think that that little extra bit from the two years to the three years when construction is going on, when there 1754 are negotiations over the terms of a lease and so on, is a reasonable period.
But from when is the lease to start? I believe that the words:
the date on which the lease takes effecthave little meaning in law. I do not know when a lease takes effect. I do not know whether it is the date of the lease, although nobody takes possession for perhaps months after that. Sometimes leases are dated back before there is any intention of possession being given and the lessee enjoying the lease, the date being inserted merely in order to fix the term of the lease.I should have thought that the reasonable thing here is to identify the date, as I have endeavoured to do in the amendment, by saying that it shall be
the date upon which the original lessee was first entitled to possession under the lease".Undoubtedly there will be provision within a long lease of this sort for the taking of possession. It may well be on the completion of the building or some such date. That is the point from which time should be given for making the election. Therefore, in place of the words of the subsection which I read out just now I seek to insert as the period for the election:three years after the date upon which the original lessee was first entitled to possession under the lease
§ Mr. Denzil DaviesThe right hon. Member for Crosby (Mr. Page) raised this matter in Committee. There are two points in his amendment. First he seeks to extend the time for election from two years to three years. In Committee he sought to extend it to four, but he has now come down to three, no doubt hoping that I would meet him.
I still stand by what I said in Committee. I think that two years is a reasonable time. We have considered the matter, and I cannot see that there would be any case of hardship. I think that a two-year limit, which I am told is the normal limit in such cases, is reasonable and should stay.
The right hon. Gentleman's second point concerned the meaning of the words in the clause:
the date on which the lease takes effect".He sought, as he would argue, to clarify that phrase by changing the wording. The 1755 right hon. Gentleman's wording is all right. The difficulty is that I understand that similar words to those in the clause already appear in the Law of Property Act 1925. There is, as I wrote to the right hon. Gentleman, some authority as to the meaning of those words. Therefore, we are dealing with a set of words which is not unknown in law, and I do not think that normally there would be much of a problem as to when a particular lease takes effect.The other difficulty is that both subsection (1) and subsection (8) are drafted on the basis of the original wording. Therefore, if we were to accept the right hon. Gentleman's wording for part of the clause it would look very odd, and we should have to recast the clause.
But my main argument is that the words chosen have been used in law and have been pronounced upon by the courts. In these matters involving property it is probably sensible to stick to hallowed words. New words, however good they might appear, generally tend to create confusion in property matters.
We shall certainly watch the matter in the course of the year, if that will help the right hon. Gentleman, and if there are difficulties they can be put right. But I cannot accept the amendment.
§ 4.30 p.m.
§ Mr. Graham PageI am grateful to the Minister for agreeing to look at this matter again. We have already discussed it in Committee. I regret that it is not sufficient for our purposes today for the Minister to undertake to examine the question in the future. The one substantial point which he made was that these
§ words are used elsewhere in the clause and that to use them in this subsection might be confusiong. This subsection deals merely with the date for election, the date from which time will run for election. There would, therefore, be no confusion.
§ The Minister also said that these words were used in the Law of Property Act. I do not wish them to have the meaning which they have in that Act. I want the time to start from the time when the lessee is entitled to possession. I have come to the conclusion in these debates that it is absolutely necessary to spell out exactly what the Bill seeks to do or what we think it intends to do—what we on the Opposition Benches wish it to do. If we do not spell out exactly what we mean there may be unforeseen results. The Minister has said that he is advised that the words mean this or that.
§ The Chancellor of the Exchequer was advised that certain words meant certain things in the case of the scholarships which arose two years ago. He administered the law for two years. Suddenly new advice was given and everything was changed. This is what happens if we do not put a few extra words into the Bill spelling out exactly what is required. In this case we do not need to have the position cleared up. Large sums of money are involved. This is no small matter. On the basis that we ought to spell out in the Bill exactly what we intend I hope that my right hon. and hon. Friends will join me in the Lobby.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 231, Noes 259.
1759| Division No. 266] | AYES | 4.32 p.m. |
| Adley, Robert | Brocklebank-Fowler, C. | Dean, Paul (N Somerset) |
| Amery, Rt Hon Julian | Brooke, Hon Peter | Dodsworth, Geoffrey |
| Atkins, Rt Hon H. (Spelthorne) | Brotherton, Michael | Douglas-Hamilton, Lord James |
| Atkinson, David (B'mouth, East) | Brown, Sir Edward (Bath) | Drayson, Burnaby |
| Baker, Kenneth | Bryan, Sir Paul | du Cann, Rt Hon Edward |
| Banks, Robert | Buchanan-Smith, Alick | Dunlop, John |
| Bell, Ronald | Buck, Antony | Durant, Tony |
| Bendall, Vivian | Budgen, Nick | Dykes, Hugh |
| Bennett, Sir Frederic (Torbay) | Bulmer, Esmond | Edwards, Nicholas (Pembroke) |
| Bennett, Dr Reginald (Fareham) | Burden, F. A. | Elliott, Sir William |
| Benyon, W. | Butler, Adam (Bosworth) | Fairbairn, Nicholas |
| Berry, Hon Anthony | Chalker, Mrs Lynda | Fairgrieve, Russell |
| Biffen, John | Churchill, W. S. | Farr, John |
| Biggs-Davison, John | Clark, Alan (Plymouth, Sutton) | Fell, Anthony |
| Body, Richard | Clark, William (Croydon S) | Finsberg, Geoffrey |
| Boscawen, Hon Robert | Cooke, Robert (Bristol W) | Fisher, Sir Nigel |
| Bottomley, Peter | Cope, John | Fletcher, Alex (Edinburgh N) |
| Bowden, A. (Brighton, Kemptown) | Cormack, Patrick | Fletcher-Cooke, Charles |
| Boyson, Dr Rhodes (Brent) | Costain, A. P. | Fookes, Miss Janet |
| Braine, Sir Bernard | Craig, Rt Hon W. (Belfast E) | Forman, Nigel |
| Brittan, Leon | Davies, Rt Hon J. (Knutsford) | Fox, Marcus |
| Gardiner, George (Reigate) | Lester, Jim (Beeston) | Rhodes James, R. |
| Gardner, Edward (S Fylde) | Lewis, Kenneth (Rutland) | Rhys Williams, Sir Brandon |
| Gilmour, Rt Hon Sir Ian (Chesham) | Lloyd, Ian | Ridley, Hon Nicholas |
| Glyn, Dr Alan | Loveridge, John | Ridsdale, Julian |
| Goodhart, Philip | Luce, Richard | Rifklnd, Malcolm |
| Goodlad, Alastair | McCrindle, Robert | Roberts, Wyn (Conway) |
| Gorst, John | Macfarlane, Neil | Rodgers, Sir John (Sevenoaks) |
| Gow, Ian (Eastbourne) | MacGregor, John | Rossi, Hugh (Hornsey) |
| Gower, Sir Raymond (Barry) | MacKay, Andrew (Stechford) | Rost, Peter (SE Derbyshire) |
| Grant, Anthony (Harrow C) | Macmillan, Rt Hon M. (Farnham) | Royle, Sir Anthony |
| Grieve, Percy | McNair-Wilson, M. (Newbury) | Sainsbury, Tim |
| Griffiths, Eldon | McNair-Wilson, P. (New Forest) | St. John-Stevas, Norman |
| Grylls, Michael | Madel, David | Scott, Nicholas |
| Hamilton, Archibald (Epsom & Ewell) | Marten, Neil | Scott-Hopkins, James |
| Hamilton, Michael (Salisbury) | Mates, Michael | Shaw, Giles (Pudsey) |
| Hampson, Dr Keith | Mather, Carol | Shaw, Michael (Scarborough) |
| Hannam, John | Maude, Angus | Shelton, William (Streatham) |
| Harrison, Col Sir Harwood (Eye) | Maudling, Rt Hon Reginald | Shersby, Michael |
| Harvie Anderson, Rt Hon Miss | Maxwell-Hyslop, Robin | Sims, Roger |
| Haselhurst, Alan | Mayhew, Patrick | Sinclair, Sir George |
| Hastings, Stephen | Meyer, Sir Anthony | Smith, Dudley (Warwick) |
| Havers, Rt Hon Sir Michael | Miller, Hal (Bromsgrove) | Smith, Timothy John (Ashfield) |
| Hawkins, Paul | Mills, Peter | Speed, Keith |
| Hayhoe, Barney | Mitchell, David (Basingstoke) | Spence, John |
| Heath, Rt Hon Edward | Moate, Roger | Spicer, Jim (W Dorset) |
| Higgins, Terence L. | Moore, John (Croydon C) | Spicer, Michael (S Worcester) |
| Hodgson, Robin | More, Jasper (Ludlow) | Sproat, Iain |
| Holland, Philip | Morgan, Geraint | Stainton, Keith |
| Hordern, Peter | Morgan-Giles, Rear-Admiral | Stanbrook, Ivor |
| Howe, Rt Hon Sir Geoffrey | Morris, Michael (Northampton S) | Stanley, John |
| Howell, David (Guildford) | Morrison, Charles (Devizes) | Steen, Anthony (Wavertree) |
| Howell, Ralph (North Norfolk) | Morrison, Hon Peter (Chester) | Stewart, Ian (Hitchin) |
| Hunt, David (Wirral) | Neave, Airey | Stokes, John |
| Hunt, John (Ravensbourne) | Nelson, Anthony | Stradling Thomas, J. |
| Hurd, Douglas | Neubert, Michael | Tapsell, Peter |
| Hutchison, Michael Clark | Newton, Tony | Taylor, Teddy (Cathcart) |
| Irving, Charles (Cheltenham) | Normanton, Tom | Tebbit, Norman |
| James, David | Nott, John | Temple-Morris, Peter |
| Jenkin, Rt Hon P. (Wanst'd & W'dl'd) | Onslow, Cranley | Thatcher, Rt Hon Margaret |
| Jessel, Toby | Osborn, John | Thomas, Rt Hon P. (Hendon S) |
| Johnson Smith, G. (E. Grinstead) | Page, John (Harrow West) | Townsend, Cyril D. |
| Jones, Arthur (Daventry) | Page, Rt Hon R. Graham (Crosby) | Vaughan, Dr Gerard |
| Jopling, Michael | Page, Richard (Workington) | Viggers, Peter |
| Kaberry, Sir Donald | Pattie, Geoffrey | Wakeham, John |
| Kellett-Bowman, Mrs Elaine | Percival, Ian | Walder, David (Clitheroe) |
| Kershaw, Anthony | Peyton, Rt Hon John | Walker, Rt Hon P. (Worcester) |
| Kilfedder, James | Pink, R. Bonner | Walker-Smith, Rt Hon Sir Derek |
| Kimball, Marcus | Prentice, Rt Hon Reg | Walters, Dennis |
| King, Evelyn (South Dorset) | Price, David (Eastleigh) | Warren, Kenneth |
| King, Tom (Bridgwater) | Prior, Rt Hon James | Weatherill, Bernard |
| Kitson, Sir Timothy | Pym, Rt Hon Francis | Whitney, Raymond |
| Knight, Mrs Jill | Raison, Timothy | Wiggin, Jerry |
| Knox, David | Rathbone, Tim | Winterton, Nicholas |
| Lamont, Norman | Rees, Peter (Dover & Deal) | |
| Langford-Holt, Sir John | Rees-Davies, W. R. | TELLERS FOR THE AYES: |
| Latham, Michael (Melton) | Renton, Rt Hon Sir D. (Hunts) | Sir George Young and |
| Lawrence, Ivan | Renton, Tim (Mid-Sussex) | Mr. Spencer Le Marchant. |
| Lawson, Nigel | ||
| NOES | ||
| Abse, Leo | Bray, Dr Jeremy | Crawshaw, Richard |
| Allaun, Frank | Broughton, Sir Alfred | Cryer, Bob |
| Anderson, Donald | Brown, Hugh D. (Provan) | Cunningham, G. (Islington S) |
| Archer, Rt Hon Peter | Brown, Robert C. (Newcastle W) | Cunningham, Dr J. (Whiteh) |
| Armstrong, Ernest | Brown, Ronald (Hackney S) | Davidson, Arthur |
| Ashley, Jack | Buchan, Norman | Davies, Bryan (Enfield N) |
| Ashton, Joe | Buchanan, Richard | Davies, Rt Hon Denzil |
| Atkins, Ronald (Preston N) | Callaghan, Jim (Middleton & P) | Davies, Ifor (Gower) |
| Atkinson, Norman (H'gey, Tott'ham) | Campbell, Ian | Davis, Clinton (Hackney C) |
| Bagier, Gordon A. T. | Canavan, Dennis | Deakins, Eric |
| Bain, Mrs Margaret | Carmichael, Neil | de Freitas, Rt Hon Sir Geoffrey |
| Barnett, Guy (Greenwich) | Carter, Ray | Dell, Rt Hon Edmund |
| Barnett, Rt Hon Joel (Heywood) | Carter-Jones, Lewis | Dempsey, James |
| Bates, Alf | Cartwright, John | Dewar, Donald |
| Bean, R. E. | Castle, Rt Hon Barbara | Doig, Peter |
| Benn, Rt Hon Anthony Wedgwood | Clemitson, Ivor | Dormand, J. D. |
| Bldwell, Sydney | Cocks, Rt Hon Michael (Bristol S) | Douglas-Mann, Bruce |
| Bishop, Rt Hon Edward | Coleman, Donald | Dunnett, Jack |
| Blenkinsop, Arthur | Cook, Robin F. (Edin C) | Dunwoody, Mrs Gwyneth |
| Booth, Rt Hon Albert | Corbett, Robin | Eadie, Alex |
| Boothroyd, Miss Betty | Cowans, Harry | Edwards, Robert (Wolv SE) |
| Bottomley, Rt Hon Arthur | Cox, Thomas (Tooting) | Ellis, John (Brigg & Scun) |
| Boyden, James (Bish Auck) | Craigen, Jim (Maryhill) | Ellis, Tom (Wrexham) |
| Bradley, Tom | Crawford, Douglas | English, Michael |
| Evans, Fred (Caerphilly) | Leadbitter, Ted | Sedgemore, Brian |
| Evans, Gwynfor (Carmarthen) | Lestor, Miss John (Eton & Slough) | Sever, John |
| Evans, John (Newton) | Lewis, Arthur (Newham N) | Shaw, Arnold (Ilford South) |
| Ewing, Harry (Stirling) | Lewis, Ron (Carlisle) | Sheldon, Rt Hon Robert |
| Faulds, Andrew | Litterick, Tom | Shore, Rt Hon Peter |
| Fernyhough, Rt Hon E. | Loyden, Eddie | Short, Mrs Renée (Wolv NE) |
| Fitch, Alan (Wigan) | Luard, Evan | Silkin, Rt Hon John (Deptford) |
| Flannery, Martin | Lyon, Alexander (York) | Silkin, Rt Hon S. C. (Dulwich) |
| Fletcher, Ted (Darlington) | Mabon, Rt Hon Dr J. Dickson | Silverman, Julius |
| Foot, Rt Hon Michael | McElhone, Frank | Skinner, Dennis |
| Ford, Ben | MacFarquhar, Roderick | Smith, Rt. Hon. John (N Lanarkshire) |
| Fowler, Gerald (The Wrekin) | McGuire, Michael (Ince) | Snape, Peter |
| Fraser, John (Lambeth, N'w'd) | MacKenzie, Rt Hon Gregor | Spearing, Nigel |
| Freeson, Rt Hon Reginald | McNamara, Kevin | Spriggs, Leslie |
| Garrett, John (Norwich S) | Madden, Max | Stallard, A. W. |
| Garrett, W. E. (Wallsend) | Magee, Bryan | Steel, Rt Hon David |
| George, Bruce | Mahon, Simon | Stewart, Rt Hon Donald |
| Gilbert, Rt Hon Dr John | Mallalieu, J. P. W. | Stewart, Rt Hon M. (Fulham) |
| Ginsburg, David | Marshall, Dr Edmund (Goole) | Stoddart, David |
| Golding, John | Marshall, Jim (Leicester S) | Stott, Roger |
| Gould, Bryan | Mason, Rt Hon Roy | Summerskill, Hon Dr Shirley |
| Gourlay, Harry | Maynard, Miss Joan | Swain, Thomas |
| Graham, Ted | Meacher, Michael | Taylor, Mrs Ann (Bolton W) |
| Grant, John (Islington C) | Millan, Rt Hon Bruce | Thomas, Dafydd (Merioneth) |
| Grimond, Rt Hon J. | Mitchell, Austin (Grimsby) | Thomas, Ron (Bristol NW) |
| Grocott, Bruce | Molloy, William | Thompson, George |
| Hamilton, W. W. (Central Fife) | Moonman, Eric | Thorne, Stan (Preston South) |
| Harrison, Rt Hon Walter | Morris, Alfred (Wythenshawe) | Thorpe, Rt Hon Jeremy (N Devon) |
| Hart, Rt Hon Judith | Morris, Rt Hon J. (Aberavon) | Tierney, Sydney |
| Hattersley, Rt Hon Roy | Mulley, Rt Hon Frederick | Tilley, John |
| Hayman, Mrs Helena | Newens, Stanley | Tinn, James |
| Healey, Rt Hon Denis | Noble, Mike | Tomlinson, John |
| Heffer, Eric S. | Oakes, Gordon | Tomney, Frank |
| Henderson, Douglas | Ogden, Eric | Torney, Tom |
| Horam, John | O'Halloran, Michael | Urwin T. W. |
| Howell, Rt Hon Denis (B'ham, Sm H) | Orme, Rt Hon Stanley | Varley, Rt Hon Eric G. |
| Hoyle, Doug (Nelson) | Ovenden, John | Walker, Harold (Doncaster) |
| Huckfield, Les | Owen, Rt Hon Dr David | Walker, Terry (Kingswood) |
| Hughes, Mark (Durham) | Padley, Walter | Ward, Michael |
| Hughes, Robert (Aberdeen N) | Pardoe, John | Watkins, David |
| Hughes, Roy (Newport) | Park, George | Watkinson, John |
| Hunter, Adam | Parker, John | Weetch, Ken |
| Irvine, Rt Hon Sir A. (Edge Hill) | Parry, Robert | Weitzman, David |
| Irving, Rt Hon S. (Dartford) | Pavitt, Laurie | Wellbeloved, James |
| Jackson, Colin (Brighouse) | Pendry, Tom | Welsh, Andrew |
| Jackson, Miss Margaret (Lincoln) | Phipps, Dr Colin | White, Frank R. (Bury) |
| Janner, Greville | Prescott, John | White, James (Pollok) |
| Jay, Rt Hon Douglas | Price, C. (Lewisham W) | Whitehead, Phillip |
| Jeger, Mrs Lena | Price, William (Rugby) | Whitlock, William |
| Jenkins, Hugh (Putney) | Radice, Giles | Willey, Rt Hon Frederick |
| John Brynmor | Rees, Rt Hon Merlyn (Leeds S) | Williams, Rt Hon Alan (Swansea W) |
| Johnson, James (Hull West) | Reid, George | Williams, Rt Hon Shirley (Hertford) |
| Johnson, Walter (Derby S) | Richardson, Miss Jo | Williams, Sir Thomas (Warrington) |
| Johnston, Russell (Inverness) | Roberts, Albert (Normanton) | Wilson, Gordon (Dundee E) |
| Jones, Alec (Rhondda) | Roberts, Gwilym (Cannock) | Wilson, William (Coventry SE) |
| Jones, Dan (Burnley) | Robertson, George (Hamilton) | Wise, Mrs Audrey |
| Judd, Frank | Roderick, Caerwyn | Woof, Robert |
| Kelley, Richard | Rodgers, George (Chorley) | Wrigglesworth, Ian |
| Kerr, Russell | Rodgers, Rt Hon William (Stockton) | Young, David (Bolton E) |
| Kilroy-Silk, Robert | Rooker, J. W. | |
| Kinnock, Neil | Roper, John | TELLERS FOR THE NOES |
| Lambie, David | Rose, Paul B. | Mr. James Hamilton and |
| Lamond, James | Ross, Rt Hon W. (Kilmarnock) | Mr. Joseph Dean. |
| Latham, Arthur (Paddington) | Rowlands, Ted |
§ Question accordingly negatived.