HC Deb 17 July 1986 vol 101 cc1311-2

Amendments made: No. 143, in page 227, line 25, column 3, at beginning insert— 'In section 457(1 A), the words from "and does not" to the end.'

No. 144, in page 227, line 30, column 3, at end insert— `Section 107(3).'

No. 145, in page 227, line 40, at end insert—

`1985 c.54. The Finance Act 1985. Section 49.

'The repeal in section 457(1A) of the Income and Corporation Taxes Act 1970 and the repeal of section 49 of the Finance Act 1985 have effect for the year 1986–87 and subsequent years of assessment.'

No. 146, in page 227, line 46, at end insert— 'The repeal of section 107(3) of the Finance Act 1972 has effect where a company ceases to carry on a trade, or part of a trade, after 18th March 1986, subject to the application of section 42(3) of this Act with the words "the repeal does not" substituted for "those amendments do not".'.

No. 176, in page 231, line 2, after 'executed', insert— 'in pursuance of a contract made'. No. 147, in page 231, line 13, column 3, at beginning insert— 'In section 7(1)(a), the word "appropriate".'.

No. 30, in page 231, line 29, at end insert—

Chapter Short Title Extent of Report
1981 c.68. The Broadcasting Act 1981 In section 32(9), the words "to amend sub-sections (4) and (5)".
In section 34(2)(b), the words from "when the" to the end.
In section 35(2)(a) and (b), the word "relevant".
1984 c. 46. The Cable and Broadcasting Act 1984. Section 40(3).

These repeals shall be deemed to have come into force on 1st April 1986.—[Mr. MacGregor.]

10.51 pm
Mr. MacGregor

I beg to move, That the Bill be now read the Third time.

Mr. Terry Davis

It is interesting that the Chief Secretary to the Treasury should move the Third Reading so briefly. I was prepared for him to make a longer speech. However, it was not necessary, because there is so little in the Bill. I am glad that, at long last, he has conceded that the Budget is irrelevant and that the Bill is uninteresting. There has been a tacit admission that we were right.

However, some things have changed since the Budget and, therefore, the Bill—not least of which is the fall in the price of oil. We were told that the Budget and the Bill were based on the assumption that oil would be $15 a barrel for the rest of the year. It is now $9 a barrel. There has been a change in unemployment. Unemployment has risen by 60,000 since the Budget.

Everywhere we look we see that the Government's strategy is in tatters. I am not surprised that the Chief Secretary did not wish to draw attention to that by seeking to make a speech when he moved the Third Reading of the Bill.

10.53 pm
Mr. MacGregor

It was not my intention not to make a speech, because I am proud of the Bill. I thought that the hon. Member for Birmingham, Hodge Hill (Mr. Davis) wanted to make progress. As I said at the start of our Second Reading debate over two months ago, the Bill continues the Government's progress in reducing the burden of taxation and reforming the tax system, despite the constraint of an unprecedented fall in oil revenues. That achievement demonstrates the underlying resilience of the economy, the limited extent to which we now need to rely on the North Sea sector, and the value of the prudent financial and economic policies that we have pursued.

The main tax reduction in the Bill is the cut in the basic rate to 29p— the first such reduction since 1979. This improves incentives for over 20 million people of working age, and is a further step towards the long-term objective of a basic rate of no more than 25 per cent., to which my right hon. Friend the Chancellor referred in his Budget speech. The higher rate threshold changes have been structured in such a way that the benefit of this year's basic rate cut is concentrated around the middle of the income distribution.

The Bill incorporates a number of other important tax measures—the introduction of personal equity plans; the restructuring of stamp duty; and the introduction of a generous package of reliefs to encourage charitable giving. Those measures have been widely welcomed in the charity field. The change from capital transfer tax to inheritance tax, with the abolition of the immediate tax change on lifetime gifts between individuals, will be of particular benefit to family firms and family farms.

We had a very constructive and worthwhile Committee stage. During our scrutiny of the Bill, we made helpful technical changes and also a number of changes that went wider than that. Most hon. Members will be aware of those changes, and I shall not elaborate upon them. The House has considered a large number of technical and other amendments in response to representations that were made in Committee and it now wishes to make progress. The Bill reflects the Government's taxation objectives. It was thoroughly worth while in its original form, and it has benefited from careful and constructive consideration. Therefore, I commend it to the House.

Question put and agreed to.

Bill accordingly read the Third time, and passed.