§
'.—(1) In section 294 of the Taxes Act 1988 (companies with interests in land), after subsection (5) there shall be inserted—
(5A) For the purposes of this section, the value of an interest in any building or other land shall be adjusted by deducting the market value of any machinery or plant which is so installed or otherwise fixed in or to the building or other land as to become, in law, part of it.
§ (2) This section shall have effect in relation to valuations which fall to be made after the passing of this Act.'—[Mr. Norman Lamont.]
§ Brought up, and read the First time.
§ Mr. Norman LamontI beg to move, That the clause be read a Second time.
In Committee the Opposition tabled an amendment which would have prevented the land and buildings description on the business expansion scheme from applying to manufacturing companies. At the time, I said that I did not want to favour a particular industry in the way that they suggested, but that I recognised the problem posed to companies with valuable fixed plant. As a result we have devised the new clause.
Where plant and machinery form part of a company's land or buildings, they are taken into account when the land and buildings are valued. The new clause will deduct the value of plant and machinery from that of land and buildings. The change will be of particular help to companies with valuable specialised plant and machinery. It is not confined to any particular sector, but will apply to all companies that qualify under the BES rules.
§ Mr. Chris Smith (Islington, South and Finsbury)In Committee we highlighted many of the problems that we saw in the operation of the business expansion scheme. One of those problems was the low percentage of BES companies within the manufacturing sector. That percentage is going down rather than up, and we fear that it will go down even further with the institution of the new rented accommodation scheme introduced by the Budget and the Finance Bill.
We argued strongly that some extra incentive should be given to assist manufacturing industry trying to raise investment through BES. The Government accepted the principle, but we are disappointed that they have not taken the route that we suggested, which was to single out enterprises within industrial use classes 2, 3 and 4. However, they have recognised the need to give some consideration to companies in this position.
We will give two cheers for the new clause. It is a concession of sorts to the points that we put in Committee, and although we do not feel that it goes far enough or takes the right approach, it is none the less welcome.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.