Where any person shall after the thirty-first day of December, nineteen hundred and eighteen, have expended any capital sum on buildings or equipment, or which shall be provided in pursuance of any statute or regulation, or which in the opinion of the General Commissioners shall be for the benefit of his employés, such person, in computing the amount of the profits or gains to be assessed to Corporation Tax and Income Tax in respect of his trade or business, may after the passing of this Act deduct such an amount as shall be equivalent to interest on such capital expenditure at the rate of five per cent. per annum.—[Mr. Hannon.]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."The Amendment is one which, I hope, will command at least the sympathy of the Chancellor of the Exchequer. We are giving him a great deal of credit for sympathy, but the net amount of his concessions during the Debate has been comparatively small. Nobody in this House realises more than he the value of the work that is being done by a great number of employers in this country in providing opportunities for recreation and for the general moral and educational improvement of their workmen, and I think that he investments which firms are making in order to provide these opportunities for improving the conditions of their workers ought to be treated with consideration by the Chancellor of the Exchequer. A great number of Members of this House were present at a meeting upstairs yesterday afternoon which I think was unprecedented in the annals of this House. A Member of the Royal Family came here and made a most striking speech on the importance of this industrial welfare movement. The Amendment asks my right hon. Friend to consider those employers who are desirous of supporting this work and have provided a certain investment for the purpose. I think they might expect to receive at the hands of the Exchequer the small amount asked for in relief.
The Amendment is one that cannot possibly be accepted. It is a proposal to allow as a deduction on the calculation of income for Income Tax purposes capital expenditure. The whole scheme of the Income Tax Acts forbids any deduction whatever for any capital expenditure of any kind whatsoever. I am not quite sure whether the hon. Member who moved the Amendment regards the expenditure as one which is of a business character, or whether he regards it as a business expenditure for the purpose of promoting the interest of the business. No doubt welfare expenditure is of great value from a business point of view, and if it does it falls within the same category as all other forms of business expenditure. If, on the other hand, he says it is a form of altruistic or philanthropic expenditure, then, for additional reasons, it is outside the scope of any Income Tax allowance or deductions. Charity cannot be given by anybody at the expense and out of the pocket of the Exchequer. We all recognise the value of welfare work, and there is not a single Member of the Committee who is not anxious to see it promoted in every possible way, but, if you are dealing with taxation, deal with it from the only point of view possible, the fiscal point of view. In attempting by a back wind through taxation to deal with social reform or charity we are making a mistake.
Surely the Solicitor-General is aware that it is possible for firms who contribute to hospitals and mental institutions to claim it, and if it is permissible in those cases surely the allowance can be made in the cases dealt with in this Clause?
I think the Solicitor-General has mixed up the two points. It may be charity or it may be business, but from the point of view of this Clause it is an attempt to see that justice is done to those men who treat their workpeople as human beings. If the hon. Member carries it to a Division I will support him.
Question, "That the Clause be read a Second time," put, and negatived.