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Appointed Day For Certain Purposes

Volume 415: debated on Wednesday 31 October 1945

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Sixth Resolution read a Second time.

Motion made, and Question proposed, "That this House does agree with the Committee in the said Resolution."

I want to ask the right hon. Gentleman why it is necessary to have an appointed day dealing particularly with the purpose of Part IV of the Finance Act, 1944. As I read it, this particular reference is to the allowance made in future to money spent upon scientific research, and under the Act referred to no refund will be payable in respect of any expenditure made for the purposes set out in that Section connected with scientific research if made before the appointed day. This provision was introduced as far back as the Budget of 1944 and I cannot for the life of me understand why it is necessary to fix the appointed day so late. It means that anyone who has some scheme for expenditure on scientific research has every incentive not to push it through as quickly as he can, but to put it off until April, for it is only after April that he will be able to claim the allowances referred to in the Resolution. I cannot understand why it is necessary to have an appointed day and I shall be grateful for an explanation.

The explanation is that this again is a "slop-over," if I may use the phrase, from the last Budget. This Resolution appeared there and also in the Income Tax Bill and the date was fixed by the then Chancellor of the Exchequer, who is a member of the right hon. and gallant Gentleman's party. [An Hon. Member: "No, he is not."] He sits on that side of the House. As the right hon. and gallant Gentleman very properly said, this writing off of allowances for Income Tax purposes of various kinds is to meet capital expenditure by productive industries, and the legislation was embodied in the enactment mentioned in the Resolution in advance of the end of the war on the full understanding that it would not come into effect until the war was over. It was felt—and in my view quite properly—that industry was entitled to know what it might expect and, therefore, this legislation was passed on the very proper understanding that it would not be possible, as it was a contribution towards modernisation and new equipment, to put this into effect until after the war. That being so the allowances should not become available and payable until then. The war with Germany finished last May and the war with Japan some time later in the year, and that being so the obvious date from which these allowances should begin to run is 6th April next, and that is the date which has been fixed in the Resolution.

I think that this is a very unsatisfactory reply indeed. As the right hon. Gentleman has pointed out, firms now will be wanting to decide upon expenditure on scientific research from this day onwards. They will be considering building and equipment and new processes and are they not to be allowed to set off against Income Tax any of this expenditure? I did not understand from the right hon. Gentleman's explanation why the Government have not appointed a day already. It was considered in the Finance Act of this summer and, surely, it would have been possible to fix a day, say, 1st September or the 1st of this month, from which such expenditure would be allowed. It is altogether an unsatisfactory reply and I think that the right hon. Gentleman can expect those of us suffering on this side of the House to take some action in the matter.

Perhaps it will save time if I give an undertaking to look into it. It is a matter which, as my hon. Friend properly said, we have taken over from my distinguished predecessor, who I am told is not a member of the Conservative Party but who remains my distinguished predecessor none the less, and this was his idea. As to the timing, I will undertake to look into it and see whether there are any difficulties, as there may well be, in advancing the date.

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.