Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 23rd June 1953.

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Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster 12:00 am, 23rd June 1953

I would not disagree with any of the principles which the hon. Member for Gloucestershire, South (Mr. Crosland) has just enunciated in his remarks, and I rise at this late hour only to make one or two observations, particularly from the fiscal point of view.

There was one omission from the speech to which we have just listened in regard to stimulating a greater flow of these modern solid fuel appliances to the domestic market; and that is, that in every year which goes by, we suffer more and more difficulty in meeting the specialised demand of the house coal market. It demands large coal, and every year that passes the seams in our pits are tending to become more remote from the bottom of the shaft, they are often becoming thinner and dirtier, and what we have been accustomed to in the form of large, clean house coal is no longer always a practicable possibility; at least, not on the scale and to the standards which we enjoyed in pre-war years. These modern solid fuel burning appliances generally burn smaller coal, and coal of a lesser quality.

It is important as mechanisation of the pits steadily proceeds—and it is reaching, I must say, almost saturation point now— that the complementary factor should be carried in mind, and that is that these appliances in our homes should be installed upon as widespread a scale as possible. The domestic market is starved of coal. In the South of England only 34 cwt. a year is allowed; in the North of England only 50 cwt.; and the Coal Utilisation Council Report, from which the hon. Gentleman quoted, draws attention to the fact that were there a free market in coal there would be a considerably enhanced demand.

11.45 p.m.

There are several great difficulties in tackling the matter in the way the hon. Gentleman suggests. As I am sure he has not omitted to notice, a Parliamentary Question to the Chancellor of the Exchequer on this matter was asked in April last year. It made the very point to which the new Clause is directed. On that occasion I asked the Chancellor: Whether he is aware that certain of Her Majesty's inspectors of taxes admit as a permissible charge for purposes of calculating liability to Schedule A Income Tax main- tenance allowances, the cost of purchase and installation by householders of modern approved solid fuel burning appliances when fitted as replacements for old grates whereas other inspectors of taxes do not so admit the charge; and whether, in the interests of solid fuel conservation he will instruct the Inland Revenue to admit such charges in all instances as a permissible item of cost when calculating liability to Schedule A tax. That is precisely the purpose of this new Clause. The Chancellor's reply was rather illuminating, because since that date I have carried out a good deal of research as to whether his reply—with great respect to him—was strictly accurate. This is what my right hon. Friend said: The admissibility of the cost of these appliances in a maintenance claim depends on the facts of the case. If the new appliance and the appliance it replaces are both part of the building the cost of replacement is admitted in so far as it does not exceed the cost of repairing or renewing the old appliance. Any excess is, in law, inadmissible as maintenance, as is the cost of appliances that are not part of the building."—[OFFICIAL REPORT, 8th April, 1952; Vol. 498, c. 199.] That is really the reply to this new Clause.

My researches in the matter covered nine sample cases taken from all parts of the United Kingdom, and this is what I discovered, after consulting chartered accountants who had had negotiations with various inspectors of taxes. In three cases the inspector admitted the whole cost of installation of the modern solid fuel burning appliance and the structural cost of altering the building as a charge for purpose of the maintenance claim under Schedule A. In three other cases the inspectors, in different parts of the country, completely disallowed the claim. They would have nothing to do with it. In the other three cases they went exactly half-way and admitted the structural alteration of the building only, but not the cost of the new appliance.

I have said enough to demonstrate, I think, that what is wanted is not new legislation on this subject, not further Clauses added to the Finance Bill, but a request from the Chancellor of the Exchequer to the Inland Revenue that there shall be consistency throughout all branches of the Inland Revenue, in their treatment of modern solid fuel burning appliances for this particular class of relief, under Schedule A maintenance.

I think it would be a dangerous precedent indeed if we added a Clause to the Bill on this particular point, because it would lead in future years to similar Clauses being added to Finance Bills covering a whole range of other items coming within the general description of domestic hereditaments or private dwellings. I have always advocated Schedule A relief as an incentive, in the way the Ridley Committee recommended, to get these modern appliances installed in large numbers; but the real way to get that incentive is to persuade the Inland Revenue to be consistent and apply in all cases what they have applied in the three successful sample cases, out of nine, which I have mentioned.

I hope that my right hon. Friend will resist this new Clause but will, by administrative action, instruct the Inland Revenue to show a greater degree of consistency.