Clause — 36. — (Scientific Research Allowances.)

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 21 May 1963.

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Photo of Mr Anthony Barber Mr Anthony Barber , Doncaster 12:00, 21 May 1963

I am sure that the hon. and learned Member for Kettering (Mr. Mitchison) would be the first to agree that if it were clear in our legislation that pilot plant was satisfactorily dealt with on the lines proposed by the Amendment he would not wish to move an Amendment, or to support one to alter the law; that is, if it was clear. At the moment, he doubts that it is clear.

There are two points I would like to bring to the attention of the Committee in this connection. First—and this is by no means conclusive, although extremely relevant because we are interested in the legislation itself—I would remind hon. Members of something about which I previously thought it would not be necessary to trouble the Committee. The point is that this allowance was introduced in 1944 when the Chancellor of the day said that research had three aspects. About fundamental research of the scientist, he said: …what I might describe as the pilot plant stage, where laboratory results are tried out experimentally on a larger scale…". Then he went on: Every industrialist knows that it is a real difficulty to translate the delicate skill of the scientific researcher and the artificial conditions in which he may have worked, into terms of large-scale production. And then he described his proposals as a …comprehensive attempt to relieve from taxation altogether funds devoted by industry to the support of fundamental research, to the translation of laboratory research to production, and to the full-scale development of the product"—[OFFICIAL REPORT, 25th April, 1944; Vol., 399, c. 677–9.] This, I believe, is the fundamental desire of hon. Members opposite. Thus the question is, first, whether this is provided for satisfactorily in the legislation as it stands, and, secondly, whether it is giving any difficulty. In all sincerity, I ask hon. Members opposite—and I will deal with the legislation in a moment—to let me know of any case where it is thought that pilot plant should have qualified but has not. I would be delighted to look into it. I had assumed that the Liberal Party had a number of such cases, or at least one to bring to my notice. When I came into the Chamber this afternoon I thought that its representatives would cite some instances.

As for the existing legislation, I would remind the Committee that an allowance is given to a person carrying on a trade for capital expenditure on scientific research related to his trade. As I said, scientific research is defined in the Income Tax Act, 1952, as …any activities in the fields of natural or applied science for the extension of knowledge… When I dealt with this matter earlier, I said that I could expand upon that, but I did not know at the time whether or not it would be right to delay the Committee in doing that. However, it can be expanded on as follows, as laid down in the 1952 Act: …references to expenditure incurred on scientific research do not include any expenditure incurred in the acquisition of rights in, or arising out of, scientific research, but, save as aforesaid, include all expenditure incurred for the prosecution of, or the provision of facilities for the prosecution of, scientific research; references to scientific research related to a trade or a class of trades include—(a) any scientific research which may lead to or facilitate an extension of that trade … The proof of the pudding is in the eating and, so far as I know, there is no current case where this is causing difficulty. I am talking about the present, for I do not know what happened ten or fifteen years ago. If any hon. Member will let me know—it may be more convenient for him to do so by post so that I can have all the details—of any case where difficulty has arisen I will, in all sincerity, look into it to see whether any change is required.