Clause 26. — (Miscellaneous Exemptions for Certain Kinds of Property.)

Part of Orders of the Day — FINANCE (No. 2) BILL – in the House of Commons at 12:00 am on 27 May 1965.

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Photo of Mr David Webster Mr David Webster , Weston-Super-Mare 12:00, 27 May 1965

I endorse what has been said about the fragmentation of agricultural property. There are many small fragmented farms in my part of Somerset. In fact, this Capital Gains Tax is a capital levy for these people because, with inflation, the value of their farms has not increased at all. There has simply been a decline in the value of money. Since the last Price Review, there is no more capital-intensive enterprise than agriculture, particularly dairy agriculture as practised in my constituency. To put it in another way, there is no other means of livelihood which earns less on the capital invested. There is an exceptionally small return on capital, and now it is alleged that the value of the properties is rising simply because of the decline in the value of money. On top of that, taxation is to be imposed on these hereditaments after compulsory loss of the property.

There is injustice at both ends. One hears about burning the candle at both ends, and for the agricultural community of Somerset this is what is happening. My farmers have to be in dairy farming because the land is suitable almost entirely for that type of production. The fields are often half a mile or a mile apart, and they have to be worked with a great deal of movement of cattle from one field to another. Inevitably, in the future, farmers in my constituency will have to dispose of more of their holdings if this tax is imposed. There will be more fragmentation and more distress in the agricultural community. I repeat that it is not a Capital Gains Tax but a capital levy at a time of decline in the value of money as a result of the inflation which is going on now and can be seen coming in the years ahead.