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Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 4:46 pm on 6th July 1983.

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Photo of Mr Richard Wainwright Mr Richard Wainwright , Colne Valley 4:46 pm, 6th July 1983

I am saying that if a Government relieve any kind of interest for taxation, and even increase relief on house purchase interest, should they not allow tax relief on interest paid to improve taxable income? The Minister should address himself to that problem, because it is fundamental.

Liberals find another measure objectionable. I refer to the lamentable approach to the taxation of capital wealth. I agree with the right hon. Member for Guildford that capital transfer tax was misconceived. The Liberal party has always said that. It is a tax on the donor. The late Winston Churchill said that it was foolish to tax people who had already left this world when the people who should be taxed were the recipients of the wealth. There can be no defence for wrecking the tax on capital transfers without putting something in its place. I hope that the Government will explain why they adamantly refuse to consider a sensible tax on the recipients of wealth. If they did that, the level of tax would depend upon the size of the gift received by the taxpayer.

A contemporary example involves the well-known manufacturing firm that produces the Baxi fire, which has been referred to recently in the House as a shining light for capitalism and which is prepared to give away its enterprise to the workers. If there were a tax on the recipients there would be almost no tax to pay on the whole of the Baxi enterprise. It employs 900 people, is worth many millions of pounds and could be distributed into 900 fractions. For that public-spirited act there would be no serious tax to pay.

That is what would happen in a sensible system of an accessions tax on the recipient of the gift. If the proprietors of Baxi decided to keep the business in the family and give it to the young Mr. Baxi, the tax that he would have to pay on being given a multi-million pound enterprise would, and should, be enormous. Such a tax is applied in the Republic of Ireland and in many other civilised countries, yet the Government consistently refuse to consider it or even to admit the justice of the principle. For those and other lesser reasons, with which I need not burden the House this afternoon, my right hon. and hon. Friends will vote against the Bill tonight.