Schedule 29 - Gains and losses of a company from intangible fixed assets

Part of Finance Bill – in a Public Bill Committee at 10:00 am on 13th June 2002.

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Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon 10:00 am, 13th June 2002

I am grateful to the Economic Secretary, whom I must congratulate on his appointment. Has the Treasury done an exercise as to the cost if the amendment were made?

John Healey: I am grateful for the hon. Gentleman's congratulations. The direct answer is yes, and the cost would be about £50 million. The provisions, which are already generous, cost the Exchequer about £200 million a year, and the amendment would add significantly to that. For the other reasons that I have explained, we cannot support the amendment.

I shall pick up on several of the points put to me by hon. Members during this short debate. The hon. Member for Torridge and West Devon raised a question from the Law Society on what is essentially a minor drafting point. We do not think that it is material. It cropped up in our consideration when preparing the Bill, and the Inland Revenue will monitor matters in case our judgment proves incorrect.

The right hon. Member for Fylde (Mr. Jack) picked me up on my reference to ''very few exceptions'', a phrase that I included because there are indeed very few. He asked for examples. One may be life assurance assets, which are subject to the special insurance tax regime. Research development gives rise to special reliefs, and so falls into a different part of the regime.

I was asked how many businesses might benefit, given the nature and scope of the new regime. The number will build in time under the new rules, but our best estimate is that about 30,000 companies will benefit that would not have done under the previous regime.

On the basis of my remarks, I encourage the hon. Member for Arundel and South Downs to withdraw the amendment. If he is not prepared to do so, I must ask my hon. Friends to reject it.