Angela Eagle: Of course, part of the thinking behind the change in investment allowances in general, of which this is a part, is to align behaviour more with the economic costs in riding down particular investments. Will he comment on his own partys proposals in this area? Capital allowances are cut in order to fund changes in corporation tax, and that leads to a situation where there are tax disadvantages to investing, as it takes the tax allowances that are given in those circumstances below the economic cost of making the investment.
Mr. Hammond: It would be accompanied by a substantial reduction in the headline rate of corporation tax. The other point is that our proposals will be presented in the manifesto at the next general election.
The Chairman: Order. We are gathered here today in order to make progress on the Finance Bill, not to start sparring about election time. The Minister should have had more sense than introduce it.
Mr. Hammond: Thank you, Mr. Cook, I shall attempt not to respond to provocation. The Minister sought to be helpful in explaining how the shared premises test would work. I am still concerned, although somewhat reassured because where one business is functionally run and performed in a premises and another is merely administered from it, it should not be caught by the shared premises test.
Mr. Hammond: The Minister nods her head, so that clears that up. We are still concerned about the mixed partnership rules. She says that there is substantial scope for abuse, and implies that I know what that scope is. I am sorry to disappoint her, but I do not know what the scope for abuse isI have been racking my brains trying to think about what mischief one could get up to. She has not addressed the point that the Government have a clear policy of similar treatment for similar economic activity regardless of the legal structure and we are disappointed that she was not able to deal with that.
In relation to ownership, of course it was never intended that double claims of allowances should be made; we were merely seeking to understand why that additional condition had to be introduced into the schedule.
It being One oclock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.
Adjourned till this day at half-past Four oclock.
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