Section three hundred and thirty-five of the Income Tax Act, 1952, shall be amended by the addition of the following paragraph
(d) pays any sum to be used for such scientific research as is mentioned in paragraph (b) of this section to any such cattle
breeding or pig breeding society as is for the time being prescribed by regulations made under the Improvement of Livestock (Licensing of Bulls) Act, 1931, as an approved breeding society for the purposes of subsection (3) of section six of the Agriculture (Miscellaneous Provisions) Act, 1944".—[Mr. Turton.]
§ Brought up, and read the First time.
§ Mr. R. H. Turton (Thirsk and Malton)
I beg to move, That the Clause be read a Second time.
This is a narrow point, but one of considerable importance to the agricultural industry. The difficulty has arisen because at present subscriptions to progeny testing stations are not eligible for tax relief. The law is governed by Section 335 of the Income Tax Act, 1952, by which relief is given for subscriptions for any activities in natural or applied science for the extension of knowledge. But the decision as to what is a natural or applied science is not left to the Commissioners, or to the Special Commissioners on appeal, or to a court of law, but to the appropriate research council.
Progeny testing, being an agricultural pursuit, is left to the Agricultural Research Council, which has taken the view that progeny testing cannot be regarded as eligible because the data found would have to be put to some further experimental purpose if knowledge is to be extended. This matter has been sent to counsel for opinion, and they advise that this interpretation is not realistic. Unfortunately, owing to the drafting of the Act, there is no way of upsetting this decision except by amending the law. Therefore, counsel have advised a Clause in these terms to cover the point. I am sorry that the Chancellor is not here, because I know that he understands the importance of progeny testing. If British agriculture is to compete with Danish or Swedish agriculture we must go in for progeny testing.
§ Mr. Turton
I do not want to waste the time of the Committee by explaining to the hon. and learned Member how we test progeny, but I could take him to a testing station and allow him to have the measurements taken——
§ Mr. Turton
This is an important matter. If we are to compete in the bacon market we must have a progeny testing station. My right hon. Friend the Chancellor himself established a Ministry station. If it is to succeed, all the breeding societies must also have their progeny testing stations. Unlike the cement manufacturers or the Industrial Research Association, these breeding societies have their subscriptions taxed. This is clearly an anomaly which was not foreseen when the 1952 Act was passed. Therefore, I ask my right hon. Friend to accept the new Clause.
§ Mr. Maudling
My right hon. Friend the Member for Thirsk and Malton (Mr. Turton) said that my right hon. Friend the Chancellor of the Exchequer is, by reason of his previous activities, an expert on these matters. I am informed that the essence of progeny testing is the testing of the quality of the sire by the assembly of information regarding the value of his progeny for their purpose, for example for meat or milk production in the case of cattle and meat production in the case of pigs. It seems a reasonable definition. On the question whether it is a research activity, I should have thought that it is hardly a matter of scientific research as of routine quality testing. The point is not whether or no it is scientific research, but who is to determine whether it is.
Under Section 335 of the 1952 Act the duty of determining whether a body of this kind is engaged in scientific research rests with the appropriate research council, in this case the Agricultural Research Council. The question whether any activities constitute scientific research falls to be decided by the appropriate research council under Section 340 of the Act.
The purpose of the new Clause is to treat one form of activity specifically by name and to say that the determination whether it is scientific research shall be made not by the appropriate body but by statute. My right hon. Friend, who has studied this matter in his present and previous capacities, feels that it is much better for the Agricultural Research Council to determine whether these activities can be properly described as scientific research.
I urge that in these matters it is right that this Committee should lay down the principles, but the particular application 1511 in matters of such detail should be left to those bodies with the highest technical qualifications. In this case my right hon. Friend feels the highest qualifications reside in the Agricultural Research Council. Of course, by rejecting this new Clause, he is not commenting on the individual case—which would not be right for him to do—but he feels that the principle must be maintained and that the determination of individual cases should be left to the existing system under Section 335 of the Act of 1952.
For that reason, without in any way disagreeing with what my right hon. Friend the Member for Thirsk and Malton said about the importance of progeny testing in relation to the Danish industry and the strain of pigs produced in this country, I am afraid my right hon. Friend cannot accept this new Clause.
§ Sir James Duncan (South Angus)
I am sorry that my right hon. Friend has taken that line because, although this is a narrow point, it is of some importance. Up to now progeny testing has been done mainly to protect the pig, but I am certain that milk yield is going to depend more and more, not on prize-winning or even breeding, but on progeny testing. It is only just starting.
I cannot say that I agree with my right hon. Friend in leaving this matter to the Agricultural Research Council. The real point is who should decide the law? Section 340, which is the definition Section, of the Income Tax Act, 1952, says:'Scientific research' means any activities in the fields of natural or applied science for the extension of knowledge".Progeny testing is one of those things which is an extension of knowledge. If we disagree with that, or are doubtful about agreeing, surely it is right that it should be tested before the Special Commissioners, or in the last resort in the courts, rather than being left to the Agricultural Research Council. The Council comprises experts and technicians, but they are not experts in interpreting the law.
As it is late, I shall not say more, but I hope that my right hon. Friend the Paymaster-General will report this short debate to the Chancellor, who understands these things, because I believe the Paymaster-General has not quite appre- 1512 ciated the narrow but important point in the interests of future breeding and the future value of stock, particularly pedigree stock, of this country.
§ Mr. Turton
In the hope that my right hon. Friend will consider this matter further, I beg to ask leave to withdraw the Motion.
§ Motion and Clause by leave, withdrawn.