Comparison of Divisions: Finance (No. 2) Bill 2006 — Remove income tax exemption for computer equipment — 2 May 2006 at 20:30 with Division No. 104 on 29 Apr 2009 at 15:49

The majority Aye voters passed a measure that would remove the income tax exemption for computer equipment^[1].

The original aim of the exemption was to promote household computer use by encouraging employers to loan computers to employees.

Dawn Primarolo MP explains why the government decided to remove the exemption as follows^[2]:

• 'It is perfectly true that many employees have benefited from the tax exemption, but the home computer initiative (HCI) has been used extensively by groups that we would not generally expect to have difficulty accessing information technology. For example, 25 per cent. of those participating in the home computer initiative are higher rate taxpayers—more than twice the proportion among taxpayers as a whole. Furthermore, nearly one third of HCI participants are from white-collar industries—often defined as industries with a greater proportion of higher-than-average earners.'

However, Mark Francois MP argues against the measure as follows^[3]:

• 'The scheme has proved popular, with about 500,000 people taking advantage of it effectively to hire a computer from their employer to help to improve their IT skills as part of a modern knowledge-based economy. This is especially important when we are seeking to improve IT skills to allow the UK to continue to compete with economies such as China and India in the 21st century. According to a recent analysis carried out by Hewlett-Packard, China and India between them now produce more than 120,000 IT graduates each year. How are we to compete effectively with that if we are bringing in measures to reduce the spread of IT literacy among our population, which is what the proposed change threatens to do?'

This measure eventually became law on 19 July 2006 when the Finance (No. 2) Bill 2006 received Royal Assent.

The Finance Bill set the government's budget for the 2006/2007 financial year.

----

• [1] The vote was on whether Clause 61 (pdf document - scroll to page 58) should remain in the Bill. As you will see Clause 61, in turn, removes section 320 from the Income Tax (Earnings and Pensions) Act 2003.
• [2] Dawn Primarolo MP, House of Commons, 2 May 2006
• [3] Mark Francois MP, House of Commons, 2 May 2006

The majority of MPs voted in favour of the motion:^[1]

• This House
• regrets the Government's recent statement^[2] outlining the eligibility criteria for Gurkhas to reside in the United Kingdom;
• recognises the contribution the Gurkhas have made to the safety and freedom of the United Kingdom for the past 200 years;
• notes that more Gurkhas have laid down their lives for the United Kingdom than are estimated to want to live here;
• believes that Gurkhas who retired before 1997 should be treated fairly and in the same way as those who have retired since;
• is concerned that the Government's new guidelines will permit only a small minority of Gurkhas and their families to settle whilst preventing the vast majority;
• further believes that people who are prepared to fight and die for the United Kingdom should be entitled to live in the country; and
• calls upon the Government to withdraw its new guidelines immediately and bring forward revised proposals that extend an equal right of residence to all Gurkhas.

As a consequence, the alternative Government motion, which read:^[3]

• This House
• recognises that this Government is the only one since the Second World War to allow Gurkhas and their families settlement rights to the United Kingdom;
• notes that in 2004 the Government permitted settlement rights to Gurkhas discharged since 1997, following the transfer of the Brigade HQ from Hong Kong to the United Kingdom;
• further notes that under these rules around 6,000 Gurkhas and family members have been welcomed to the UK;
• acknowledges that the court judgement of September 2008 determined that the 1997 cut-off date was fair and rational, while seeking clarification of the criteria for settlement rights for those who retired before 1997;
• further notes that on 24 April the Government published new and more generous guidelines for the settlement applications of Gurkhas who retired before 1997;
• supports this revised guidance, which will make around 10,000 Gurkhas and family members eligible to settle in the UK;
• further notes that the Government undertakes actively to inform those who may be eligible in Nepal of these changes and to review the impact of the new guidance within 12 months;
• further notes that the contribution Gurkhas have made is already recognised by pensions paid to around 25,000 Gurkhas or their widows in Nepal that allow for a good standard of living there; and
• further notes that in the year 2000 Gurkha pensions were doubled and that, earlier in April 2009, in addition to an inflationary uplift of 14 per cent., those over 80 years old received a 20 per cent. increase in their pension.

... was never voted upon.

Although this extremely rare Government defeat in an opposition day motion is not binding (has no legal force)^[4] a Government minister made a statement later in the day to bring "forward the date for the determination of the outstanding applications to the end of May."^[5]

• [1] Christopher Huhne MP, House of Commons, 29 April 2009
• [2] Phil Woollas MP, Written Ministerial Statement, 29 April 2009
• [3] Phil Woolas MP, House of Commons, 29 April 2009
• [4] Home Secretary Jacqui Smith blamed for humiliating Gurkhas defeat in the Commons, Daily Mail, 30 April 2009
• [5] Phil Woolas MP, House of Commons, 29 April 2009