The principle the Deputy is outlining in relation to deregulation and other losses business people suffer is that the State should step in with a form of compensation. I did not think that was the position adopted by either the Deputy or his party in these matters.
As I said, I am willing to consider genuine hardship cases in the Finance Bill to see how they can be facilitated by the tax code. It is a separate debate as to whether people will do more or less business in the taxi area as a result of deregulation. There has been more business for everyone in other businesses that have been deregulated and properly run. I do not profess to have any great expertise in the area of taxis, but I am bold enough to state that the living to be made from owning a taxi in the future, in spite of deregulation, will be better than it is now. That has been the experience in all other areas.
The situation I outlined in regard to capital allowances would put everyone in a better position in terms of their after tax income than is currently the case. Irrespective of whether people made large or small incomes from their businesses in recent years, they are not allowed the cost of the asset they purchased. If a person mortgaged his or her house, he or she is allowed, in terms of expenses, interest on the loan. However, he or she is not allowed, up until now, depreciation on the asset. Therefore, he or she has to fund the repayments or principal out of after tax income.
The changes I made in respect of capital allowances mean that after tax incomes are higher. We could have a separate debate on whether overall gross income at the top, due to deregulation, will rise or fall, but the net tax positions will be somewhat better. The Deputy is correct in stating that the higher a person's income the better will be his or her benefit at the marginal rate. This applies to all other areas.
The market was regulating itself in this sector as regards prices. People were paying large prices in the free market in the expectation of garnering big profits. One would not pay £60,000 for a taxi plate if one thought one was only going to make a couple of thousand pounds per annum. That would not make economic sense and I doubt if anybody did so.
What I am allowing people in terms of depreciation will be of more benefit to them in terms of their ongoing business. The separate question arises in respect of the expected capital depreciation by which a taxi plate might be affected in the future. That will not be the case because taxi plates will not be sold in that way. I will provide an analogy. Deputy Noonan's house, like mine, might have been worth £50,000 15 years ago and it could be worth a couple of hundred thousand pounds today. It might give the Deputy great comfort knowing that but if one wants to buy a new house one is obliged to pay the current market price. A person can only sleep in one bed and live in one house.
Unless a person involved in the taxi business is going to sell the plate when he or she retires, it is of no particular value to them. However, under my scheme of depreciation, it is of value to them as they continue in business. People do not appreciate that.