HC Deb 14 February 1956 vol 548 cc2162-3
34. Mr. Freeth

asked the Chancellor of the Exchequer if he can now give an estimate of the cost to the revenue during the financial year 1955-56 of the initial and investment allowances.

Mr. H. Brooke

It is too early to give a firm figure, but, provisionally, the cost of initial and investment allowances combined is expected to be between £80 million and £90 million for the current year.

Mr. Freeth

In view of the fact that since these allowances were reintroduced or instituted, substantial reductions in direct taxation have been made, does not my right hon. Friend consider that there is a case for considering their reduction or abolition, especially in view of the fact that the investment boom has exhausted our supply of men and materials?

Mr. Brooke

If I were to seek to answer my hon. Friend's question it might be thought that I was anticipating my right hon. Friend's Budget statement, and that I cannot do.

Mr. Warbey

Will the Financial Secretary save some of this vast sum by withdrawing investment allowances from those wasteful forms of capital investment to which the President of the Manchester Chamber of Commerce called attention in a recent speech?

Mr. Brooke

I refrained from giving an answer to the previous supplementary question, and I must refrain equally in this case.

Mr. Jay

Has not the right hon. Gentleman's hon. Friend asked a very pertinent question? Why are the Government simultaneously discouraging investment by a credit squeeze and encouraging it by these allowances, both of which are expensive to the Treasury?

Mr. Brooke

The right hon. Gentleman will realise that this is not Budget day and, therefore, it is not a day when announcements of any kind can be made.