§ 24. Mr. Skeetasked the Chancellor of the Exchequer if he is aware that the write-off period of British machinery and equipment is unfavourable relative to most other European countries and adversely affects the competitiveness of British industry; and if he will examine the whole question of depreciation allowances in the United Kingdom.
§ Mr. BarberTax codes differ so much that comparisons are not easy but certainly in some respects, flowing from the investment and initial allowances, our treatment of the depreciation of industrial plant and machinery is more favourable than that of other countries. In reply to the second part of the Question, this is a time of year when my right hon. Friend reviews various features of the tax code.
§ Mr. SkeetWhile appreciating the first point, may I ask if the Economic Secretary is aware that in the United Kingdom it takes over twenty years to write off industrial equipment whereas in many European countries it takes ten years only, and the average tax life of fast machine tools is fifteen years here compared with ten years on the Continent? Will my hon. Friend make some observations on that?
§ Mr. BarberThe observation I would make is that I think the point made by my hon. Friend illustrate how difficult it is to make comparisons in these cases. I would point out on the other side that the position in the first year with regard to the writing off of plant is very different, because, with the relatively unimportant exception of Luxembourg, the United Kingdom gives greater reliefs for the cost of acquisition of plant and machinery than the main European countries.