HC Deb 15 October 1968 vol 770 cc189-90
22. Mr. Michael Shaw

asked the Chancellor of the Exchequer if he will introduce legislation to permit the granting of free depreciation rates for tax purposes in respect of all machinery purchased as a result of the need to convert or replace existing machinery arising out of the decimalisation of the currency.

Mr. Taverne

I cannot add to my right hon. Friend's reply of 26th July to my hon. Friend the Member for Wythenshawe (Mr. Alfred Morris) and my hon. Friend the Member for Bradford, West (Mr. Haseldine).

Mr. Shaw

Does not the hon. and learned Gentleman realise that this expenditure is likely to be very considerable indeed in certain sections of industry and that it is not incurred for the creation of new types of machinery for new purposes but to maintain the existing position? Is he aware, therefore, that this expenditure is incurred more in the nature of a repair than as a true addition to capital and, as such, should be allowed as a charge in the year of purchase against the profits of that year?

Mr. Taverne

A reasoned case on this subject was put forward by the Decimal Currency Board just over a week ago, so that all these matters will be carefully studied, when the likely cost and effect that will be involved by this change will be looked into.

Mr. Macdonald

Perhaps my hon. and learned Friend is not prepared to give an immediate answer, but is he broadly satisfied with the apparent rate of progress being made in plans to invest in new machinery so that we are ready for decimalisation day?

Mr. Taverne

I do not think that it would be appropriate for me to express a view on this matter generally, when the Question is concerned with the specific matter of allowances for free depreciation.