HC Deb 19 January 1971 vol 809 cc706-7
18. Mr. Maxwell-Hyslop

asked the Minister of Agriculture, Fisheries and Food whether, in calculating farm machinery depreciation for the Annual Price Review, he will allow a higher rate of early depreciation, and a lower rate of later depreciation, in place of the straight-line depreciation rate currently employed by his Department.

Mr. Anthony Stodart

My right hon. Friend is satisfied that straight-line depreciation at replacement costs is suitable for the Departmental Net Income Calculation.

Mr. Maxwell-Hyslop

Surely my hon. Friend wants to achieve some degree of reality so that the net farm income figures are meaningful? Is not it desirable that the written-down value of machinery should bear some relation to what it actually fetches when it is traded in?

Mr. Stodart

The alternative to the straight-line depreciation is the diminishing balance. The straight-line system uses current replacement costs and is approved by the National Farmers' Union, while the diminishing balance, although it is the traditional Inland Revenue method, does not take account of inflation, and therefore has grave disadvantages.

19. Mr. Maxwell-Hyslop

asked the Minister of Agriculture, Fisheries and Food whether he will take steps to inform farmers that they should make sure to enter all their machinery on the annual census form, so that depreciation on it all can be calculated by his Department for inclusion in its annual computation of the industry's costs.

Mr. Anthony Stodart

My right hon. Friend has no reason to think that farmers do not complete their census returns accurately and fully, in accordance with their statutory obligation.

Mr. Maxwell-Hyslop

Will my hon. Friend look into this matter? If he wants to find out what the costs are—in other words, to run his Department on the basis of accurate information—he will find, if he examines the matter, that a lot of machinery which is not frequently used does not appear on the annual census form.

Mr. Stodart

I absolutely agree, but there is no reason to suppose that the depreciation allowances are under-rated, because allowances are made in respect of machines that are not returned. I should be unwilling to add more questions to the already lengthy census returns. I would rather have fewer.

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