§ 17. Mr. Adley
asked the Chancellor of the Exchequer if he will seek powers to ensure that small hotels which are compelled to undertake structural work under the Fire Precautions Act are enabled to offset the cost of this work against tax, rather than have to consider the work as capital improvement.
§ Mr. Patrick Jenkin
No, Sir. I do not think I should be justified in singling out this particular form of expenditure for special treatment.
§ Mr. Adley
Is my hon. Friend aware that this will cause not only concern but anxiety to many small hotel keepers, particularly those who run their own hotels, very often with their wives, working long hours, and who find it difficult to borrow money in the first place and will now be faced with enormous burdens under the Fire Precautions Act, which, of course, we all support? In the context of employment in the regions, will my hon. Friend bear in mind that this situation could have a serious effect and that many small hotels could be forced to close unless he gives them some form of assistance?
§ Mr. Jenkin
I have listened carefully to what my hon. Friend has said and have read the letter he wrote earlier this month on the matter. He may be exaggerating the problem. He may be leaving out of account the great difficulties there would be if there were any departure from the basic rule that if people invite members of the public on to their premises they are responsible for making them safe. There is no difference here between these cases and the problem of making food shops safe, with proper levels of hygiene, and so on, for example.
§ Mr. Douglas
Will the hon. Gentleman accept that there really is a problem here, particularly in relation to the tourist industry? Will he consult the Secretary of State for Scotland and the Secretary of State for the Environment to ensure that when hotels and boarding houses are registering, the fullest information is available about financing facilities in order to speed up these very desirable improvements?
§ Mr. Jenkin
I undertake to get in touch with my right hon. Friends, as the hon. Gentleman suggests, but of course the question of safety and fire precautions is a matter for my right hon. Friend the Home Secretary.
§ Mr. Joel Barnett
Surely the hon. Gentleman would agree that whilst it is the responsibility of the hotel owner to make his hotel safe for his customers, it is part of his "wholly, exclusively and necessarily incurred" expenditure. For this purpose it should be allowed for tax. It would encourage safety. Will the hon. Gentleman reconsider his answer?
§ Mr. Jenkin
The hon. Gentleman is perhaps confusing two matters—the question of whether expenditure is an allowable revenue expense on the ruling he mentioned, and the question of whether it is entitled to capital allowance. There is no question that it is allowable as revenue expenses. Capital expenditure such as expenditure on plant, sprinklers, fire alarm systems and fire-fighting equipment will probably qualify for the new 100 per cent. first year allowance. As far as the expenditure represents capital improvement to non-industrial premises, there are at present no allowances under the tax system.