HC Deb 26 March 1987 vol 113 c557
2. Mr. John Townend

asked the Chancellor of the Exchequer if he will estimate the cost to the revenue in a full year of treating expenditure on glasshouses as plant and machinery rather than agricultural buildings.

The Financial Secretary to the Treasury (Mr. Norman Lamont)

I regret that a precise figure is not available, but the cost is likely to be small.

Mr. Townend

I accept that it is reasonable to write off normal agricultural buildings over 25 years, but does my right hon. Friend accept that to remain competitive with overseas growers—especially the Dutch—British growers must replace their glasshouses every seven to 10 years? As so much of the cost of a modern glasshouse could be decribed as plant and machinery, will my right hon. Friend consider changing the tax rules so that glasshouses can be dealt with as plant and machinery?

Mr. Lamont

Equipment within glasshouses can qualify for the 25 per cent. allowance. Moreover, because of the balancing adjustment system introduced in 1986, if the building itself is demolished or disposed of, the rest of the value that has not been written off can be written off. My hon. Friend made a comparison with Holland. The rate of tax for small companies here is 27 per cent., compared with 42 per cent. in that country. I am not convinced that all the advantages are against the British producers.