§ Mr. Hicksasked the Chancellor of the Exchequer what would be the estimated cost to the Treasury if hotels and associated developments were allowed a 50 per cent. industrial building allowance in the first year, rather than the existing 20 per cent.; and if he will make a statement.
§ Mr. Peter ReesThe estimated cost of increasing the first-year allowance for hotel building expenditure to 50 per cent. would be negligible in the first year, about £5 million in the second year and over £10 million in a full year, assuming that the additional allowances are covered by profits.
§ Mr. Wickendenasked the Chancellor of the Exchequer if, in respect of the fiscal years 1979–80 and 1980–81, he will state the estimated cost to the Exchequer of extending to expenditure on industrial buildings the 100 per cent. first-year capital allowances which are currently available in respect of expenditure on plant and machinery.
§ Mr. Peter ReesIf expenditure on industrial buildings on or after 1 April 1979 qualified for 100 per cent. first year allowance the cost in 1979–80 would be negligible and £140 million in 1980–81. Afterwards it would rise to a maximum of about £250 million before declining again if the underlying expenditure remained constant. The figures assume the extended allowances would be covered by profits.