§ Mr. Barry FieldTo ask the Chancellor of the Exchequer what measures he intends to introduce to enable United Kingdom shipping companies to maintain their merchant fleets and crews, replace their aging tonnage and improve their rates of return.
§ Mr. LilleyI refer my hon. Friend to the reply that I gave to the hon. Member for Don Valley (Mr. Redmond) on 5 April 1990,Official Report, c. 717–18.
§ Mr. FearnTo ask the Chancellor of the Exchequer, pursuant to his reply to the hon. Member for Don Valley (Mr. Redmond) of 5 April,Official Report, column 718, what is his estimate of (a) the current rate of return on investment in a large container ship and (b) the rate of return if he reinstated 100 per cent. ship allowance, against investment in new and second hand ships.
§ Mr. LilleyThe answer to these two questions depends critically on assumptions about a number of factors, including the earnings of the vessel over its life and the eventual proceeds from its sale (perhaps in 10 or 20 years' time). The rate of return on any investment in machinery or plant—whether it is a ship or any other asset—will increase if an Exchequer subsidy is given. However, my right hon. Friend has no plans to change the present capital allowances regime for ships, which already offers more generous deductions than commercial depreciation.