§ Mr. Kirkwood
To ask the Chancellor of the Exchequer if he will list policies of a financial nature which have been pursued by Her Majesty's Government since 1979 which have been of assistance to the United Kingdom merchant fleet.
§ 4. Mr. Maude
[holding answer 17 February 1992]: The list sets out the financial measures which have been of particular assistance to the shipping industry since 1979.
Writing-down allowancesIn 1985 the capital allowance rules were changed to allow capital expenditure to be written down for tax purposes from the date on which it was incurred rather than from the time the asset was brought into use. These new arrangements are of particular importance for ships where stage payments are normally made as construction proceeds. Also in 1985, the special rules which provide that writing down allowances for ships can be used more flexibly than those for other forms of capital expenditure were extended to second-hand ships—previously they applied only to new ships.
Business expansion schemeIn 1986 the business expansion scheme was extended to include ship chartering as a qualifying activity. Ship operating and chartering companies have an annual finance limit of £5 million (as do private rented housing companies) instead of the £750,000 limit for other trading companies.
Foreign earnings deduction for seafarersIn 1988 the length of time which seafarers may spend in tehe United Kingdom without losing foreign earnings deductions was extended from 62 days, which is still the concession allowed to other workers with a significant overseas component to their jobs, to 90 days. In 1991 the concession for seafarers was extended to 183 days.
Training and crew relief costsThe 1988 Merchant Shipping Bill introduced two schemes to help the industry:
- (a) Government assistance for training (GAFT), under which the Government provides funds equivalent to half the cost of training officer cadets. The budget for GAFT is about £3.5 million per annum.
- (b) The crew relief costs scheme, under which the Government assists with the costs of transporting United Kingdom-based crews to and from United Kingdom-flagged vessels in distant waters. The budget for this scheme is about £5 million per annum.