§ Mr. Dorrell
The existing tax regime provides relief for capital investment on machinery and plant, including equipment used in the production of CFC-free products. By providing a broadly neutral tax system for businesses, with a common rate of capital allowances for investment in most equipment, we allow businesses to decide where investments should be made. The increase in first-year capital allowances from 25 per cent. to 40 per cent. which was announced in the autumn statement, will provide an additional incentive for investment by businesses in the year to October 1993.