HC Deb 31 October 1966 vol 735 cc36-7W
Mr. Bruce-Gardyne

asked the President of the Board of Trade what was the value of investment allowances plus free depreciation plus all such Board of Trade grants as are subsumed into or replaced by the new system of investment grants during the financial years 1963–64; and what would have been the amount paid out under the new system of investment grants if it had been in operation during that financial year.

Mr. Jay

The tax relief allowable in 1963–64 in respect of investment allowances, plus the offers of grants under the Local Employment Acts for plant and machinery totalled about £210 million. The free depreciation allowable in that year was negligible. I estimate that the amount of investment grants which would have been payable in that financial year had the new system been in operation then would have been of the order of £225 million. A comparison between these figures is however not meaningful, for example, because of the changes in company taxation, because not all investment incentives are included and because of the selective nature of investment grants.

Mr. Bruce-Gardyne

asked the President of the Board of Trade if he will estimate the amounts which, on current forecasts of manufacturing investment, will eventually be payable in respect of investment during the current financial year; and what would have been the corresponding value of investment allowances, plus free depreciation, plus all such Board of Trade grants as are subsumed into or replaced by the new system of investment grants.

Mr. Jay

On the basis of current estimates, investment grants of the order of £250 million will in due course be payable in respect of investment in the current financial year. The tax relief which would have been available, on the investment to which these grants relate, in respect of investment allowances, and the extra tax relief in respect of free depreciation, plus the offers which I would expect to be made in respect of Local Employment Act grants for plant and machinery, total about £185 million. A comparison between these figures is however not meaningful, for example because not all investment incentives are included, and because free depreciation is only an acceleration of writing-down allowances.