§ Mr. Maclennanasked the President of the Board of Trade if he will now state the Government's conclusions on the case for further assistance for the hotel industry.
§ Mr. CroslandI would refer my hon. Friend to the statement which I made during the course of debate in the House today. I can at this stage given the following more detailed information, but a full account of the scheme must await publication of the White Paper.
Following is the information:
104WHotel Development Incentives
The Government propose to give assistance towards the capital cost of providing new hotel accommodation and the extension and improvement of existing hotels in the following ways:
(1) Hotel development grants would be available for new hotels; for extensions to existing hotels which provide more bedrooms for letting; and for some items of fixed plant and equipment in connection with improvement schemes.
(2) Loan assistance would be available in appropriate cases towards financing new hotels, and bedroom extensions and improvements to existing ones.
Eligibility
Hotels eligible for consideration would be those which offer accommodation and meals to travellers and visitors overnight or for longer periods without their necessarily having booked in advance. Establishments which only offer accommodation on a longer term residential basis or only against advance reservations would not be eligible. Moreover grants and loan assistance would only be available for hotels providing at least 10 bedrooms exclusively for the accommodation of travellers and short-time visitors. In the area of the Greater London Council the minimum requirement would be 25 letting bedrooms. The assistance would not be confined to hotels which could show significant overseas earnings.
Rates of Grant Proposed
(1) New hotels. For new hotels, a grant would be payable of 20 per cent. of expenditure on buildings and specified fixed equipment (excluding expenditure on the purchase of land and of any existing buildings on the land) but subject to an upper limit of grant calculated on the basis of £1,000 for each letting bedroom created by the development.
(2) Grants for extensions. For extensions which provide not less than 5 additional bedrooms for letting, bringing the total number of letting bedrooms to not less than 10 (25 in the area of the G.L.C.), a grant would be payable of 20 per cent, of expenditure on new building work including specified fixed equipment (excluding expenditure on the purchase of land and existing buildings) subject to an upper limit of £1,000 for each additional letting bedroom created by the development.
(3) Improvement schemes. A grant of 20 per cent. of expenditure on purchasing and installing certain items of fixed plant and equipment in respect of expenditure on such items of not less than £1,000 in any financial year.
(4) Development Areas. The rate of grant in Development Areas would be 25 per cent. for all three forms of assistance, subject to an upper limit of £1,250 per additional bedroom in respect of new hotels and extensions. Hotels in Development Areas would have to satisfy the other criteria including the minimum requirement of 10 bedrooms or more for letting.
105WLoan Assistance
To qualify for consideration for loan assistance, the same criteria of size and additional accommodation would have to be met as for hotel development grants. New hotel projects could attract loan assistance of up to 30 per cent. of expenditure, providing it exceeds £20,000, on buildings and specified fixed equipment (excluding expenditure on the purchase of land and of existing buildings). Extensions and improvements to existing hotels which have or would, on completion, have 10 or more letting bedrooms (25 in the G.L.C. area) could attract loan assistance of up to 50 per cent. of expenditure, providing it exceeds £10,000, on new buildings and specified fixed equipment (excluding expenditure on the purchase of land and existing buildings).
Maximum amount and terms of loans
The maximum amount of loan would be £500,000 for any one project. For new hotels, the maximum period of loan would be 20 years; for extensions and improvements to existing hotels it would be 15 years.
Nationalised industries
Nationalised industries having powers to operate or invest in hotels would be eligible for hotel development grants but not for loan assistance.
Local Authorities
Grants or loan assistance would not be available to local authorities who are exempt from Corporation Tax.
Duration of the Scheme
Initially hotel development grants and loan assistance on the bases summarised above would be available only for hotel projects on which work begins on the site after 31st March. 1968, and before 1st April. 1971. Such projects moreover would have to be completed before 31st March, 1973.
Applications
It will not be possible for any applications for grants or loans to be accepted for consideration until Parliament has approved the necessary legislation. Intending applicants should, in the meantime, retain any documents which could help to establish eligibility and substantiate expenditure.