§ Mr. Adleyasked the Chancellor of the Exchequer what he estimates would be the cost of making hotels eligible for capital building allowances; and by what percentage such allowances would have to be reduced overall to enable the cost of making hotels eligible to be financed without additional public expenditure.
§ Mr. Denzil DaviesThe cost of extending the industrial building allowances to hotel buildings is estimated to be of the order of £25 million in a full year. In the short run this cost could be met by reducing the rates of both initial and annual allowances for qualifying buildings by approximately 9 per cent. In the long run such compensation cannot be achieved, since ultimately all qualifying expenditure would be allowed. Both estimates assume that sufficient profits would be available for advantage to be taken of the whole of the allowances.