§ Mr. Austin Mitchellasked the Chancellor of the Exchequer what is his estimate of the carry-over of losses of various kinds for manufacturing industry into the current financial year; and what is his estimate of the cash flow in each of the next five years as a result of the changes in allowances for (a) plant to machinery and (b) industrial buildings on the basis of (i) the current real rate of investment and (ii) the peak rate of investment since 1975 and the forecast rate of inflation.
§ Mr. MooreThe latest estimate of tax losses carried forward by manufacturing industry is some £10 billion. This estimate is extremely tentative.
The changes in capital allowances proposed by my right hon. Friend are, of course, accompanied by the abolition of stock relief and substantial reductions in corporation tax rates over the next few years. The precise net effect of these changes on tax liabilities in future years will depend not only upon the rate of investment but also on the level of profits, and on the extent of tax exhaustion.