§ Mr. Higgins
asked the Chancellor of the Exchequer if he will provide figures, by way of example, to show how the introduction of Corporation Tax will affect the advantage businessmen will derive from investing in a development district, rather than elsewhere.
§ Mr. MacDermot
The total relief to a company on expenditure of £100 on plant and machinery in a development district is about £65 16s. 0d. in terms of tax at present rates, together with £10 as a grant from the Board of Trade, making £75 16s. 0d. in all. This is £2 14s. 0d. more than the relief on corresponding expenditure elsewhere. Under a Corporation Tax of 35 per cent. the total relief would be £50 18s. 0d. in a development district or £45 5s. 0d. elsewhere, a net advantage of £5 13s. 0d. which is over double the advantage under the present rates of tax. The corresponding amounts of advantage on the same expenditure on industrial buildings in a development district are about £8 16s. 0d. under the present rates of tax compared with £15 under a Corporation Tax at 35 per cent.