Schedule 17 - Capital allowances: energy-saving plant and machinery
Finance Bill
5:30 pm
Mr Michael Jack (Fylde, Conservative)
An interesting observation came to mind during that helpful interregnum. If a company were running a fleet of leased cars and decided that it wanted to take advantage of the new regimes that we discussed earlier in the Bill, it might choose a more environmentally efficient fleet of cars by virtue of leasing arrangements. Those arrangements would benefit from the transfer of the capital allowance to the lessor organisation. The objective of diminished environmental outputs from motor vehicles would be assisted by the leasing facility that the Government are happy to put a tick beside, but the Economic Secretary says that we are focusing—that is the word that she used. I want to examine the word ``focusing'' for a moment. We are focusing on those companies that are in the fortunate position of having enough money to buy a piece of energy-saving equipment. They are making a profit and can, therefore, use all of the capital allowance under the schedule at one fell swoop.
However, the Economic Secretary is aware that many parts of British manufacturing industry are showing the opposite characteristics. They are making a loss and struggling to stay in business. They might want to deal with the impact on their businesses of the climate change levy by purchasing energy-saving equipment, but they might need to spread the purchase over time through hire purchase. That was the term used by the hon. Member for Torridge and West Devon; leasing is the more modern terminology for such an arrangement. Discrimination has crept in: unless a company is an up-front, 100 per cent. purchaser, it will not receive an allowance from the Government for acquiring energy-saving equipment.
I do not expect that the Economic Secretary will bother to reply to those points. We have now teased out from the Government the fact that there is discrimination against those who want to use lease finance. I hope that the Finance and Leasing Association will read these proceedings and correspond with the Economic Secretary, because they might do a better job of persuading the Government to re-examine the issue than I have this afternoon.