Clause 62 - First-year allowances for expenditure wholly for a ring fence trade
Finance Bill
12:45 pm
Mr Edward Davey (Kingston and Surbiton, Liberal Democrat)
I rise again because I was not happy with the Minister's reply. I have also been informed of a point that has not yet been raised, which is that smaller fields and companies tend to lease, not purchase, their equipment. They have therefore profited from 100 per cent. relief on such leasing, but the clause does nothing to help them offset the new tax. Such smaller companies, which are often the most innovative—and are trying to develop the marginal fields that we have heard so much about in the Government's defence of themselves—will not benefit. They will be hit by the 10 per cent. tax and will have no offsetting allowances.
If the Minister is trying to tell the Committee that the new structure will be beneficial to investors in the long term because the marginal fields will benefit, she shows that she and the Government do not understand how the industry works through leasing for small companies and fields. I hope that the Government will take that on board, and that if the Minister speaks again she will give more assurances to the Committee and the industry that the Government will think again about the measure and will consider the amendments under discussion.