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Clause 1. — (Machinery and Plant.)

Part of Orders of the Day — Industrial Development Bill – in the House of Commons at 12:00 am on 11th August 1966.

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Photo of Mr Frederick Corfield Mr Frederick Corfield , Gloucestershire South 12:00 am, 11th August 1966

The President of the Board of Trade will not be surprised that his attitude to this Amendment comes as a great disappointment to my right hon. and hon. Friends. He has based his case on his view it is not appropriate to assist hotels in this way. He has once again drawn attention to the fact that court decisions had resulted in investment allowances being paid for a much wider range of equipment throughout the whole industry—including the manufacturing and extractive industries, and so on—than might have seemed to be in accordance with the original intentions. He said that that was the basis of the policy of changing over to these grants.

From there on he seemed wholly illogical in saying that, therefore, this was not an appropriate method to apply to hotels, because the discretion that resides in the President of the Board of Trade and the selectivity that can be used, answer the problem of preventing grant being payable in respect of certain types of equipment which, in the past, attracted investment allowance and have, at times, been the subject of a considerable amount of criticism. He argued that he has produced a system ideally suited for selectivity in grants of Government assistance which the hotel industry requires.

He went on to indicate the other types of assistance that were available to the hotel industry—the increased initial allowance, and the 25 per cent. building allowance in the development areas. One of the big needs of the development areas—and here one thinks immediately of the Highlands, the South-West, and so on—is every bit as much for modernisation of existing hotels as for the building of new ones, but, in most cases, when one modernises an hotel one does not increase employment—indeed, by putting in modern facilities and equipment one may actually be reducing the employment available. That, together with the £5 million maximum loan at a favourable rate, contrasted with something like £20 million extra burden in the form of the S.E.T. and the loss amounting to many times that amount as a result of the withdrawal of the investment allowances, cannot be regarded in any sense as more than a drop in the bucket by way of recompense.

We come back to the ludicrous nature of the distinction that the Government have drawn for the purposes of this legislation and the S.E.T. between manufacturing industries and others. That was well brought home this afternoon by the Prime Minister who, in reply to a Question, said that all hotels do not contribute to earnings of foreign exchange. That is very true, but all manufacturers do not contribute to exports. Many manufacturers produce articles whose utility is not always immediately obvious.

It was the Prime Minister himself who referred to "candyfloss" as epitomising the frivolous and the futile, yet those who make candyfloss—I am not quite certain what it is, but I believe it is not a very useful or permanent substance—will under this Bill qualify for a grant for the machinery for making it. Here we have the height of absurdity in drawing such a distinction. The President of the Board of Trade has wholly failed to make out a case for the rejection of this Lords Amendment, and I hope that my right hon. and hon. Friends will vote against his Motion.