Lancashire Liberal Democrat MP Gordon Birtwistle recently wrote to the Chancellor and the PM and sent them a copy of his recent economic growth proposal report on Capital Allowances and the Construction of New Affordable Homes.

The report promoted an introduction of 100% capital allowance on all capital purchases for the next 2 years to encourage companies to draw on substantial cash reserves to invest in new capital assets. It is hoped that in turn this will deliver revenue to the Treasury. The cash returns to the Treasury will come from the extra profits made by the companies and increased PAYE income from the increased workforce. The claims for capital allowance against corporation tax would come at least two years after the purchase of the asset. This claim would have been offset in cash terms by the increased revenue from corporation tax and PAYE.

Commenting Gordon Birtwistle said:

“In my view, if the Government wishes to see substantial growth in the economy over the next two years it needs to show confidence in its growth programme. Adopting this measure would, I believe, give confidence to companies to invest and we all accept investment is the key to growth. I see this as a very critical issue and as time is short the measure should be introduced in the Autumn Statement at the latest if we wish to see growth in the economy over the next eighteen months.”

“Both the Chancellor and the PM have responded to my report very positively and appreciate that if they want to see the kind of economic growth they need then they need to increase manufacturing as a percentage of GDP and time really is of the essence.”