Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, with reference to the CBI's People and Prosperity Report, published in September 2014, if he will increase the UK's capital allowances regime in line with other G7 economies in order to increase long-term investment.

Under this government firms have benefited from the increased Annual Investment Allowance, which gives a 100 per cent up-front tax allowance on up to £500,000 of expenditure on qualifying plant and machinery until 1 January 2016,. This covers the total qualifying investment of 99.8% of businesses.

The main rate of corporation tax has been cut from 28% to 21%, and this year it will fall to 20%, the joint lowest rate in the G20. In addition, the small profits rate was cut to 20%. Cuts to corporation tax are expected to increase business investment by between 2.5% and 4.5% in the long term, equivalent to £3.6 billion and £6.2 billion in today’s prices. This government has also introduced a number of business tax measures to increase investment, cutting all major business taxes Fuel Duty, Employer NICs and Business Rates, and introducing investment incentives such as the Patent Box and above the line R&D credit.