HC Deb 06 February 1964 vol 688 cc1326-7
28. Dr. Bray

asked the Secretary of State for Industry, Trade and Regional Development what estimate he has made of the present value at 6 per cent. of the benefits under the Local Employment Acts of £10 million spent on plant and machinery in oil refineries in development districts, where full advantage is taken of the free depreciation provisions; and, on the basis of 200 jobs having been created, what is the cost to the Exchequer per job created.

Mr. Heath

This is a hypothetical question which assumes, among other things, that the full standard plant and machinery grants would be payable in respect of an unspecified number of capital-intensive projects. I am not able, therefore, to give the hon. Member the information he is seeking.

Dr. Bray

Is the Minister aware that even if the standard grants were not paid the value of the free depreciation would mean the cost per job provided was about £5,000, which is about 50 times the cost averaged over the past three years? Is he further aware that I.C.I. has announced an expenditure of £30 million on capital-intensive projects in development districts which would have gone through anyway? This means more money will be paid to I.C.I. and Shell in free depreciation than has been paid in grants to the whole of England in the past three years.

Mr. Heath

The conclusion of the hon. Member seems to be that the inducements of the 1960 Act and the free depreciation of the Chancellor's Budget should not have been available for capital-intensive projects. If that is his conclusion I do not think his constituents or Tees-side will be pleased.

Mr. Proudfoot

Does my right hon. Friend appreciate that people in my constituency welcome this project and that I should like, through my right hon. Friend, to thank the hon. Member for Middlesbrough, West (Dr. Bray) for raising this question as it affects entirely my constituency?

Dr. Bray

Is the Minister aware that this free depreciation provision is regarded as a grossly inefficient incentive by the industries themselves? Is he aware that they would very much rather have the money spent on training and the renewal of social capital on which their own prosperity depends?

Mr. Heath

I have not had any firm complain to me about arrangements for free depreciation. What I have found is that it is not yet fully understood by firms, and unfortunately it has not yet proved to be the inducement which it ought to be. I hope that with the additional publicity we shall give by means of a pamphlet which is about to come out, it will become more widely known and will lead more firms to development areas.