§ 10.5 a.m.
§ The President of the Board of Trade (Mr. Douglas Jay)
With permission, Mr. Speaker, I should like to make a statement.
On 21st March I announced that payment of claims for investment grants for expenditure in the first quarter of 1966 would be brought forward three months, and begin on 1st April. Since that announcement the rate at which claims have come in has more than doubled, and already £26½ million of grants have been paid. Payment of the second quarter's claims will begin next month.
I am now able to announce a further measure of acceleration. On 1st July, the five Investment Grants Offices will be ready to receive claims for the whole of the second half of 1966—that is for a period of six months instead of three—and they will begin to pay these claims on 1st October. This will increase the cash flow to industry, and the fact that firms will be able to claim for two quarters on a single form will, I hope, save them some trouble. They will then be able to complete their applications for the whole of their 1966 investment. This may be particularly convenient for some smaller firms who may perhaps claim only once a year.
The average delay between investment and payment of grant will now be reduced to twelve months, as compared with 18 months under the old investment allowance system. I believe that these two instalments of speeding up should reinforce the incentive to increased investment provided by the temporary increase in the rates of grant to 25 per cent. generally, and 45 per cent. in development areas, for expenditure in 1967 and 1968 which I announced in December.
These accelerations will mean additional expenditure in the current year and 470 the necessary supplementary provision is being sought.
§ Sir K. Joseph
Although we have reservations about the Government's major changes in this system, will the right hon. Gentleman accept that we welcome these improvements? However, since the estimates of the increased expenditure to which he referred involve a judgment about what expenditure will be undertaken by industry this year, what is his expectation now of the difference in level between private manufacturing investment during 1967 and that of 1966?
§ Mr. Jay
Yes, Sir, in a sense it is. It is as a result of our having speeded up this organisation and of the staff having worked very hard and efficiently, that we were able to do this, but, of course, it is necessary to do it and the decision to do it is certainly intended to accelerate investment by industry.
Earl of Dalkeith
Is the right hon. Gentleman aware that some of us are very disappointed that he has not taken this opportunity to announce that Edinburgh and Leith will be included in the development areas, since the differences which he has announced today in the rate of repayment will accentuate the slow and steady strangulation of Edinburgh? Will he reconsider this in the light of the increasing number of representations which are being made to him?
Mr. Edward M. Taylor
Has the right hon. Gentleman closed his mind to removing the obvious anomalies in Scotland, for example, on the question of plant hire on building construction, and would he not consider including Leith, with its vital port development?