HC Deb 07 February 1968 vol 758 cc373-5
17. Mr. Costain

asked the President of the Board of Trade how many persons are employed by his Department in work on the investment grants scheme; what total remuneration is payable to them; what is the cost of accommodation required to administer the grants scheme; and whether he will estimate the cost to industry and the accounting profession of the presentation of grant claims and of dealing with correspondence with the Board of Trade.

Mr. Darling

Eleven hundred staff are employed at a cost of about £1¼ million, which is about 1½ per cent. of the payments to industry. The investment grants offices cost just under £¼ million. The cost to industry and the accounting profession of handling claims is impossible to estimate, but I would not expect it to add greatly to the cost of other essential work on financial control, auditing and taxation.

Mr. Costain

Does the Minister really mean what he has just said? Does he not realise that industry is finding the scheme a very heavy burden, and that the accountancy profession objects to it? Will he make representations to his right hon. Friend the Chancellor of the Ex- chequer to put this nonsense right in the next Budget?

Mr. Darling

We have no evidence at all that this, in itself, is placing a burden on the accountancy profession. In fact, had we not made any changes at al from the investment allowance to the investment grant system there would still have been a burden on the accountancy profession because of the growth of industry, trade, and so on. We have no evidence at all that the accountancy profession has made the kind of observation that the hon. Member alleges. In fact, we have constant consultation with the accountancy professional bodies, and they are satisfied that the investment grant scheme is working satisfactorily.

Mr. Michael Shaw

Will the right hon. Gentleman recollect certain criticisms of the scheme that I, for one, in the profession put to him during the passage of the Bill? Will he not now, as a result of his experience, accept that it was a serious mistake ever to get rid of investment allowances?

Mr. Darling

I do not want to go over the arguments about investment allowances, except to say that I thoroughly disagree with the hon. Gentleman. I also recollect certain things that I said in Committee. For instance, I estimated that we would employ about 1,100 people —we are doing so. I estimated that the cost would be £2 million—it is £1½ million. And I can tell him that, out of experience, we are now proposing to reduce the staff and save another £40,000 because the system is working so satisfactorily.

Mr. Patrick Jenkin

Will the right hon. Gentleman recollect what I said in Standing Committee—[Interruption]—when I warned the Government that a scheme which would involve the handing out of large sums of money would require the most meticulous administration to prevent fraud? Does he realise that this means getting in touch with accountants who have signed certificates in order to verify that they have, in fact, signed them?

Mr. Darling

The latter part of the hon. Gentleman's statement is incorrect. We intended from the beginning—and the hon. Member for Scarborough and Whitby (Mr. Michael Shaw), who is in the profession, will agree here—to check the figures with the accountants. As for fraud, I am quite sure that the system we are working, which is very efficient, will prevent any fraud at all.