Industrial Development (Hansard, 10 November 1969)

§ 33. Mr. J. H. Osborn
asked the Minister of Technology what information, and in what form, he proposes to circulate to industry outlining the advantages of industrial development in both intermediate areas, particularly in Yorkshire and Humberside as well as in the development areas in the north of England; and if he will summarise what is available in the OFFICIAL REPORT.

§ Mr. Varley
The Government have already announced the advantages and are giving them publicity but, with permission, I will circulate a summary in the OFFICIAL REPORT.

§ Mr. Osborn
In welcoming the fact that there is to be publicity, may I ask the hon. Gentleman that care should be taken to publish this widely to industry so as to make it possible readily to assess the advantages and disadvantages of going into the different types of industrial area, including intermediate areas?

§ Mr. Varley
I can agree with that supplementary question. We will give as much publicity as possible.

§ Mr. Edwin Wainwright
Will my hon. Friend take into account that in South Yorkshire, because of the rundown of manpower in the mining industry, there are not the jobs which should be there? Will he use whatever powers he has with other Ministers to ensure that new jobs and industries are introduced into South Yorkshire?

§ Mr. Varley
The Local Employment Bill which is at present before the House is designed to meet exactly the problem which my hon. Friend raises.
Following is the summary:
Financial Assistance in the Development and Intermediate Areas

The following forms of special financial assistance are available to industry in the development areas:—

(i) Investment grants at a rate of 40 per cent. (20 per cent. elsewhere) of new plant and machinery provided for use in a qualifying process;

(ii) Regional employment premium (30s. per week for each full-time male worker);

(iii) Training assistance from the Department of Employment and Productivity in the form of grants towards on-the-job training costs and by the provision of training courses;
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(iv) Assistance from the Department of Employment and Productivity towards the transfer of key workers;

(v) The following incentives are available under the Local Employment Acts:

(a) Ministry of Technology factories for rent or sale (in the case of certain projects new to the development areas the first two years may be rent free);

(b) building grants at a rate of 25 per cent. of eligible costs to firms building and occupying a factory or an extension, or buying a building not previously occupied. In the case of certain projects new to the development areas, the rate of grant may be 35 per cent.;

(c) loans at moderate rates of interest;

(d) removal grants towards certain costs incurred in transferring an undertaking to a development area.

On 14th November, 1967, the President of the Board of Trade announced that additional assistance would be available in areas likely to be particularly affected by colliery closures (the special development areas). These extra incentives, which are available only to new projects setting up for the first time in a special development area include:

(e) Rent free periods of up to five years in Ministry of Technology factories;

(f) Operational grants at a rate of 10 per cent. per annum of cumulative expenditure on buildings and plant and machinery (net of investment and building grants) in each of the first three years of operation of a project in the special development areas;

(g) Loans towards the balance of building costs (not available elsewhere in the development areas).
In exercising its powers under the Local Employment Acts the Ministry is required to have regard to the relationship between the expenditure involved and the employment likely to be provided, and to any consequential effects on employment elsewhere in the development areas.
The amounts, terms and conditions of loans under the Local Employment Acts, and of removal grants and operational grants, are recommended by the Ministry's statutory Advisory Committee, an independent Committee of business and professional men. The Committee also examines applications for building grants, involving building costs of over £10,000. Before making a favourable recommendation, the Committee has to he satisfied that there are good prospects that the undertaking seeking assistance will be successful. Applicants for loan assistance are expected themselves to provide a reasonable proportion of the finance for a project.
Assistance under the Local Employment Acts is directed primarily towards manufacturing industry. Since 31st August, 1968, assistance has not been available for projects in the service industries (with the exception of projects which bring into the development areas at least 50 additional jobs)
31 Under the provisions of the Local Employment Bill, which is at present before the House. the Ministry of Technology and the Department of Employment and Productivity will be able to make available in the intermediate areas certain assistance already available to industry in the development areas. Subject to the passage of the Bill through Parliament, it is intended that the following incentives will be available in the intermediate areas on the same basis as in the development areas:—

(i) Training assistance from the D.E.P. ((iii) above);

(ii) Assistance from the D.E.P. for key workers ((iv) above);

(iii) Ministry of Technology factories for rent or sale ((v)(a) above);

(iv) Building grants at a rate of 25 per cent. (in some cases 35 per cent.) of eligible building costs ((v)(b) above).