HC Deb 31 July 1972 vol 842 cc198-204
Mr. Bruce Milan (Glasgow, Craig-ton)

I beg to move Amendment No. 2, in page 3, line 12, after '(inclusive)', insert 'and Minimum List Heading 876 of Order XXV'.

Mr. Deputy Speaker (Miss Harvie Anderson)

I think it will be for the convenience of the House to take at the same time Amendment No. 3, in page 3, line 16, after 'research', insert and development'.

Mr. Millan

Our proposal would insert research and development services into the list of qualifying activities. We had a debate about this in Committee, when the Under-Secretary was able to give the assurance that most of the research and development establishments we had in mind in one way or another be covered by the Bill or otherwise be eligible and in receipt of Government assistance. It seemed doubtful, however, whether all these establishments would be so covered and the Under-Secretary promised to look at the matter again and, if necessary, see that the change was made on Report.

As the hon. Gentleman will recollect, it was my hon. Friend the Member for Barrow-in-Furness (Mr. Booth) who was particularly interested in the point, but he is not able to be with us tonight. [HON. MEMBERS: "Where is he?"] he happens to be ill, as was announced to the House on Friday. I hope the Minister will now be able to assure us that he has looked into the matter and that there are no gaps in provision relating to these establishments.

Mr. Anthony Grant

As the hon. Member for Glasgow, Craigton (Mr. Millan) said, in Committee we agreed to look again at research in the context of the coverage of the regional development grant system to see whether any serious gaps remained after allowing for the assistance available for research from other Government sources. I said that we would look carefully at the speeches that were made to see that that was the case.

As Clause 2(2) is drafted, scientific research relating to any qualifying activity is itself a qualifying activity. This research will, therefore, be eligible for grant whether or not it is conducted on the same premises as manufacturing, mining or construction.

A great deal of assistance is available for research relating to non-qualifying activities from the research councils—agricultural, medical, science and environmental—and other Government Departments direct. As far as we have been able to establish—and we have looked carefully at those—it is unlikely that any worth while scientific research conducted outside the public sector in these activities would go without Government support from one source or another, either under the Bill or from separate sources.

The suggestion was also made in Committee that the definition of scientific research should be broadened to include things such as statistics, economics and market research. We have considered this possibility and we have come to the conclusion that it would not be practical to define research in such a way as to qualify only research of this kind which is relevant to qualifying activities or the broad objectives of the Bill. My conclusion, therefore, at this stage is that we should see how Clause 2 operates in practice. The provision is broadly worded and should bring in a very wide range of research of the kind which the hon. Member and his colleagues would wish to be supported in the assisted areas.

I can, however, assure the House that any deserving research project in an assisted area which for some reason did not receive either regional development grants or other Government support would certainly be considered for selective assistance under Clause 7. If a serious gap appeared in the future we could, of course, extend by order the coverage of the regional development grant scheme. I think, therefore, that the position concerning research is fairly well bottled up.

Mr. Millan

The closing sentences of the Under-Secretary's reply are very helpful—namely, that there is a possibility of selective assistance or of later amendment by order of the definition of qualifying activities.

Mr. Dick Douglas (Clackmannan and East Stirlingshire)

I wonder whether my hon. Friend accepts that the Minister's closing remarks somewhat circumscribe the definition of scientific research and seem to me to limit the definition as it appears in the interpretation Clause, Clause 6.

11.45 p.m.

Mr. Millan

I cannot answer for what the Minister understands to be the interpretation of "scientific research" in Clause 6. In Committee we were assured that, rather against what I would have thought was the common sense interpretation, the definition was in very wide terms. We must accept that.

On the understanding that, as the Minister said, if it should transpire that either the definition or the description of qualifying activities is deficient the Government will look sympathetically at means of putting matters right, by means either of selective assistance or of an order to vary the activities, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Anthony Grant

I beg to move Amendment No. 4, in page 3, line 17, at end insert: '(cc) the repair or maintenance of any machinery or plant designed for use in any manufacturing or mining process, or in the processing of scrap and waste materials, or in any activity described in heading 500 of the Standard Industrial Classification (construction of buildings, roads and bridges), and (cd) repairs of the kinds described in heading 370 (shipbuilding and marine engineering), 383 (aerospace equipment manufacturing and repairing), 384 and 385 (locomotives, rolling stock and railway equipment) and 500 (buildings, roads and bridges) in the Standard Industrial Classification, whether or not also within paragraph (cc) above, together with the maintenance of anything the repair of which is included in this paragraph, and.

Mr. Deputy Speaker

With this Amendment we are to discuss Government Amendment No. 5 and Amendment No. 47, in page 3, line 40, leave out subsection (4).

Mr. Grant

In Committee we agreed to reconsider the treatment of repairing activities in the Bill. One of the problems to which attention was drawn in Committee was that the standard industrial classification does not deal with repairing in a consistent way. As a result, a number of relatively unimportant repairing activities are mentioned in the orders which qualify for grant, while the great majority of repairing activities are not specifically mentioned at all.

The effect is that, as the Bill is drafted, only a very narrow group of repairing activities would qualify for grant. We consider that most repairing activities should not qualify for grant. I had in mind the repair of consumer goods such as domestic appliances and shoes, the great majority of vehicles and general purpose plant of a kind which is used widely in non-qualifying activities. Repairing activities of this sort are usually conducted locally and, as in the cases of services generally, we would not be justified in paying grant on the plant and and buildings involved.

We are, however, proposing an exception in the case of the plant and machinery designed for use in manufacturing, mining and building activities proper. The repairing of this plant and machinery is so closely connected with the manufacturing process itself as to justify special treatment.

I must make it clear that we think it right to interpret this exception narrowly. Thus, only assets used in the reparing of plant and machinery of a kind which in practice is used almost entirely for the qualifying purposes will attract grant. Plant which is designed for a multiplic- ity of purposes and which accordingly used on a major scale in non-qualifying activities will not.

I have no doubt that the bulk of the plant used in manufacturing processes of the kind with which the hon. Member for Glasgow, Craigton (Mr. Millan) raised, will in practice benefit from this provision. The Amendment makes it clear that in this context the maintenance of plant and machinery will also qualify. In practice, it is difficult to distinguish between repairing and maintenance and I have no doubt that we should make no attempt to do so.

The second part of the first Amendment deals with the anomalies arising from the treatment of repairing in the standard industrial classification to which I have already referred. Thus, the repairing of ships and boats, marine engines, aircraft, locomotives, railway rolling stock and buildings will remain as qualifying activities, but the other repairing activities specifically mentioned in the standard industrial classification will not.

I see no justification for paying grant on assets used in the repairing of the excluded articles, which, in the main, are consumer goods—books, china, organs, and so on—but the repairing of ships and the other items I mentioned will remain eligible for grant, because it is in their case akin to manufacturing, and we believe that it should be a qualifying activity in its own right.

In most cases, these repairing industries have a high degree of mobility and may, therefore, be attracted to the assisted areas by the availability of grant.

I am grateful to the hon. Member for Craigton and to my hon. Friend the Member for Cheadle (Mr. Normanton) for drawing this matter to our attention in Committee.

Mr. Tom Normanton (Cheadle)

My hon. Friend the Minister has been realistic in trying to bridge the gap and clear our minds on the kinds of activity under the general heading of repairs which would be eligible, and I think that his definition may well be appropriate. However, I have one or two specific questions to put.

Will such activities as the following fall within the terms of the Amendments: the construction of and repair of containers for transhipment of goods, and the construction of, and repair of, road tankers for haulage purposes, of commercial vehicles and of coaches? Also, will the repair of heavy machinery and plant, including heavy electrical generating machinery, qualify?

Mr. Millan

I welcome the Government's reconsideration of the matter. I shall not go through the detail of the Amendments now, because, as the Minister appreciates, it is virtually impossible for the layman, or, indeed, for anyone, to know whether the Government have got things absolutely right. The decision to define qualifying activities in terms of the standard industrial classification has given rise to a number of difficulties, and this is one of them.

The Amendments are a substantial improvement, but it may well turn out in practice that the Government have not got it right yet. I assume, therefore, that the undertaking which the Minister gave on the previous Amendment will apply here also, so that if representations are made hereafter that a particular activity should he included, the Government will be willing to look at the possibility of amendment by means of an order. The hon. Gentleman could readily give such an undertaking. If he gives it, I shall advise my hon. Friends to accept the Amendments.

Mr. Grant

I can confirm that we have the power to alter by order, if necessary, and we will certainly look at the matter to see whether it is working out and, if it is not, we shall use that power.

I always hesitate to give what I regard as free legal advice off the cuff, but as I understand my hon. Friend the Member for Cheadle (Mr. Normanton), some of the items he mentioned related to non-qualifying purposes, mostly to transport activities, in which case they would not qualify. I refer to containers, coaches and so on. But the heavy machinery to which he referred, if it relates to a qualifying activity, does qualify. I cannot help him more than that at this stage.

Mr. Normanton

I was not referring to transport but to activities relating to the manufacture and repair of items of equipment used in transport activities. The activity itself is clearly not included.

Mr. Grant

Transport is not one of the qualifying purposes but if one of the items to which he refers relates to a qualifying activity it will be eligible for grant.

Amendment agreed to.

Amendment made: No. 5, in page 3, line 40, leave out subsection (4) and insert: '(4) Subject to paragraphs (cc) and (cd) of subsection (2) above, the repair or maintenance of any articles shall not be a qualifying activity, and in the case of the activities described in the said Classification, other than those mentioned in the said paragraph (cd), this subsection applies whether or not repair or maintenance is mentioned in the Classification.'—[Mr. Anthony Grant.]

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