FINANCIAL ASSISTANCE UNDER INDUSTRY ACT 1972 FOR BODIES CORPORATE WHICH MAKE PLANNING AGREEMENTS. (Hansard, 22 October 1975)

§ Mr. Kaufman

I beg to move, That the House doth disagree with the Lords in the said amendment.

645 The clause repeats the words of the 1972 Act, which is the authority for the payment of all regional development grants. Clause 1(1) of that Act reads as follows: The Secretary of State may make a grant to a person towards approved capital expenditure. That is a quotation from the Tory Act of Parliament for which Conservative Members voted and whose words they now find unsatisfactory because they have changed sides meanwhile.

Anyone who has experience of the operation of the regional development grant system knows that, despite the word "may", payment of grant is virtually automatic to all who satisfy the rules. The word "may", however, permits the application of administrative rules which would have to be spelled out in the Act itself if it were cast in mandatory form.

It is desirable that the Secretary of State should be able to give additional certainty to planning agreement companies in respect of regional development grants for appropriate projects in return for the greater assurance which the Government and their workers will have about their future plans as a result of the planning agreement. But it would be inapposite for the Secretary of State to have to offer this for all projects. It would make it impossible, for example, for the Secretary of State to make the offer dependent on certain conditions. All projects would receive the benefits, irrespective of whether the company offered an adequate bargain.

But this amendment would be more damaging than that. It would have the ridiculous effect that if a company made a planning agreement one day and the next day denounced it completely, the Secretary of State would still be obliged to give the company the benefit of the "guarantee" of the regional development grant for projects which had been identified in the agreement.

I am surprised that my right hon. Friend the Chief Secretary to the Treasury can remain conscious in face of such a prospect.