HL Deb 12 April 1967 vol 281 cc1284-6

2.47 p.m.

THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON) moved, That the Industrial Development (Eligible Assets) Order 1967 be approved. The noble Lord said: My Lords, this, I admit, is a somewhat technical Order designed to enable the Board of Trade to pay investment grants on assets leased to Northern Ireland. The Industrial Development Act 1966 provides in general for investment grants to be made only for assets to be used in businesses in Great Britain. Northern Ireland has long had its own system of investment incentives, and in fact the Northern Ireland Parliament passed last December the Industrial Investment (General Assistance) Act (Northern Ireland) 1966 the provisions of which are very similar to those in our Act. These enable the Ministry of Commerce in Northern Ireland to make grants to persons carrying on business in Northern Ireland, if the machinery or plant or computers are provided for use in Northern Ireland.

Under the Industrial Development Act in this country the Board of Trade may make grants to persons carrying on business in Great Britain for machinery or plant for use in Great Britain in those processes which qualify, and for computers for use in Great Britain, and for hovercraft. Where the user buys any of these assets there is no problem about making a grant. But there is a growing practice of leasing machinery. This was provided for under Section 4 of the Act. Under this section the Board of Trade may make a grant to the lessor of an asset if it is leased to a person who would have qualified for a grant had he bought the piece of plant or machinery. If the lessee would have qualified for a higher rate of grant because he uses the asset in a development area, then that higher rate is paid to the lessor.

My Lords, if this Order were not made, any assets leased to Northern Ireland would fall between the two systems, that of the Northern Ireland Government and our own. The Board of Trade could not pay the lessor because the lessee is outside Great Britain; and the Ministry of Commerce in Belfast could not pay either, because the lessor is outside Northern Ireland; and grants towards capital expenditure cannot be paid under either Act to lessees, since they are renting their equipment. It was to avoid this anomaly that in another place my right honourable friend the President of the Board of Trade moved an Amendment to the Industrial Development Bill, which is now Section 7(2) of the Act. It gives the Board of Trade power to make an Order when they are satisfied that reciprocal action has been taken in Northern Ireland. At that time the Northern Ireland legislation had not yet been passed. Now that it has been passed, and the Northern Ireland Government have made an Order under which the Ministry of Commerce can make grants to lessors in Northern Ireland who hire out assets to Great Britain, we can fulfil our part of the bargain, and make this Order.

I would explain that there is a special provision in Section 4 of our Act for construction plant hire, since this plant is normally hired out for short periods. As a result of this Order, a construction plant hire firm will be able to hire out machinery or plant, on which it is getting grant, anywhere in the United Kingdom.

Article 1 of the Order enables the Board of Trade to make grants under Section 4 of the Act even though the asset is going to be used in a business in Northern Ireland and not in Great Britain, and Article 2 provides that the rate of grant shall be what it would be if Northern Ireland were a development area in Great Britain. Thus, if expenditure were incurred this year or next, the rate would be 45 per cent. for machinery or plant, or for computers which are integrated with machinery or for scientific research, whereas on other computers, hovercraft and on construction plant on short-term hire, the rate would be 25 per cent.

Section 7 of the Industrial Development Act empowers the Board of Trade to make Orders to vary the rate of grant or to make grants for additional assets not hitherto eligible, subject to Affirmative Resolution procedure. Since assets leased to Northern Ireland were not previously eligible for grant, this Order technically provides for the addition of eligible assets, but the number of applications which will benefit from it is likely to be small. The Order will apply to expenditure already incurred since the beginning of the investment grants scheme in both countries, since no grants were paid before this Order came into operation. I ask your Lordships to approve this Order.

Moved, That the Industrial Development (Eligible Assets) Order 1967 be approved.—(Lord Walston).

On Question, Motion agreed to.