§ Mr. Robert L. Howarthasked the Minister of Technology if he will take further action to assist the machine tool industry, in view of the fall in orders for machine tools in recent months.
§ Mr. Benn:The large rise in export orders for machine tools over the past year has been more than offset by a fall in home demand, and new orders overall have not been keeping pace with deliveries. Devaluation will give a further impetus to exports, and orders generally for machine tools should increase as manufacturing investment grows to meet the new expectations of demand. In the 236W period immediately ahead, however, it is important to achieve a higher level of activity in the machine tool industry so as to avoid lengthening of delivery dates when demand rises.
The Government therefore proposes to assist metal-working machine tool firms to build for stock by offering to share the risk of loss on the sale of machine tools built for stock under stockbuilding programmes agreed between individual firms and my Department. A scheme to give effect to this proposal has been discussed with the machine tool industry and is being introduced on an experimental basis today. Under it the Government is prepared to assume a maximum contingent liability of £2½ million, which will enable £5 million worth of machines to be built for stock. The extent of the contingent liability will be kept under review in the light of the response from the industry,
Details of the scheme are being published by my Department. Broadly, it provides that manufacturers will be able to put in hand up to 31st December, 1968, the production of agreed types and quantities up to an approved limit. My Department will charge a premium of 1 per cent. of the estimated cost of the stock and will accept 50 per cent. of any net loss arising from the sale of the total stock in hand or in course of production at 31st December, 1968. The scheme is essentially one of insurance against possible loss.
Applications will be considered up to 31st March, 1968, and manufacturers interested in the scheme should make applications as soon as possible. A Supplementary Estimate will be presented in due course to cover the contingent liability arising.