§ Mr. Kenneth Clarkeasked the Secretary of State for Industry why the closing date for applications for assistance under the drop forging scheme has been put back; why the upper cost limit for projects has been abolished; why the minimum project cost threshold has been reduced; and what changes in the industry and its markets have taken place since November 1977 to require these changes in the scheme.
§ Mr. Les HuckfieldShortly after the drop forging industry scheme was introduced, the industry's confidence in an increase in demand, which it had previously expected, weakened. However, during the latter part of 1978, companies began to show a greater interest in the scheme and, at the end of the year, 13 applications had been approved, with grants totalling £0.3 million and 67 applications for a maximum total of grants of £3.5 million were under consideration.
307WThere were indications that the limits of project costs were preventing the scheme from providing an incentive for some desirable investments. Therefore, the maximum cost limit was removed although, by retaining the requirement for a company's eligibility of not more than 5,000 tons annual output, the scheme would continue to be directed towards the jobbing sector.
The minimum cost limit has been reduced to £25,000 for projects involving, only plant, machinery and equipment so that the replacement of key parts might be included.
To allow time for these changes to have their effect and for companies to complete applications, the closing date for applications has been extended by six months to 30 June 1979. Each application will continue to be scrutinised carefully.