§ Mr. Roger Whiteasked the Secretary of State for Trade and Industry how he proposes to implement changes in assistance to industry under the Local Employment Acts announced in the White Paper on Investment Incentives.
§ Sir J. EdenThe White Paper on Investment Incentives (Cmnd. 4516) published yesterday announced a number of steps which the Government intend to take to provide further assistance under the Local Employment Acts, including their intention to seek powers to increase the rates of building grant in the development areas. It is proposed in these areas to raise the normal rate from 25 per cent. to 35 per cent. of the eligible expenditure and the higher rate (which is available in special circumstances) from 35 per cent. to 45 per cent. There will be no change in the rates in the intermediate areas.
The increased building grants and other additional assistance will not be available for proejcts which were started before yesterday. Subject to this, effect will be given, where appropriate, in offers made from now on to the intention to use more extensively the power to make loans and to the increase in the administrative limits on the assistance made available in relation to the jobs to be provided.
The increase in the rates of building grant will require legislation. No offers or payments of grant at the new rates can be made until this legislation is in force. It is, however, intended, subject to the terms of the legislation, that development area projects for which a building grant is offered from now on or has already been offered should be able to benefit from the new rates, provided that none of the work which is eligible for grant was started before yesterday or, in the case of the purchase of a new building, other than one constructed for occupation by the applicant or an associated company, the contract to purchase was not made before yesterday. For this purpose the start of work means the start of any work on the site, if the cost of that work would fall to be treated as part of the expenditure eligible for building grant.
There will be a change in the basis of calculation of operational grants in the 135W special development areas, following the withdrawal of investment grants, which enter into the preesnt calculation. Operational grants offered in future will be calculated on the basis of 20 per cent. of the eligible wage and salary costs of the project during the first three years of operation, subject to a limit in cases where the employment to be provided does not justify a grant of the full amount.