HC Deb 07 December 1976 vol 922 cc150-1W
Mr. Ford

asked the Secretary of State for Industry what proposals he has for improved assistance to the clothing industry.

Mr. Alan Williams

I am pleased to announce an extension of and improvements to the clothing industry scheme of assistance under Part II of the Industry Act 1972.

The original scheme, introduced in October 1975, has not proved entirely successful in generating new investment in advanced machinery, although the provisions to encourage consultancy studies have been quite well received. The clothing industry has been passing through a most difficult period, and the expected upturn in trading conditions did not in fact materialise over the past year. As a result it is not likely that grants of more than £4 million will have been authorised by the current closing date. The Economic Development Committee for Clothing therefore proposed to my Department that the scheme should be extended so as to allow the industry increased opportunity to take up assistance, and to stimulate the investment vitally necessary for its long term survival. The EDC also recommended changes in the scheme likely to prove attractive to firms seeking to modernise their plants and improve their productivity. The improvements I am now announcing largely follow the EDC's proposals.

Whilst the basic framework of the scheme remains unaltered there are substantial improvements in incentives and in the conditions of eligibility for assistance.

  1. (i) the basic rate of grant for approved investment projects will be increased to 25 per cent. from 20 per cent.
  2. (ii) The minimum size for investment projects is to be reduced to £10,000 from £30,000. The new limit is designed to bring many more projects within the scope of the scheme, and is specially tailored to the needs of the clothing industry.
  3. (iii) The limit of £5,000 on consultancy assistance is to be removed.
  4. (iv) The consultancy and limit of 300 employees will now be applied to the establishment. Companies or groups with up to 1,000 employees will now be eligible for consultancy aid. The previous limit of 300 employees was applied to companies or groups.
  5. (v) The closing date for applications is to be extended by one year to 31st December 1977. Projects will still have to be completed by 31st December 1978.
  6. (vi) The improved terms and conditions will apply to all projects approved on and after 1st December 1976.

We have also decided that the total sum of money available under the scheme will be £15 million. Consequently about £10 million is now available to the industry for projects under the improved terms of assistance.

I am confident that the clothing industry will seize this opportunity to invest in new advanced machinery, and that the revised scheme will greatly help the industry in its efforts to meet competition by increasing productivity and by restructuring and rationalising its organisation and production methods.