§ Mr. Maddenasked the Secretary of State for Industry whether he is now able to make a statement about further support for the wool textile industry.
Mr. Alan WilliamsI am pleased to announce a further scheme of assistance 33W for the wool textile industry under Part II of the Industry Act 1972.
The original wool textile scheme, introduced in July 1973, was successful in generating substantial investment in plant and machinery, and buildings, but the provisions designed to encourage structural change secured only a limited response. The Economic Development Committee for Wool Textiles therefore proposed to my Department a second limited scheme aimed mainly at further encouraging rationalisation and restructuring in order to secure the fullest benefit to the industry and the economy from the investment stimulated by the first scheme. The scheme I am now announcing largely reflects the EDC's proposals.
It provides, first, for assistance to restructuring and rationalisation projects in the form of loans at preferential rates of interest, or interest relief grant in lieu, for up to 50 per cent. of approved costs, less any regional development grant or re-equipment and building grants for which the applicant may be eligible. Where a project involves expenditure on re-equipment or new buildings, extensions or alterations to buildings grants of 20 per cent. for new plant and machinery, new works and alterations to buildings and of 30 per cent. for new buildings and/or new extensions will be available for approved expenditure, subject to specified minimum project values.
The cost of retraining within the firm arising from a project may be included in the qualifying expenditure for that project if the training is not already receiving assistance from public funds. As in the earlier scheme, the demolition of existing buildings will be a condition of assistance. In addition the scrapping of equivalent machinery will be a condition where a separate re-equipment grant is paid.
Secondly, it offers 50 per cent. grants towards the cost of obtaining external professional advice in order to improve company performance by a firm with less than £500,000 total assets.
The scheme will have effect from today's date, and we shall require applications to be submitted by 30th September 1977 and projects to be completed by 31st March 1979.
Up to £5 million is to be provided for this further scheme from within the sums 34W set aside for industry schemes. The assistance will be selective, and will be dependent on my Department being satisfied with the viability of the company and the commercial soundness and desirability of the project.
Firms in assisted areas may apply for regional selective assistance for projects not qualifying under the new scheme or as an alternative. Such applications will have to meet the criteria applicable to selective financial assistance.
We are confident that this further assistance will accelerate the vital process of rationalisation and restructuring of the industry. A copy of the scheme has been placed in the Library.