HC Deb 23 March 1979 vol 964 cc111-2W
Mr. Michael Latham

asked the Secretary of State for Employment what evidence is available to him of firms which have successfully applied for temporary employment subsidy and have then reduced their selling prices by a commensurate amount, thus indicating they were not in any financial difficulty prior to their application; whether such a practice is in accordance with Government policy; and what monitoring is undertaken by his Department to ensure that temporary employment subsidy is used to prevent redundancies rather than to improve competitive advantages.

Mr. Golding

There is no evidence to show that the temporary employment subsidy is used to reduce prices by an amount commensurate with the amount of subsidy. However, where the cause of redundancies is lack of work the temporary employment subsidy may enable a firm to accept orders which would otherwise be unprofitable and thereby maintain jobs at risk, and the available evidence suggests that this may be one of the uses of the subsidy in a minority of approved applications.

It is not Government policy to seek a commitment on prices from firms applying for the temporary employment subsidy. Applications are thoroughly examined by officials in my Department, in particular to ensure that there is evidence of a decision to declare a redundancy. Applications which are approved are reviewed at three-monthly intervals during payment; if my Department is not satisfied that all or any of the jobs currently being supported remain at risk of redundancy, support under the scheme will be reduced or terminated. In addition, payment of the subsidy beyond six months is authorised only where the firm submits a satisfactory restructuring plan which demonstrates how the job at risk will be placed on a viable basis without further subsidy at the end of the 12 months' maximum period of payment

Mr. Shersby

asked the Secretary of State for Employment what is the total amount of financial assistance provided to date under the small firms temporary employment subsidy (a) in Greater London as a whole, (b) in the London borough of Hillingdon and (c) in the remainder of the United Kingdom.

Mr. Golding

At 28 February 1978 the total amount of financial assistance provided under the small firms employment subsidy scheme (a) in Greater London, (b) in the London borough of Hillingdon and (c) in the remainder of Great Britain was £260,000, nil and £11.6 million respectively. The scheme applies only in Great Britain.