HC Deb 31 January 1983 vol 36 cc45-6W
Mr. Ernie Ross

asked the Secretary of State for Scotland what is the total of offers of assistance (a) under section 7 of the Industry Act 1972, and (b) under other schemes of selective assistance to industry which he is empowered to make; at what stage further authorisation is required; and up to what limit this may be.

Mr. Alexander Fletcher

There is no statutory limit to the total amount of assistance which my right hon. Friend is empowered to offer under section 7 of the Industrial Development Act 1982 (formerly the Industry Act 1972). He is not however directly responsible for any other schemes of selective assistance to industry. Offers made under section 8 of the Industrial Development Act 1982 are the responsibility of my right hon. Friend the Secretary of State for Industry.

The availability of resources is not a barrier to the provision of section 7 assistance and my right hon. Friend has frequently expressed his willingness to consider such assistance for any eligible investment project.

Mr. Ernie Ross

asked the Secretary of State for Scotland what provision for all types of selective assistance to industry available through his Department has been made for the current financial year; and what proportion has so far been exhausted, distinguishing in each case between assistance under different legislative provisions.

Mr. Alexander Fletcher

My right hon. Friend is directly responsible only for the provision of selective financial assistance to industry under section 7 of the Industrial Development Act 1982 (formerly the Industry Act 1972). The provision for 1982–83 is £26 million, of which some £15 million has been disbursed to date.

Mr. Ernie Ross

asked the Secretary of State for Scotland to what extent the authorisation for expenditure or commitment of expenditure under schemes of selective assistance to industry is made retrospectively, as, for example, by seeking the approval of a supplementary estimate.

Mr. Alexander Fletcher

No authorisation for expenditure or commitment of expenditure under schemes of selective assistance to industry is made retrospectively. Provision is made through the normal public expenditure survey and estimates procedures. Actual and forecast expenditure is closely monitored and if it became apparent, in the course of a particular year, that the provision might prove inadequate, a supplementary estimate would be sought before the existing provision was exhausted.

Mr. Ernie Ross

asked the Secretary of State for Scotland whether his Department ensures that offers of Government financial assistance made to companies and not taken up are not used by those companies to attract further financial support elsewhere on the false basis that the money offered by Government will be used to increase the financial and product strength of the company; and whether he is satisfied that sufficient powers are available to him in this respect.

Mr. Alexander Fletcher

I am satisfied that the system of providing regional selective assistance under section 7 of the Industrial Development Act 1982 (formerly the Industry Act 1972) is not abused in the way the hon. Member describes.

An offer of assistance is not made to a company before evidence is provided that adequate funds can be secured to bring the project concerned to fruition. The potential availability of Government assistance is only one factor among many which other financial institutions take into account before deciding that the financial and product strength of a company merits support. I have no evidence to suggest either that companies deliberately apply for regional selective assistance with no intention of taking it up in order to attract additional outside support or that, were they to attempt to do so, they would be successful.

Mr. Ernie Ross

asked the Secretary of State for Scotland, once the take-up of an offer of selective assistance has been notified to his Department, how long it is, in the absence of a request to transfer the funds, or the first instalment, before his Department reviews the eligibility of the firm concerned to receive the agreed assistance.

Mr. Alexander Fletcher

The period between acceptance of an offer of assistance and the application for the first payment of grant varies considerably according to the nature of the project and the payment conditions attached to the grant. Each case is kept under review and if the company does not submit an application for payment at the time it might reasonably be expected to do so, officials seek to establish the reason for the delay. Provided these enquiries do not reveal any material change in the project, the delay will not normally prejudice the eventual payment of grant.

All offers of selective assistance include a final date beyond which there is no obligation to make any payments.