Standard Capital Grants Scheme (Hansard, 12 January 1988)

§ Mr. Viggers

This scheme, which is unique to Northern Ireland, provides automatic grant assistance at a current rate of 12.5 per cent. on capital expenditure in qualifying manufacturing sectors of industry. It is not related to job creation criteria or conditions.

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Recent reviews of the scheme, including a major survey of firms claiming standard capital grant, have shown that it contains substantial deadweight—in most cases the investment would have proceeded without Government financial assistance—and has the effect of distorting competition within Northern Ireland. These and other shortcomings have led me to conclude that the scheme no longer constitutes an effective means of stimulating economic activity in Northern Ireland, nor does it provide good value for public money.

For these reasons the Government have decided to abolish the standard capital grant scheme and to concentrate the industrial development effort on the wide range of selective assistance available from the Industrial Development Board and the local enterprise development unit. I am convinced that available resources should be targeted much more selectively if they are to have the maximum beneficial effect in strengthening the economy. this underlines the Government's policy to encourage enterprising firms in developing quality products, seeking out new markets and improving their competitiveness.

I shall shortly be publishing a proposal for an Order in Council to terminate the scheme in respect of expenditure incurred after 31 March 1988. Applications for such assistance will, however, continue to be accepted by the Department of Economic Development until 31 March 1990.