HC Deb 19 January 1988 vol 125 cc674-5W
Mr. Hicks

To ask the Chancellor of the Duchy of Lancaster if he will list, for development and intermediate areas, the various schemes that will apply as from April for the promotion of regional policy and the encouragement of business enterprise, together with details of the level of financial assistance and any associated conditions.

Mr. Atkins

[holding answer 18 January 1988]: From April 1988 the following schemes of assistance will apply under the DTI regional initiative:

Regional Selective Assistance, available in development and intermediate areas:

  1. (a) Project grants based on the fixed capital costs of a project and the number of jobs expected to be created or safeguarded. The level of grant is negotiated, within certain EC and national limits, as the minimum necessary for the project to proceed.
  2. (b) Training grants at up to 80 per cent. of eligible costs.

To be eligible for assistance projects should be viable, create or safeguard employment, offer regional and national economic benefits, and need assistance to go ahead. Consultancy Assistance

  1. (a) A free 2-day Business Review.
  2. (b) Assistance for consultancy projects of 5–15 man days on:
    • marketing
    • design
    • quality
    • manufacturing strategy and systems
    • business planning
    • financial and information systems.

Assistance is normally at the rate of half of the agreed consultancy cost. But in the development and intermediate areas, and in urban programme areas, the assistance is at the rate of two thirds of the agreed consultancy cost to reflect the particular need to stimulate increased use of consultancy in those areas. This assistance is available to independent firms or groups with fewer than 500 employees.

Investment grants of 15 per cent. of the cost of fixed assets up to a maximum grant of £15,000, and innovation grants of 50 per cent. of the agreed project cost up to a maximum grant of £25,000, will be available to independent firms with fewer than 25 employees in development areas. These two schemes are being targeted at the development areas in recognition of the particular difficulties in those areas in raising finance for business development and stimulating innovation. Further details of these two new grants will be published nearer the date of their introduction on 1 April.

In certain parts of the assisted areas (and some non-assisted areas) the following are also available:

  1. (a) Exchange risk cover on foreign currency reconversion loans from the European Coal and Steel Community up to a maximum of £500,000 per project; and
  2. (b) Temporarily, business improvement service grants to help support the development of small firms.

Mr. Teddy Taylor

To ask the Chancellor of the Duchy of Lancaster if the reforms of regional policy which he announced on 12 January require the prior approval of the European Commission before they are implemented; and if he will make a statement.

Mr. Atkins

[holding answer 18 January 1988]: The regional policy changes which were announced on 12 January included plans to grant or alter state aid, of which the European Commission must be informed in accordance with article 93(3) of the EC treaty. The Commission has been informed of these plans and has decided to raise no objections to them.