Source: https://api.parliament.uk/historic-hansard/lords/1967/mar/21/investment-grants-1
Timestamp: 2019-04-21 22:27:15+00:00

Document:
My Lords, it might be convenient if I were now to repeat a Statement which has just been made by my right honourable friend the President of the Board of Trade in another place.
§ Their Lordships divided: Contents, 89; Not-Contents, 42.
Ailwyn, L. Effingham, E. Oakshott, L.
Airedale, L. Elton, L. Ogmore, L.
Albemarle, E. Emmet of Amberley, Bs. Rathcavan, L.
Allerton, L. Falkland, V. Rea, L.
Amherst, E. Ferrers, E. Reay, L.
Amherst of Hackney, L. Fortescue, E. Redmayne, L.
Ampthill, L. Goschen, V. [Teller.] Sackville, L.
Arran, E. Gridley, L. St. Helens, L.
Asquith of Yarnbury, Bs. Grimston of Westbury, L. St. Oswald, L.
Auckland, L. Haddington, E. Salisbury, M.
Balfour of Inchrye, L. Henley, L. Sandford, L.
Barnby, L. Hereford, V. Saye and Sele, L.
Bessborough, E. Howard of Glossop, L. Semphill, Ly.
Braye, L. Hylton-Foster, Bs. Sinha, L.
Brooke of Cumnor, L. Ilford, L. Somers, L.
Brooke of Ystradfellte, Bs. Inglewood, L. Soulbury, V.
Buckton, L. Jellicoe, E. Spens, L.
Clinton, L. Kilmany, L. Strang, L.
Clwyd, L. Lambert, V. Strange, L.
Congleton, L. Lothian, M. Strathcarron, L.
Craigavon, V. Luke, L. Strathclyde, L.
Crathorne, L. MacAndrew, L. Thurlow, L.
Daventry, V. Mar, E. Vivian, L.
Deramore, L. Massereene and Ferrard, V. Wakefield of Kendal, L.
Derwent, L. Merrivale, L. Willingdon, M.
Devonport, V. Mersey, V. Windlesham, L.
Drumalbyn, L. Milverton, L. Wolverton, L.
Dudley, L. Mowbray & Stourton, L.
Addison, V. Hurcomb, L. Rusholme, L.
Beswick, L. Kirkwood, L. St. Davids, V.
Blyton, L. Latham, L. Segal, L.
Bowles, L. [Teller.] Leatherland, L. Shackleton, L.
Boyd-Orr, L. Longford, E. (L. Privy Seal.) Shepherd, L.
Brockway, L. Maelor, L. Sorensen, L.
Brown, L. Morris of Kenwood, L. Stocks, Bs.
Champion, L. Moyle, L. Stonham, L.
Douglas of Barloch, L. Phillips, Bs. Stow Hill, L.
Gardiner, L. (L. Chancellor.) Popplewell, L. Summerskill, Bs.
Hall, V. Raglan, L. Taylor of Mansfield, L.
Henderson, L. Rhodes, L. Walston, L.
Hilton of Upton, L. [Teller.] Ritchie-Calder, L. Wells-Pestell, L.
Hughes, L. Rowley, L. Williamson, L.
§ "What I announced on December 1 the Government's decision to make a temporary increase in the rate of investment grants payable by the Board of Trade under Part I of the Industrial Development Act 1966 I stated that I intended to speed up the payment of claims as soon as practicable. I have therefore reviewed whether the new organisation which we have built up could handle more claims. Claims on 681 investment made in 1966 have so far not come in at the rate we allowed for, and I am satisfied that the organisation can now start speeding up payments.
§ "I have therefore decided, after consultation with my right honourable friend the Chancellor of the Exchequer, that payments of valid claims for the first quarter of 1966 which have been cleared by the Grants Offices should begin in April instead of July. This will reduce the average interval between a firm's expenditure and payment of grant from 18 months to 15 months from the very beginning of the scheme.
§ "We have already invited firms to submit claims from April 1 onwards on their expenditure during the second quarter of 1966, and it will be our aim to begin making payments on this second batch of claims in July.
§ "Under the old system of investment allowances the delay between a firm's expenditure and the receipt of the allowance averaged about 18 months. We shall be improving on that this year, and I hope that this will encourage firms to take full advantage of the temporary increase in the rates of grants for investment this year and next, and go ahead with schemes for modernising and expanding their production capacity."
My Lords, I should like to thank the noble Lord for having repeated that Statement and to welcome it so far as it goes. I should also like to express the hope that it is only the first step in implementing the Government's promise to reduce the period which is to elapse between the incurring of the expenditure on the investment and the receiving of the grant. Is the noble Lord aware that in comparing the time between the incurring of the expenditure and the receiving of the grant under the new system with the time under the old system of investment allowances he is not really comparing like with like? Under the old system the time that elapsed depended on the part of the financial year in which the expenditure was incurred. Under the new system the delay is imposed purely arbitrarily. I hope, therefore—particularly since, when the Bill was going through Parliament, the main reason for this delay under the new system was said to be the need to avoid, as 682 it were, a double burden of payments on the Exchequer in the initial stages of the Bill—that as time goes by it will be possible to space these out more and more until the delay is very substantially reduced. Therefore, while welcoming the Statement, I hope that the noble Lord will be able to tell us that it is only the first step.
My Lords, I am grateful to the noble Lord, Lord Drumalbyn, for his welcome. Perhaps this is a debating point (although I do not mean it as such), but the noble Lord said that the delay was an arbitrary one. It was arrived at, however, for practical reasons. It has now been shown possible to speed up the actual payment. I will not enter into a rather detailed argument as to whether in fact firms will be paid more quickly than under the old system, or whether it will take longer, although I think the noble Lord would agree that on average they will receive their money more quickly than under the old system. But whether that is so or not, the important thing is that now they will receive their money more quickly than they expected. This achievement is due in part to administrative efficiency in the Board of Trade to which I pay due credit. I hope the result of this will be, as I said, an incentive to investment, which, coupled with the other incentives already provided, will prove effective.
My Lords, the point I am trying to make is that, while I recognise the administrative efficiency with which this is being done—and we hope that this will improve more and more—the main impediment, obviously, is the financial incapacity to meet the payments sooner; and I would ask the noble Lord whether the efficiency of the Board of Trade in this matter will not, so to speak, be "trumped" by the unwillingness of the Chancellor of the Exchequer to make the payments earlier?
My Lords, while welcoming this speeding up, may I ask what amount of money is involved after the first quarter of 1966?
My Lords, I am afraid I cannot give my noble friend an answer in respect of that figure because we still have to await the full vetting of the claims for payment. With regard to 683 the question put by the noble Lord, Lord Drumalbyn, I can only repeat what I said in the actual Statement, that my right honourable friend the President of the Board of Trade has throughout all these talks been in touch with my right honourable friend the Chancellor of the Exchequer; and at this stage, and so far as one can see in the future, there will be no question of the Treasury saying, "You have gone far enough and you must now stop". Obviously, one cannot anticipate what will be the strain on the resources before the actual claims come in.

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