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Development Areas (Financial Aid)

Volume 774: debated on Monday 25 November 1968

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asked the Secretary of State for Economic Affairs if he will set out, for 1964–65 and for 1967–68, respectively, and where appropriate, the annual rate of cost of regional employment premium. investment allowances and grants in relation to development areas, local employment grants, and other payments directed toward helping the development areas, respectively.

The information required is given in the following table:

Regional Employment Premium (1)34·1
Free depreciation (2)3·04·0
Investment Grants (2)158·0 (3)
Assistance given under the Local Employment Acts28·245·0(4)
Premium element of Selective Employment Tax25·0 (5)
Assistance towards industrial training (6)1·74·5
Highlands and Islands Development Board (7)1·5


(1) The Regional Employment Premium was introduced with effect from 4th September, 1967. In a full financial year it is estimated to cost £99 million.

(2) Investment grants were introduced with effect from 17th January, 1966 in place of the previous system of investment allowances. The standard rate of grant in Development Areas is 40 per cent.; outside the Development Areas it is 20 per cent. The regional differential in favour of the Development Areas replaced the previous facility of free depreciation and plant and machinery grants under the Local Employment Acts, available in the Development Districts. As a short term stimulus to industrial investment, these rates of grant have each been increased by 5 per cent. for expenditure in 1967 and 1968.

(3) This figure of £158 million represents the total paid in respect of assets provided for use in the Development Areas. Out of this total, the value of the differential clement is estimated at £70 million.

(4) This figure is provisional.

(5) Up to March, 1968 the premium element of Selective Employment Tax was also available to manufacturers outside the Development Areas. but was withdrawn from them in April.

(6) These figures include Department of Employment and Productivity grants for industrial training in Development Areas and the cost of Government Training Centres, including Industrial Rehabilitation Centres (but excluding the cost of premises).

(7) The Highlands and Islands Development Board was established in November, 1965.