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Industrial Development

Volume 982: debated on Tuesday 1 April 1980

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asked the Secretary of State for Northern Ireland if he will make a statement on the incentives available for investment in Northern Ireland and on the bodies involved in promoting industrial development there, in the light of the review of these matters which he announced in July 1979.

The Government's review of industrial development incentives and institutions in Northern Ireland, which were the subject of reports by separate consultants, is now completed. The Government are satisfied that the present incentives are broadly competitive with those available in other countries, and, consistent with the high priority which they attach to the drive for additional investment, have decided to retain this attractive range of incentives for a further period. The Government will take steps to extend the favourable tax treatment of capital grants in Northern Ireland for a further three years. In order to improve the cost-effectiveness of selective financial assistance, the Government will henceforth require applicants to satisfy the criteria of "additionality" and "efficiency" which are already applied in the rest of the United Kingdom.Major institutional changes would require legislation and could not be effective for some time. In view of the present economic climate the Government have decided that such changes would risk serious disruption in the current industrial promotion effort, which is producing a significant level of investment in difficult circumstances. The present structure, in which the Department of Commerce, the Northern Ireland Development Agency and the Local Enterprise Development Unit all contribute to the industrial development effort, will therefore be retained. But, new important arrangements will be introduced to improve co-ordination between the institutions at both the operational and policy levels; regular chief officer meetings will be instigated; and the guidelines of the Northern Ireland Development Agency and the annual directive to the Local Enterprise Development Unit will be reviewed to remove any ambiguities and unnecessary duplication. In addition, the Government will be proposing to the Northern Ireland Economic Council the creation of a consultative forum based on the council and including the heads of the three Industrial Development Institutions, to provide a regular and formal exchange of views on industrial development matters. The Government propose that this forum should be chaired by a Minister.Further initiatives are being taken to enhance the contribution of the individual institutions to the industrial development drive: the Government will propose an increase in the Northern Ireland Development Agency's financial limit from the £50 million set in 1976 to £75 million; the Local Enterprise Development Unit will be encouraged to explore all possible ways of stimulating the growth of small firms in Northern Ireland whether engaged in manufacturing or in services; the Department of Commerce will be deploying two additional promotion staff in the USA and one each in France and Germany; and the Department of Man- power Services will adopt the lead role for management training and education.Finally, the Government will take all steps necessary to ensure that all the institutions are operating in the most cost-effective manner possible.I have placed in the Library of the House today a memorandum which deals with these matters in detail.