Clause 1 - Increase in limit on selective financial assistance
Industrial Development (Financial Assistance) Bill
8:55 am
Mr Henry Bellingham (North West Norfolk, Conservative)
It is a pleasure to serve under your chairmanship, Mr. Illsley.
I offer the apologies of my hon. Friend the Member for Sevenoaks (Mr. Fallon), who cannot be here today. He is a member of the Select Committee on the Treasury and is currently in eastern Europe. He spoke at length on Second Reading, and is quite an expert on the subject of the Bill. I added my name to his amendments and new clauses because it is important that they are discussed in Committee and that the Minister gives the Committee the benefit of his views.
The first two amendments are probing amendments. My hon. Friend the Member for Sevenoaks and I are keen to establish whether it is vital that the sums in question are raised by the amounts set out in the Bill and explained by the Minister on Second Reading. He talked about Her Majesty's Government and the Department of Trade and Industry needing a well to dip into to support the different schemes. He pointed out that the new limits were chosen by a 20-year roll forward of the existing limit of £2.7 billion in real terms using a 2.5 per cent. GDP deflator. He said that the limits are based on current spending, and that the new ceiling will last for six years, assuming that the rate remains constant. On that basis, the Minister and his officials plumped for the new base figure of £3.7 billion.
That is a very large increase, but the very large increases in the four tranches concern us even more: they are to increase from £200 million to £600 million. When we discussed that on Second Reading, my hon. Friend the Member for Sevenoaks, in an extremely well prepared and comprehensive speech, made a strong argument about why those figures were over-optimistic and excessive in any circumstances.
As I said, the amendments are probing. They can be discussed again on Report and in another place, but I should like the Minister to comment on my point about the 20-year roll forward and the 2.5 per cent. GDP deflator.