Those firms in the textile and rubber reclamation industries which carry out manufacturing processes resulting in an end product significantly different from the original waste materials can qualify for investment grants on their new machinery or plant. Firms carrying out less substantial processes, such as sorting rubber or textile waste, do not qualify.
Since both investment grants and S.E.T. are governed by much the same principles, will the hon. Gentleman accept that the industry does not agree with his assertion that large parts of the textile waste reclamation industry do not produce goods to a specification for the purposes of their customers and that the grounds on which he is refusing such firms investment grants and advising that they are not entitled to refunds of S.E.T. are bogus?
There are several questions, such as whether there is a manufacturing process, whether there is a substantial change and whether goods are produced to a specification. We attempt to maintain a clear line between those processes which benefit from grants and those which do not. I think that we are maintaining a clear line here.
Is it not relevant that the reclaimed products are the result of a manufacturing process? Should not they, therefore, qualify for investment grant? In view of the enormous import saving produced, will not the hon. Gentleman reconsider his decision?
I have said that where there is a manufacturing process resulting in end products significantly different from the original waste materials, we make an investment grant. Where it is merely a matter of sorting, we do not.
Since this is an import saving industry, does not my hon. Friend think that such firms are treated unfairly as regards both investment grants and S.E.T. in comparison with the scrap metal and waste paper industries?
The principles involved are similar to those which operate in waste paper and scrap metal. We have never been able to take account of whether a process is import saving. However, one of the beneficial characteristics of the investment grant scheme is that it concentrates on manufacturing industry which produces a large proportion of our visible exports.
Is my hon. Friend aware that the woollen rag trade is centred in my constituency? I am sure that he will have read the report of the Wool Textile Working Party, which was commissioned by Sir Stafford Cripps, and which reported to the present Prime Minister when he was at the Board of Trade. Is my hon. Friend aware that in that report the woollen rag trade was treated as an integral part of the wool textile industry? That being the case, why is not the woollen rag trade on the same basis as the wool textile industry for the purpose of investment grants?
My hon. Friend is requiring me to have a long memory in several respects. I will look at that report. Nevertheless, in respect of investment grants, the division of principle was clearly laid down in the Act. Where there is a manufacturing process, there is grant; where there is merely sorting, there is not. We have to stick to that distinction.