INDUSTRIAL DEVELOPMENT (FINANCIAL ASSISTANCE)
Memorandum by the Department for Trade
219. The Industrial Development (Financial Assistance)
Bill was brought from the House of Commons on 8 April 2003.
220. The Bill provides for a continued, rather
than a new, power to make delegated legislation by statutory instrument.
The Bill contains two clauses and its purpose is to amend the
financial ceiling in section 8(5) of the Industrial Development
Act 1982. Section 8 contains the principal power of Ministers
to give financial assistance to industry outside areas which have
been granted Assisted Area status. The Bill enables financial
assistance to continue to be given by Government Departments and
the devolved administrations.
221. Section 8(5) of the 1982 Act contains a
limit of £1,900 million on the amount of assistance which
can be granted, and this may be increased by order made with the
consent of the Treasury on not more than four occasions by a sum
not exceeding £200 million. The Bill retains the structure
of four additional tranches in the existing legislation but replaces
the numerical ceilings with new, higher ones. The Bill replaces
subsection 5 of section 8 of the 1982 Act by substituting higher
figures of £3,700 million as the initial ceiling and £600
million as the maximum amount by which the ceiling can be raised
by each order.
222. The other provisions of section 8 remain
unaltered, including subsection 10 which provides that an order
under subsection 5 shall be contained in a statutory instrument,
and shall not be made unless a draft of the order has been approved
by a resolution of the Commons. The Bill does not, therefore,
introduce new delegated powers but provides for continuing Parliamentary
control over section 8 expenditure through the existing secondary
legislation mechanism, which allows the initial ceiling to be
raised by affirmative order of the Commons on up to four occasions.
Under existing legislation, the financial ceiling has been raised
three times and, on each occasion, the orders were considered
in standing committee, not on the floor of the Commons. A fourth
and final order under existing legislation is planned for January/February
223. Based on current levels of spend and assuming
that rate of spend remains constant, the new ceiling of £3,700
million is expected to last for about 5 years before the first
order is needed, with increases by affirmative order required
every 3-4 years after that. These new limits are intended to even
out the Parliamentary process and to provide for more regular
Parliamentary consideration of the section 8 power than previously.