i i i i i the September 1967 issue
following important information is reprinted from page er netted Vol.LVI No. 9 which can be obtained from LRD Publications Ltd., 78, Blackfriars Road, S.E.1 at 1/6d per copy. The Ministry of Technology is to give £200,000 worth of 'support' to Bievel ey Industries to help the company in developing new machinery for robot assembly. This is typical of the announcements which appear with increasing pede as the Ministry steps up its assistance to firms which are developing new an x advanced types of machinery and plant, The cost of these research and development contracts will rise this year to £6.5m, compared with only £lm, last year. This is dwarfed by the vast scale of the help given to the aircraft industry. But it is a new and very significant kind of state intervention because it extends what has hitherto been mainly confined to aircraft and electronics to the whole of the engineering industry. It isa recognition of the fact that, without continually increasing state aid, private enterprise cannot achieve the rate of technical innovation that is needed in many sectors of engineering to be able to compete effectively on world markets, The table shows that private industry and agriculture are now benefiting from government financial assistance in the shape of grants, loans, and research contracts which, for the first time, approaches £1,000m, a year, Admittedly it can be argued that some of the items which have been put in ought to be left out, and others which have been left ought to be put in, But our table is based mainly on Table X of the Memorandum by the Financial Secretary to the Treasury showing the estimated government expenditure for 1967-68 on assistance to private industry etc, Table X arrived at a total of £722.5m, Since it was compiled, the Government has decided to go ahead with the new Regional Employment Premium which will pump £100m. a year into manufacturing industry in the development areas, beginning on September 4th, Every manufacturing employer in these areas will get a premium of 30s. a week for every man employed, 15s. for women and boys and 9s. 6d. for girls (on top of the Selective Employment Premium, payeble to manufacturers in all areas, of 7s. 6d. per man, 3s. 9d. per woman or boy, and 2s. 6d. per girl). We have included Regional Employment Premium in the table at the annual rate of £100m. though of course only about £50m. will be paid out in the financial year 1967-68 since it is starting half way through the year, The Government's Table X also omits the cost of research and development of military aircraft and missiles amounting to £173.9m. But it includes the cost of research and development of civil aircraft - mainly the Concord - and it is difficult to see the distinction in principle between military and civil aircraft, The fact that the aircraft industry is still in private ownership and the shareholders benefit from having practically the whole cost of research and development borne by public funds, Investment grants of £154.5m. are the largest item after research and development and the two kinds of employment premium, Before 1966 companies were encouraged to buy new plant and machinery by means of generous investment allowances which gave them tax relief in proportion to their capital investment, and were therefore equivalent to a cash grant to those firms that were paying enough tax to benefit from them, Since 1966 investment allowances have been abolished and replaced by investment grants payable to all manufacturing companies at the rate of 45 per cent in development areas and 25 per cent in all
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