(Con |
i i lls in develop-
e to build four new weaving mi
oe ee ae so the actual cost to Courtaulds will be £5am.
i vestment grants are a form of financial aid which must be pal tee pian aioe: On the other hand, companies benefit from — other kinds of fiscal incentives as well. They receive eg ee a iiak their investment expenditure which are somewhat complicated in = _— but are equivalent, in the words of the White Paper on Investment cove eo to an interest-free loan, Then there is the export rebate, — = : of about £80m. a year, paid to all manufacturing firms in relation ° ie exports, Neither of these two forms of financial aid have been include in our table, though a strong case could be made for putting them in. In any case the total is likely to increase rather than diminish. The Govern ment is committed to giving loans of up to £62.5m. and grants of £5m. to shippbuilding firms if they arrange to merge into a few large firms to the satisfaction of the Shipbuilding Industry Board; yet the estimates for the current year include only £1.9m, for the expenses of the board, The Industrial Reconstruction Corporation (IRC) has been set up with a capital of £150m, to stimulate the reorganisation of industries into larger companies, and has already lent £15m, to English Electric as a 'sweetener' to tempt it out of its previous reluctance to take over Elliott Automation and its mixed collection of computer and investment companies, Negotiations are going on for the merger of Hawker Siddeley and the British Aircraft Corporation into a single giant airframe company in which the Government will take a substantial shareholding, The IRC has also taken £3m, worth of shares in the Rootes group in order to safeguard British interests, now that the American Chrysler company has secured control of the group, This could be a precedent in relation to future American takeovers of important British firms, Judging by Mr. Harold Wilson's statement on July 18th it seems likely that a Bill may soon be introduced to extend the Government's power to take shareholdings in private firms, with a view to hastening the necessary structural reform of industry, The purchase of shares in a company by the Government does not seem to be any different in principle from the grant of loans - the state hopes to get its money back in due course, but in the meantime the private firm benefits from the injection of public finance.....