Britain: An official handbook > 1977

2o8
Encouragement
of Investment
Industrial and
Regional Policy
Assisted Areas
BRITAIN 1977: AN OFFICIAL HANDBOOK
to services since March 1976. Not all restrictive agreements are taken before the
court; there is a frequently used procedure by which those containing only
insignificant restrictions may effectively be exempted. The Secretary of State
for Prices and Consumer Protection may exempt proposed agreements of sub¬
stantial importance to the national economy or agreements designed to keep
prices down. Restrictive agreements relating exclusively to exports are not
subject to registration but they must be notified to the Director General of Fair
Trading (and to the Commission of the European Community if they fall
within its rules of competition).
Britain has a generous system of national incentives for industrial development.
Under the Finance Act 1972 incentives to encourage capital expenditure in plant
and machinery take the form of a system of free depreciation enabling the whole
of such expenditure to be written off against profits for tax purposes in the year
in which it is incurred; there is in addition a 54 per cent initial allowance on new
industrial buildings and structures and an annual writing down allowance of
4 per cent thereafter. Direct investment from overseas is also encouraged, and
overseas firms are offered the same facilities and incentives as those applying to
British-owned companies. Under the Industry Act 197^ other assistance may be
provided throughout Britain where it is judged to be in the national interest.
The Government has selected a number of key industries which have critical
roles in the economy but also some impediment to their increased efficiency and
is providing assistance in the form of grants, sometimes with the possibility of
additional selective assistance to enable these key industries to overcome their
problems.
Economic imbalance between different parts of the country is due partly to the
steady decline over the years of older industries, such as coalmining and ship¬
building, causing a high level of unemployment in certain regions and such
adverse factors as poor amenities, derelict buildings and land and net outward
migration. In addition, the newer and expanding industries have tended to
develop mostly in the Midlands and the South East, and unemployment has
remained a persistent problem in Scotland, Wales, Northern Ireland and some
parts of England, particularly the North and Merseyside. The ending of regional
imbalance has been an objective of successive Governments. Financial and other
aid to areas of high unemployment began in the 1930s and has been expanded
considerably over the years.
The map opposite shows those parts of the country where assistance is
offered by the Government to encourage industrial development and the move¬
ment of office and other service employment. The assisted areas cover the whole
of Scotland, Wales, Northern Ireland and in England the Northern, North
West and Yorkshire and Humberside regions; parts of the South West and
East Midlands regions; and Oswestry in the West Midlands. There are three
different categories of assisted area; special development areas, where the eco¬
nomic situation and consistently high rates of unemployment give rise to the
most urgent need for assistance; development areas with similar but rather
less severe problems; and the intermediate area, where some assistance is
necessary but where the need is relatively less acute than in the other types of
area. Under the Industry Act 1972 regional development grants are available
in the assisted areas to help meet the cost of buildings and works on premises
used wholly or mainly for specified activities in manufacturing, construction
and mining and, in the special development and development areas only,