THE relatively high level of grant assistance for Northern Ireland companies may be depressing wages, according to a report issued last week by the Northern Ireland Economic Council.

In a study of industrial policy assessment, the council found that, in spite of some recent changes, public subsidies for capital investment in manufacturing were high when compared with other EU countries, with a large proportion of the funding being directed to a relatively small number of companies.

The report made specific reference to the levels of selective financial assistance (SFA) available through the IDB.

Using grants as the main instrument of industrial policy "may inadvertently encourage the development of relatively low wage companies and industries, especially in the case of inward investment."

It recommends that there should be closer cooperation with other agencies in England, Scotland, Wales, and the Republic of Ireland, and that government and its agencies should set up improved databases for industrial policy assessment.