Do you know the internal diameter of the pipe? To get the screw to bite, it needs to be small enough to go a few mill in before you start turning it. Alternatively, a tapered tap for thread cutting should get it, the smallest one I've got is an M1.2, I'm sure the pipe must be larger than that so you should get one to fit.
BTW, £500 to lower the back of the engine? I heard that lowering the gearbox gives enough clearance. I've not needed to do mine, but I've done it before on another car by swapping out the cross member bolts with lengths of studding, from what I can see it's a half hour job and with the Jeep you don't even have to jack it up to get under it - unless someone knows different?