§ Q6. Mr. William Hamiltonasked the Prime Minister if he will raise at the discussions he intends to have with representatives of the CBI and the TUC the effectiveness of the Government's regional policies and the co-ordination of the various Departments with responsibilities in that field.
§ The Prime MinisterI am always ready to discuss regional policies with the CBI and the TUC, but both are already fully aware of and have welcomed the policies embodied in the Industry Act to help the regions.
§ Mr. HamiltonIs the Prime Minister aware of the considerable degree of agreement between the CBI and the TUC on the desirability of continuing the regional employment premium? Unless REP is continued after the end of 1974 and there is a statement to this effect soon, uncertainty will result in increased unemployment in Scotland and other areas. There is no possibility of the unemployment figure in Scotland dropping below 100,000 in 1973, but the situation will be even worse in 1974 unless an early statement is made on the future of REP.
§ The Prime MinisterI do not share the hon. Gentleman's judgment on unemployment. We have said that REP will be phased out after September 1974. We are having consultations with the TUC and the CBI about the way in which that shall be done. In this we are maintaining exactly the same position as did the Labour Government.
§ Dame Irene WardWill my right hon. Friend say when the statement about phasing out REP will be made? Will he give an assurance that there will be an opportunity for Parliament to have a full discussion on employment in the regions? I should welcome a full discussion, so that Parliament may be involved as well as the CBI and the TUC.
§ The Prime MinisterIt will not be possible to make a full statement until the discussions with the CBI and the TUC 590 have been completed. It is right that we should have these discussions. I will of course draw to the notice of the Leader of the House my hon. Friend's view—he has in any case heard it—about the need for discussion.
§ Mr. Roy JenkinsDid I hear aright the right hon. Gentleman's reply—that he is committed to the phasing out of REP after the autumn of 1974?
§ The Prime MinisterThat is right, Sir; yes. It is the same position as under the Labour Government.
§ Miss Joan HallWhat does the Prime Minister suggest for those regions where there is a shortage of labour, as in the West Riding, where the wool textile industry is doing extremely well and cannot get the labour it requites?
§ The Prime MinisterWe have been developing regional policies to get a better balance in the regions. I agree with my hon. Friend that there are particular situations in which employers are finding it difficult to get certain types of skilled labour. I hope that these difficulties can be solved to enable growth to continue, perhaps by some of those in the regions moving to places where excellent jobs await them.
§ Mr. MaclennanDoes not the right hon. Gentleman realise that the Government's regional policies favour capital-intensive industries, and the merit of REP is that it is a subsidy to labour? Will he reverse his commitment to phase out REP and enter into discussions with both sides of industry on the possible extension of the principle to the manufacturing sector and to the service industries?
§ The Prime MinisterI cannot give an undertaking of that kind. We require to develop in the regions the most effective kind of industry from the national point of view. The more effective, efficient and successful the industry is, the more soundly based it will be in the regions and the more secure will be their prosperity.
§ Mr. David SteelWill the Prime Minister tell the House of any body of opinion outside the Government that is in favour of phasing out regional employment premium after 1974?
§ The Prime MinisterI am prepared to discuss the subject with any body of opinion, but it has long been the stated position of this Government that we were going over to a system of regional incentives, which we have developed to a higher degree than ever before. We do not favour a system which means that all firms already in a region receive this subsidy, so that it gives no inducement to anybody to go there. We do not believe that that is the basis of sound regional policy.
§ Mr. CrouchI think the whole country recognises that in the last 12 months the Government have taken exceptional steps to resuscitate the development of the regions. I believe that we should give further thought to the regional employment premium as a step which would complete the process.
§ The Prime MinisterRegional employment premium is already there. What is important, in our view, is that we should establish regional incentives and inducements to industry to expand and not merely to maintain its present position. In other words, regional employment premium is an indiscriminate subsidy which goes there whether the firm needs it or not.
§ Mr. Cledwyn HughesIs the right hon. Gentleman aware that the phasing out of REP would have been reasonable had unemployment been substantially reduced? Is he further aware that unemployment in my constituency of Anglesey, which is a development area, is 9.6 per cent. of the insured population, and that the phasing out of REP will make it virtually impossible to solve the situation and bring unemployment down to a reasonable level?
§ The Prime MinisterI recognise the position stated by the right hon. Gentleman and that there are particular areas where there are still levels of unemployment which are much too high. It does not alter the fact that unemployment has been coming down very steeply in the past year—by a total of more than 200,000—and has been coming down faster in the regions than in the country as a whole.
§ Mr. SkinnerThat is not true.
§ The Prime MinisterThe hon. Gentleman says that is not true. The figure has fallen by 1.4 per cent. in Scotland compared with 0.9 per cent. in Great Britain as a whole.