HC Deb 14 November 1968 vol 773 cc591-3
7. Mr. Sheldon

asked the Secretary of State for Economic Affairs what research he is at present conducting into the effectiveness of the regional employment premium.

15. Mr. Clegg

asked the Secretary of State for Economic Affairs whether he will initiate a study of the effect of the regional employment premium.

Mr. Shore

A survey is currently being made into the attitude of firms to the location of new investment, including the effect of R.E.P. and other development area incentives. However, I believe that any detailed research specifically on the R.E.P. will be more fruitful when the premium has been given more time to produce results.

Mr. Sheldon

I warmly welcome the research which my right hon. Friend is carrying out. To test how valuable the R.E.P. has been, and in what areas, will it not be necessary to determine the number of jobs attributable to the spending of £100 million annually in this way? When will the understanding of the number of jobs involved be available to my right hon. Friend?

Mr. Shore

I cannot without notice say when the survey I have mentioned will be completed. The problem of identifying one form of regional assistance as distinct from others and quantifying its effect in terms of employment produced will not be easy. I am not saying that it is impossible, but it will not be easy. We said from the start that the R.E.P. would take a period of years to gather momentum and to have its effect. I will certainly consider the matter further.

Mr. Clegg

Does not the right hon. Gentleman realise that there is a feeling of urgency on both sides of the House that we should have more information about the way the tax is working on two points: first, cost-effectiveness, which has already been mentioned? On the other hand, there are hon. Members who are concerned about the effect the tax is having on the grey areas. If the right hon. Gentleman could give the House the information as soon as possible, it would be very welcome.

Mr. Shore

I take the point of the hon. Member. Research into tax measures generally is very desirable. But I cannot add to the point I have already made, that there are difficulties in obtaining and isolating the effects of a particular measure within so short a period of time after its introduction.

Mr. Barnett

Has my right hon. Friend's preliminary research indicated the effects on the incentive of the Opposition's indication that, if by some misfortune they were returned to power, they would remove the R.E.P.? Is there any indication that this is affecting industrialists in the making of their decisions?

Mr. Shore

That is a point which would obviously have to be proved in any deep analysis of the effects of R.E.P. It is a fair point that the effectiveness of particular measures depends to a considerable extent on the amount of continuity that people, particularly industrialists, believe the policy will have.

Mr. Stratton Mills

Will the right hon. Gentleman confirm that it is clear that the regional employment premium is incompatible with membership of the European Common Market?

Mr. Shore

I have no reason to confirm that.