HC Deb 02 December 1969 vol 792 cc1281-3
23. Mr. Boyden

asked the Chancellor of the Exchequer if he has investigated representations made to him from the North-East that the selective employment tax has had an inhibiting effect on some commercial activities which ought to be encouraged in the interests of regional employment; and what conclusions he has reached.

Mr. Diamond

The North East Development Council made a number of representations to me on these lines. I have replied that I do not think S.E.T. is a handicap to the development of commercial services of the kind which the council is particularly anxious to attract to the region.

Mr. Boyden

Does not my right hon. Friend agree that there is an over-concentration of services like banking, insurance and even architectural advice in London, and that there needs to be more growth in these services in the North-East? Will not he look at it from that point of view?

Mr. Diamond

I share my hon. Friend's view that there can be a over-concentration in London. Certainly the Government have set a pattern, which I should have thought others would be happy to follow, of dispersal wherever it is possible and appropriate.

Dame Irene Ward

In view of the fact that unemployment in the North-East is increasing, is the right hon. Gentleman certain that all his views are right? Certainly we in the North-East do not think so? As he does not seem to be having the proper effect, perhaps he would look at some of the ideas emanating from those of us who live there and understand what goes on there?

Mr. Diamond

I am always anxious to listen to advice from those who are on the spot. As the hon. Lady knows, preferential assistance to the Northern region is running at about £75 million a year, and there has been considerable success in attracting manufacturing industry to the area. I can only conclude, therefore, that the situation would be worse if the Government had not adopted these policies.

Mr. Milne

While agreeing that incentives to the North-East are having a valuable effect on the economy there, would not my right hon. Friend also look at the effect of the selective employment tax, since its removal would give us a diversity of industry which is lacking at the moment in our development?

Mr. Diamond

I am sure that my hon. Friend will recognise that if we attract manufacturing industry which provides the greater measure of employment. exhypothesi the proportion of services is smaller than it would be otherwise.