INTERMEDIATE AREAS (HUNT REPORT) (Hansard, 25 June 1969)

§ The Secretary of State for Economic Affairs (Mr. Peter Shore)
With permission, Mr. Speaker, I should like to make a further statement on the Report of the Committee on the Intermediate Areas under the chairmanship of Sir Joseph Hunt.
In my statement on 24th April I described the new intermediate areas in broad terms, leaving the precise boundaries to be determined after consultation with the Regional Economic Planning Councils. These consultations have now been completed and the views of other bodies have also been taken into account.
There is now available in the Vote Office the full list of 54 employment exchange areas to be included in the new seven intermediate areas—North-East Lancashire, Yorkshire Coalfield, North 1507 Humberside, Notts-Derby Coalfield, South-East Wales, Plymouth and Leith. I am also circulating the list in the OFFICIAL REPORT.
I said on 24th April that the cost of the measures would be met out of the very substantial and growing sums being spent on assistance to industry in the development areas. The savings required will be obtained by the withdrawal of the selective employment additional payment of 7s. 6d. a week at present payable in the development areas. This will cease to be paid from the beginning of the financial year 1970–71.
This does not affect in any way payment of the regional employment premium of 30s. a week. I reaffirm our commitment to continue to pay the R.E.P. in the development areas for the minimum period of seven years from 1967. This is an important part of their very large preference in assistance to industry over the rest of the country.
The House will recall that we propose to make available for industry in the new intermediate areas assistance of the kind provided in development areas under the Local Employment Acts, excluding those loans and grants for general purposes which are made on the advice of B.O.T.A.C.
A Bill will be introduced as early as possible next Session to give effect to our proposals. Meantime, it is important that develepment should go ahead in the new intermediate areas.
First, from now on industrial development certificates will be made available in the intermediate areas on the same basis, as in the development areas.
Second, in respect of projects started in the intermediate areas from today, the Board of Trade will be ready to consider applications for building grants. Guidance to industry on this and certain necessary conditions is being issued today.
Third, eligible local authority schemes for derelict land clearance approved after 24th April, or where the main work started after that date, will be considered for 75 per cent. capital grants. These grants will be available in the new intermediate areas and the other areas which I mentioned in my previous Statement.
The Opencast Executive of the National Coal Board has valuable experience 1508 in reclamation. We shall encourage local authorities to make full use of the executive's services as technical adviser and agent for the execution of their schemes.
The Hunt Committee rightly emphasise the human assets of the regions and the importance of industrial training. The Government will provide in the new intermediate areas the full range of development area training grants and other training assistance.
Further, the Government have considered in the light of the Hunt Report the level of benefits paid to men and women moving to new jobs away from their homes with Government assistance. The Government are arranging to bring these benefits into line with present-day requirements. A further announcement on the details and timing of these measures will be made shortly.
Regional policy is essentially a matter of priorities and we have had to apply very strict criteria in determining the new intermediate areas and their precise boundaries.
In conclusion, I wish to stress the Government's continued determination to press ahead with the progress being made in the development areas; and our intention to maintain our close watch over the changing needs of all the regions and areas of the country.

§ Sir K. Joseph
Is the right hon. Gentleman aware that the ending of the S.E.T. premium, a by-product of a tax which we abominate, is far preferable to any cut in the infrastructure in the development areas? It at least removes one of the elements of unfairness between competitors inside and outside the development areas.
Will the right hon. Gentleman say how he will look after those industries, such as shipbuilding, which have entered into long-term contracts on the basis of this 7s. 6d. additional payment per head, and which now will suddenly find these firm price contracts perhaps turned into losses for them?
Will the right hon. Gentleman say what saving will be made next year, and also whether there is to be an excess over the cost. If so, whether he intends to pass any excess to his right hon. Friend the Secretary of State for Social Services 1509 for teeth and spectacles?—[Interruption.] Perhaps, as last time, the right hon. Gentleman does not know the financial figures involved.
Does the right hon. Gentleman agree that the grey areas which are not scheduled as intermediate areas will now be even worse off than they have been in the past?—[Hon. Members: "Too long."] I hope that the right hon. Gentleman is taking note of these questions.
Finally, did the Government consider, as Professor Brown in his minority report suggested, cutting the investment grant to those capital-intensive projects which are disproportionate in their yield of new jobs?

§ Mr. Shore
I shall try, without taking too much time, to answer the more serious points put by the right hon. Gentleman.
First, I note what the right hon. Gentleman said about the removal of S.E.P. Obviously, I also considered the alternative possibility of making savings by other means, including the suggestion made by Professor Brown, but the conclusion to which I came was that, taking into account all the circumstances, the right thing to do was to remove the additional selective employment payment of 7s. 6d. a week. The total saving to be derived from this is £25 million a year.
Second, the right hon. Gentleman asked whether firms which may have entered into contracts on the basis of S.E.P. will be inconvenienced. I should be very surprised if firms have entered into commitments on the basis of a premium which we have never guaranteed on a long-term continuing basis. This is utterly different from the R.E.P., which we pledged ourselves to continue for seven years, and which will not be affected by this announcement.

Several Hon. Members
rose—

§ Mr. Speaker
Order. I remind the House that there is important business ahead, which I must protect.

§ Mr. Roy Hughes
I congratulate my right hon. Friend on his statement, which will bring considerable benefits to my constituency of Newport. Will my right hon. Friend now give further consideration 1510 to the idea of bringing the whole of South-East Wales into a development area to enable it the better to meet the challenge of Severnside?

§ Mr. Shore
I am grateful to my hon. Friend for his remarks, though I think that he is looking somewhat further ahead in thinking of the development of Severn-side. I am satisfied that the establishment of an intermediate area will be of considerable help to South-East Wales, and certainly to his own area of Newport.

§ Mr. Fletcher-Cooke
Is the right hon. Gentleman aware that the decision to give a 75 per cent. grant for clearing derelict areas will be most welcome in that part of my constituency which is included in his statement? Will he consider including the other half of my constituency, because it is equally derelict?

§ Mr. Shore
I am glad to have this opportunity of acquainting the hon. and learned Gentleman with the facts. He clearly has not understood either my first statement, or my statement this afternoon, and, given the amount of tittering that was going on on the benches opposite, that is perhaps hardly surprising.
The real point is that the 75 per cent. dereliction grant is available throughout the North-West, the Yorkshire and Humberside regions, and, further, to parts of North Staffs. That is the situation. It is also available in the intermediate areas. If a part of the hon. and learned Gentleman's constituency is within a new intermediate area, and another part of it is outside, both will qualify for the dereliction grant.

§ Mr. H. Boardman
I understand that South Lancashire is excluded from the list. How can my right hon. Friend possibly justify the exclusion of an area like Leigh, Atherton and Tyldesley, where pithead gear and textile mills are falling like nine-pins?

§ Mr. Shore
I must make it clear to my hon. Friend that the South Lancashire area is eligible for the dereliction grant. It is available through the whole of the North West. I am fully aware of the great problems of dereliction there, and I believe that what I have said will be of great assistance to the area.

§ Mr. Geoffrey Lloyd
To reduce damaging uncertainty, will the right hon. Gentleman carry out the recommendation 1511 in paragraph 484 of the Hunt Committee Report, that the widest possible publicity should be given to the considerations determining I.D.C. control in individual areas, with subsequent alterations?

§ Mr. Shore
I think that the right hon. Gentleman has a point, and I can inform him that my right hon. Friend the President of the Board of Trade is discussing this matter with the C.B.I.

§ Mr. Sheldon
While warmly congratulating my right hon. Friend on ending the anomaly of the 7s. 6d. S.E.T. payment, may I ask him to consider whether what we really need to do about the large amounts of money that we spend in the development areas is not to have this blanket, indiscriminate approach, but to try selectively to improve those areas which can be selective, and which can be proved to be valuable in their own case?
Can my right hon. Friend say how much he is spending on extra training, because this is a matter on which money can be spent most valuably?

§ Mr. Shore
If my hon. Friend puts down a Question about the exact amount of money that we are spending on training, I shall be able to give him the answer.
To take my hon. Friend's main point, I accept that as soon as possible we should attempt to make a serious appraisal of the particular impact of the measures which we have introduced, a number of them quite recently, to help development areas.

§ Mr. Richard Wainwright
Can the right hon. Gentleman say at what intervals of time these finely-drawn boundaries will be reviewed? Does the right hon. Gentleman agree that, for the very people that he has decided to help within the areas he has announced, attractive work opportunities are likely to be available outside the areas he has delineated, without excessive travel to work? Will the right hon. Gentleman consider extending the boundaries accordingly?

§ Mr. Shore
I have announced the boundaries following discussions and consultations with the E.P.C.s, but I take the view on intermediate areas, and, indeed, on regional policy generally, that they should be kept under review. The basic 1512 reason for this is that circumstances change in different parts of the country, and I think that the Government should have the possibility of responding to those changes by having a flexible policy to adopt.

§ Dr. John Dunwoody
But would not my right hon. Friend agree that the economic and employment position in many of these development areas is far worse than in the intermediate areas? Therefore, does he not consider that it is illogical and rather disturbing that the entire cost of the aid to intermediate areas is to come from the development areas of today?

§ Mr. Shore
I regret that we have had to find this money for the intermediate areas from the assistance that we are now giving to the development areas, but I should like to put this into context. I remind my hon. Friend that as recently as 1966–67 the total sum spent on aid to industry in development areas was £56 million. Last year, 1968–69, it was in excess of £260 million. I think that the cut must be seen against that background of a really massive increase in development area expenditure.

§ Mr. Wood
Am I right in thinking that one effect of the right hon. Gentleman's proposals will be to squeeze an area of relatively high unemployment between two areas with low unemployment which will qualify for assistance? If that is correct, what plans has he for helping these inter-intermediate areas with higher unemployment?

§ Mr. Shore
There are always difficulties in drawing the frontiers of any area eligible for assistance. I am aware that there are one or two towns which are somewhat disadvantaged by the existing borders, but I cannot at present give the hon. Member any prospect of a solution. I will keep a watch on the problem, and at a later date I may find it possible to be helpful—but not now.

§ Mr. McNamara
Is my right hon. Friend aware that his statement will be very welcome in North Humberside, and particularly in the city and county of Kingston upon Hull? Can he say what will be the effect of his new proposals on the small shipbuilding industry of Humberside?
1513 Secondly, will he now give every encouragement to firms in the area to expand in the intermediate area and not follow the alignment of the development areas?

§ Mr. Shore
Encouragement will obviously be given to firms both outside the intermediate areas and already within them as a result of the new forms of assistance that we are proposing. I have no doubt that the response will develop. I cannot give him any special assurance with regard to the situation in the Humberside shipbuilding industry.

§ Sir Frank Pearson
I welcome the fact that the more critical areas of North-East Lancashire are included within the limited scheme, but can the Minister say when we are likely to receive the report of the committee which is surveying potential industrial sites? When can he give a timetable for the construction of the Calder Valley Road?

§ Mr. Shore
I understand that a feasibility study is at present taking place on the Calder Valley Road. Advice to the Government on favourable sites will be tendered by the regional economic planning councils.

§ Mr. John Mendelson
Since my right hon. Friend made his first announcement there has been a general welcome in the areas concerned for the policy that he is proposing, but is he aware that hon. Members representing those areas and neighbouring areas have also received a larger number of letters making further suggestions both as to the areas concerned and to the policy? He has announced that there will be a debate on the Bill, but is it not essential that there should be a debate before the Bill is introduced, so that hon. Members and the House can bring their knowledge to the Government, so that when they draft the Bill information will have been given to them by hon. Members? Will he arrange for a day to be set aside for a full debate on this matter before legislation is introduced?

§ Mr. Shore
My hon. Friend will realise that it is not for me to decide the question of a debate, but I personally would welcome the opportunity of debating regional policy.

§ Mr. Younger
Is the Minister aware that in Scotland the financial effect of 1514 the change amounts to nothing less than daylight robbery? Has he noticed an Answer given yesterday, in which the Government admitted that Scotland is £48 million net worse off because of S.E.T.? Now there will be a further £10 million removed in respect of S.E.P. Could not we at least have Edinburgh included as one of these areas, if that is what Scotland has to pay?

§ Mr. Shore
I remind the hon. Member that in 1964–65 Scotland was receiving £15 million in assistance to industry in the Scottish development area, and that last year the sum was over £90 million.

§ Mr. Mapp
Is the Minister aware that the list of areas that he has published is highly discriminatory and that there is as yet little hard evidence for his selection? Will he undertake to ensure that in respect of each of the employment exchanges mentioned in his statement and in the appendices to the Hunt Report such information will be given to justify each exchange so that comparisons can be made with other areas which many of us know to have even higher unemployment figures than is the case in his selected areas?

§ Mr. Shore
I will consider my hon. Friend's request. I do not know whether I can precisely relate the factors put forward as criteria for the selection of intermediate areas with those put forward in the Hunt Report. I shall need to consider the matter carefully.

§ Sir Harmar Nicholls
How does the Minister's statement referring to the granting of industrial development certificates affect the priority given to areas developing under the new town procedures? They are going through a lot of difficulties, problems and expense, and if this extension means that they will lose the small priority they have their development will not be successful.

§ Mr. Shore
I am aware of the point. When I made my first statement I said that the Government undertook to keep a close watch on this and to keep the development of new towns and overspills in phase with the growth of industry in those new towns and overspills.

§ Mr. Robert Howarth
Is my right hon. Friend aware of the problems of the older textile towns in South Lancashire, 1515 whose difficulties will now be compounded by the proximity of the boundaries of the new intermediate areas? How can he justify the exclusion of towns such as Bolton while including towns such as Blackburn?

§ Mr. Shore
Towns in South Lancashire, such as Bolton and Oldham, certainly have their problems, but they are not of the same degree of severity, measured by the criteria I put forward—the unemployment and loss of population criteria—as is the case in the North-East Lancashire sub-region which we are including as an intermediate area.

§ Mr. Stainton
May I put to the Minister a special plea on behalf of East Anglia, where the wage and earnings rates are demonstrably very low? An essential part of the Hunt Committee Report implied the expansion of Ipswich as a growth point and this proposal was cancelled by the Government last Friday.

§ Mr. Shore
I am certain that Ipswich will continue to grow. All the signs are that it has that capacity. As for East Anglia, it is, of all the regions in the country, the one that can expect the greatest amount of investment in new towns and overspill towns, with the supporting public investment to make this possible.

§ Mr. Gardner
Is my right hon. Friend aware that despite the obvious difficulties of the right hon. Member for Leeds, North-East (Sir K. Joseph) the decisions taken in relation to the Nottingham-Derby coalfield will be very welcome? Can he confirm that when he talks about labour exchange areas he means that the areas are irrespective of local authority boundaries?

§ Mr. Shore
Yes. It is the employment exchange areas whose boundaries we have taken in defining the intermediate areas.

§ Mr. Michael Heseltine
Is the right hon. Gentleman aware that the deplorable decision to exclude the Tavistock employment exchange will be widely resented in South Devon as a result of today's statement? Is he further aware he has excluded the equivalent of 8 per cent. of the total number of unemployed in South Devon from intermediate development 1516 area status, and has ignored the advice of every elected authority in South-West Devon?

§ Mr. Shore
I regret that I am unable to include all the areas which have a claim, but the whole purpose of the intermediate area policy, and the development area policy, is not to deny that certain areas have claims; it is to establish priorities. In this case not only the Hunt Committee and the Regional Economic Planning Council, but also the D.E.A. have all come to the conclusion that this area should not be included. Against that we have the hon. Member's own judgment, with all that goes with it, and I think that on this occasion it might just be the case that he is wrong and we are right.

§ Mr. Michael Heseltine
On a point of order. Is it in order for a Minister deliberately to misquote the evidence of the Hunt Committee in replying to an hon. Member on a matter of this sort?

§ Mr. Speaker
Order. We are becoming very sensitive about points of order.

§ Mr. Anderson
It is good news that the Government have rejected the Hunt Committee recommendations for South-East Wales and have recognised the special problems of towns like Cwmbran and Abergavenny, but can my right hon. Friend given me one good reason why the Chepstow and Monmouth unemployment exchange areas, which have the same unemployment level and suffer from the same problems as other areas, have been excluded?

§ Mr. Shore
We looked very carefully at the claims of these areas, and this one did not meet the same criteria of need that we had established, and which other areas met.

Several Hon. Members
rose—

§ Mr. Speaker
Order. I must protect the business of the House.