HC Deb 26 June 1969 vol 785 cc1688-90
15. Mr. Brooks

asked the Secretary of State for Economic Affairs what means are employed by his Department to ascertain the effect of the regional employment premium as an instrument of development area policies.

21. Mr. Dalyell

asked the Secretary of State for Economic Affairs if he will make a statement on the operation of regional employment premium in relation to Scotland.

Mr. Shore

I keep a close watch on all the regional incentives. R.E.P. is a comparatively new measure, but I am considering possible means of inquiring into its effect on industry and employment.

Mr. Brooks

Is my right hon. Friend aware that many of us who are conscious of the problems of development areas welcome his proposal to investigate the efficacy of this unselective and undiscriminating hand-out across the board? Does not he consider that, if this is a bad way of bringing industry to the development areas, the earlier we find out the better and, similarly, if it is a good way, the earlier we find out the better?

Mr. Shore

I would agree with my hon. Friend that we want to get accurate information about the effects of particular measures and the sooner the better. I think the whole House would agree with that. When he describes this measure as undiscriminating, he must remember that in two very important ways it is discriminating. It is discriminating in terms of the areas to which it applies, and it is discriminating in terms of its application to manufacturing industry.

Mr. Dalyell

Is my right hon. Friend aware that our suspicion is that R.E.P. has not had a very beneficial effect on employment in Scotland, and will he isolate the figures?

Mr. Shore

I would very much like to do so but, as I have said before, the difficulty is that we have had less than two years' experience of it and inevitably it is an incentive whose effect, assuming that it has the effect we want, is bound to be a cumulative and growing one.

Mr. Waddington

Has the Secretary of State closed his mind entirely to the important and fundamental recommendation of the Hunt Committee that there should be a comprehensive review of development area policies here and now?

Mr. Shore

It is obvious from what I said that my mind is far from closed. I cannot have an inquiry into policies until I have some reason to believe that their effects can be measured, and that time has not yet come.

Mr. Mikardo

Has my right hon. Friend seen the figures which were given in a Written Answer on Tuesday by the Department of Employment and Productivity which show that male unemployment in the special development areas is growing very rapidly? Does not that rapid increase suggest a failure of the Government's policies, including the regional employment premiums, to do the job which they were meant to do, and should not he therefore apply a new policy—for example, the policy of the Labour Party which he did so much to devise?

Mr. Shore

The special development areas, as their name implies, have problems which are especially acute, and the designation of special development areas started only in November, 1967. I do not take the pessimistic view of my hon. Friend as to the effect of the policies. As to other policies, I think that my hon. Friend is referring to the use of public sector industry as well as private industry in development areas, and I am as anxious as he is to employ the public sector in producing jobs in development areas.

22. Mr. R. C. Mitchell

asked the Secretary of State for Economic Affairs if he will now commission a study of the effects of the regional employment premium on shipbuilding firms outside the development areas.

Mr. Shore

No, Sir.

Mr. Mitchell

Why not?

Mr. Shore

Because, added to the general difficulties which I have already listed in making an examination of R.E.P. at this stage, there is the particular difficulty of analysing its effects on shipbuilding firms, not merely in the development areas but also outside them.

Mr. Wingfield Digby

Is the right hon. Gentleman aware that this is obviously an unfair discrimination against extremely efficient firms in the South. It has gone on too long and is giving an advantage to marginal firms in other parts of the country which, in the long term, is of no benefit to shipbuilding as a whole.

Mr. Shore

It is the nature and purpose of R.E.P. to discriminate in favour of manufacturing firms in development areas. This raises a matter of the principle of the R.E.P. itself. But there is no reason to believe that either the Vosper Thornycroft Group in Southampton or Brooke Marine in Lowestoft are suffering from the effects of competition with firms receiving R.E.P.