HC Deb 09 November 1970 vol 806 cc1-5
1. Mr. Strang

asked the Secretary of State for Trade and Industry if he will now make a further statement on the financial inducements he proposes to provide for private industry in the development areas.

33. Mr. Molloy

asked the Secretary of State for Trade and Industry if he will maintain incentive grants for industry moving to regions with problems of unemployment; and if he will make a statement.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies)

I would refer the hon. Members to the statement made by my right hon. Friend, the Chancellor of the Exchequer, on 27th October and the White Paper on Investment Incentives.

Mr. Strang

Is the right hon. Gentleman aware of the serious concern that exists in the development areas because of his decision to replace tax allowances with investment grants? Is he aware that this concern stems from the fact that many firms will be worse off, including firms in the shipbuilding industry and foreign companies coming to this country? Would he consider allowing a system of investment grants to exist alongside his system of tax allowances, so enabling firms to choose the best system for themselves, since this would be compatible with his philosophy that private industry knows best?

Mr. Davies

I am aware of the concern felt by certain firms that the proposed arrangements will he less advantageous to them than existing arrangements. However, taken as a whole, I am convinced that the package proposed will prove advantageous to the development areas. It would be impossible and excessively costly to have the two systems working in parallel.

Mr. Molloy

Is the right hon. Gentleman aware that the statement of his right hon. Friend and, indeed, the White Paper is causing considerable concern in the areas involved and that some despair has been caused to both sides of industry? Would he agree that the policy of the previous Administration in this context was not only economically wise and embraced the ethic of the Good Samaritan but was approved by all sections of industry? Should not he adopt the measures of the Labour Government in this connection and propose to relieve himself of some of the disingenuous and, indeed, vulgar and contemptible remarks—[Interruption.]—which he made in his speech last Wednesday?

Mr. Speaker

Order. Long supplementary questions mean fewer Questions being asked.

Mr. Davies

I am of the opinion that the balance of the present package is more advantageous to the development areas and that there would be no purpose in going back to the former system. Contrary to what the hon. Gentleman said. I believe that the arrangement now envisaged is more favourable to the generality of development areas; and the hon. Gentleman will have particularly in mind the interests of the service industries in this respect.

Mr. Waddington

I congratulate my right hon. Friend on the change of policy towards the development areas. Will he take an early opportunity to clarify the situation for the intermediate areas, about which there seems to be some doubt?

Mr. Davies

The intermediate areas receive certain advantages, which will be intensified by this new package of arrangements. However, I will certainly look at the matter again to see whether there is anything further that can be done. My hon. Friend will be aware that the Government are proceeding to a deep study of regional policy and that this may bring further matters to light.

Mr. Varley

Would the right hon. Gentleman tell us more about the wider use of the Local Employment Acts as envisaged in the White Paper, to which he referred? For example, what does he intend to do with his Independent Advisory Committee? Are its terms of reference to be changed? Does he intend to rely more on the Local Employment Acts and Ministerial discretion? What savings does he envisage?

Mr. Davies

As I said, I am conducting a major study into all aspects of regional policy. This will include such matters as those to which the hon. Gentle man referred. I expect, however, that the use of the Local Employment Acts will be intensified. Certain improvements in the application of the Acts have been announced by my right hon. Friend.

22. Mr. Blenkinsop

asked the Secretary of State for Trade and Industry whether he will now announce the changes he proposes to make in development area policy and, in particular, the changes in financial assistance at present being given to encourage industry to develop on Tyneside and in other similar development areas with heavy unemployment.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)

My right hon. Friend the Chancellor of the Exchequer announced the Government's proposals on investment incentives on 27th October. I am confident that these will encourage industrial development in Tyneside and other parts of the development areas.

Mr. Blenkinsop

Is the hon. Gentleman aware that the Chairman of the Chamber of Shipping has declared that the Minister is throwing the baby out with the bathwater and is extremely concerned at the effect on the whole shipping and shipbuilding industry which had a chance of developing under the previous proposals?

Mr. Grant

I realise that there are anxieties, but I believe firmly that the Government's new package will assist the development areas overall.

Dame Irene Ward

Has the Secretary of State yet received the deputation from Alderman Grey and Mr. Dawson of the North-East Development Council who have specific proposals to make on behalf of the North-East Coast, which are not politically motivated? May we have an assurance that the requirements which are put forward by that body, which are nonpolitical, will be accepted without any further delay, because we are getting tired of delay?

Mr. Grant

I can assure my hon. Friend that the distinguished gentlemen have seen my right hon. Friend and that he took close note of what they said. I am advised that they went away very satisfied.

Mr. Varley

Does the hon. Gentleman accept that the success of the development area policy in part has to be judged by a strict observance of I.D.C. control? Will he give the House an obsolute assurance that if he receives an application for an industrial development certificate for a major motor car assembly plant outside a development area or an intermediate area, he will refuse it?

Mr. Grant

The hon. Gentleman has the experience to know that I could not possibly give such a blanket undertaking of that nature. However, I will look at each I.D.C. request on its merits, and I hope to pursue a flexible and thoroughly satisfactory policy.

Mr. Jay

Can the hon. Gentleman assure us that he has no plans for reducing the size of the present development areas?

Mr. Grant

The position, as I think my right hon. Friend said earlier, is that we are reviewing the whole situation of development areas and intermediate areas and will make an announcement in due course.

Mr. Blenkinsop

In view of the unsatisfactory nature of that reply, I give notice that I propose to raise the matter, particularly with reference to Tyneside, as soon as possible.