DEVELOPMENT AREA POLICY

HC Deb 16 November 1970 vol 806 cc990-1008

Mr. Speaker

Order. For the record, I understand that the hon. Member for The Hartlepools (Mr. Leadbitter) has informed the Minister that he wishes to raise a topic on the Adjournment. Mr. Leadbitter.

9.34 p.m.

Mr. Ted Leadbitter (The Hartlepools)

I thank the Under-Secretary of State and the officials in his Department for the courtesy which they have accorded me during the evening in making arangements for this Adjournment debate. One cannot predict the time when a debate will start when other hon. Members have indicated that they wish to raise other subjects. I am, therefore, particularly grateful to the hon. Gentleman and his Department.

This is the first opportunity which those of us in the House directly concerned with development area policy have had to challenge the Minister on matters of deep concern to us arising from a lack of knowledge of the Government's policy, a confusion of statements and hasty visits to areas, in particular mine, in the Northern Region of Ministers who appear not to have stayed long enough to be able to give a comprehensive account of their visits.

It is easy to make party political points, and I do not suppose that in the past I have resisted the temptation to do so, but we must try to address ourselves to the issues involved and to analyse the problem, because at the end of the day it is not we in the House who must bear the brunt of various measures but the people who work and live in the areas. For perhaps far too long people have been deprived of the information which has been essential in order to get at the root causes of the problems affecting their working lives. It is not an exaggeration to say that every Government, particularly since the war, has made some attempt to solve the problem, but the inescapable dilemma of increasing and improving rates of development not keeping pace with the decline in the basic industries has confounded us all.

Not many years ago a considerable number of miners were working in the Northern Region. In 1965, there were about 92,000 men working in the mines. By the end of 1969, the figure had been cut to 51,650. In other words, there was a loss of about 39,000 jobs. Although new jobs were found, not for the same number of men but for some of them, this remained a difficult problem for the last Government, as it would have been for any Government. That is one basic element in the problem of the Northern Region.

There is, however, another element, and that is the inability of politicians and of Governments to ensure that the development areas are made a part of the national economic and social fabric. For far too long our psychology and thinking has been that the regions are separate and, because we have not understood that they are part of the national fabric, it has not been realised that unemployment levels in the development areas which are above the national levels have meant a loss of about £150 million per annum in terms of the gross national product. As a nation, we cannot afford that loss.

I have described briefly one element of the internal problems of development areas and the need to think in terms of development areas as being part of the national fabric. I will not propound that any further, but the Labour Government tried to learn from tentative measures which had been adopted before to deal with the basic problems of the development areas and they produced a system of investment grants, allowances, initial allowances, subsidies for development of the infrastructure in the areas, school-building programmes, hospital programmes, construction works and road works, the removal of dereliction, and all this in the short period between 1964 and 1970. Those of us who have studied the question of industrial and social development know only too well that for this work that is a very short period of time.

Without developing the theme, I can say that the hard fact is that the result of that policy between 1966 and 1969 was to produce 97,000 new jobs in the northern area. No one can deny that that did not happen. However, I must remind the House that on the other side of the balance sheet there was a loss of jobs due to the decline of the basic industries.

Between 1964 and 1969 the policies of the Labour Government found 116,000 new jobs. In that period there were put on the ground some 49.5 million sq. ft. of factory space arising out of the use of industrial development certificates, and in addition to that we had some 60 new advance factories from 1964, and the jobs in prospect at the end of last year were some 43,300. In addition to that we had public expenditure on new and construction works of about £70.7 million in 1965–66, and this was increased to £163 million at the end of last year. Road works in the northern region were at about £50 million last year.

When I asked a Question in the House only last week I discovered, much to my surprise, that 186 miles of motorway had been built in the Northern Region between 1964 and 1969, whereas none had been built before. [An. HON. MEMBER: "Oh."] This is an answer from the Minister. I presume that the hon. Member is not trying to suggest that his right hon. Friend has not told the truth. I accept what his right hon. Friend said.

As an hon. Member of this House and responsible for a constituency which has suffered a great deal, I have to say that by the end of 1969 we had still not cracked the nut, because the North-Eastern Economic Development Planning Council calculated in 1969 that, even so, 281,000 new jobs were required by 1981 before we could claim that we were on what might be called a viable footing.

This caused me to pose a question which I have posed before in the House: if the policies which I have just briefly enumerated produced 116,000 new jobs in five-and-a-half years is it likely that the same policies, provided the same circumstances and economic conditions persist, will produce 281,000 new jobs in 10 years? If it is likely, that means that we must pose another question. Will any new policy be likely to invite a change in that result?

It is because a new policy is now before us that we have a right to seek from right hon. and hon. Gentlemen opposite answers to some specific questions. Right hon. and hon. Gentlemen opposite have got rid of the investment grants. We on this side of the House claim, and the North-Eastern Economic Development Planning Council still claims, the need to have cash grants, because it has only been by the use of the carrot that we have been able to persuade industries to come to the Northern Region, and to some locations there to which they would not otherwise have come without that cash inducement. If there is no cash inducement, is it likely that allowances—the policy of the new Government—will produce the result that has been experienced during the past few years?

How can an industry in its infancy be expected to establish itself in the west part of Durham, for example, where there is unemployment, when it has not established the profitability base upon which it qualifies for the new allowance? It will not be done. I challenge the Under-Secretary of State to say something more than the old claptrap about value for money. There is an arrogant presumption by the Government that it is necessary only to promise people that they will get better value for money. Who do they think they are? Do they think they have the monopoly of public money and a new insight into the use of public money so that they can give to private enterprise as well as to nationalised industry? Do they presume to have better judgment than the Opposition? No politician in charge of a Government Department wants to argue that the officials who are scrutinising applications for Government grants are fickle and negligent when Labour is in control but wise when the Tories are in control.

Last week the Secretary of State for Trade and Industry, in his great speech, referred to "lame ducks". I have a question to ask the Under-Secretary of State which the Secretary of State would not be prepared to answer. The Under-Secretary of State has more experience in the House than has the Secretary of State, and I do not see why I should put this question to the new boy who makes such big errors. Is it not time that the Conservative Government named the "lame ducks", and stopped kidding the people of this country along and using "lame ducks" as an excuse for not putting into the development areas the money which is required?

Let the companies who have misused Government grants be named. If Rolls-Royce is named and given £42 million of the taxpayers' money, the companies who have misused the money should also be named. If the Under-Secretary cannot accept that challenge, he should take a tip from this side of the House and tell the Secretary of State for Trade and Industry to shut his mouth.

Those of us who represent the Northern Region are determined that the people there shall have work, and we have a right to ask the Government how, within their proposed public expenditure cuts, they expect to help the development areas. Industrialists will not come to the Northern Region, where so much remains to be done, if instruments which were created by the Labour Government are snapped out of their hands. The Government have abolished the Industrial Reorganisation Corporation. As the Leader of the Opposition said last week, the Secretary of State for Trade and Industry will soon regret that action, for the I.R.C. was important to the development areas.

The Regional employment premium is to be abolished. The Secretary of State for Trade and Industry should listen to the Chairman of Swan Hunter—a man who knows his own business, albeit he has enjoyed the taxpayers' support in the past—when he says that dangers will arise in that industry from the loss of R.E.P. There is to be a cut in expenditure on technology of £16 million by 1971–72, and a further cut of £70 million by 1974–75. What about getting rid of the British Productivity Council—a measly trick? What about getting rid of the Consumer Council—a niggardly trick? Those organisations are important to my region. They are not unrelated to development, or to inflation which my region feels more harshly than does the rest of the country. How will industry be attracted to that area now that the carrot has been taken away?

Investment grants have been discontinued completely from 27th October. Road transport is being cut by £23 million between 1971 and 1972, and by £58 million between 1974 and 1975. In housing there is to be a cut of £100 to £200 million by 1974. [Laughter.] That is no laughing matter, but the hon. Member for Leicester, South-West (Mr. Boardman) laughs. Get on your feet if you want to enjoy a laugh in this House—

Mr. Speaker

The hon. Gentleman must say "The hon. Gentleman must get on his feet". He must not ask me to get on my feet.

Mr. Leadbitter

What about the cuts in shipbuilding grants? I pose these questions because I and my hon. Friends as Members for the Northern Region are concerned about them, and we hope that the Minister will give some specific answers.

Mr. Tom Boardman (Leicester, South-West)

Since the hon. Gentleman referred to housing cuts, perhaps he would elaborate how the Government's policy will adversely affect his area? Does he not agree that it will help his area?

Mr. Leadbitter

I will announce that in six or seven months' time when the results will be known.

Mr. Speaker

Order. A number of hon. Members still wish to speak. There will be time for them to do so if speeches are brief.

9.54 p.m.

Mr. George Lawson (Motherwell)

I compliment my hon. Friend the Member for The Hartlepools (Mr. Leadbitter) on his diligence in recognising the fact that the business was likely to fold up early and that there was a chance to raise this important matter on the Adjournment. I should also like to thank the hon. Gentleman the Under-Secretary of State for coming to the House, since we all know how inconvenient it is to learn suddenly that there is to be an Adjournment debate on a particular subject and to have to speak at short notice.

I wish to confine myself to a specific question, and if I expand on it in trying to make clear what is in my mind I know that the House will understand. I am seeking information. I understood at one time that both the Board of Trade and the Ministry of Technology were engaged in studying in depth the relative merits of investment grants as compared with investment allowances.

The first Report of the Estimates Commitee in the year 1968–69, which was published on 22nd January, 1969, says in paragraph 27, referring to the investment grants scheme: Your Committee asked what steps have been taken or were contemplated to find out how far the scheme was succeeding in its objects". In commenting on this Report the Winter Supplementary Estimates for 1968–69, dated April, 1969, stated that preparatory work had been put in hand some while ago and that the Government had decided to undertake a study with which industry would be associated.

I was a Member of the Select Committee on Scottish Affairs in the 1969–70 Session and we heard evidence from representatives of Government Departments. A document dated October, 1969, was submitted to sub-Committee A of the Select Committee on Scottish Affairs and stated that after consultation with industry a questionnaire was being circulated to a number of firms, and that it was hoped to complete the survey by the summer of 1970. The Board of Trade said that until the results of this survey were available, it would not be known how far it would be possible to provide the information requested by the Committee about the effectiveness of grants compared with tax allowances as an investment incentive. But in subsequent evidence on 4th February, 1970—and I quote from page 309 of the Report Question 310—the Ministry of Technology witness said: The Government announced some time ago that they had started a study of the effectiveness of the grant scheme as a whole, and it is one aspect of that study that a survey will be made of firms. This is something which was put in hand by the Board of Trade last year and the Ministry of Technology have now taken it over. It is hoped that the survey will give some practical information about the effect of grants on firms. I have quoted those extracts in an attempt to show that we are entitled to take it that over a lengthy period a thorough survey has been undertaken into this matter. I should like to know how investment grants compare with tax allowances in their effect as a means of inducing firms to go to development areas. We were told that the matter was gone into in considerable depth, that many firms were examined and that a Report was to have been published, it was hoped, by the summer of 1970. We are now well past the summer of 1970, and we know that the Government have replaced the grants system. I realise that the grants paid for projects already set on foot are still to continue, but no new work is to be regarded for investment grant as from the Chancellor's announcement on 27th October.

It being Ten o'clock, the Motion for the adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fortescue.]

Mr. Lawson

In the new White Paper, Cmnd. 4516, dated October 1970, we have in paragraph 14 the statement: A thorough-going study of regional development policy has been put in hand. I may be wrong, but it seems to me that that is a statement about a different project having been put in hand. My question is, did the Government take their decision on the scrapping of the investment grants without considering the Report which ought to have been in their hands from, first, the Board of Trade and, then, the Ministry of Technology? Is there such a Report now? Shall we see that Report or has that Report been scrapped? What is this new project, or is a continuation of the other one?

We are surely entitled to know what has happened to that study. What are the results of it? It is not a question of giving us some little details which it might suit the Minister to give. We ought to have access to that study, which ought to be published in full. It may be that what the study says will be contrary to our ideas about the effectiveness of the grants as distinct from the allowances, but we certainly ought to know the result of the study.

The Minister has had ample warning about this because the subject has been raised in several Questions to him or his Ministry. It was raised, for example, by my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). There should now be the means of telling us precisely when the Report will be published and whether it is to be published in full.

10.2 p.m.

Mr. Tom Boardman (Leicester, South-West)

I did not intend to intervene, but the hon. Member for The Hartlepools (Mr. Leadbitter) made such sweeping and inaccurate statements and was so provocative in his presentation that I feel bound to comment on his generalisations. He referred, first, to investment grants and suggested that they were having a particularly adverse effect upon the regions.

Mr. Leadbitter

That is exactly the opposite of what I said.

Mr. Boardman

The abolition of the investment grants and their replacement by investment allowances was, he said, having an adverse effect upon the regions. No supporting figures were given, because that is just not so. One cannot generalise in matters like this. The calculations of cash flow and so on depend upon the particular circumstances. I am sure that if the hon. Member will consult industries in his region, he will find that many of them are better placed under the new system than they were under the old. That sort of comment has nothing to do with the issue which he originally raised. It is general attack, which is irrelevant to the argument.

He will find also that the investment grant, which went to those who were profitable or unprofitable, was wasteful of resources, whereas the investment allowance which is now introduced will follow the maxim of supporting success, supporting those industries which are profitable and which will bring growth and further prosperity to the region, instead of paying the grants regardless of the merits.

Mr. Gavin Strang (Edinburgh, East)

What about Rolls-Royce?

Mr. Boardman

The hon. Member may have the opportunity of catching Mr. Deputy Speaker's eye later. Secondly, the hon. Member referred to the I.R.C. and suggested that the abolition of the I.R.C. would adversely affect the regions. Of course, he cited no case because there is no case to cite. He will know that the I.R.C., in its combined rôle of a marriage broker or mortgage broker, or whatever might have been its correct designation, brought no successes but put together and subsidised with public money companies which did nothing and made no contribution to the success of the regions.

Mr. Leadbitter

indicated dissent.

Mr. Boardman

The hon. Gentleman may shake his head, but, if he could cite one case, I should gladly give way. He cannot, and neither do I expect him to do so.

The hon. Gentleman referred, finally, to housing and the effect of the Government's housing policy on the regions. Under some provocation, I intervened to ask in what way the new housing policy was hindering the regions, and I suggested that, in fact—this will prove to be the case—it was helpful to the regions. Time forbids me to elaborate on that point, but I am sure that that is so. In reply, the hon. Gentleman made a lame response to the effect that, perhaps, he would see in seven or eight months' time. We shall see in seven or eight months what the truth of the matter is, and the hon. Gentleman will see that his criticism was unfounded, as was every other point which he made on investment grants, the I.R.C. and housing.

10.6 p.m.

Mr. Ernest Armstrong (Durham, North-West)

I express my appreciation, also, to the Under-Secretary of State for coming to listen to the debate. The first point which I put to him, with all the seriousness that I can muster, is that there is great need to give confidence to those industrialists whom we are trying to attract into the development areas, and into the Northern Region, in particular.

I commend to the hon. Gentleman's study an article in this morning's Northern Echo by Mr. Bill Campbell, the business editor. This article reflects the general lack of confidence in the Government's change of policy as it affects the bringing of industry into the area: The North-East cries out in the dark for more jobs. No one yet knows what will come next. No one knows when it will come. Some would say the new Government itself has not a clue what its step should be to help the regions like the North-East. But that might just be malicious. The article goes on to quote the view of the North-East Development Council. The Council has already seen the Secretary of State for Trade and Industry, so it is not, as it were, talking off the cuff. Its representatives were received at the Department, and they had a long interview with the Secretary of State. This is the Council's view: The North-East Development Council says:' Due to the uncertain outlook over the past six months the number of industrial inquiries received in the region has fallen considerably'. That is not airy-fairy opinion. It is a comment by a non-political body which has had the news, so to speak, from the horse's mouth, having been received at the Department only two weeks ago.

I stress that there is a lack of confidence. In a Question last week, I asked the Minister about two industrial estates in my area. At Meadowfield and Crook there have been developments over the past five years—we now have two advance factories completed, and I know that there have been several inquiries—but the uncertainty over Government policy is preventing industrialists from coming to the area. I urge the Under-Secretary of State at least to persuade his right hon. Friend to make a definite announcement so that the sort of article which he can read in this morning's northern newspaper may appear no more, and so that we shall know what the Government's policy really is.

I shall not argue now about grants as opposed to allowances and so on, but the truth of the matter is that the new policy for the regions is conceived by a Government who have as their first priority the reduction of public expenditure. We have heard about the importance of obtaining value for money and about the lack of success of the old policy. Industrialists in the north, representatives of the C.B.I., and the Shipbuilders' Association, which regards the phasing out of R.E.P. as a direct blow at its interests, know that, whatever the Government may say, their real aim is to reduce public expenditure. This Government see the massive resources pumped into these areas by the Labour Government as an ideal target in their efforts to reduce public expenditure.

In the special development areas we had a rolling programme for advance factories. In setting up the special development areas, which were particularly related to the difficulties caused by pit closures, the Secretary of State stated that, when a tenant was found for a new advance factory, under the rolling programme immediate authorisation would be given for the building of a new advance factory.

The whole of my constituency is in a special development area, because pit closures have been severe there. We are anxious that the policy introduced by the Labour Government, which meant a great deal to my constituency, shall be continued. We hope that the commitment given by the previous Government will be honoured by this Government.

The North-East Development Council—a non-political body in the area—says that we need 18,500 jobs a year. People who seek to criticise the efficacy of the investment grant system should first examine what has happened. From January to March of this year, 64 projects were authorised, which created 3,500 jobs. From April to June, 77 projects were authorised, creating 10,300 jobs. Thus, in the first six months of this year, 13,800 jobs were created. The Development Council now forecasts that, because of the uncertainty and the lack of confidence which I have mentioned, the target of 18,500 jobs will not be achieved, which means a dismal performance in the first six months of the new Government.

I urge the Government to end the widespread apprehension in the North-East and give us details of definite policy as quickly as possible. I ask the Government to remember that the special development areas still have an urgent need for special attention, and the rolling programme for advance factories will be a great reassurance for my constituency.

10.13 p.m.

Mr. David Watkins (Consett)

I compliment my hon. Friend the Member for The Hartlepools (Mr. Leadbitter) on his diligence in seizing the opportunity to initiate this short debate. Also, I add my thanks to those which have been expressed to the Minister for coming to the House at short notice to reply to the debate.

My hon. Friend and constituency neighbour, the Member for Durham, North-West (Mr. Armstrong), spoke about the special problems of the special development areas. My constituency like his, falls into that category. The provision of advance factories—that is, factories which were built in development areas in advance of any industrialist taking them over as a tenant—was one of the important aspects of the Labour Government's regional policy which the present Administration have inherited. Hon. Members will readily call to mind instances of advance factories having been built but having remained devoid of tenants for a long time.

Strenuous efforts had to be made to find appropriate tenants. Many advance factories are now not standing empty—I understand that virtually all such factories are now occupied—but nevertheless present a problem. I refer to advance factories which are almost completed or are otherwise under construction. Will every effort be made to find tenants for them? I appreciate the overriding consideration which the Government have to cut expenditure, rather than to utilise it for this type of intervention, but we need a firm assurance that the most strenuous efforts will be made to find tenants for these factories.

Time is short, and I cannot develop this point as much as I would like. In Leadgate in my constituency we are building a trading estate to include advance factories. In an age when we are continually being told of the necessity to cut Government expenditure, it would be ludicrous if these factories and similar factories in other development areas were built but strenuous efforts were not made to find tenants for them.

It is no good leaving these matters to so-called market forces because when this theory of economics was put into operation areas like the north-east of England suffered immensely because of the concentration of industry in other parts of the country. Geographically, areas like the North-East are at a disadvantage. For this reason the Labour Government made strenuous efforts to improve communications.

In this connection, I regard the refusal of the Secretary of State to permit loan sanctions for the necessary expansion of Newcastle Airport as a shocking blow against the communications which are so badly needed in this region.

I stress with all the power at my command that it is no good advance factories being built if, at the same time, tremendous efforts are not made to provide tenants for them. I reiterate that tenants cannot be found purely by the play of market forces. I therefore hope that the Minister will give an assurance that every effort will be made to tenant these factories.

10.19 p.m.

Mr. Bob Brown (Newcastle-upon-Tyne, West)

I do not apologise for returning the House to the question of investment grants. Thanks to these grants, I have in my constituency a factory of the Ever-Ready Company. It began with virtually no employees in 1968 and now it employs 300. Within the next 12 months it expects to expand and employ 650 people. We are sadly in need of employment of this kind, and without investment grants we would not have had this development in Newcastle, West.

We are constantly told by Ministers of the need, particularly in development areas, for improved communications and a better infrastructure. We have heard what hon. Gentlemen opposite consider to be the justification for many of the Government's measures—the fact that money saved will be money available to go towards improving the infrastructure of the development areas. This is absolute claptrap and hypocrisy. My hon. Friend the Member for Consett (Mr. David Watkins) mentioned the decision on Newcastle Airport. Could any form of communications in this part of the country be more vital?

The Government say with some pride, "We have made no cut in the motorway programme, nor in the trunk road programme." What they do not mention is the intended cut in the principal road programme, which is the most important part of communications for the county boroughs, particularly in development areas. In my city the eastern ring road and the western ring road are both principal roads, paid for 75 per cent. by the Government and 25 per cent. by the local authorities. These are the type of roads which are to be cut. This is deplorable. I hope that the Minister will convey my views to his right hon. Friend the Minister for Transport Industries. I wish we still had a Minister of Transport.

10.20 p.m.

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

I, too, should like to congratulate the hon. Member for The Hartlepools (Mr. Leadbitter) on his ingenuity in securing this Adjournment debate. He will appreciate that if we had had a little more notice my reply might be more acceptable and more detailed.

Because of the late hour I propose to confine myself to answering the points made so far as I can and indicating quite broadly the views I take on this very important subject. I thought it right to allow as many hon. Members as possible to have their say, so far as time permitted, because I know that they all come from development areas and have a particular interest in the subject. Having relatively recently undertaken my present responsibility, I find it extremely helpful to hear the views which are put forward.

The hon. Member for Newcastle-upon-Tyne, West (Mr. Bob Brown), former Parliamentary Secretary to the Ministry of Transport, may rest assured that what he said will be drawn to the attention of my colleagues in the Environment Department, and my hon. Friend the Minister for Local Government and Development is sitting beside me for that very purpose.

I have recently been to the North-Eastern Region on an all-too-short visit. Admittedly, it was almost entirely in connection with exports rather than with regional development. But at least it gave me an impression of a lively, very brisk community of delightful people with a delightful climate and delightful countryside. It was also borne upon me, precisely as the hon. Member for The Hartle-pools said, that the region, like so many other development regions, is going through the traumatic experience of having to change from old and basic industries which are dying to new industries. That is precisely where development policy comes in.

Let me make it absolutely clear that I and the Government are wholly committed to a development area policy. We have set this out quite clearly in our speeches and manifestos and I believe that it is absolutely essential in the interests of the country.

Where the two sides of the House differ is in the ways in which this can best be achieved. Progress has been made in many aspects of infrastructure. But let us never forget where this all started. If we are to make a party political point, it was initiated by the Government of which I was not a member, when my noble Friend the present Lord Chancellor had responsibilities for these matters. Let us be quite clear on where praise and blame lies. [An HON. MEMBER: "Helping lame ducks."] I shall not indulge in ornithological metaphors. That is not my way.

What is important on the issue of investment grants or investment allowances is not how much is spent but how well it is spent. The error of the previous Administration was that they took the view that one had only to hand out grants indiscriminately, and inevitably vigorous projects would appear in the development areas.

Mr. Leadbitter

On a point of order. I do not want to interrupt the Minister, because he has been so kind to us, but can you protect us, Mr. Deputy Speaker, from a misstatement of the kind which the hon. Gentleman has just made, which is so wrong?

Mr. Deputy Speaker (Miss Harvie Anderson)

Order. That is not a point of order.

Mr. Grant

I was really giving the philosophy of the matter. The hon. Gentleman raised the question of investment grants as opposed to investment allowances, and I was telling him what I thought was the delusion in the minds of the previous Administration. Let us be fair in respect of investment grants. I recall many complaints from these excellent regions about the development policy, whichever method was used. I am merely advocating that we should try, as we have set out clearly not only in speeches but in the White Paper, what we believe is a new and vigorous policy which is particularly geared to encouraging the sort of employment that we all want to achieve.

No doubt I could continue this great philosophical debate on investment allowances and investment grants at considerable length, but the fact, as was stated clearly in the House and in the White Paper, is that the package announced by the Chancellor is intended to encourage employment because it will encourage the sort of firm that has growth potential. It is firms of this kind that will attract employment in the areas where it is so necessary.

The hon. Member for Motherwell (Mr. Lawson) raised the question of the study carried out within the Department some time this year. A certain amount of work has been done on the effectiveness of the investment grant system, and the evidence of that study was taken into account in the change in the pattern of incentives. However, the evidence of the study that is so far available is not particularly conclusive. Only about 300 firms were sampled, and it is difficult to draw too many conclusions from this study which was, after all, an internal one. Nevertheless, the evidence that it has produced so far has been taken into consideration.

The hon. Member for Durham, North-West (Mr. Armstrong) mentioned the fall in the number of inquiries in the North-East due to a lack of confidence. I am sorry about this, but it reflects the general economic state of affairs, for which this Administration does not accept full responsibility. I hope that the situation will change. I hope, too, that hon. Gentlemen opposite will not spend all their time decrying the new package but will do everything they can to let it be known to the industries in their areas that substantial assistance is being given to firms to create employment in the regions. I believe that if they do that, as we shall by the widest possible publicity and advertising, it will attract into the regions precisely the sort of firms and growth that it is necessary to encourage.

The hon. Gentleman also raised the question of advance factories. If I may accept his offer, I will write to him about the provision of advance factories in his constituency.

The hon. Member for Consett (Mr. David Watkins) also raised the question of advance factories. A large number of these factories is in the pipeline. Demand for them has been less brisk than we should like, but this, again, is a reflection of the state of the economy generally, and I assure the hon. Gentleman that we shall seek vigorously to find tenants for factories which have not yet been let.

Let me next say a few words, because it will be my responsibility to deal with them, on the question of I.D.C.s. I have no doubt that within six months I shall be the most unpopular Minister in this House, both for granting I.D.C.s and for refusing them. Nevertheless, my policy will be to grant them as freely as possible in the development areas. What is more, I shall do everything I can to encourage firms to go to the development areas.

I have found this short debate very helpful. We believe in the regions. We have a development policy which we believe is a much better and less wasteful than the previous policy. We believe that investment allowances will encourage the best firms and provide the best employment, and that they will be better than the wasteful investment grant system which they are to replace. By these investment allowances we shall stimulate long-term growth by increasing the basic economic attractions of the areas concerned. I hope that if there is an oppor- tunity to debate these matters in six months' time, hon. Gentlemen opposite who are present today will find that there is a lot more employment, "go" and enthusiasm in their areas than there is in the situation that we have inherited from the previous Administration.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.