Regional Development Policy

HC Deb 07 April 1971 vol 815 cc422-4

8. Mr. John Smith

asked the Secretary of State for Scotland with whom he had consultations prior to the formulation of the changes in regional development policy announced by Her Majesty's Government.

Mr. Gordon Campbell

I undertook no formal consultations on the matters which were examined in our review of regional policies, but I had the opportunity of discussing various aspects of regional policy with the Scottish Economic Council, the Scottish Council (Development and Industry), the Scottish Trades Union Congress and the Confederation of British Industry in Scotland.

Mr. Smith

Is the right hon. Gentleman aware that I have been told in a Parliamentary answer that no consultations took place with foreign industrial interests before the abolition of investment grants? Does he not consider that in view of the previous interest of the Government in attracting investment to Scotland from West Germany it was rank incompetence to change the system of industrial incentives before consulting some of the people who might have been coming here?

Mr. Campbell

We made it clear at least a year before we came to office that we were considering changing the inflexible system of investment grants and replacing it by more use of the Local Employment Acts and tax allowances. I remind the hon. Gentleman that the main anti-regional development measure of recent years was introduced with no warning or consultation at all; namely, S.E.T., which is about to be halved and will be abolished in two years' time.

Mr. Russell Johnston

Does the right hon. Gentleman agree that probably the best boost for the regional areas would be a complete abolition of S.E.T.? Will he raise with the Chancellor of the Exchequer the idea of varying the 50 per cent. across-the-board cut proposed by his right hon. Friend so that it is totally removed in the development areas?

Mr. Campbell

That is an interesting suggestion, which I will make sure my right hon. Friend hears about. The rates of S.E.T. were introduced by the previous Government in three stages. I am delighted that we can cut them in half in one.

Mr. MacArthur

Does my right hon. Friend agree that the statements about S.E.T. and investment allowances are only two of the 61 pledges already carried through by this Government, and does he accept that the fulfilment of those two pledges will bring about a situation in Scotland far more profitable to the country than the miserable employment record achieved by the Labour Party?

Mr. Campbell

I endorse what my hon. Friend has said. I am sure that his arithmetic is correct. The only point is that the number may be increasing during the course of today.

Mr. Ross

Was the Secretary of State consulted by the Chancellor before the change from investment allowances was announced? Does he apreciate that this has been an absolutely disastrous change, recognised as such by everyone concerned, and that the new impetus he announced in October, when it was put forward at a Press conference, is amply exemplified by 122,000 unemployed in Scotland today?

Mr. Campbell

I was one of the architects of this policy as a member of the Shadow Cabinet when the original proposals were published. The right hon. Gentleman criticises the system. His was the system which produced unemployment figures of 93,000 last July, at the height of summer, and before that he was opposed to any change at all.