HC Deb 21 June 1972 vol 839 cc456-8
17. Mr. John Smith

asked the Secretary of State for Scotland if he will cause the Scottish Development Department to make a special study of the forms of employment subsidy which would be suitable for Scottish industry.

Mr. Younger

No, Sir. Following a comprehensive review of regional policies we have decided on the measures which we consider necessary to stimulate industrial and regional regeneration and we are now seeking the powers to implement them.

Mr. Smith

Is the Under-Secretary aware that he has not referred to the future of the regional employment premium? This involves a case of confusion doubly confounded, because in 1970 the Chancellor of the Exchequer announced that it was to be abolished in 1974. After the Government's change of front on regional policy, the Chancellor said it would be phased out after 1974. There is now total uncertainty in the minds of incoming industrialists whether REP will be paid after 1974 and in what amounts. Does that not greatly diminish the incentive effect of the system and is it not high time that the Government made an announcement about its future, because it is worth £50 million a year to Scotland?

Mr. Younger

Details of the regional employment premium would be for my right hon. Friend the Chancellor of the Exchequer or my right hon. Friend the Secretary of State for Trade and Industry to deal with. I appreciate the hon. Member's point about industrialists needing to know the position, but we have given them an assurance that REP will continue until September, 1974, and thereafter it will be phased out. We shall consult all those concerned to find how best this can be done.

Mr. Bruce-Gardyne

There may be more to be said for a congestion tax on the areas of over-development in the South and the Midlands rather than an extension of REP. Would my hon. Friend consider the possibility that even the extension of REP would be of greater value to the economy of Scotland than the heavily capital-intensive biassed incentives provided in the Industry Bill.

Mr. Younger

Both those questions are for my right hon. Friends and I am sure my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) will put them to them.

Mr. Grimond

Is the Under-Secretary satisfied that his plan takes sufficient account of transport and freight rates which have been stressed again and again in nearly all inquiries into employment in Scotland? In many parts of Scotland, owing to the constant draining off of top jobs, there is a shortage of people coming forward for skilled jobs of all kinds— entrepreneurial, accountancy, costing and so on. What steps are being taken to put this right?

Mr. Younger

Transport costs do not fall uniformly on all types of industry, but there are some types in which they are a particularly important factor. On the right hon. Gentleman's second point, there are some local shortages of persons for particular jobs in Scotland, but the general position is that we have people available for jobs and I continually stress this in trying to attract new industry

Mr. Ross

But surely the Scottish Development Department and the advisory committee which advises the Secretary of State should look at the best way of replacing REP. It is essential that we should get going with this, bringing pressure to bear on the other Ministers concerned, particularly on the Treasury, because it is a vital matter to Scottish industry.

Mr. Younger

My right hon. Friend the Secretary of State certainly has those sources of advice and he makes very good use of them frequently. But the new package of regional incentives is, by common consent, the best we have ever had and we should make the best of it.