HC Deb 02 July 1973 vol 859 cc18-20
19. Mr. Horam

asked the Secretary of State for Trade and Industry if he is yet able to report on his discussions with the CBI and the TUC about regional employment premium.

31. Mr. Radice

asked the Secretary of State for Trade and Industry what further discussions he has had with the CBI and the TUC about the regional employment premium.

Mr. Anthony Grant

Discussions with the CBI and TUC have been held by officials of the Departments concerned. The next step will be to consider the position reached in those discussions.

Mr. Horam

Is the hon. Gentleman aware that the worst time to phase out a major regional aid like REP is in the middle of an economic boom, when we are getting labour shortages in the South-East and the Midlands? Should we not reinforce regional aid by restoring REP and restoring its value in real terms as in 1967? Is this on the agenda?

Mr. Grant

It has been possible to express all views on this subject in the discussions, and all views will be taken into consideration. I would only remind the hon. Gentleman that we are doing what his right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) advocated, that REP should be phased out after seven years.

Mr. Bruce-Gardyne

Now that the European Commission appears in essence to have washed its hands of the scatter of British regional policies for at least the next 18 months, does this not enhance the case for thinking carefully before we add further to the capital intensive bias of our existing industrial incentives?

Mr. Grant

That is certainly a factor which will be taken into consideration by my right hon. Friend the Chancellor of the Exchequer, among the other points which have been put up for discussion.

Mr. Radice

Does the hon. Gentleman understand that the reason why my hon. Friends and others keep asking about the regional employment premium is that it is now recognised at all levels within industry, in academic circles and, above all, in the regions themselves, that the REP is an essential part of our regional policy? Will the hon. Gentleman tell the House that he will now reconsider his decision?

Mr. Grant

It is not surprising that those who are in receipt of £100 million worth of taxpayers' money should be concerned at its disappearance. The question is the method by which it is phased out.

Mr. John Smith

The hon. Gentleman is aware that the CBI, the TUC and the regions want to continue REP. The only people with any doubts are the Government. Why did they start this silly exercise in the first place, and when will it be stopped?

Mr. Grant

As one hon. Member has said, there are also those who pay this money who have to be taken into consideration. In addition, there are the views which were held by the party opposite when they were in government.

Mr. Waddington

Will my hon. Friend bear in mind that, although he has been told by about four people that the regions want a continuation of this premium, I can assure him that those parts of the North West which are intermediate areas do not want a continuation of the premium?

Mr. Grant

My hon. and learned Friend has indicated that there is more than one view on this subject.

Mr. Varley

Can the hon. Gentleman confirm the weekend reports that the European Commission will not subject Britain's regional policy to the transparency test and that, therefore, there is no European blockage to a continuation of REP?

Mr. Grant

I am not responsible for what appeared in the weekend Press, but I can assure the hon. Gentleman that there is nothing in the treaty which stops something like REP. Indeed, there is something like REP in Italy.