§ Q2. Mr. Dormandasked the Prime Minister whether, in any future talks with the TUC and the CBI, he will discuss the proposal to phase out the regional employment premium.
§ The Prime MinisterI refer the hon. Gentleman to the reply which I gave to the hon. Member for Lanarkshire, North (Mr. John Smith) on 19th July.—[Vol. 860, c. 205.]
§ Mr. DormandThe Prime Minister knows from our correspondence on this matter that I can speak on behalf of the 30 Labour Members in the Northern Region. Will he also be assured that I have the support of the trade unions in the region in urging the retention of REP beyond 1978? Is he aware that every organisation which has commented on REP has urged that it be retained, including the CBI which says that it should be retained in its present form 1401 until at least 1978? In view of his continuing obstinancy in this matter, will the Prime Minister tell the House his reasons for contravening the views of all these responsible voices?
§ The Prime MinisterI told the House that the Government would carry out consultations with the CBI and TUC and take account of the other views that have been expressed. Those consultations have now been carried out and the Government are considering the best way of dealing with this matter and the phasing out of REP. When we have reached our conclusions, a statement will be made to the House.
When REP was introduced, it was for a period of seven years and the Labour Party, which introduced it, said it would then be phased out—[HoN. MEMBERS: "No."[Yes, indeed. The right hon. Member for Cardiff, South-East (Mr. Callaghan) said:
In our view it is right, as my right hon. Friend said, that the scheme should exist in full for seven years and that it should then begin to phase out—obviously a review will be made nearer to the time to see how it is going"—That is what we are doing, and we have carried out the consultations—but this is our present intention—coming to an end theoretically after 10 years or so, because we could take two or three years to phase it out."—[OFFICIAL REPORT, 5th June, 1967; Vol. 747, c. 750.]That was the Opposition's position when they were in office. There is no point in their trying to deny that their intention when they introduced REP was to phase it out after seven years.
§ Dame Irene WardAs I feel strongly about this matter, may I ask my right hon. Friend whether since the TUC and the CBI both feel that, especially in the part of the country which the hon. Member for Easington (Mr. Dormand) and I represent, something should be done about the regional employment premium, he will give an undertaking, after taking the advice of those bodies, that he will reconsider the Government's attitude? I am perfectly sincere in my request.
§ The Prime MinisterWe are prepared to consider the matter further with the CBI and the TUC in the discussions we are having with them. The Government have announced their intention to carry 1402 on REP for the full length of time and then to consider how it might best be phased out. What the Government have to consider is whether the use of the money in REP is the most cost-effective way of helping regional development. It must be of some importance that, since the Government reaffirmed their intention of having discussions and phasing out REP, unemployment in the development areas in which REP is paid has gone down by 108,000 and is continuing to fall.
§ Mr. EwingIs there not a great danger that the Prime Minister is open to the allegation that he does not want tripartite agreement in these talks? If, as the hon. Lady the Member for Tynemouth (Dame Irene Ward) has said, the CBI and the TUC both want the regional employment premium to be retained, what valid reason can the Prime Minister give for withholding his agreement? The Prime Minister seems to be ruling this out, in addition to ruling out food subsidies and the withholding of rent increases. Are the talks worth holding in those circumstances?
§ The Prime MinisterI told the House that I am prepared to listen further to the CBI and the TUC. We can discuss this matter in the context of the economic situation. But what the Government wish to ensure is that the money spent on REP is the best means available of getting industry into the development areas and reducing unemployment.