HC Deb 21 January 1974 vol 867 cc1187-8
15. Mr. Radice

asked the Secretary of State for Trade and Industry whether he is now in a position to make a statement about the regional employment premium.

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

I refer the hon. Gentleman to the answer which my hon. Friend the Chief Secretary gave to the hon. Member for Lanarkshire, North (Mr. John Smith) on 17th January.—[Vol. 867, c. 139.]

Mr. Radice

Does the Minister agree with the conclusion of the Expenditure Committee that the withdrawal of the REP without any comparable replacement would create serious difficulties for many firms? Is he aware that the gap in levels of unemployment between the North and the South will widen as a result of the economic crisis and that, therefore, every kind of regional incentive, including REP, is desperately needed? Is it not about time that, on this as on so many other issues, the Government told the House what they intend to do?

Mr. Grant

My right hon. Friend the Chancellor will announce his decision to the House as soon as possible. We shall certainly lake note of the report of the Trade and Industry Sub-Committee in which I note it is also stated in the conclusions that it is difficult to judge whether or not there could be a more effective way of spending £100 million a year.

Mr. Rost

Will my hon. Friend give an assurance that, before a decision is made, the non-assisted and intermediate areas will be considered and thought will be given to whether the money could be used more effectively in other ways?

Mr. Grant

My hon. Friend has drawn attention to the fact that there is more than one side to this case. All aspects will be taken into consideration.

Mr. Maclennan

Will the Minister say how the Government propose to take into account the case of Scotland, which at present obtains £40 million of the total? What is proposed to be put in its place in view of the imminent expectation of economic disaster following the last week's happenings?

Mr. Grant

The interests of Scotland, as of other development areas, will be taken into consideration, as will be the national interest.

Mr. Benn

Have the Government considered the matter again in the light of the much worsened situation, the very serious risk that unemployment will rise, the possibility that the prospects of higher investment will not materialise and the effects that these are bound to have on the development areas? If the Government are so willing to look at all their other policies again, will they reconsider the desirability of maintaining REP, which has been shown to contribute to prosperity in areas which would otherwise be bereft of such help?

Mr. Grant

The Government will consider all the factors in the light of present circumstances and will take into consideration the views of the right hon. Member for Cardiff, South-East (Mr. Callaghan) when he was Chancellor, when he recommended that the premium should be phased out after seven years.