HC Deb 01 July 1974 vol 876 cc9-10
6. Mr. Radice

asked the Secretary of State for Industry whether he will now increase the regional employment premium.

Mr. Heffer

As my right hon. Friend the Chancellor of the Exchequer said in his Budget Statement, we intend to continue the existing rates of payment beyond September 1974 while considering further possibilities for the future.

Mr. Radice

Does my hon. Friend agree that the REP has been seriously eroded by inflation? Further, does he accept that restoring the REP to its original value would help the regions to provide effective protection against the high level of unemployment that is forecast for 1975?

Mr. Heffer

I think that my hon. Friend is aware that the determination of the REP is not within the scope of my Department. The Department of Industry, of course, has a view on this matter. We are all concerned about inflation and we feel that steps must be taken to deal with it.

Mrs. Kellett-Bowman

Will the Minister and his right hon. and hon. Friends bear well in mind that the regional employment premium is extremely damaging to intermediate areas such as the ones that I represent, in Lancaster? Therefore, will the Minister do nothing to increase the premium, and will he try to persuade his right hon. and hon. Friends to abolish it?

Mr. Heffer

That may be the view of the hon. Lady but it is not the view of the CBI or the TUC. They favour very much the continuation of the REP and they have expressed opinions that it might be increased. Surely the hon. Lady is aware that if the REP had not been introduced the level of unemployment would have probably been greater in the under-developed areas.

Mr. Wigley

Is the Minister aware that whatever the position may be in intermediate areas, development areas or special development areas, there will be a great welcome for any extention of the REP? Further, does the hon. Gentleman agree that there is a requirement for certainty as to the length of time that the premium will exist for industry's investment plans in such areas?

Does the Minister appreciate the need for financial incentives for industry to be introduced apart from REP, to overcome, in particular, deficiencies in industrial infrastructure in development areas, such as roads and railways? Such matters are often the greatest hindrance to getting companies to set up in development areas. Will the hon. Gentleman put pressure on the appropriate Ministry?

Mr. Heffer

The hon. Gentleman will be aware that the Government made clear that the REP would be continued beyond the date that it was due to be phased out and that this has meant reassurance to industry in development areas. He will also be aware that we are very concerned about building up industry in development areas. That is why we shall be bringing proposals before the House to help in that direction. They will be proposals that have not been welcomed by both sides of the House.