HC Deb 17 July 1979 vol 970 cc1302-21
The Secretary of State for Industry (Sir Keith Joseph)

With permission, Mr. Speaker, I should like to make a statement on regional industrial policy.

The Government have completed their review of regional industrial policy and selective financial assistance in Great Britain within the context of their overall economic aims and the steps being taken to encourage national industrial vitality and prosperity. As the House knows, the Government seek to create conditions in which the whole country can prosper, including those areas with severe economic problems.

As part of our general framework for industry, we propose to continue with a strong—but more selective—regional industrial policy. We shall maintain the three-tier structure of the assisted areas—that is, special development areas, development areas and intermediate areas—as well as the existing instruments of regional industrial policy, but concentrating on those parts of the country with the most intractable problems of unemployment.

The assisted areas currently cover over 40 per cent. of the employed population. We propose over a transitional period of three years to reduce this to around 25 per cent., in order to focus on the remaining assisted areas more effectively, and to treat different parts of the country more consistently and fairly.

We propose immediately to upgrade a small number of areas to take account of their changed circumstances. A number of special development areas and development areas will be downgraded by one step for similar reasons, but these changes will not take effect until 1 August 1980. We propose that from 1 August 1982 a number of these areas should be further downgraded, but that of these those due to become non-assisted areas should be the subject of a special review before such descheduling takes final effect. In addition, we propose that a number of intermediate areas should become non-assisted areas in three years' time.

Full details of these proposed changes in assisted areas boundaries and gradings are given in my written answer to my hon. Friend the Member for Nelson and Colne (Mr. Lee) and are available in the Vote Office, the Printed Paper Office and the Libraries of both Houses.

We propose to maintain regional development grant at its present level of 22 per cent. in the special development areas, so that assistance will not be reduced in the areas of greatest need. In development areas we propose that the rate of grant should be reduced from 20 per cent. to 15 per cent. on buildings, plant and machinery provided after 1 August 1980. We also propose that the 20 per cent. regional development grant on buildings provided in intermediate areas should be abolished from the same date. Finally, we propose to raise the minimum levels from £100 for plant and machinery and £1,000 for buildings to £500 and £5,000, respectively, in respect of expenditure defrayed on or from 18 July 1979.

Full details of the transitional arrangements are given in my written answer to the hon. Member for Nelson and Colne.

Our objective is to maintain reasonable stability in the framework of regional investment incentives and to avoid abrupt changes.

In future, regional selective assistance under section 7 of the Industry Act 1972 will be provided in the assisted areas only where it is necessary to enable projects to go ahead.

Mr. Beith

On a point of order, Mr. Speaker. The Secretary of State referred to copies of a statement being available in the Vote Office. A number of hon. Members are waiting at the Vote Office, which claims no knowledge of the statement, and it is not available.

Sir K. Joseph

The copies are on the way to the Vote Office now, Mr. Speaker.

Mr. David Young

Further to that point of order, Mr. Speaker. Will you consider suspending the sitting until the papers are available?

Mr. Cyril Smith

Further to the point of order—

Mr. Speaker

Order. May I say that I should have thought that it would be wiser to hear the statement and then to take any points of order. [Interruption.] Order. I can then take points of order, when we shall all be better informed.

Mr. John Silkin

Further to the point of order, Mr. Speaker. A number of hon. Members on both sides will not know how their constituents are affected.

Several Hon. Membersrose

Mr. Speaker

Order. There is nothing that I can do about this point of order until we have heard the statement. I shall then know.

Mr. McNamara

On a point of order, Mr. Speaker.

Mr. Speaker

Order. There are plenty of points of order being raised, but may I say that I honestly think that the House will be better served when it has heard the statement. There can then be points of order, and they will lose no validity by waiting the extra five minutes.

Mr. John Silkin

Further to the point of order, Mr. Speaker. If the written answer has not appeared in the Vote Office by the time the Secretary of State has completed his statement, will you then consider suspending the sitting?

Mr. Beith

Further to the point of order, Mr. Speaker. The difficulty for hon. Members is that there are many—there were certainly many when I was there—at the Vote Office window who would like to catch your eye to ask a question on the Secretary of State's statement. They have been courteously informed by the right hon. Gentleman that he would refer to their constituencies, but they are not now in a position to know whether their constituents will be affected, and if they go out at the conclusion of the statement in order to find out, they will lose their opportunity to ask their questions. Is this not what lies behind the failure to deliver the papers to the Vote Office, and do not Back Benchers have a right to be protected?

Mr. Robert C. Brown

Further to that point of order, Mr. Speaker. Yesterday the Leader of the House gave a clear undertaking that he would endeavour to have the answer to which the Secretary of State referred available in the Vote Office before the statement. Transparently, this has not happened, and the right hon. Gentleman has referred to a written answer that is not available to Members at the Vote Office.

I submit, Mr. Speaker, first, that it is quite monstrous that the Government should try to override the House by replying on an important policy decision through the subterfuge of a written answer. Secondly, Mr. Speaker, may I submit that it is monstrous that the sitting should not stand suspended until we have the facts before us?

Sir K. Joseph

I am sorry, Mr. Speaker—

Mr. Ogden

On a point of order, Mr. Speaker. Is it not reasonable to suggest that in these circumstances, in response to a fair number of hon. Members, you have the power to suspend the sitting to allow the papers to come forward and then allow the Secretary of State to continue? He has come to the House to give us information. May we have a chance to get it before we question him?

Mr. Speaker

It is possible that the Minister knows for how long the delay will continue—if there has been a delay. I want to help the House to get its business completed. I have had a request from the Opposition Front Bench to which I am prepared to give consideration after the statement.

Sir K. Joseph

I am very sorry that there has been any delay. It was because of the importance of putting into hon. Member's hands all the documents concerned so that they would know about their constituencies that it was orginally discussed that there should be a writteen answer followed by a debate. I am not one who tries to avoid discussion in the House. The documents are now available. The House will appreciate that there are 14 pages in the written answer and that there is a great deal to cover. I hope that I shall be allowed to continue with the statement.

Mr. Alan Williams

There are 14 pages annexed to the answer. That means, inevitably, that hon. Members will need considerable time to absorb their contents. They will need to absorb them in conjunction with the various policy changes that the right hon. Gentleman is outlining. Therefore, it becomes a farce to continue with the statement until we have the documents.

Sir K. Joseph

On a point of order. Mr. Speaker. It is precisely because there is so much to absorb that my right hon. Friend the Leader of the House is arranging for a debate next week, which was always intended after a statement of this importance.

I was saying, Mr. Speaker, that our objective is to maintain reasonable stability in the framework of regional investment incentives—

Mr. Buchan rose

Mr. Speaker

Order. The House will obviously have an opportunity for thorough questioning and debate on this very question. We have been told so. A statement is being made and the House can act accordingly later. That is as I see it.

Mr. Buchan

On a point of order, Mr. Speaker. The statement does not mention areas but includes a series of definitions and percentages. None of this is meaningful unless we know the specific areas involved. Questioning will be meaningless unless we are aware of the areas concerned. Many requests have been made that you, Mr. Speaker, suspend the sitting for the dignity of the House as well as for the better furtherance of our business, and I reiterate those requests.

Mr. Speaker

I think that the dignity of the House will best be served now by hearing the statement.

Sir K. Joseph

In future, regional selective assistance under section 7 of the Industry Act 1972 will be provided in the assisted areas only where it is necessary to enable projects to go ahead. Particular attention will be paid to the provision of more productive and more secure jobs. I shall say something about the future of national selective assistance under section 8 of the Act in a moment.

We consider that factory building is a useful and relatively inexpensive instrument of regional industrial policy, and this will continue. We intend, however, to secure a greater element of self-financing.

We have also reviewed the operation of industrial development certificates in the light of our objective of reducing the burden of Government controls on industry. I am satisfied that the IDC procedure can still be useful in identifying large projects which are potentially mobile. I propose, however, to abolish IDCs in the intermediate areas and to raise the exemption limit to 50,000 sq. ft. in the non-assisted areas, including the South-East.

We estimate that these changes will by 1982–83 lead to total savings of £233 million in the expenditure of £609 million on regional development grants, regional selective assistance and factory building projected in the 1978 White Paper revalued at 1979 survey prices. Although expenditure on regional incentives will continue to be substantial, I must emphasise that regional differences will not be reduced simply by redistributing money from taxpayers; there needs also to be local enterprise and plenty of co-operation in making businesses competitive and profitable. Nothing will do more for the prosperity of a region than a reputation for effective work, high productivity and co-operation between work force and management.

Finally, I turn to our decisions on national selective assistance under section 8 of the Industry Act 1972—which can, of course, be paid to enterprises in the assisted areas as well as in the non-assisted areas.

After consideration, the Secretary of State for Energy, the Minister of Agriculture, Fisheries and Food and I have decided to allow the energy conservation scheme and the two remaining sectoral schemes, for footwear and redmeat slaughterhouses, to run their course. All applications under these schemes and any outstanding applications under the other sectoral schemes that have already closed will be processed under existing criteria.

The selective investment scheme, for major investment projects, closed for applications on 30 June. All outstanding applications which have not yet been approved will be processed against the existing criteria but we shall interpret these criteria somewhat more stringently than in the past, so that marginal projects will in future not be assisted.

For the future, the Government will continue to provide assistance under section 8, but more selectively than hitherto. We shall continue to offer assistance to enable internationally mobile projects to locate in the United Kingdom; this is an area where other Governments are also very active. We intend also to support projects leading to very substantial improvements in performance, particularly in productivity, or projects which will result in the introduction of new products. In addition, every project will have to demonstrate that it will result in a substantial net contribution to United Kingdom output or will introduce a significant degree of innovation to the United Kingdom. Assistance will be given only for projects that would not go ahead as proposed without it, and will be negotiated as the minimum necessary to achieve this.

I am laying before the House the four orders required to introduce the changes in regional industrial policy, one dealing with regional development grants, one with assisted area boundaries and gradings, and two with industrial development certificates. The regional development grant order requires an affirmative resolution and my right hon. Friend the Leader of the House will be announcing shortly the date for a debate next week at the conclusion of which this resolution will be moved.

Mr. John Silkin

Is not the truth of the matter that the whole of this long statement is concerned with only one thing, namely, cutting by £233 million? Is it not also true that this is payment deferred for the cut in the rate of tax and the tax rate threshold adjustment in the Budget, which cost £662 million, and that it will be the dole queues of Britain that will be paying for the relief to the rich?

I ask the Secretary of State some specific questions on downgrading. Incidentally, I like the touch of his referring to his hon. Friend the Member for Nelson and Colne (Mr. Lee) as the hon. Member for Nelson and Colne and not as his hon. Friend. Having looked at the list and seen that Nelson and Colne is no longer an intermediate area, I understand why he said it.

Is it not true that the intermediate areas, to which so much destruction has been done, are the very areas that are vulnerable to importation? For example, footwear and textiles in Yorkshire and Lancashire are at risk. As for Humberside and the fishing industry, perhaps that goes hand in hand with his right hon. Friend's fisheries policy in Europe.

Secondly, is it true that over the past decade the Labour Government's regional policy created 300,000 new jobs and, it is estimated, cut unemployment by the same amount? What were the estimates of new jobs not being created and of old jobs not being filled that were given to him by his Department as a result of the changes he specified?

Finally, is not the sole effect of this statement and policy to remove from the assisted areas the safeguard they had with the IDCs and to send new factories into the prosperous areas of the South-East?

Sir K. Joseph

The Labour Party, when in government, reduced regional payments and regional subsidies by £280 million at two weeks' notice, equivalent to £300 million at today's prices. The reduction of borrowing and personal taxation which the Government have already set in hand, and for which this change provides part of the resources, is essential if we are to reduce unemployment.

I have not been given any figures about what is referred to as the reduction of jobs due to this package, as there is no evidence whatsoever that in net terms, taking the country as a whole, there is any change in the number of jobs. I grant that there is some displacement of investment as a result of regional incentives. The best figure that I have been able to get is that the average number of jobs transferred from the non-assisted areas to the asissted areas each year in the 1970s was of the order of 10,000 for the country as a whole. There is no figure to give the House about the reduction of jobs as a result of that.

Mr. Cyril Smith

Is the Minister aware that in the North of England his statement will be received with great dismay and that it appears to many of us that it is biased very much towards a part of the South of England and against the North of England? Some of us view that matter with grave concern. Will he tell us what his statement does for the encouragement of small businesses and small industries, which we have understood was one of the major planks of Government policy? Will he say what the reaction of the CBI is likely to be to this statement—or is he as unconcerned about its attitude as was the Prime Minister in her earlier statements at the Dispatch Box at Question Time this afternoon?

Sir K. Joseph

The present map is full of anomalies. There are many parts of the country receiving assistance from regional development money which have lower unemployment and better economic structures than many other areas that have not been receiving such assistance. It was about time that the Government altered the map to achieve more sensible relationships.

Secondly, small businesses are helped by the general economic and tax climate. My right hon. and learned Friend's Budget has been, and will be, a help to them. Thirdly, the CBI is naturally, as are all members of the Government and of the House, extremely concerned about cash flows in business and industry. We are intensely concerned about that matter. However, the House will recognise that the changes we propose are covered by a transitional period and do not come into effect for three years. It is not the regional policies on which the cash flow of industry mainly depends.

Sir William Elliott

Does my right hon. Friend accept that many of us appreciate that the overspread of available aid has not led to lower unemployment or greater national production? Will he accept from me my appreciation of his realisation that the special development areas, including the North-East of England, are in need of extra aid? Does he recognise that in the North-East of England there is a great shortage of skill and that there is a need for extra training facilities and for more co-operation between the trade unions, employers and the education system? Does he recognise that the North-East of England wishes to play its full part in that national economic recovery for which he so bravely strives?

Sir K. Joseph

I am grateful to my hon. Friend.

I hope the House will appreciate that the more widely spread is the assistance from the taxpayer, the less effective is the help to those areas that are in most need. The purpose of this policy is, precisely as my hon. Friend understands, to focus and concentrate the help from the taxpayer on those parts of the country that are in most need.

Mr. Molyneaux

In his opening words the Secretary of State referred to Great Britain. May we therefore assume that there will be an early statement by the Secretary of State for Northern Ierland? May I assure the Secretary of State that he will have our support in steps and measures to ensure that incentives lead to the best possible long-term results?

Sir K. Joseph

My right hon. Friend must answer that question for himself. There is no immediate statement in mind.

Mr. Kenneth Baker

Will my right hon. Friend clarify the matters concerning IDCs? Am I right in thinking that in the non-assisted areas it will be possible to have industrial development up to 50,000 sq. ft. without an industrial development certificate? If so, is he aware that many Labour and Conservative Members of Parliament representing London constituencies have been pressing for that for a long time? Is he also aware that the right hon. Member for Deptford (Mr. Silkin), who speaks for the Opposition on these matters, would have had a much more prosperous constituency if that had been done many years ago?

Sir K. Joseph

The answer is " Yes " to both parts of my hon. Friend's question.

Dr. McDonald

Will the right hon. Gentleman, who is now known as the cut-and-run man, tell us what he will do about the regional development boards, which give special assistance to medium-size, regionally based companies? Will he also explain why he has raised the minimum qualifying levels of assistance for plant and machinery in the regions? Will he say whether he is prepared to add to his criteria for future selective assistance the criterion of public accountability? Will he explain why the bias of regional aid will go towards big business and not small and medium business? Is that because he is afraid of facing big business as he is of facing the House?

Sir K. Joseph

I want to help the hon. Lady, but I do not recognise the expression " regional development boards ". Perhaps the hon. Lady will explain to me later what it is she wants me to answer, and I shall try to do that.

On the question of bias, I hope that the House will not misunderstand the raising of the threshold. To convert the £100 and £1,000, which are the threshold levels for plant and buildings, respectively, to current money levels, they would need to become £300 and £3,000 respectively. We raised them to £500 and £5,000 to allow some leeway. They are not prejudiced against small businesses. Large and medium as well as small businesses buy small items of plant and authorise small buildings.

Mr. Lee

I thank my right hon. Friend for his answers to my questions. Does he agree that the Opposition seem totally obsessed with the belief that investment comes only from the public sector? Would he like to comment on the information that I obtained from the Stock Exchange today, namely, that since the Government came to power on 3 May no less than £420 million has been raised by public companies on the Stock Exchange for investment purposes by way of rights issues?

Sir K. Joseph

My hon. Friend is abundantly right. Investment and expansion respond to the economic climate and not just to subsidies.

Mr. Dormand

Does the Secretary of State not recognise that everything he has said this afternoon—and, indeed, the bungling in failing to provide essential background information—will be regarded in the Northern region as so much camouflage to hide his doctrinaire theories about the non-interventionist society? Is he not aware of the immense success of the Labour Government's regional policy? Is he not also aware that what he has said today will lead only to a most serious deterioration in the area?

Sir K. Joseph

I do not think that the inhabitants of the special development areas would regard Labour's regional policy as a great success. The taxpayer will still be finding very large sums of money for regional policy.

Mr. Emery

Does my right hon. Friend realise that most people who understand this problem will believe that the cost-effectiveness of Government money in creating new jobs is of the greatest importance? Does he appreciate that many areas, such as my own constituency, where there is 10 per cent. unemployment, have had no aid at all, and that the statement will be seen as being much fairer to the whole of the country? Will he make a statement—or have a Minister in his Department make a statement—about the ability to create new jobs in the areas so affected, by encouraging small industries and small businesses, and to stop certain of the present restrictions in labour legislation which discourage small businesses from taking on new employees?

Sir K. Joseph

It is our object to encourage the creation and expansion of existing business in every way that we can, including the removal of constraints.

Mr. Maclennan

If the Secretary of State proposes to look more favourably on internationally mobile industry, as he indicated, how will he avoid discriminating against domestic industry in the same field? Will he say why he has decided upon such an arbitrary reduction, from 40 per cent. to 25 per cent., in the assisted areas in three years' time? The sparsely populated parts of the country, which are large in area, might be very adversely affected by that decision.

Sir K. Joseph

It is an unavoidable fact that any help to a company, be it international or domestic, may be a prejudice to a home competitor. That is unavoidable in regional policy.

We did not choose a magic figure as a percentage of the population to which to reduce the proportion covered by regional incentives. We looked at a fair division between those areas which have structural economic difficulties, including unemployment, and those which are in a different order of difficulty, with much less difficult problems.

It is true—we recognise it—that there are some sparsely populated areas of the country where there are relatively large but absolutely small pockets of unemployment, and we have taken these into account.

Mr. Sproat

Does my right hon. Friend realise that while we shall want to study closely the details of the changes proposed this afternoon, we very much welcome the fact, first, that Scotland will now get a higher percentage of the development areas than it had under the Labour Government, secondly, that more help is to be given to the worst-hit areas in the West of Scotland, and, thirdly, that industry in Scotland will have time to adjust on this occasion, which it did not have under the last Government?

Sir K. Joseph

I am grateful to my hon. Friend for all three points.

Mr. Rowlands

Will the right hon. Gentleman tell us what advice he took and whom he consulted before embarking on the process of downgrading? For example, did he consult the Secretary of State for Wales before the special development area of Merthyr Tydfil was downgraded? Did he find out that the Hoover company in Merthyr, which employs a third of my working population, is in serious economic difficulties, and that already hundreds of job losses have to be faced, in addition to the fact that the company has had to postpone an extension upon which the whole of Ebbw Vale and the Heads of the Valleys area were depending for new jobs? Does he realise that he has now dashed all the hopes not merely of Merthyr but of the whole of the Heads of the Valleys by downgrading the area? What advice did he get on this issue from the Secretary of State for Wales?

Sir K. Joseph

What I have announced today is Government policy. I shall be glad to take up individual points when we come to the debate or, through my colleagues or myself, in discussions with individual Members.

Mr. Grylls

Will my right hon. Friend look at the machinery to enable smaller firms to take advantage of a regional development grant? Will he also look at the service industries, which will be bringing many of the new jobs of the future? Can those industries be given more help than in the past?

Sir K. Joseph

My answer is " Yes " to the first part of the question, and not so readily " Yes " to the second part of the question.

Mr. Mulley

Will the Secretary of State give an assurance that none of his proposals announced today, or those in the interim period, will have retrospective effect, so that people can go on with the projects already in hand? Secondly, will he, in the review, take account of the local enterprise that he commended to the House this afternoon? The city of Sheffield has attracted industry by its own efforts. Now the special status, on which its success has been based, is to be taken away from it.

Sir K. Joseph

I do not want to be inaccurate in any way. I refer the right hon. Gentleman to the written answer, which contains all the transitional arrangements. I want to be very careful in answering about dates. This information, again, is contained in the written answer. I cannot accept that the city of Sheffield has had successes only as a result of regional policy. The country as a whole has had patchy successes, and they do not relate to the impact of regional policy.

Mr. Kilfedder

In view of the fact that the Secretary of State for Northern Ireland will faithfully pursue the policy laid down by the right hon. Gentleman, will the right hon. Gentleman give me an absolute assurance that there will be no reduction whatever in the financial assistance to Northern Ireland and the inducements offered to industrialists to provide employment there?

Sir K. Joseph

My hon. Friend must put that question to my right hon. Friend the Secretary of State for Northern Ireland. My hon. Friend must not draw conclusions for Northern Ireland from the statement that I have made today about Great Britain.

Mr. Heffer

Is the right hon. Gentleman aware that despite the fact that Merseyside, in the main, has been retained as a special development area, this is a very black day for the British people? Does he accept that regional policy is virtually at an end because of the IDC policy? Is it not clear that areas such as Merseyside, with their high levels of unemployment, will be very seriously affected—despite the fact that the right hon. Gentleman says that Merseyside will be helped—precisely by this policy? Does he accept that the policy needs to be changed, even at this late stage? I appeal to the right hon. Gentleman to think again about the whole of his regional policy.

Sir K. Joseph

I shall listen to any argument that the hon. Gentleman puts to me.

Mr. Kenneth Carlisle

Is my right hon. Friend aware that many parts of the country will welcome this news, in particular my constituency, which is surrrounded on three sides by intermediate areas, even though the unemployment in Lincoln is higher than the regional average? The phasing out of these anomalies will make it much easier for many places that have high unemployment to attract new employment.

Sir K. Joseph

I agree with every word that my hon. Friend has said.

Mr. Mark Hughes

Will the right hon. Gentleman confirm, first, that there is a consequential effect of this announcement on the availability of any grants from the regional fund of the European Community, and that whichever area is downgraded as a consequence of this will no longer be eligible, under the knock-on effect, for any grant whatever from the regional fund of the European Community?

Secondly, does the right hon. Gentleman accept that the central corridor of Durham will provide the way in which unemployment, both to the east and to the west, can be solved, and that to downgrade that central corridor does not help to reduce unemployment, either to the east or to the west, within five or six miles?

Sir K. Joseph

During the transitional period of three years, European money will be available to all the present assisted areas. As for what is to happen at the end of that time, there will be plenty of opportunity to discuss the renegotiation of at least part of the European regional fund, which is already imminent, to take into account any arguments that the hon. Gentleman may want to put.

Mr. Peter Mills

Will my right hon. Friend bear in mind that we in the South-West fully agree that these matters should be looked into, particularly as intermediate areas have not been successful, whereas the full-status areas have? We in the South-West will give my right hon. Friend a fair wind on these proposals, but, if they do not work, will he bear in mind that we are not prepared to see further unemployment develop in the South-West, and will he then change his policy?

Sir K. Joseph

Unemployment does not rise and fall only in relation to regional policy. The House knows that. It responds to the general economic and tax climate, and to the activities and co-operation of individual British people.

Mr. Faulds

May I remind the right hon. Gentleman of the damage he caused to the National Health Service through a series of earlier inanities? Does he not realise that where older industries are declining and unemployment is therefore rising, as in Smethwick, and where no new industries are coming in, there is greater, not less, need for regional help? Has the right hon. Gentleman any conception of the damage that his ideological commitment will cause?

Sir K. Joseph

Today's statement does not flow from any ideological commitment; it flows from a desire to provide a more cost-effective and less costly regional policy.

Mr. John Townend

I congratulate my right hon. Friend for making a start in doing away with the anomalies. Will he clarify the position in respect of tourist grants recently made available to intermediate areas if they lose that status and are downgraded?

Sir K. Joseph

Tourist grants are not affected.

Mr. Dan Jones

The statement made by the Minister will cause intense disappointment in my constituency of Burnley, not least among members of the right hon. Gentleman's party. In view of the fact that he said that he was prepared to have discussions with anybody, will he accept a delegation from Burnley, consisting of members of the town council, chamber of commerce and trade unions for precisely that discussion?

Sir K. Joseph

One or other of my hon. Friends or noble Friends or I would be glad to see the hon. Member and his constituents, but no effect is expected until 1982.

M.. Maxwell-Hyslop

I thank my right hon. Friend for recognising the anomaly, persistent over so many years, whereby high unemployment in Torbay was completely ignored. Torbay is now given a fair status with other areas of similar unemployment. Will my right hon. Friend get rid of another anomaly, whereby the interpretation of area measurement for the IDC limit is now taken to include car parking space? In areas where local planning authorities insist that new projects can provide for car parking for their own employees, that space is included in the calculation, which has the effect of negating my right hon. Friend's proposals unless he gets rid of that interpretive anomaly.

Sir K. Joseph

As so often, I am learning from my hon. Friend. I will take up the point that he raised.

Several Hon Members rose

Mr. Speaker

Order. In view of the fact that this matter is to be debated next week and also that we have a very heavy programme later today, I propose to call four more hon. Members from either side.

Mr. Urwin

Does the Minister realise that his answer to my hon. Friend the Member for Easington (Mr. Dormand) was a lamentable failure because it devalued the importance of regional aid in the Northern region? The result of the last general election bears living testimony to the fact that masses of people in the Northern region fully supported the policies of the outgoing Labour Government. As the Minister's statement is aimed at reducing the global amount of money available for industrial aid to depressed and assisted areas, I suggest that if he wishes to be regarded as a Minister responsible for constructive policies, in that section which is headed " Work of Development Agencies " he should give urgent attention to the importance of setting up a development agency for the Northern region.

Sir K. Joseph

I note the suggestion of the right hon. Gentleman.

Mr. Trippier

I appreciate that unemployment in my constituency of Rossendale is fairly low, but does not my right hon. Friend feel that it is very dangerous to withdraw intermediate status from that area, which is so heavily dependent upon textiles and footwear?

Sir K. Joseph

I fully understand the point made by my hon. Friend. The Government of the day will watch the changing circumstances and take them into account.

Mr. McWilliam

Bearing in mind that there will be a debate on this subject next week, and also that there is nothing in the statement which tells us of that, will the right hon. Gentleman tell us the exact criteria upon which he determined those areas that were to be reduced in status or lose status? Is it that the right hon. Gentleman made that decision purely on the basis of a determination to cut public expenditure, regardless of the social cost?

Sir K. Joseph

No, Sir. We made a judgment—it necessarily had to be a judgment—on the relative economic health, employment level and prospects of the various areas of the country.

Mr. Thornton

I thank my right hon. Friend for his statement. Many on Merseyside, if not all Merseyside, will welcome the fact that its status has not been changed. Having determined this policy, will my right hon. Friend look at those outstanding applications for regional development grants in the Merseyside area with a view to expediting their approval?

Sir K. Joseph

Yes, Sir.

Mr. Bagier

Does the right hon. Gentleman accept that most of his replies have been based on investment in industry or on profits? Will he turn his mind to thinking about people for a change? Does the right hon. Gentleman appreciate that the reduction or concentration of the amount of aid will all be cancelled out by relaxation of IDCs? That is one of the most important factors in the right hon. Gentleman's statement. Will he also reply, at this late stage of his questioning, to the question put from my Front Bench? Does he seriously say that he has not done any homework to see how many unemployed will be created by the reduction of £233 million in public expenditure?

Sir K. Joseph

First, very few IDCs have been refused in recent years. Secondly, the money that is saved is not abolished or destroyed; it remains in the economy, in taxpayers' pockets, and will be spent in the creation of jobs.

Mr. Mellor

Is my right hon. Friend aware that his announcement of exemption limits for IDCs in the South-East will be welcome throughout the region, especially in Greater London? Is it not a fact that a malignant and malevolent effect of regional policy over the last 15 years has been the loss of 1 million jobs in London and the tripling of unemployment in many London boroughs? Does not the restoration of prosperity to London depend on the Government moving out of the area and leaving free enterprise to do its work?

Sir K. Joseph

The reduction of economic vitality in large parts of the Midlands and in London is no help to the North, Scotland or Wales. In fact, we need thriving industry and activity in as many parts of the country as possible if there is to be improvement in the regions.

Mr. John Evans

Is the Secretary of State aware that the policy that he has announced today will damage the social fabric of much of the North of England? Can he give one iota of evidence that firms which did not go to areas such as the North-West with regional assistance will now go there without it? On a specific point, will he look very carefully at the question of grants to areas such as Earlham, which lost a steelworks and has now been downgraded, and tell the House whether it will continue to receive cheap loans from the European Coal and Steel Community? That is an extremely important point.

Sir K. Joseph

Firms did not rush to go to the North-West when there was exactly the present map. The announcement today will do no more and no less harm to the country than the withdrawal of an almost identical amount of money in 1976 by the Labour Government, when, at two weeks' notice, they withdrew regional employment premium.

Mr. Beaumont-Dark

Will my right hon. Friend accept the thanks of the city of Birmingham that at long last the IDC limits have been changed? The relaxation to 50,000 Sq. ft. will enable industry to expand on its own without any further Government money. Will my right hon. Friend welcome with me what Guest, Keen and Nettlefolds has recently done in a development area, where it is going to that area for its own sake and has turned down the use of other people's money to do so? That is the way for this country's industry again to become prosperous—to go to a place because it believes that it is the best place to go to.

Sir K. Joseph

Yes, I repeat that nothing could do more to help the regions than a reputation in them, and in the country, that there can be found effective work forces co-operating with good management.

Mr. Les Huckfield

Is the right hon. Gentleman aware that he has made a very complex statement, which does not seem to be understood, particularly by Conservatives and especially among those of his hon. Friends who have complimented him? Is he actually telling the House that he took the many and complex decisions that he did without first getting advice on the number of jobs that might be affected? Secondly, what will he say to that continual procession of Conservative Members of Parliament and representatives of Conservative-controlled local authorities who have been begging and pleading with Department of Industry Ministers to give them assisted area status because they felt that it was so important, in that it offered such a financial incentive? Finally, is the right hon. Gentleman aware that the total effect of all that he has announced today can mean nothing less than no hope at all for the regions and a massive drift of industry into the South-East?

Sir K. Joseph

I repeat that the best advice that I have been able to get is that during the 1970s there has been a net increase of 10,000 in jobs in the regions as a whole.