Regional Assistance (Hansard, 9 June 1980)

§ 5. Mr. Straw
asked the Secretary of State for Industry what is his estimate of the effect of the withdrawal of regional assistance to industry from many parts of the North-West upon manufacturing output and investment in the North-West.

§ The Under-Secretary of State for Industry (Mr. David Mitchell)
It is not practicable to estimate the detailed effect of changes in regional aids on manufacturing output and investment in the North-West. The changes in regional industrial policy announced last July were designed to concentrate assistance, where it was most needed.

§ Mr. Straw
Is the Minister aware that since the Government's announcement last July unemployment has shot up in the North-West, including areas where assistance has been withdrawn? How much further must unemployment rise before industrial assistance is restored to such areas?

§ Mr. Mitchell
Where there is a change in the relative position of one travel-to-work area compared with others, we shall be prepared to consider fresh evidence if the hon. Gentleman presents it to us.

§ Mrs. Kellett-Bowman
Will the Minister consult his colleagues about the problems of dereliction, which still afflict parts of the North-West? Will he see whether it is possible to retain the 100 per cent. dereliction grant to assist such areas?

§ Mr. Mitchell
The Government are reviewing the position of derelict land clearance areas in places that are due to be downgraded from assisted area status in 1982. When the Government have completed that important review, we shall make an announcement accordingly.

§ Mr. Robert Sheldon
Is the hon. Gentleman aware that the Government's policies are creating a gulf between the North and the South? Does he agree that we are experiencing a further industrial decline of the North while the South faces less difficult problems? Does he accept that that can be put right only by a return to the type of regional policies operated by the previous Government?

§ Mr. Mitchell
The right hon. Gentleman should know that the policies pursued by the previous Government led to assistance being spread so widely that it was not really effective. We are seeking to concentrate assistance on the areas where it is most needed—the special development areas, and places such as Liverpool, Glasgow and Newcastle which, since the 1930s, have suffered most and have not been successfully treated under past policies.

§ Mr. Nicholas Winterton
Is my hon. Friend aware that I accept the basic strategy behind the Government's regional aid policy, but does he agree that the removal of any form of regional status from many areas of the North-West means that they are not eligible for any aid from the 7 EEC? Since the areas have to compete with many areas in the EEC that receive regional aid, can a formula be devised to ensure that places that do not have special development area status can apply for EEC funds?

§ Mr. Mitchell
It appears that all the available funds from the EEC will be fully utilised in the assisted areas. Our priority is to give help to the areas where it is most needed.

§ Mr. Allan Roberts
Is the Minister aware that the excuse that he gives for cutting regional assistance in the Northwest—that he wants to concentrate more help on development areas such as Merseyside—does not bear examination, because help to development areas is also being cut? Is he aware that industry on Merseyside is becoming dissillusioned with the Government because they are restricting applications for regional assistance, making regulations more difficult and putting a barrier on investment, even in development areas?

§ Mr. Mitchell
The hon. Gentleman will know that we are not extending assistance to projects that will go ahead anyway. We are opening up a difference of 7 per cent. between special development areas and development areas which concentrates the assistance on special development areas.

§ Mr. Fletcher-Cooke
When can the North-East Lancashire development association expect an answer to the deputation that went to see the Minister's colleagues some time ago? Is he aware that the association has been awaiting an answer on the question of an extension of time between now and when assistance is removed? When my hon. Friend talks about concentration and gulfs, will he explain why the area represented by my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) will continue to receive assistance while Darwen will not, although it needs it just as much?

§ Mr. Mitchell
The representations made by the North-East Lancashire development association are being carefully considered. Of course we shall be prepared to consider my hon. and learned Friend's representations about Darwen if there is a change in Darwen's relative position compared with that of Lancaster.