HC Deb 09 June 1980 vol 986 cc7-9
7. Mr. Dormand

asked the Secretary of State for Industry what action he is taking to assess the effect of the regional policies instituted in 1979.

Sir Keith Joseph

Most of the changes that I announced on 17 July last year do not take full effect until 1 August this year. But the health of the economy of these regions does not depend primarily on the amount of regional assistance they receive ; it depends on the vitality and competitiveness of industry and commerce there and the degree of co-operation between managements and work forces.

Mr. Dormand

Is the right hon. Gentleman aware of the rapidly deteriorating position of the Northern region? If he really believes what he has just said, he is living in cloud-cuckoo-land. Is the right hon. Gentleman further aware that the effect of the policies that he announced last year is the opposite of what was intended? Does he agree that there is a lack of business confidence? Has he read the newspaper report describing how one of the most successful North-east businessmen is contemplating building a factory in the United States? Will he issue a report on the effect so far of his statement?

Sir K. Joseph

The effect of different stages of regional policies cannot be judged until several years after they have been implemented. I remind the House that by August 1982—that is at the end of the transitional stage—88 per cent. of the working population of the Northern region will still be in an assisted area, and 81 per cent. in a special development area or development area.

Sir Anthony Meyer

Does my right hon. Friend consider that, even after the fining down operation that he has carried through, the regional policies of the Government are sufficiently sharp and discriminating to deal, in particular, with short-term intense difficulties, such as occur in parts of my constituency, where male unemployment is approaching 25 per cent. in certain places?

Sir. K. Joseph

Yes, and I think that the House should recognise that by removing, over a period of three years, the competition with the special development areas and the large number of assisted areas that are being reduced in status, the likelihood of new expansion in those areas most needing expansion is sharply increased.

Mr. Barry Jones

In view of the rapidly increasing unemployment rate, should not the right hon. Gentleman now consider whether he should totally revamp his regional policies and pump in even more and massive financial aid?

Sir K. Joseph

The hon. Gentleman speaks as though what he calls massively increased aid comes out of the air. It does not. It comes out of the pockets and the handbags of the taxpayer and causes damage, perhaps even in the assisted areas as well as everywhere else.

Mr. Les Huckfield

Cannot the Secretary of State understand that the combination of downgrading areas and the relaxation of industrial development certificate policy, coupled with enterprise zones and the fact that every forecast is now predicting a decline in manufacturing production and investment, will have the effect of undermining any regional policy? Is he not intending to do any specific monitoring of the effects of these policies?

Sir K. Joseph

I totally disagree with the hon. Gentleman's diagnosis. He speaks as if it were possible to shift extra resources into the regions without any damaging effects elsewhere.