HC Deb 09 March 1981 vol 1000 cc604-6
7. Mr. Viggers

asked the Secretary of State for Industry if he is satisfied with the present balance between regions in the allocation of State assistance to industry.

8. Mr. Dormand

asked the Secretary of State for Industry if he is satisfied with the working of the Government's regional industrial policies.

18. Mr. Knox

asked the Secretary of State for Industry whether he is satisfied with the operation of the Government's regional policy.

Mr. Tebbit

I am satisfied that regional industrial policy is now more effective for being concentrated on the areas of greatest need.

Mr. Viggers

In considering further appeals for regional aid, will my hon. Friend bear in mind that in the South many companies, particularly in consumer electronics, are finding that their fiercest competition is. coming from within the United Kingdom, from foreign-owned companies set up in regions other than the South with Government money? Will he bear in mind that there is a risk that Government money will be used to export unemployment from the North to the South?

Mr. Tebbit

I take my hon. Friend's point, but that is not the usual circumstance. Regional development grants are available automatically to British or foreign companies that wish to set up in development areas. Selective aid is a different question and there we can bear in mind considerations of the sort that my hon. Friend raises.

Mr. Dormand

In spite of the answer that the Minister gave to the first question, is he aware that the new regional policies that were introduced with a fanfare in 1979 are proving to be a dismal failure in the Northern region? Has he seen the recently published figures from the Business Statistics Office, which show that investment in the North has decreased substantially in the past two years? What will he do about the increasing number of fly-by-night operators, who grab all the regional development grants they can and in a short time close down, leaving behind the problems of employees without jobs, redundancy payments and all the other rights?

Mr. Tebbit

On the latter point, I think the hon. Gentleman is mis-stating the position. He knows, because I have written to tell him, that in such circumstances within up to four years there is a clawback of the grants that have been made. Thus, the position is not as he sets it out. He should realise that during 1979–80 alone the expenditure per head on regional preferential assistance to industry in the Northern region was £48. That is £48 per head of taxpayer's money. That is vastly greater than in any other region of Great Britain.

Mr. Knox

How can my hon. Friend be satisfied with a regional policy under which the town of Biddulph in my constituency receives no special help, even though the level of unemployment has risen from 130 in February 1974 to over 800 now?

Mr. Tebbit

I am satisfied with it because the town of Biddulph is not an isolated community on an island. It is part of the Stoke-on-Trent travel-to-work area, and its fortunes are adjudged in that light.

Mr. William Hamilton

What criteria does the Department use in assessing the success or failure of its regional policy?

Mr. Tebbit

The answer is the extent to which the regional imbalances within the United Kingdom can be eased by Government action, but the most important part in easing those imbalances is that the work forces and the managements in the areas concerned should set out to please their customers.

Mr. Penhaligon

Earlier today the Minister indicated that if a foreign company came into an area to develop it would receive aid through the development grant system? Will he explain, therefore, why any foreign company that comes to my constituency and wants to develop mining is excluded from that enterprise, when clearly mining is an industry natural to my part of the country and, therefore, might be inclined to grow?

Mr. Tebbit

Extractive industries have always been excluded. That is not necessarily a long-term good answer, but it must be borne in mind and considered whenever we consider the pattern of regional incentives.

Mr. McQuarrie

Is my hon. Friend aware that the removal of assisted area status is having a detrimental effect on the EEC aid that certain of those areas could obtain if the status had not been removed from them? In view of the high unemployment that is arising in certain of those areas where assisted area status has been removed, will he consider the facts before the final decision is made in 1982?

Mr. Tebbit

As my right hon. Friend has made plain, we are always prepared to consider assisted area status in the light of long-term changes. My hon. Friend should not assume that aid that comes to us from the European Community is of itself free. The money has to be raised by taxpayers across Europe. We contribute a not insignificant share of that money.

Dr. John Cunningham

Does the hon. Gentleman agree that whether regional policy is effective depends largely on companies believing that it will be stable and that it will not continually be altered? Were not the first blunders of the Government to reduce regional incentives and resources for the regional role of the National Enterprise Board and the Scottish and Welsh development Agencies? Have the Government not already admitted those errors by introducing recent changes in the Industry Bill to reverse the situation?

Mr. Bruce-Gardyne

What about the regional employment premium?

Dr. John Cunningham

If the Minister believes what he says about the effectiveness of the Government's regional policy, why, in regions such as the North, as my hon. Friend the Member for Easington (Mr. Dormand) said, is unemployment inexorably mounting?

Mr. Tebbit

The hon. Gentleman seems to have forgotten the history of the twists and weaves of such absurd taxes as the selective employment tax. He seems to have forgotten the regional employment premium. He counsels me not to keep making changes. As far as I can I shall take that counsel from him, but, equally, I have to consider the particular circumstances of some areas on their merits.