HC Deb 14 February 1983 vol 37 cc13-4
16. Mr. Dormand

asked the Secretary of State for Industry if he will make a statement on the progress being made on the review of the Government's regional policies.

Mr. Norman Lamont

Officials of the Departments concerned have completed the first stage of the review, which was to examine the working of current regional economic policies and identify ways in which they might be made more effective. We now have to decide what further work we may want to commission. I should like to emphasise that there will be no further substantial changes in the lifetime of this Parliament.

Mr. Dormand

Is the review a cover-up for yet another attack on regional aid? What possible justification can there be for the proposal in the public expenditure White Paper to cut regional and general industrial aid by 21 per cent.? Will the Minister give an assurance that before any conclusions are reached he will consult organisations and local authorities in the regions concerned?

Mr. Lamont

We consult local authorities and other people involved in the regions on regional policy all the time. I have already said that no further changes in regional policy are planned in the lifetime of this Parliament. But, having said that, it is perfectly reasonable that the Government should review regional policy and its effectiveness, about which there is a lot of argument and controversy.

Mr. Hal Miller

Does my hon. Friend agree that under current criteria the west midlands would qualify for assisted area status, so that he is faced with the choice of either including it or reviewing the policy? In that review, will he pay particular attention to the creation rather than the diversion of jobs—which many suspect the current policy encourages—and the cost-effectiveness of regional policy as a means of assisting industry?

Mr. Lamont

The criteria, of course, include geographical position and access to markets, too, and not just levels of unemployment. I entirely agree with my hon. Friend that cost-effectiveness, and, indeed, the effectiveness of regional policy, are the very things that inevitably any Government must look at.

Mr. Prescott

Does the Minister agree that the only principle that seems to govern the Government's attitude to a review of regional policy is how to reduce the areas given grants and thus save money? Are they not the overriding considerations? Will the Minister tell us that in considering the review of regional policy he will seriously think about the effective role that the Labour-controlled councils, such as the GLC, the west midlands and Manchester, and smaller local authorities, play in creating jobs, some at a cost of only £250 a job and not the £40,000 a job, which is quoted from the Conservative Benches on occasions?

Mr. Lamont

Unfortunately, some of the jobs safeguarded in the public sector by Labour-controlled authorities have been at the expense of jobs in the private sector. The hon. Gentleman talks about cuts in regional policy. We have simply narrowed the area covered by regional policy schemes, which must make sense if they are to be effective. It makes no sense for regional policy to cover nearly half the country. RDGs in 1979–80 were £330 million, in 1980–81, £490 million and in 1981–82, £616 million.