HC Deb 14 February 1983 vol 37 cc15-6
23. Sir Anthony Meyer

asked the Secretary of State for Industry if he will seek to extend assistance under the Industry Act 1972 to service industries.

Mr. MacGregor

Assistance is given to service industries through several schemes set up under the Industrial Development Act 1982, which consolidates the Industry Act 1972 and amendments, including for example, under the office and services industry scheme, the coal firing scheme and the small firms loan guarantee scheme. A considerable number of service industries have already benefited from the last mentioned scheme.

Sir Anthony Meyer

Is it not now becoming increasingly clear that, even if there is a major upturn in the world economy, manufacturing industry will not be able to provide many more jobs and that they will have to come from the service industries? Is not the time coming to switch resources from manufacturing industry into the service industries, including, in particular, tourism?

Mr. MacGregor

As my hon. Friend will know, tourism is aided through other schemes. I have said that there are a number of service industries that will benefit under the Act. I agree with my hon. Friend that a major source of new jobs will be the service industries. I think that he may have in mind regional development grants, but there are problems about extending them to service industries generally. For example, one must be careful that assistance to one firm is not simply displacing activity by another in the same area. There are also problems in that many service industries are less flexible in the choice of location.

Mr. Wigley

Is not that point equally valid for manufacturing industry? May not grants given to one manufacturing concern displace jobs in another area? Has not the time come to look at service and manufacturing industries together and get a new structure of grants, recognising that many more jobs in the future will be available in service industries rather than in manufacturing?

Mr. MacGregor

I have heard what the hon. Gentleman says. That argument has been put forward by a number of people. Regional development grants were designed to increase capital investment and, on the whole, capital expenditure has taken place on a much wider scale in manufacturing than in service industries.

Mr. Robert C. Brown

In view of the disappointing reply that the Minister of State gave to question 16, would the Under-Secretary of State read the debate on the northern region last week and consider what was said about small businesses, particularly in the service sector?

Mr. MacGregor

I do not need to read it. I listened closely to the entire debate. As I said, I entirely accept that small firms will be a major source of new jobs in the future. That is why we are concentrating a large number of schemes and other forms of assistance on small firms. Nearly all of them apply to the service sector as well as to manufacturing.