Regional Industrial Policy

HC Deb 22 July 1983 vol 46 cc693-757 9.36 am

Mr. John Whitfield (Dewsbury)

I beg to move, That this House urges Her Majesty's Government, following the completion of its current review of regional industrial policy, to adopt a radical approach in its policies towards the regions, so as to effect a reversal in the drift to and concentration of resources in the South and South East of the country; and in particular to take account of the long term future of the textile industry which forms a substantial, vital and traditional part of the manufacturing base in the Yorkshire and Humberside Region. I am grateful to you, Mr. Speaker, for giving me the opportunity to make my maiden speech. Until this time last week, when my hon. Friend the Member for Broxbourne (Mrs. Roe) eloquently moved a motion on the police, no new Member had made a maiden speech on a balloted motion since 1959. In that year my distinguished predecessor, Mr. David Ginsburg, was first elected as the Member for Dewsbury borough constituency. For 22 years as a member of the Labour party, and for a further two years as a member of the Social Democratic party, David Ginsburg ably served the electors of Dewsbury, 68 per cent. of whom now form part of the new Dewsbury county constituency that I have the privilege to represent.

The remaining parts of my constituency comprise the wards of Denby Dale—famous to some hon. Members for its pies—which was formerly part of the Colne Valley constituency, and the ward of Kirkburton, which is part of the old Huddersfield, East constituency. I pay tribute to the hon. Members for Colne Valley (Mr. Wainwright) and for Huddersfield (Mr. Sheerman), both of whom have entrusted to me part of their former constituencies. I assure both hon. Gentlemen and also Mr. Ginsburg that I will do my best to follow the excellent examples that they have set in looking after the interests of the constituents of the new Dewsbury county constituency.

My constituency lies in the heart of what used to be called the heavy woollen district. It is also on the western edge of the Yorkshire coalfields. The evidence of the decline of the textile and coal mining industries in that part of Yorkshire is shown by the many proud, but now empty, stone-built multi-storey mills and the scars in the landscape left by the worked-out pits, such as those at Thornhill, Shuttleye, Skelmenthorpe and Shawcross.

When the Yorkshire mills were built they expressed the rugged determination and independence that is part of the Yorkshire character. The mills that are now unoccupied—and there are many—stand out like proud tombstones in an old graveyard. By contrast, the pitheads have largely been demolished, but no amount of landscaping and grassing over of the spoil heaps can disguise the scars in the landscape that coal mining always leaves behind.

While the coal industry had tended to move out of my constituency in an easterly direction in search of more profitable and easily worked seams, the textile industry continues to play a major role and still forms a substantial part of the manufacturing base of the region.

In 1982, the textile and clothing industries nationally still provided one in ten of all jobs in manufacturing industry. However, the number of jobs in textiles alone fell from 597,000 in June 1972 to 306,000 in December 1982. A further loss of 130,000 to 150,000 jobs is predicted by 1988. Notwithstanding this decline, the textile and clothing industries continue to play a major part in the national economy, having contributed some £3.25 billion in added value in 1981. That is twice as much as the aerospace industry; two and a half times as much as the iron and steel industry; and six times as much as the computer industry.

Those facts give some indication of the heavy responsibilities that I am to bear on behalf of the Dewsbury constituency during this Parliament. My constituents know that decades of support by them for the Labour party and Socialism have not in any way arrested the decline of their traditional local industries of textile manufacturing, mining and engineering. Nor has their loyalty closed the gap that still exists in so many facets between the north and the south. They have turned to the Conservative party because they know from bitter experience that Socialism has failed them and they hope and believe that the policies of the Conservative Government, which appeal to their basic Yorkshire sense of what is right, will eventually bring them the benefits that the Labour party has so often promised but failed to deliver.

If ever there was an act of faith in the policies of the present Government it took place on 9 June this year when a broad blue band was painted on the political map of industrial Yorkshire, stretching from Keighley through Halifax, Bradford and Calder Valley, to Spenborough, Batley and into my constituency of Dewsbury.

It has long been the claim of Opposition Members that there was a line drawn across the country dividing the soft Tory south from the industrial heartlands of the midlands and the north. One side of this line, they said, was always blue and the other side always red. More recently, such hon. Members, faced with the complete rejection of their policies by the electorate, have sought to find sympathy for their views from those self-appointed guardians of the social conscience on the Conservative Benches who have warned about the dangers of creating two nations.

I have not been elected as the first ever Tory Member for Dewsbury to dismiss all this talk of two nations as a load of nonsense. While I find it somewhat strange that those right hon. and hon. Members in my party who talk about the dangers of dividing our society between the haves and the have-nots represent constituencies in the south, I am bound to agree that the dangers of which they speak are real.

In Dewsbury, the expression "one nation" is best avoided. Unemployment is high and prospects are grim. my constituents are not directly concerned with the Falklands, with hanging, with defence, or even with Members' pay. Mostly they are concerned with housing, feeding and clothing their families. Most of them do not object to being told to stand on their own two feet—that is what they wish to do—but the reality is that they look to the Government to create the right circumstances and the practical help to do so.

Tradition dies hard in Yorkshire. The man of the house is still expected to be the breadwinner and, more important, he expects this of himself. What effect does a prolonged period of unemployment have on his pride and his ability to care for, love, lead and direct his family? We must simply offer him more than hope. People have lived on hope for too long. It is no use my telling the disillusioned breadwinners in my constituency that more than one third of all direct United States investment in manufacturing industry in the EC is concentrated as it is in the United Kingdom. If I did, I would quickly be told to go and represent the people of Reading, Slough, Swindon and all those prosperous parts of the country which I understand property people refer to as the golden triangle.

If there are great opportunities in the high technological areas, I fear that Dewsbury and many similar places will be unlikely to benefit from them. The statistics show that the percentage of electronics in total manfacturing employment in Yorkshire and the Humberside region is only 1.5 compared with more than 12 in the south-east. The plain fact is that, although successive United Kingdom Governments have introduced a wide range of incentives for British industry to employ new technology, most of these incentives appear to have been taken up in the south-east of England along the M4 corridor between London and Bristol.

I have referred to Dewsbury and the Yorkshire region on many occasions, because I am aware of the special problems of those areas, but there are, of course, many Dewsburys in the country. Do the Government have the will and the determination to revitalise all these Dewsburys? I warn the House that, without such determination, we shall never have one nation. I also warn the Government that we do not have much time. The previous Conservative Administration were rightly proud of the reduction that they achieved in tae rate of inflation. However, the principal mechanism in achieving this reduction—high interest rates over a long period allied with the resulting strength of the pound—meant that manufacturing industry and particularly the textile industry had to pay an extremely high price. Most of us have been taking the same medicine, but my constituents in Dewsbury have been taking larger doses of it than many.

Virtually the whole consequential impact of Government policies to reduce the rate of inflation, which I entirely support, have, however, fallen on manufacturing industry through pressures on working capital and investment and the adverse effects of the strength of sterling on imports and exports. Those sectors which escaped were the service industries, which are much less exposed to international competition, and the public utilities themselves which usually have a monopoly and can increase their prices to earn the return on capital set for them by Government.

So, inevitably, there has been a serious contraction of our national manufacturing base, particularly in the textile industry, and much capacity has been lost. On the positive side, however, the remaining capacity has the potential for a marked improvement in manufacturing efficiency and profitability. Confidence is now the key to its survival through the current period of adversity and to recovery beyond it. It is essential, therefore, that the Government should now be firmly committed to supporting a strong and efficient manufacturing sector and to be seen to be so committed.

However, since we became members of the EC, it is easy to see that the nearer one is to the English channel, the more one will benefit. My hon. Friends from the north-east, the north-west and Scotland will be well aware of the problem. I said earlier that we in Britain receive a much bigger share of American investment than our EC partners. This is not, however, the result of some special regional policy but simply because we alone in the EC speak almost the same language as the Americans, which helps them to tackle the whole EC market from here. It is also because many Americans have a great affinity with this country. However, it would be foolish to believe that, in present circumstances, American investors can be persuaded to prefer Dewsbury to Dorking or Sheffield to Swindon. The world economy, as with our own economy, will have to improve enormously for the Dewsburys of this country to benefit from EC or other foreign investment. Unless radical steps are taken, there will need to be a shortage of labour and land before any genuine improvement comes to our declining regions.

There is not time this morning to go into the issue of the rating of industrial property, but I make the point that the current rating valuations, which are based on rental values, are 10 years out of date. A revaluation is a necessity if reality is to be restored to the rating of industrial property and such a revaluation would, I am sure, show that the real weight of property values lies in the south. It would also show that much of the north's industrial property stock was unsaleable and unlettable.

It is a sorry fact that the present regional incentives, whether they arise from locationns in enterprise zones, intermediate areas, development areas or special development areas, make little difference at the end of the day to the decision to set up a major new manufacturing plant. Furthermore, regional grants are as likely to cause distortion, not to say unfair competition in the market place, as they are to achieve their primary objective of stimulating growth in the disadvantaged regions of Britain. Two examples will suffice to illustrate this.

A successful yarn spinner in Dewsbury who has survived the worst of the recession and is anxious and able to compete with anyone in the world suddenly finds himself subject to unfair competition. Such competition does not come from Taiwan, south Korea or any undeveloped, low labour cost part of the world. It comes from Kilmarnock, where one of his principal competitors, a well known group of textile companies based in Bradford, happens to find that it has a run-down yarn-spinning subsidiary. Because this subsidiary is located in Kilmarnock, it can obtain the benefit of substantial Government grants to modernise its plant and machinery and go out into the market place and compete successfully, which it could not do previously, with my constituent.

It has obtained substantial grants from Government not because of need—its parent company admits to having £30 million in the bank—but because it happens to be in Kilmarnock. The yarn spinner in my constituency can see no real distinction between this situation and having to cope with cheaply produced Third world products which are dumped here.

My other example of distortion created by grants concerns another company based in the Yorkshire and Humberside region. The company is engaged in the rendering of waste animal material, the end products of which are meat, bone meal and tallow. It applied to the EC for a FEOGA grant to modernise one of its rendering plants. The plant in question received a substantial part of its raw material from a farmers' co-operative-owned abattoir in the same region. However, the application was unsuccessful principally because, it was told, its activities were not sufficiently close to the food industry, which was intended to be the main beneficiary of such grants.

The farmers' co-operative, however, managed to obtain such a grant for the complete refurbishment of its abattoir and—this is the important point—the addition to it of a new rendering plant sufficient to process more than double the quantity of animal waste material which became available from its own activities. As a result, the rendering company not only lost a valuable supplier of raw material to its own plant, but is now having to compete with that same supplier for the remaining material in the region, and not even on equal terms because one half of the costs of the competing plant has been funded by the EC.

One is drawn increasingly to the conclusion that the whole system of zones, intermediate areas, development areas and special development areas tends to amount to sticking plasters on sore spots wherever they arise and wherever the pressure groups press hardest. I appreciate, of course, that it will be possible for hon. Members to point to success stories and areas which would be even more deprived than they are were it not for these palliative measures.

The Government's current review of regional development policy will, no doubt, come to its own conclusion on which the Government may or may not take action. The purpose of my motion is to urge the Government in any event to look much more deeply into the serious situation which confronts the nation, for there is a growing and apparently accelerating trend for the regions to become poorer, with the exception of those in the south and south-east, which are becoming richer. Never was it more important than now for the Government, having been returned to power with such a nationally representative number of Members of Parliament, to take radical steps to reverse this divisive trend.

First, steps should be taken in relation to the textile industry, a vital part of our national economy, the manufacturing base of which should not be allowed to decline further. Textile manufacturers have been beset by a battery of problems, but principally the declining competitiveness which has been caused by the high sterling exchange rate and the unfair, and often illegal, sectoral aids which our EC partners, particularly those in Belgium, Italy and France, have given to their indigenous industries.

For example, the Italian man-made fibre industry has been subsidised and refinanced over the past seven years to an extent which has allowed it to remain in business despite continuous losses which in some years have been in excess of 50 per cent. of turnover. Total subsidies are estimated in Italy to have amounted to £1½ billion over the period, making it impossible for even the most efficient free enterprise organisation to compete. It is clearly the responsibility of the Government to insist that the Commission should act to prevent these abuses of its rules.

No such sectoral aids exist in the United Kingdom, and regional aids to the textile, clothing and footwear industries are very small. As I mentioned earlier, the industry has suffered more than most. That part of it which has survived is fitter and leaner than ever before and is poised to take full advantage of any increased demand. But it requires confidence to continue to invest and keep up to date with modern technology.

The British Textile Confederation in March of this year put forward a plan for action which I strongly urge the Government to adopt. Under the plan, a system of interest stabilisation and abatement would apply for five years in relation to all investment in the industry. It would take the form of a direct grant, effectively reducing the rate of interest payable by those making investment to a constant figure of 5 per cent. It would apply to existing programmes of investment from the day appointed for the implementation of the scheme.

Companies financing investment from their own resources would receive a cash grant equivalent to the interest abatement. There would, however, be no retrospective element for expenditure already made. Capital required would continue to have to be raised commercially and there would be no call on Government for capital loans or payments other than those already available under the Industry Act provisions and other existing aid programmes. This new aid would, therefore, be restricted in effect to companies which are viable or potentially viable and which, with the advantage of interest abatement, can attract investment funding from commercial sources or from their own resources. The cost of the scheme to the state would be reduced as interest rates fell.

The plan also recommends that additional compensation for redundancy would be provided by the Government for five years and that there should be added to the minimum basic payment an amount based on service and age. It is unfortunately on inescapable fact that the greater efficiency and productivity required and adopted by the industry has inevitably led to contraction in employment. It is inequitable and demonstrably unfair if textile employees who are made redundant are treated less favourably than workers in other industries receiving Government aid for restructuring and modernisation.

Recent experience has been that for many displaced people in the textile industry, statutory redundancy payments have been the limit because of the depressed profitability of the industry. It is yet another example of those who work in the private sector suffering by comparison with those who work in the public sector.

The plan also provides that for a guaranteed period of not less than three years, the level of support for all forms of research and development in the textile industry should be considerably increased. The substantial pressure on profitability in the industry has meant that the trend of investment in research and innovation has been downward rather than upward, and the assistance for research and the application of microprocessor techniques has not been taken up by the industry to the full extent that is available. On the subject of education, the contraction of the industry—

Mr. John Prescott (Kingston upon Hull, East)

Will the hon. Gentleman give way? [HON. MEMBERS: "This is a maiden speech."]

Mr. Speaker

I must ask the hon. Gentleman not to interrupt a maiden speech.

Mr. Whitfield

The contraction of the textile industry has reduced its career attractiveness to young people with eager and inventive minds. A return to confidence and prosperity should halt that process, but it is essential that appropriate education facilities should be available. The industry will require a flow of highly skilled managers, scientists and technicians. The proposed reductions in the availability of higher education in textile skills of all kinds at university and college levels must be reversed. The necessary facilities must be available in higher education for all skills in textiles as well as in the associated discipline of colour chemistry.

By adopting the proposals in the British Textile Confederation's "Plan for Action" the Government would make a real contribution to sustaining the viability of the remaining fit and lean sectors of the textile industry which are indigenous to the region that I represent and a vital part of its manufacturing base.

As well as supporting the indigenous industries in the regions the Government should take steps to promote employment away from the south-east. I can see no reason why the Government should not relocate whole sections of their own agencies and Departments in the regions, and in Yorkshire and Humberside in particular. For more than 20 years most of the job growth in the United Kingdom has been in the service industries, especially in offices. Again, those activities are concentrated in the south-east.

Substantial devolution, particularly of research and development facilities, would greatly benefit Yorkshire and Humberside, directly with new jobs and indirectly through the demand that such relocation would bring for local support services.

Previous Government measures to encourage service industries to move to the regions have, for some reason, been withdrawn. The Location of Offices Bureau was closed in 1976. Office development permits to control office development in London and the south-east were abandoned in 1979. The programme for the dispersal of Civil Service jobs was also discontinues in 1979, although 1,850 jobs in the Manpower Services Commission were brought to Sheffield.

I urge the Government to reintroduce schemes for the decentralisation of the Civil Service and other public sector jobs away from the south-east. I also urge the Government to consider carefully the effect on the regions of the location of major Government-funded capital expenditure projects, and in particular to take account of the strong representations which have been made to them from the Yorkshire and Humberside region about the proposal to site a third international airport in the southeast.

I know that several other hon. Members wish to take part in the debate. The drift and concentration of resources to and in the south and south-east is, indeed, a divisive trend. My hon. Friend the Under-Secretary of State, who will reply to the motion on behalf of the Government, represents a constituency similar to mine and he, therefore, also has a first-hand knowledge of the marked differences between the regions and the south-east. To reverse the trend which is taking wealth away from the regions, the Government must even consider the use of the stick as well as offering the carrot.

Instead of offering incentives to industrialists who locate in the regions, perhaps industrialists should have to face taxation disincentives if they do not. The problem is enormous and complex and an answer must be found. The people of this single nation require a solution and action should be taken forthwith. I trust that lion. Members on both sides of the House will feel able to support the motion, which I strongly commend to them.

10.4 am

Mr. Stan Crowther (Rotherham)

The hon. Member for Dewsbury (Mr. Whitfield) has done the House a service by selecting an extremely important subject for debate. I listened with great interest to his speech—a rather lengthy one. I agree with much of what he said. In particular I support his call for radical policies to solve the problem. I regret that at the end of his speech his suggestions did not seem to be very radical. To use his analogy, he merely produced larger pieces of sticking plaster. We need to go much further in re-thinking regional policy if we are to solve the problem.

I agree that all past attempts to solve the enormous problem of regional imbalance were miserable failures. The trouble is that no Government have attempted to learn from their own mistakes or from the mistakes of their predecessors. The supposed policy adopted for a long time to deal with the problem is based on the same principle, whatever Government are in power. It is based on offering financial inducements to private enterprise firms to go to a region, coupled until recently with negative control through industrial development certificates. Although there have been variations in the application and size of inducements, the basic principle has always been the same—and it has always failed. It cannot be said that in any part of the United Kingdom regional industrial policy has brought about the equalisation of employment opportunities that is supposed to be its primary purpose.

The differences in the regions have become greater as the years have gone by and such policies have operated. In no part of the United Kingdom has the unemployment level been brought down to the national average as a result of regional policies, even though the national average has grown more appalling.

Mr. Barry Sheerman (Huddersfield)

Does my hon. Friend agree that the problem is not merely the drift to the south, but the drift of investment by British firms overseas to our main competitors? The last Tory Government encouraged that. Massive overseas investment has taken place and caused foreign goods to be brought back here unfairly.

Mr. Crowther

My hon. Friend is right.

In the early 1960s Rotherham started feeling the pinch of technological unemployment. We lost many jobs, not through the collapse of the market for steel, bur because of the technological advance in the steel industry. Ever since then, for more than 20 years, the unemployment level in my constituency has been at least 50 per cent. above the national average.

In the middle of the 1960s, when I was chairman of the Rotherham planning and development committee—a job that I held for 12 years before I came to the House—I brought a deputation to see my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) who was then a Minister in the Department of Economic Affairs. That meeting was successful in the sense that he agreed to include my town in the new intermediate area that he was about to create. Hon. Members will recall that intermediate areas were invented as a result of the Hunt report. We have enjoyed assisted area status of one kind or another ever since. Despite that, we are still one of the less favoured areas of Britain.

There is no doubt that jobs have been created through our assisted area status. Sometimes, this policy has been more effective than others. We should have been in a worse position if we had not been an assisted area. However, the policy has not come anywhere near to reducing our unemployment level to the national average. It is tragic that many of the new jobs that have been created during the past 15 or 20 years in Rotherham have been wiped out during the past four years because of the Government's disastrous economic policies. I can refer to at least 1,000 jobs, created throughout intermediate area status, which disappeared within the past two years as a result of that policy.

In trying to solve the regional problem, we must look at the appalling state of the national economy and the low level of industrial activity and employment opportunities being created. In those circumstances, how to create regional employment is an academic question.

The enterprise zone system, which the hon. Member for Dewsbury mentioned, is an example of the nonsense that is talked about assisting the less favoured areas. The enterprise zone scheme has not been shown to have created one new job anywhere in the country, although it may have moved a few jobs around. With reduced purchasing power, because of mass unemployment, excessive interest rates, exorbitant energy costs and a depressed home market, in which imports are taking an increasing share, the incentive to set up a new manufacturing enterprise is greatly reduced. Any would-be manufacturer, whether or not he is in an enterprise zone, must first answer one simple question: shall I be able to sell my products? The answer is likely to be no.

Before we can do anything meaningful about improving the less favoured regions, we must put the national economy back on its feet. The hon. Gentleman did not cover this point. We must produce a sensible background to develop a regional policy. There must be a growing demand for goods and services and sensible Government actions on energy costs and interest rates, which are a terrible burden on manufacturing industry. There must be a high level of public investment in the transport and construction industries, and, as my hon. Friend the Member for Huddersfield (Mr. Sheerman) mentioned, a restoration of exchange controls to stop the drain of capital from this country. Until this is done we are talking only in hypothetical terms about solving the regional problem. If we adopt these measures, we can develop policies that will solve the regions' problems and bring about a more equitable distribution of employment and wealth.

I agree with the hon. Member for Dewsbury that this change cannot be brought about with the worn-out policies that have been in force for so many years. It must be accepted that free market forces have created this problem. Sooner or later the Conservative party must grasp that nettle. We cannot solve the problem merely by tinkering about the edges of free market forces, by offering a little bribe here and there.

I am not denying the importance of the private sector in any scheme to revive the regions, but the foundation of the solution must be massive public intervention. I have been saying this for so long that I sometimes feel like a gramophone record. I was saying it for many years before I became a Member and during my maiden speech seven years ago. I have said it many times since. Sooner or later, I hope that someone will start listening. There is no possibility of solving this problem with a scheme that relies mainly on private enterprise. There must be a level of public intervention that hitherto has not been tried.

We must revive the National Enterprise Board, which is now known as the British Technology Group. The board must be given new roles and powers. We must create regional enterprise or development boards—whatever we call them—with adequate capital resources to develop new growth industries through subsidiary companies in the regions. There must be a massive investment in the infrastructure and we must ensure that the communications network is viable. I am happy to say that the recently completed Sheffield and south Yorkshire navigation improvement has made a useful contribution. It is unfortunate that the project took successive Governments 12 years to decide that the scheme was worth proceeding with. By the time it was undertaken, the cost had increased from £2.4 million to £11 million or £12 million. It will prove to be useful.

I agree with the hon. Member for Dewsbury that we must pay particular attention to the service industries because the greatest opportunities for employment will arise in those industries. Above all, we must have a change from that thinking that is leading to an extraordinarily expensive public inquiry about a new London airport at Stansted. If we are to solve the region's problems we must stop thinking that everything must be concentrated in the south-east and that only the crumbs that fall from the table of the south-east may be allowed to land in the north, in Yorkshire and Humberside, in the north-west, Wales and other regions which have always been the poor relations. We must stop leaving matters to chance and adopt positive policies backed by positive action.

From the time I joined the Labour party in 1944, it has been talking about the planned economy. No Labour Government have yet introduced a planned economy. I hoped that, if we had had a different result on 9 June, we might have started on that road, because our policies were along those lines. Sooner or later, we must have a planned economy. I am pleased that my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) is on the Opposition Front Bench, because he is playing a leading role in developing such thinking. There are many i's to be dotted and t's to be crossed, but the Labour party is at last developing the kind of regional policy which, if implemented, would go a long way towards solving the problem. I have little hope of any sort of solution emerging while the Government remain in power.

10.19 am

Mr. Geoffrey Rippon (Hexham)

I congratulate my hon. Friend the Member for Dewsbury (Mr. Whitfield) on a notable maiden speech. He has done a great service to the House, both by his choice of motion, which I am sure will commend itself, and by the way in which he introduced it. I am sure that we shall have many opportunities to hear equally wise contributions in the future. I should like to associate myself with the tribute that my hon. Friend paid to David Ginsburg, who was a much respected Member, and who performed his duties in the House diligently. It was nice to hear that recognised by my hon. Friend.

The health of any regional economy is closely linked to that of the country as a whole. At the same time, I have always believed that a regional dimension must be included in all Government policies, particularly policies relating to spending and investment decisions of all kinds. The Treasury is far too inclined to impose cuts across the board with no regard to regional or special circumstances.

In many areas, including my own in the north of England, there are signs of a slight improvement in unemployment statistics, coupled with an increase in the number of vacancies, but it is associated largely with a mini-boom in consumer spending, which may be short-lived, and new job opportunities are confined mainly to skilled workers. In many regions we sill have to face the grim reality of industrial decline.

I entirely agree with what my hon. Friend said about the damage done to manufacturing industry in recent years. It is a good thing that we have brought down inflation, but the cost has been high in many industries. Companies are still going out of business at the rate of about 250 a week. It looks as though 1983 will be a record year for bankruptcies. Figures from the Central Statistical Office show that between 1979 and 1982 there was a fall of 34 per cent. in the volume of investment in manufacturing industry and a further fall of 12 per cent. in the first quarter of 1983 compared with the same period last year. We ignore these facts provided by official statistics at our peril. We must reverse that trend. We can do so only by considering region by region how we can promote an investment-led recovery.

There is hope that the new Chancellor of the Exchequer will provide a better balance between fiscal and monetary policies than in the recent past. Sound money must be maintained, not by dear money for necessary investment but by scarcer money for subsidised consumption. I agree with my hon. Friend that among the main priorities must be a reduction in interest rates—which place the most severe burden upon many companies—increased public capital expenditure and investment in infrastructure of all kinds, particularly communications, sewerage, drainage and environmental improvements. The regions would be better served and better able to attract new industry if that course were followed. That expenditure on public works would be carried out mainly by private firms. In the process they would create for the country and the region real wealth and real jobs. I have never thought that indiscriminate aids and subsidies can ever be more than temporary and usually expensive palliatives. My hon. Friend is absolutely right about the distortion that is caused in many ways by the application of that form of Government aid.

For example, the new enterprise zones that were carried through the House with no real discus ion of what was entailed were quite an imaginative idea but discriminate unfairly against areas outside the zones. They attract existing industries, usually the ones that have the resources, to move into the enterprise zones rather than encourage new ones.

Of course, a great deal has been done by the Government. There are about 100 schemes of various kinds to assist small businesses, but many people are unable to weave their way through the maze of bureaucracy to the supposed pot of gold at the end of the rainbow. However, much more could be done to help new and small businesses to get on their feet by providing more adequate advisory services. Sometimes they are more important than even cash. I welcome the news that there is to be an initiative by the Department of Industry and English Industrial Estates, which will be tested in Tyne and Wear and Northumberland. For six months there is to be a small firms service counsellor who will be available to existing and future tenants of English Industrial Estates. Such an initiative should be extended.

Even more welcome would be a simplified taxation system and a reduction in industrial and commercial rates. My hon. Friend said that we could not go in depth into that aspect of policy today, bur there is no doubt that in many areas, especially in the north of England, the rateable values, which are based on the boom period of the early 1970s, are totally unrealistic and should be reviewed. There is a tendency to underestimate the contribution that industrial derating made to recovery in the 1930s. That would require a complete reorganisation of local government finance, but that is essential in any event. It will not prove sufficient to provide an arbitrary cap on local government expenditure, imposed centrally from Whitehall regardless of differing regional and local needs. Mr. Douglas Jay, who was a notable Member of the House —I am sorry to see that for the time being he will not continue to be a Member of Parliament—used to be much abused for saying that the gentleman in Whitehall knows best. I thought that he was wrong then. Those who say it today are equally wrong.

Rural areas face particular problems of deprivation, not least in the availability and cost of public transport. One is bound to draw on one's constituency experience for examples. What I shall say probably applies to hon. Members in other constituencies. It does not make sense to close the Hexham tax office, which provides a service that people cannot afford to travel many miles to obtain. It is not always appreciated that the Inland Revenue does not just collect taxes. It is willing to help taxpayers to put their affairs in good order, especially when they are in difficulties.

Mr. Ted Garrett (Wallsend)

I am pleased that the right hon. and learned Gentleman mentioned that point. I am one of his constituents. I can speak from personal experience about the frustration and anger due to the closure of that important tax office, which is at the central point of the right hon. and learned Gentleman's constituency. I hope that the Minister is taking serious note of what the right hon. and learned Gentleman is saying and that he will state that his point will be given serious consideration.

Mr. Rippon

I am grateful for my constituent's support. The hon. Gentleman is one of my best supporters.

Even more deplorable are some of the likely effects of the current review of rural jobcentres. In Northumberland the Manpower Services Commission proposes to close the part-time employment office in Haltwhistle and to reduce the opening hours of the offices at Amble and Prudhoe to two days and three days a week respectively. One has to bear in mind the fact that the journey from Haltwhistle to the alternative office in Hexham is over 15 miles, with a return fare by bus and rail of £2.20. From other parts of my constituency the costs are higher, for example £2.50 from Gilsland and Slaggyford and £3.60 from Halton Lea Gate. In addition the public transport services are extremely limited. That shows a totally insensitive attitude to the regional needs of the unemployed in rural areas.

I always thought that it was a mistake to transfer the regional offices for the north-east from Newcastle to Leeds. That is similar to having regional offices for London in Exeter. We would do better if Newcastle had a regional office to advise the Government on the effect of these policies. The proposal is all the more astonishing as the Manpower Services Commission apparently told the local authorities that the saving would be only £1,600 a year. That is a minuscule sum compared with the costs that people must pay for the additional bus services, apart from other inconveniences. There has been no reply yet to the suggestion that local authorities should themselves pay the £1,600. The problem of rural areas is reflected not only in my constituency, but in others.

Mr. Prescott

I am interested in what the right hon. and learned Gentleman said, especially about transport costs. If the tax office to which he referred were in south Yorkshire transport costs would be considerably lower, and this would be a considerable benefit to local people. But the right hon. and learned Gentleman regularly votes against such policies.

Mr. Rippon

I declare an interest as, not so long ago, I represented Sheffield in a rating case involving its bus service.

The basic aim of regional policy is to concentrate resources on providing the services and creating the conditions needed for new industrial growth, both rural and urban. I was pleased that the Miscellaneous Financial Provisions Act 1983 was passed on the last day of the previous Parliament. It gave the development commission new powers to help rural areas and I hope that the Government, having provided the powers, will now provide the funds so that those powers can be effectively used.

The European Community has in the past contributed about £1,000 million to United Kingdom regional needs, of which £216 million has gone to the northern region. The social fund has also provided considerable help. These funds must be augmented.

We will never make sense of the Community budget unless we change its shape and size to allow the development of policies that would be of most benefit to this country. In this respect, I welcome, as, I hope, does the House, the terms of the Stuttgart solemn declaration on European union, which was signed by the Prime Minister and the Heads of other Governments a few weeks ago. In our name, they resolved among other things to accord a high priority to the Community's social progress, and in particular the problems of employment by the development of a European social policy. Then follows the important sentence: This implies in particular the transfer of resources to the less prosperous regions. We must assume that the Heads of State and Government knew what they were signing and meant what they so solemnly declared. General de Gualle, when speaking of the European leaders of his time, said "The mice are dancing." They are still dancing but, to adapt an old phrase, they are the best mice we have. There is not a Speedy Gonzales amongst them, but at least we have our own Mighty Mouse, who, from time to time, dons her magic cloak — perhaps I should say apron — and galvanises her fellow European leaders into some semblance of activity. I hope that she will do so in respect of the declaration on regional policy, that the Government will do everything they can to make it a reality and that the intention of the Governments of the European Community, including ours, is to transfer resources to less prosperous regions. I believe that that must be part of a sensible national economic policy.

10.34 am

Mr. Piers Merchant (Newcastle upon Tyne, Central)

It is appropriate that, as I address the House for the first time I should do so on a subject of profound significance both in a hard practical sense and in simple terms of morale for the people of my constituency.

I come from an area that is not exactly renowned for its overwhelming Tory tradition and my constituency might not demographically be considered a Conservative paradise. It is an all-urban seat at the core of a major industrial city that dominates the traditional heavy industrial heartland of Tyneside. Despite some leafy avenues and affluent areas, one in five of the working population can find no job. It includes some of the most deprived inner city areas, where old industry has died for good but little has come in its place, and a sense of uselessness pervades the lives of many who, without hope, scratch out a meagre day-to-day existence.

Hand in hand with this inner city tradition runs the Labour tradition, and it is not surprising that the areas in which 38,000 of my constituents live have not been represented by a Conservative Member for 38 years. Until June, those areas were served by no fewer than three Labour Members of Parliament. It is clear that there has been a marked advance in productivity. I wish to pay tribute to the work of the hon. Members for Newcastle upon Tyne, North (Mr. Brown), for Wallsend (Mr. Garrett) and for Tyne Bridge (Mr. Cowans) who represent a valid, if dated, Tyneside Labour tradition and whose work for the people of Tyneside is undoubted. They are genuine and caring men. As one who has frequently written about their activities in the region's excellent morning paper, The Journal, I compliment them on the energies that they have devoted to representing the interests of Tyneside. I hope that at times we shall work together in that common interest.

It is only right that I reserve special mention for Sir William Elliott, the former hon. Member for the old constituency of Newcastle upon Tyne, North, from whom I inherited 25,000 constituents. He served Newcastle in this place for 26 years and did so with consistent honesty, dedication to purpose and loyalty to his constituents and to his party.

Drawing from his sensitive nature, Sir William looked after his constituents with a devotion and patience equalled by few, continually demonstrating the caring spirit in the best Conservative tradition. He was always a stalwart defender of his principles and of his party in the House. I am sure that all hon. Members who knew him will join with me in praising his work.

Sir William, in his last speech in the House in a regional debate, said: The north-east of England wishes, above all, to play its full part in the strong economic future of this country as it certainly played its part in our strong economic past."—[Official Report, 9 February 1983; Vol. 36, c. 1071.] Of course he is right. It is particularly right to stress the pride that Tyneside has in its great tradition of industry and the years when its successes made it the workshop of England. What has been can be again and nothing more unites the people of the north-east than that determination. But it is not a determination to squeeze more cash out of Government or merely to prosper at the expense of other regions. Neither is it a desire to wave the begging bowl until it is filled to overflowing while refusing to accept the vital need for initiative and self-help. The north asks for its problems to be recognised and expects a little understanding from Government — an understanding which has not been sufficiently forthcoming from this Government or their predecessors during the past 20 years or more.

The north-east needs incentives on which to build a new future. In return, I believe that it is prepared to offer the very best in industrial tradition, hard work, high productivity, top quality, inventiveness and innovation. Of course we accept that millions of pounds have been poured into industry and firms as regional aid to the northeast and other regions. However, aid policy has not always achieved its purpose nor has it always been directed in the most effective way. Special development areas have been of great benefit but, alone, they are rot sufficient. If we rely too heavily on assisted area status, we all know that other regions will demand such status and the whole operation will deteriorate into a destructive and humiliating auction.

Direct cash aid is not the most important or effective way in which Government can help. Far more vital is the provision of the highest quality regional infrastructure, especially transport links, and improvement of the quality of life, as my right hon. and learned Friend the Member for Hexham (Mr. Rippon) rightly said. In those respects, the Government can take convincing action, as anyone who travels north regularly on the A1 on a Friday knows. The main north-south road link, Newcastle airport and the east-coast railway are vital targets for high capital investment development.

Every facility should be given to encourage investment to improve the overall quality of life. There are many examples of companies not coming to Tyneside, either because there is insufficient good quality housing or because the area appears to be run down. The Government's generous inner city aid has been of great benefit but more help is needed. The area must be made a showpiece to attract the best talent and expertise to new industries so that they thrive and generate wealth.

Perhaps the most important seed from which the industry of tomorrow will grow is the talent and skill of the population. I am fortunate to have a highly rated university and an extremely successful polytechnic in my constituency. A few miles south is situated one of the country's most prestigious universities—Durham. Those three institutions of higher education have recognised the merit of especially close ties wih industry. That is a concept that the Government should encourage and develop further, so that the skills that are taught in the regions are not lost to the area for good. In that regard, nothing could be more short-sighted and dangerous to the long-term future of such regions than a contraction in education resources.

The development of a science park in the north-east is a distinct possibility. It should be encouraged as an addition to the successful enterprise zone and the free port scheme, which are much appreciated initiatives that the Government have masterminded.

Another prong of regional policy should be greater incentives in depressed areas for the development of new industries and new technologies. They are desperately needed in the north because of the inevitable decay of the older, heavy industries on which we have been so dependent. Just as it is right to allow 19th century industries to pass away naturally, so it is important to sponsor the development of alternatives for the 21st century. Government must play a role in that.

The mechanism by which those processes can be encouraged in the regions is important. I ask the Government to take an early opportunity to review the unsatisfactory duplication of job creation and industrial aid efforts. They should consider creating a unified structure. In the north-east, many ideas have been mooted—a Minister for the north and a northern development agency are but two. Although each suggestion has merit, a more efficient answer lies in a type of "super North of England Development Council" with enhanced powers, greater resources and a wider remit. It should replace the activities of many of the smaller industrial development agencies or units. The Government should consider that possibility.

If I have stressed the problems of my constituency, city and region, I had not intended to belittle the progress that has already been made on Tyneside. The Vickers Dreadnought project and NEI's overseas order book are signs of the tremendous potential on Tyneside. That potential is beginning to he tapped. Newcastle is a great city that has continued to thrive because of the vision of its civic leaders. Men such as the former Conservative leader, Councillor Arthur Grey, have given the necessary local leadership to establish a firm foundation for a prosperous future.

I am honoured to represent part of one of Britain's great cities. I profoundly believe that the resurgence of industry in the north, the rebuilding of the region's wealth and the renaissance of its spirit will not spring simply from Government action or from London handouts. It will certainly not spring simply from industrial subsidies. It will and can come only from the people of the region.

Therefore, we are discussing the creation and encouragement of individual effort, initiative and enterprise, their being sustained, and the creation of an attitude of mind and a new sense of purpose in the people of the region. Government can help in that process, especially by boosting the region's morale and self-confidence. I appeal to Ministers to take a major initiative to demonstrate that. Ultimately, the Government will not be judged on their success in rural areas of the south. The real test of their economic policies will be in the areas of real difficulty. The north-east provides an opportunity to demonstrate their willingness to face the challenge.

10.45 am

Mr. Ted Garrett (Wallsend)

I am sure that you, Mr. Deputy Speaker, and other right hon. and hon. Members will join me in congratulating the hon. Member for Newcastle upon Tyne, Central (Mr. Merchant) on his sincere and informative dissertation on the problems in Newcastle and the northern region. He made a clear analysis of the region's advantages and some of the disadvantages that have been overcome. Those right hon. and hon. Members who knew the hon. Gentleman's predecessor, Sir William Elliott, will agree that his tribute was generous. Above all, the hon. Gentleman was accurate about the man's character and ability and the service that he gave during the 26 years that he represented the area.

There are slight omissions from the motion. I should have liked it to include the north of England, especially the north-west. I exclude Scotland and Wales because they have a voice in the Cabinet; the other regions do not. It is odd that Ministers who represent the provinces go to a Department and immediately forget that they come from the provinces.

One of the problems that Britain has always faced is that, although it is a comparatively small group of islands, the Government have never been persuaded of the true potential of the regions. I have a feeling that that is due to the advisers who surround Ministers, whatever political colour they are. By instinct, civil servants are metropolitan minded. It would be easier to take out their back teeth than to persuade them to move to other regions. They know that, so they will know that my criticism is valid when they read it on Sunday morning before reading the Sunday Times and The Observer.

Mr. Barry Henderson (Fife, North-East)

I entirely agree with the hon. Gentleman on that point. Is it not also curious that, when they are dug out of their bunkers in London and taken to other parts of the country with a much kinder environment, they complain when they have to go back to London?

Mr. Garrett

The hon. Gentleman is right, but the process of education takes too long to bring them to this attitude of mind.

Mr. Prescott

Will my hon. Friend give way?

Mr. Garrett

I will, but I should like an opportunity to make my own speech eventually.

Mr. Prescott

My hon. Friend is discussing a very important topic. One of my discoveries when visiting his region is that many of the civil servants located to the regions stay in those regions for only two years and do not have sufficient time there to understand the problems. Their career prospects mean that they move back to London.

Mr. Garrett

Again, I cannot disagree with what my hon. Friend says.

We have heard a good deal about regional infrastructure. Of course, there is a lot to be done, but during my political career in the north-east, which stretches back to when I was in my twenties, there have been enormous changes. We have virtually got the road pattern set. We have almost completed a massive reorganisation of the sewerage system north and south of the river Tyne. We have just about got the airports as good as we can expect. My only adverse comment is that there are minor road improvements which could be undertaken.

Mr. Rippon

I seek the hon. Gentleman's support again. Although the infrastructure is good between London and the north-east, does the hon. Gentleman agree that it is not so good east to west? Does not he think that this would be a good time to complete the road between Newcastle and Carlisle?

Mr. Garrett

I could not agree more and I understand that much of the work will be completed before the right hon. and learned Gentleman and I have to face our electors again in about four and a half years.

We have the infrastructure about right, but the problem remains. Why are the regions still not taking their share of the nation's wealth? The answer lies in another part of the argument which has emerged in the debate. It was mentioned by the hon. Member for Dewsbury (Mr. Whitfield). It is the problems associated with our manufacturing base.

It is undeniable that the decline in our manufacturing base has hit the regions very hard. We see acre upon acre of desolation. Manufacturing capacity has been closed down because of obsolescence, a change in process or new means of technology being introduced. We in the regions have not seen the need to match the rate of change. It is there to be seen, and I could name some of the derelict areas. Yesterday it was announced that railway workshops in Shildon and other parts of the country are to be closed. As job opportunities continue to diminish, the loss of jobs there presents enormous problems. We have good roads, good lighting systems, good sewerage systems, good schools and reasonable further education facilities in our universities and polytechnics, but still we are short of a manufacturing base.

I do not pretend to know the answer. I do not know how we are to get the change brought about with the rapidity necessary if we are to reduce the level of unemployment, especially in the regions.

The metropolitan counties are under fire at the moment, but I want to pay tribute to them. The efficient metropolitan counties kicked off in very difficult circumstances, and I have in mind Tyne and Wear, south Yorkshire and Manchester. They are now co-ordinating all their activities in a wider area than the old local authorities could and using what resources are available in a more efficient manner. Regrettably, the antics of the Greater London council, especially of some of its personalities, have caused the Government to think that, because the GLC has its problems and the political attitude that it does, the other metropolitan counties must be regarded in the same light. To us in the regions it seems as though those associated with the GLC have no idea how much damage they are doing to the standard and structure of the metropolitan counties. I hope that the Government will reconsider their own attitude and try to isolate the GLC from the other metropolitan counties. They can look at the GLC in isolation if they wish to, but I hope that they will regard the other metropolitan counties in a different light because they started from a zero position and are now in a positive position.

I wish to comment on the remarks of the right hon. and learned Member for Hexham (Mr. Rippon), who is my Member of Parliament. I disagree with his views on the European Community. I am sure that he will not object to my saying that I thought that his economic analysis was incorrect. He mentioned regional aid, but he omitted to give the other 50 per cent. of the argument, which is that British taxpayers have paid the taxes for the regional aid to come back to us. Would it not have been better if we had done the job ourselves from our own resources? In that way we would have had a direct say about where these resources should be allocated—a politically direct say—rather than leaving it to non-elected people to decide the allocation.

I look forward to the time when our Prime Minister regards this as a priority. I have always been looked upon as eccentric in my attitude to the EC. My political colleagues thought that I was mad when I argued for withdrawal from the Community. But if it continues its present policy towards the regions, the person who will lead us out of the EC is the right hon. Lady who sometimes sits on the Treasury Bench. That prophecy may be fulfilled before we go before our electors again in a few years.

Mr. Robert C. Brown (Newcastle upon Tyne, North)

If this Government continue with the regional policies that they pursued from 1979 to June of this year, the northern region will be crucified and will become a complete industrial desert. My hon. Friend talks about aid from the EC regional development fund. Is not the problem that all the money that we get from the fund is taken back with the other hand by this Government. who continue to pay that amount less to the regions?

Mr. Garrett

I am in the mood to agree with everyone today. I agree wholeheartedly with ray hon. Friend the Member for Newcastle upon Tyne, North (Mr. Brown).

So far this has been an excellent debate. It has kept well within the terms of the motion. Above all, the fact that so many right hon. and hon. Members are willing to attend the House on a Friday and participate at what I consider to be a high level in a debate on a very important aspect of government demonstrates that we are prepared to discuss issues in the House before proposals are put forward to the regions, where very often the people who have to operate them are unaware of the reasons for them.

Many more hon. Members wish to intervene. I repeat that this has been a good debate. I trust that debates of this kind will occupy more of the time of the House than some of the more altruistic discussions in which we have engaged of late.

10.56 am

Mrs. Elizabeth Peacock (Batley and Spen)

In my first address to this House it is appropriate for me to support what my hon. Friend the Member for Dewsbury (Mr. Whitfield) said today. However, at this point I pay tribute to the former Member for Batley and Morley, Mr. Ken Woolmer, who I know worked hard and long for the woollen industry in his role as trade spokesman on the Opposition Benches. I had the honour, good fortune, and sufficient votes to defeat Ken Woolmer for the Batley and Spen seat in June. I thank him again for the clean campaign that he fought, and I thank him sincerely on behalf of his former constituents in Batley for his hard work between 1979 and 1983. I also thank my hon. Friend the Member for Keighley (Mr. Waller) for the good stewardship of the Spen part of my constituency, in his former role as the Member for Brighouse and Spenborough.

Being the Member for the constituency that adjoins Dewsbury I find that many of the problems highlighted by my hon. Friend apply in my area also. That is hardly surprising, as the new constituency of Batley and Spen includes a small but important part of Dewsbury. I, with my hon. Friends the Members for Dewsbury and for Bradford, North (Mr. Lawler), have a special responsibility in this Parliament. We have been returned by parts of Yorkshire that have not returned Members of Parliament to these Benches for many years. In fact, Batley has not elected a Conservative Member of Parliament since 1931. There is a new mood in Yorkshire, looking for change, and there is a radical new approach to life and the problems of the county. I for one am determined to do all that I can to see that that is achieved.

The name Batley and Spen united Batley with such famous places as Cleckheaton, Heckmondwike and Liversedge. They are famous because of their deep-rooted involvement in the development of the Yorkshire woollen industry. They remain famous today for their down-to-earth reliance on Yorkshire thrift, grit and graft, which to those who live south of Watford means hard work. Perhaps the Minister will see this for himself when he visits the constituency, which I hope he will do in the not too distant future.

The Batley and Spen valley towns are medium-sized communities that grew up with the development of the woollen industry. They are fiercely independent, with a population that wants to work hard, utilising the skills of the textile industry, not only with wool but with fibreglass and other fibres. We have developed a mixed industry, from brake linings to biscuits and general engineering, with soundly based, progressive companies. Now we must move forward to attract, develop and extend the businesses of the 21st century—electronics, communications, and their satellite industries. That will be one of my priorities in this Parliament.

The textile industry in Batley and Spen, like Yorkshire cricket, has seen better times, much better times, and that is where we must offer help and support. The shoddy or heavy woollen industry based in Batley, has been particularly badly affected by the recession and can expect to be the last part of the woollen industry to recover as the industrial climate recovers. For that reason, I am looking for special Government help for that part of Yorkshire to aid recovery, put new life into existing industry, and attract new technology and new industry to this attractive part of the north.

I return to the immediate problems of my part of Yorkshire. I place certain demands upon the Government, and I shall continue to press those demands until I have the right response on the ground in my area. First, I am looking for a review of the regional investment grants. I may not be able to justify special development status for the whole of my constituency, but there is absolutely no reason why intermediate status should not be granted. In fact, with unemployment in Batley approaching 20 per cent., there is every reason for the establishment of an enterprise zone. If Wakefield and Rotherham can achieve that, I shall certainly seek it for my constituency.

We in Yorkshire will invest if we see a good thing, and I know that existing businesses in Batley and Spen will invest. What we want is a little help and encouragement to do so. Secondly, I have a deep-rooted suspicion that the British textile industry, in particular the woollen industry, is not getting a fair deal from Europe. I should like an assurance from the Secretary of State for Trade and Industry that we really do have a common market for woollens. It seems highly likely that certain member countries of the European Community are giving preferential treatment to their own woollen industries—whether by taxation advantage or by investment, I do not know, but they appear to be getting advantage from somewhere. Those advantages must either be stopped—a vain hope, I suggest, even if we took the case to the European Court—or we must provide similar assistance to our own industry. We must be in a position to compete. The Government cannot afford to let us down in this respect.

We in Yorkshire are proud—but not too proud, I hope, to accept some criticism, and at the risk of having much criticism heaped on my head, I must say that I am looking for new initiatives for the marketing of British textiles and clothes. Currently, it is to be hoped, the international tide of designer blue jeans is receding and there is a resurgence of suits, jackets and trousers for men and women. To grab any advantages that can be gained, we need to look at the styles of clothes that are demanded, checking whether the jackets are too long or too short, or whether the trousers are too baggy. I suggest that in many cases they are, and that the continental designers are stealing our markets from us. To overcome the problem, I am looking for assistance with hardware—buildings and machinery—and for Government assistance to develop markets by investment in a marketing programme, initially for the whole market, but one that will provide a new impetus for imports in the future.

11.6 am

Mr. Michael Meadowcroft (Leeds, West)

I have great pleasure in congratulating the hon. Member for Batley and Spen (Mrs. Peacock) on her maiden speech. I do not know, Mr. Deputy Speaker, whether you are aware that we are good friends, although I would not wish to impede the hon. Lady's prospects in her party. In fact, we come from the same voluntary organisation stable. It is therefore a particular pleasure for me to thank her for her contribution today.

I listened with interest when the hon. Lady spoke about Liversedge and the other places in the Spen valley. For me those are very evocative names, as is talk of the production of shoddy, which comes from her constituency. Elsewhere that provokes much ribald laughter, which is certainly not deserved by the people in her constituency. I appreciated what she said about the former Member for Batley and Morley, Ken Woolmer, who is a former colleague of mine on various councils in Yorkshire. I regard him as one of the best arguers of a poor case that I have ever come across. We had great fun arguing and debating in Yorkshire. I am sure that the House will look forward to hearing the hon. Lady speak on future occasions. At one point I worried whether she would examine the sartorial elegance of hon. Members in the Chamber. I wished that I had brought one of my suits made from cloth that came from Leeds and put together by a tailor in Leeds. However, it was not possible for me to do that on a Friday.

I am pleased to have the opportunity to speak in this debate, not least because it gives me a chance to thank the hon. Member for Dewsbury (Mr. Whitfield) for introducing this debate. It is not very long since we had a debate on a similar topic in the last Parliament, initiated on that occasion by the hon. Member for Huddersfield (Mr. Sheerman). The motion on that occasion was not dissimilar from the one that we are debating today, in spite of the fact that it came from the other side of the Chamber. The main difference, of course, was that some of the rhetoric took a slightly different form from the rhetoric of the hon. Member for Dewsbury. I do not know whether the hon. Gentleman had a certain prescience about Mr. Speaker's injunction about brevity this morning, but it is interesting that his motion has been somewhat abbreviated in the 24 hours since it first appeared. Some of the more extreme comments have been taken out and replaced by rather more delicate ones. I do not know whether the Whips have leant on him, but the motion is less radical than it was when it first appeared.

The general proposition in the motion is true—there are problems in the region that are not alleviated by a policy that affects the whole country. Although that general proposition is accurate, I should not want it to be thought that hon. Members who represent the north of England do not appreciate that there are pockets of problems in the south-east that also deserve attention. For example, there are parts of London, particularly the old parts of the east end and south of the river, that show the signs of dereliction and industrial desert that many parts of Yorkshire are showing. Development grants and aid do not work in some parts simply because they cannot cope with the small pockets of great need.

To try to alleviate some of the problems, we need much better statistical analysis of the problem. For instance, we need to highlight where the particular pockets of high unemployment occur. The city of Bradford metropolitan council did its own interesting survey of the council estates in that city and discovered that although the general level of unemployment was high enough in the city, one estate, Thorpe Edge, had a 56 per cent. level of unemployment.

If we look at the statistical evidence in more detail we may find, similarly, that particular pockets need exceptional attention if the whole fabric is not to break down and if instability and insecurity such as we saw in the more cosmopolitan areas in July 1981 are not to appear on those huge old inter-war estates, where I suspect there is a problem that we do not recognise.

As other hon. Members on the Opposition Benches have hinted, one of the great problems is that of ownership. The last time that I contested Leeds, West in the two elections of 1974, I systematically visited the industrial concerns in the Aire valley. It is interesting to think back to those businesses and to see what has happened to them today. Where are the huge engineering complexes such as Wilson and Mathiesons, the treasured names in Leeds history such as Fairburn Lawson, Greenwood and Batley, Turner Machinery, and, on the textile side, Yates' Mill, or the printing concerns such as Tapp and Toothill? If these companies have not disappeared, they are at the very best a shadow of their former selves.

In many of these cases, the companies have been taken over by owners outside Yorkshire and Humberside, who do not have the same concern for promoting those industries in the region and who have asset-stripped them and determined that the best way to deal with their global operations is to take away the base in Leeds or Yorkshire. Yet, in 1974, all those organisations were going concerns with good order books. In some cases, they were saying that if only they could find more skilled labour they would open up a new production line.

All those firms were of the same size — roughly between 300 and 800 employees. That size encouraged a good work attitude and a good concept of what the plant was about, because the end product could be seen from the beginning of the process. As a result there was considerable promotion from the shop floor and movement of labour from one process to another, and there were few labour problems in those companies. It was because of the size and the way of working together, which was important to them, that they managed to survive. All that has gone. Firms that were flourishing nine years ago, looking for more staff, and had good order books, have gradually disappeared.

Something else that is allied to that, which is alarming, is the way in which some of the workers have been made redundant after 45 years in a company but have received only the bare statutory minimum redundancy pay. The firms who have asset-stripped say that they cannot afford to pay more because the worker is still part of the local factory that is not productive or economic. As a result, redundant workers suffer badly.

What has replaced these industrial plants? Small units have been developed and one of the more encouraging aspects of the scene in Leeds has been the growth of small units of 500 sq ft minimum that are snapped up as soon as they come on the market. In some ways, the industrial plant has been replaced by enterprising voluntary initiative. For example, one of Yates' mills, which have otherwise disappeared, has been taken over by the local church and is being developed imaginatively on a grand scale as a centre for unemployed young people, with the hope that some of the processes that will be used there will become viable, and can be moved away from that complex to a new one.

There is also a growth of co-operatives, and I am sure that if the hon. Member for Huddersfield (Mr. Sheerman) returns to the debate, he will want to emphasise their value. What is more, there has been a considerable increase in service industries. There are advantages for Leeds because as a regional centre it has attracted new industry. However, people in Leeds have become a bit complacent because of the new service industries. There is a tendency for people in Leeds to rely too much on these industries, and they are not too concerned about the production and manufacturing base. However, if the manufacturing base declines there will be less service in the medium and long-term future. If we rely too much on the service industries, it will be highly dangerous. Unless we manufacture, there can be no real future in the creation of a surplus of wealth or employment, or in promoting service industries in the longer term.

There will not be a re-creation of engineering or printing work in the same form as existed before. We need a concentration on the smaller businesses and an ability to build those from nothing to viable concerns at their own level, from which they can expand. A recent report of the Association of Independent Businesses comments: Finally due to a Liberal party initiative, which resulted in the appointment of Lord Lever as small business minister in the 1978 Labour government, we have experienced a year and a half of cabinet representation. The existence of a minister, with a very small staff, working for us began the implementation of several proposals that had been on the table for too long. Regrettably the present Conservative government has failed to follow this lead. I hope that the Minister will take note that there is independent evidence of the value of having representation for small businesses in that direct way, and will respond to that.

It is true that the textile industry poses particular problems, as the hon. Member for Battey and Spen said. The hierarchy of the textile industry brings problems to particular parts of it. The difference between the traditional products of the heavy wool industry of Batley, Bramley and Huddersfield will inevitably pose problems for those who have been in what is, in economic terms, the lower end of that process. The failure of those textile businesses to go into the added value products has been most marked in recent years, not least because those who have moved into this have stepped up their production and have managed to survive.

I hope that the Minister will not rely on some of the expedients that we have had in the past. I read in the Official Report of 26 February 1981 his comment that the temporary short-time working compensation scheme was inadequate. It is true that, by a strange paradox, to have the temporary short-time working compensation scheme is almost a sign that a firm is suffering and is on its way out, and it may even encourage that process.

Opposition Members hinted at the need for import controls and the need to control the market processes that produce problems. Where import controls are effective, they are immoral because they affect the developing economies of the Third world. Where such controls are moral, they are ineffective because they affect those who can retaliate. I accept that that is a generalisation. We must not put forward an argument in this House that we should help our economic survival at the expense of those worse off than ourselves.

Mr. Prescott

I am sure that the hon. Gentleman has read "Plan for Textiles" issued by the textile industry at the beginning of the year. It shows that most of the imports come from considerably richer countries, which receive greater subsidies than Britain.

Mr. Meadowcroft

I recognise the force of the hon. Gentleman's argument. However, a vast proportion—about 80 per cent.—of the raw materials on which we rely for manufacture come from either the Third world or Communist countries. I agree that many imports come from countries with which we usually compete, but many come from Taiwan and South Korea. We have grave doubts about the exploitation of people in the industries of those countries, although the small wages that they receive are at least better than they were previously. It is difficult to find a way of enabling people to develop their own economies if we deny them markets in Britain. That is a harsh problem that must be faced by the textile industry. I cannot see a way around it if fairness is to rule.

I accept that there is a case for some form of exchange control to inhibit the flow of capital. The hon. Member for Rotherham (Mr. Crowther) said that the free market forces had failed, but in many ways the planned economy that he wants has failed also. It would be hard to find a Socialist state where the economy and the attributes of that economy were beneficial to its inhabitants.

The conflict of ideology, if carried to extremes, prevents the consideration of pragmatic help. We must make more flexible the ways and means of assisting people facing changes in the textile and other industries in the north. If we want to tackle the problem of transnational companies, we cannot do that without some cognisance of the need for transnational politics. It is strange that the hon. Member for Wallsend (Mr. Garrett) argues for withdrawal from the EC without saying that, for all its faults and weaknesses, there is some prospect of it tackling the problems of transnational companies by transnational politics. If we say that it is impossible to change the politics of Europe, we open ourselves to the possibility of exploitation by companies that will hire their labour where it is cheapest and pay their taxes there where they are lowest—whether that helps or hinders people in Britain.

There is considerable competition among firms for the larger and better grants offered not only by the Government but by local authorities. Some companies are moving around the country every four or five years to pick up the available grants. They are becoming Bedouin businesses. Perhaps we should consider new attitudes towards financial underpinning that can better assist industries.

All hon. Members appreciate that the enterprise allowance scheme is now available throughout the country. That experiment proved to be successful and assisted people to put capital into their small businesses without the immediate risk of having no income. Can the Minister remove some of these doubts and worries about the future of that scheme? Some people wishing to participate in the scheme have been told that it is guaranteed only for three months and that there is no future beyond that for new projects.

Our acceptance of the enterprise allowance scheme may mean that we are moving away from our previous antipathy towards a benefits-plus society. Opposition Members, and even some Members within my party, have often argued against benefits-plus for social reasons. I begin to wonder whether, in the crisis that we face, it might not be better to accept some of the problems that would bring so that people can retain some of their social security benefits while earning considerably more than they can at present. Quite apart from the incentive to take part in work and business, that might inhibit the flourishing black economy. It would help people to retain their integrity so that they are not forced through economic circumstances to get around the rules and regulations.

The Manpower Services Commission could do a great deal more to help with the problems of the regions and to help combat unemployment. The incentives to production given by the MSC could be enhanced if they were more flexible. Currently, unless someone can persuade the MSC nationally that an experiment is worth backing, all that is available is either 100 per cent. funding or nothing. That is ludicrous. Currently, if someone starts a project he is guaranteed one year's work. Any income from the project must go back into it. There is no incentive to market or to sell. That is a strange perception of how people should begin a business and how to encourage them to become self-supporting. It is possible to deal with embryo projects and schemes in a more flexible way.

When I was involved in the voluntary sector I was responsible for a project that employed 12 disabled men. They had been unemployed for some time. They would not usually have met socially, but they were prepared to work together. They formed a workers' co-operative to produce aids and adaptations for the disabled. They were guaranteed an income for one year, but nothing after that. Fortunately, it was possible to bridge the gap between MSC funding and EC funding with local authority help. The EC proved to be more flexible than the MSC. It is prepared to offer a grant on a declining percentage, accepting that that project will never be 100 per cent. economically viable. If the project could survive on 40 per cent. funding, that would be less expensive than providing for those people on the dole with 100 per cent. funding. The Government accept the principle of partial funding in other areas. British Leyland and the British Steel Corporation are partially funded. Why then cannot partial funding be accepted for other projects such as the one to which I have referred?

I agree wholeheartedly with the right hon. and learned Member for Hexham (Mr. Rippon) about the need to maintain the infrastructure. If we destroy the transport links with the regions, it becomes doubly difficult to maintain the industrial base. Any attempt to implement the proposals of the Serpell report on the railways would have disastrous consequences for the regions. It would remove another link that assists the regions to survive economically. Roads are in growing disrepair because of the lack of funds for local government. People are not encouraged to invest in the regions because of the state of the roads. Sewers are collapsing in many of the northern cities. To improve the facilities would not be inflationary because it involves capital expenditure on infrastructure, which puts money back into the economy. Why do the Government clobber local government and prevent it from assisting the development of industry and the economic base in the regions?

It is agreed on both sides of the House that people in Yorkshire and Humberside do not want handouts. They do not want simply to be provided with goods and cash. They want to be enabled to stand on their own two feet. They need assistance to do that rather than rewards from the Government. We must consider precisely how people can be assisted rather than provided for.

I only hope that the holding of this debate and the contribution of hon. Members to it will encourage the Minister and his colleagues to move towards enabling people to carry on with their skills, to train for new skills, to be enabled to stand on their own two feet and to be proud members of the community, as has always been the case.

11.30 am

Mr. Geoff Lawler (Bradford, North)

First, I should like to offer my apologies to the House as I will have to rush off after making my speech. My right hon. and learned Friend the Home Secretary is visiting my constituency today and I should like to join him in some important meetings.

I should like to congratulate my hon. Friend the Member for Dewsbury (Mr. Whitfield) on raising this subject today. It is a taxing enough experience to draft a maiden speech as a short contribution to a debate let alone having to write a speech moving the main motion. I admire my hon. Friend's courage.

With so many maiden speeches being made at this time, one hopes that one can come up with that telling phrase or flash of wit that will make one's maiden speech stand out. Despite sitting up until 5 am for two nights this week —with a little help from the Whips—trying to think of that phrase, I am afraid that I shall have to content myself with commenting on the privilege that it is to make this speech as the new Member for Bradford, North.

It is indeed welcome to see so many familiar faces, on both the Conservative Benches and the Opposition Benches, of hon. Members who have been around the political and community circles in Yorkshire and Humberside for a number of years. I hope that it is a good sign for the future that we will be able to have all-party co-operation in pushing the case for Yorkshire and Humberside.

I should like at this stage to pay tribute to the previous Member for Bradford, North, Mr. Ben Ford, who had the honour to represent the constituency for 19 years. He was a dedicated parliamentarian, as was evidenced by his work for the IPU, among other groups. That should make Opposition Members all the more ashamed that Mr. Ford was forced to stand as an independent Labour candidate and that the Labour party found it easier to adopt someone with considerably more extreme views as the official Labour candidate. That is thoroughly to their discredit. I know from the remarks I have heard that many Opposition Members felt uneasy and ashamed about that position. I admired Ben Ford for his stand within the Labour party which he served for so long. It cannot have been an easy decision. I know that many friends on both sides of the House will wish him well.

While Bradford, North is probably best known to those who are familiar with it for the television programme "Emmerdale Farm", which is filmed in a more rural part of the constituency, it is part of a dynamic city which has a proud industrial heritage and is renowned for its forward thinking. Perhaps the most telling measure of the city's ingenuity is the fact that it recently received an award as the fastest growing tourist resort in this country, an accolade that is somewhat remarkable and probably unbelievable to many Members, especially those who come from south of Watford.

Two years ago, it would have been a source of much humour if someone had prophesied that Bradford would be the fastest growing tourist resort, but now, having had 15,000 visitors last year, it is indeed a reality. Hon. Members could do much worse in the coming long recess than to spend a few days taking advantage of one of Bradford's admirable tourist breaks and exploring the delights of our industrial heritage and the countryside around.

I am particularly pleased to be able to use my maiden speech to bring to the attention of the House the economic scene in Yorkshire and Humberside and to consider the effect there of regional assistance. Although Yorkshire and Humberside, particularly west Yorkshire and perhaps even more particularly the city of Bradford, has had historically a high concentration of traditional manufacturing industry, it has not been slow to adapt to change and certainly during the first half of the 1970s the region's gross domestic product per head grew faster than the national rate.

However, that has not been sustained and since 1977 diversification into newer and lighter manufacturing areas has not been enough to compensate for the decline of sectors such as engineering, which has suffered a 20 per cent. drop in employment, and textiles where nearly 30 per cent. of the jobs have been lost between 1977 and 1981. As a result, the unemployment level for the region has changed from being consistently below the national average prior to mid-1979 to being consistently above the national average in the period since. However, this average masks wide discrepancies in the region where unemployment varies from 6 per cent. in some of the more prosperous parts to more than 20 per cent. in the more depressed areas.

The dramatic loss of 173,000 jobs in manufacturing in the seven years between 1975 and 1982 has never provoked the gigantic headlines that have accompanied closures in major areas such as Consett, Corby and Merseyside and the north-east of England. Perhaps if we had suffered these major closures and the sudden social consequencies of them we would have received the attention and benefits from Government sources that those areas have attracted. Instead, the region has undoubtedly lost out in attracting its fair share of Government assistance.

Between 1975 and 1982, Yorkshire and Humberside contained an average of 16 per cent. of the unemployment in the assisted areas. However, it has received only 7 per cent. of regional assistance payments This means that during that period the region received only £125 per head in grant for the working population compared with a national figure of £365 per head—the equivalent of a total loss in aid to our region of £200 million.

Having pointed out the inequality of treatment that Yorkshire and Humberside has suffered, and while this is a plea for greater recognition of our case, it is not a plea for the return to the position before the operation of the Industry Act 1981. It is certainly not a plea for the scale of massive public intervention advocated by the hon. Member for Rotherham, (Mr. Crowther). Until the hon. Gentleman made that remark I had high hopes that he had at last learned the basic tenets of Conservative economic policy. The hon. Gentleman said that for industry to succeed it had to sell its goods and inflation had to be kept down.

We need to recognise that regional assistance and the way that it has been provided since the war is completely inappropriate to today's needs. Its aim has been to bolster the manufacturing sector in areas where that sector is most concentrated. However, the net result has been only to transfer employment from one area, often by no means a prosperous one, to another area, with little or no tangible benefit to the national economy. Indeed, in some cases where a branch of a large company has taken advantage of regional assistance, that branch has often been the first to shed labour or to close altogether when times have become tough. As the Yorkshire and Humberside CBI commented in 1980 at the time of the Industry Act, There is little evidence that in fact the assistance offered is a major determining factor in relocation but more a benefit which will be considered at the margin, all else being equal. It has been calculated that in the north-east, about which we have had many representations from hon. Members today, there are 92 separate agencies all devoting public resources to bringing jobs to the region, agencies often acting in competition with each other. It is absurd that this wasteful use of limited resources should continue and I hope that this duplication of effort will be considered by the Department of Trade and Industry when formulating its review of regional policy.

Perhaps the most important benefit of assisted area status in the past 10 years has been in attracting funds from the European Community. Since we joined the EC, Yorkshire and Humberside has benefited to the tune of £1,373 million in grants and loans. The benefits are too long to list, but perhaps the most tangible and important in terms of the future long-term economic development of the region is the £650,000 that has been given towards the Leeds-Bradford airport extension. However, much of the area is no longer eligible for EC grants, with the loss of assisted area status.

I strongly urge the Department to look at the "black spot" theory as advocated by the EC commissioner responsible for social policy. It would allow funds to be diverted to contained and narrowly defined areas of economic activity, be they geographically of sectorally defined. It would take us away from the blanket bombing approach which still plagues the application of aid, despite the vast improvement brought about by the 1980 Act. Each project could then be considered on its merits, regardless of location, which would remove many anomalies, for example of finding a high unemployment area in an otherwise relatively prosperous region.

An added measure of flexibility would be to broaden the criteria for aid. The city of Bradford is a prime example. It is now looking to move away from its dependence on the manufacturing sector to other areas such as services, leisure and tourism. The development of these activities, as the city has successfully proved, brings income and employment to the area. While it is not always easy to quantify the benefits, certainly in terms of employment, of developing a theatre complex or of having a national photographic museum sited in the city, they undoubtedly bring added prosperity to the city.

Interest in developing these commercial areas can be seen from the fact that it is this sector which attracted the largest number of development inquiries received by the Yorkshire and Humberside development association last year. It was due only to the initiative and persistence of Bradford's councillors and their officers that they were able to attract money from the EC for the museum project. I hope that steps will be taken to make it considerably easier to attract Government and EC funding for the development of projects in the sectors I have mentioned. This is central to the point that regional assistance is not just financial; it is the display of confidence and the development of a successful image in an otherwise depressed area.

For the city of Bradford, if the Government were to announce that the proposed new regional offices of the Departments of Environment and Transport were to be situated in Bradford, rather than in Leeds, where one is at present, or in Harrogate, where the other is, that would be of immeasurable long-term benefit to the city of Bradford, unmatchable by almost any injection of straight cash.

Regional aid is most effective in attracting foreign investment and assisting the creation of new businesses. Yorkshire and Humberside has an excellent record on both of those counts. Its higher-than-average number of small firms gives great hope for the future. We have seen how the Government can be flexible in allocating funds to attract major investment projects from overseas, albeit that they have not always been great successes. This policy should continue and complement the work of the leading development agencies of each region. What must be avoided is the spectacle of councillors or other amateurs squandering ratepayers' money by jumping on planes and arriving in foreign countries intent on grabbing some prized project for their own corner.

I hope that the current review of regional assistance will lead to the correction of the severe imbalance in regional prosperity. However, it will stand a better chance of arriving at that result by producing a more flexible and cost-efficient package of aid. I look forward to the day when political commentators are not able to express surprise at the election of so many Conservative Members from the north, considering the relatively depressed state of the region. Then I will be happy that we shall have achieved once and for all the demise of the concept of two nations, both geographically and economically.

11.46 am

Mr. Stuart Bell (Middlesbrough)

I wish, in the tradition of the House and with some genuine admiration, to congratulate the hon. Member for Bradford, North (Mr. Lawler) on his maiden speech after what has been a hectic week in Parliament. I congratulate him on his composure, the way in which he put forward his views, the way in which he referred to the Labour candidate in the election and on the ultimate hope and wish with which he ended his speech. We all hope—we live in hope—that one day we will not live in a country of two nations. I congratulate the hon. Gentleman and wish him well and I am sure that he will make a significant and important contribution to the House.

I must refer also, albeit briefly, to the maiden speech of the hon. Member for Newcastle upon Tyne, Central (Mr. Merchant) who, I am glad to see, has returned to the Chamber. I have known him for many years. He too, made an admirable maiden speech. I know from personal experience that he will render a valuable contribution to the House and I wish him well.

There is a contradiction in terms facing us as we debate the motion. If one believes, as the Government do, in a free market economy, one cannot have a regional industrial policy because the free market economy would exclude such a policy. I submit that the Government have a financial policy and not an industrial policy, and for so long as they propose to place the emphasis on money rather than on men not only will jobs be lost but they will never be recreated.

Some years ago, when I was in the United States, it was explained to me how the Wall Street stock market operated. It was said that the value of a share, if all the information was gathered in and was known to everyone, would be the proper value of that share. A free market economy can work only if all things are equal and all factors are the same. We live in a world in which that is not the case. For example, Brazil, a newly developed and newly industrialised country, cannot even meet the interest payments on its sovereign debts, which must be recycled and rescheduled. Yet to pay even the interest on that money Brazil must export its steel on to the world markets, and that brings it into competition with British Steel at Redcar and the north-east. The hon. Member for Dewsbury (Mr. Whitfield) referred to what he called the low labour-cost parts of the world and he was referring, I presume, to countries such as South Korea. The workers in the shipbuilding industry there work seven days a week, 12 to 15 hours a day, have little or no holidays and receive a salary that would not even be considered the lowest salary possible in Britain. Yet we are supposed, in this free market economy, to compete with shipyards such as that, which is an impossibility for shipyards in for example the constituency of my hon. Friend the Member for Wallsend (Mr. Garrett). Therefore, the concept of a financial policy rather than an industrial policy for our regions will not lead us out of the morass, out of the two-nation state, that we have today. We had an example of that on Teesside only yesterday. The workers at the Cargo Fleet lane works of British Steel, which is in the Redcar constituency, many of whom live in my constituency, are living under what the Evening Gazette, my local newspaper, has called the shadow of the guillotine because 450 workers there may lose their jobs as a result of British Steel transferring its manufacturing of piling from there to Scunthorpe.

It is doing that because it cannot compete with Japan. In an effort to be productive and achieve low unit labour costs the plant is to be transferred. I wish no ill to those who work in Scunthorpe, but that move has created blight and uncertainty, which is hanging over British Steel workers.

One of my great criticisms of the Government is that in the past four or five years they have converted a sense of job security into a sense of job insecurity by creating, with the world recession, a reservoir of unemployed and they have made those in work anxious for their own future. That blight lies over the Cargo Fleet lane works as it does over other parts of the north-east.

Even when national companies in the area comply and play the game by the Tory rules of the free market economy, they suffer. ICI (Wilton) is an example. It employs about 8,000 workers, many of whom live in my constituency. The firm had a crisis in petrochemicals and plastics, so reduced its capacity. It redeployed skilled workers and craftsmen to comply with the Government's aims to compete in the so-called free market economy. After doing that it was in direct confrontation and involved in litigation with the Government over the ethylene feedstock taxation scheme. The Government chose to favour the Moss Morran ethane cracker plant due to come on stream in 1985–86 through Esso and Shell to the detriment of ICI (Wilton). It is a technical problem dealing with the valuation for tax purposes of ethane as opposed to naphtha. That is also casting blight over the livelihoods of 8,000 and more workers at ICI (Wilton).

The problem is caused by the proposal in the last Finance Bill. All the negotiations between ICI (Wilton) and the Government have not resolved the problem. The Government are consequently involved in litigation with one of the largest and most important companies in Britain. In the next few weeks I shall be writing to the Chancellor asking him to review the situation and to remove the blight on ICI (Wilton) by finding a solution to the ethylene feedstock taxation problem.

You, Mr. Deputy Speaker, come from Durham and my hon. Friend the Member for Wallsend is in the Chamber. As a child I remember the pit villages. On the way to Newcastle I went past Scotswood road and the Vickers Armstrong works where 22,000 men and women worked. Further down the coast I remember the shipbuilding yards and the fishing fleets. The area was a hive of activity, but in the early 1960s we let the coal mines go. We closed the pits without realising the impact that it would have on the local economy. Once the pits went, the steel went. Once the steel went, shipbuilding went. We have come full circle because since steel has gone and shipbuilding has gone we are back to coal. The call is for more and more retrenchment in coal.

If the proposals by the Monopoly and Mergers Commission for the coal industry are implemented it will have a deep and significant effect on the northern region. The Government cannot say that they have a regional industrial policy if they allow the railways board to effect the cuts proposed in the Serpell report. If the coal mines are closed the people in the region will experience a serious loss of expectation and disappointment.

It is as plain as a pikestaff that regional policy must be built on existing industries. I can think of no reason why ships cannot be built on the Tyne. I can think of no reason why British Steel at Redcar should not be allowed to build up and sell its products. There is no reason why there should be further retrenchment in the mining industry. A properly constructed regional policy involves building up industries and manufacturing concerns. I hope that the Government will take that on board.

I had the honour to fight the right hon. and learned Member for Hexham (Mr. Rippon) in a general election. He calls for modest reflation. We cannot expect this Government to take on board proposals by the Opposition for a northern development agency, but we can hope and expect a modest reflation to assist the areas and give people hope. If we can stop the job haemorrhage we can hope to begin to build.

The right hon. and learned Member for Hexham mentioned General de Gaulle. I shall quote something that Clough wrote, which Churchill gave to Roosevelt in 1941—dark days for our country. Roosevelt wrote some poetry to Churchill and his reply was And not by eastern windows only, When daylight comes, comes in the light, In front the sun climbs slow, how slowly, But westward, look, the land is bright. The land will be bright if we have a regional industrial policy that is as bold in its approach as the motion suggests. If it gives hope to those who live in the regions, if it gives hope that they will be in employment, if it gives expectations to young people, it if lifts their hopes, the regional policy will succeed. If the Government introduce such a policy we shall support it.

11.58 am

Sir Michael Shaw (Scarborough)

I was interested in what the hon. Member for Middlesbrough (Mr. Bell) said, not least because some of my constituents look northwards to his constituency for employment. I have sympathy with much of what he said. He said that we should support existing industries. We must be sure that such industries have a future. Many of them have a future, but as a general concept we must ensure that we are not just keeping the carriage train going at the expense of more modern transport. That may be regarded as a quibble, but it is important. In general I agree that there is concern and a need for the great companies to be encouraged to develop to ensure that there is a future, not only for them, but for the people who work in and supply the area.

A whole range of maiden speeches have been made today. I was encouraged by listening to them. Plainly we shall have great contributions from our new colleagues. I congratulate my hon. Friend the Member for Dewsbury (Mr. Whitfield). When I cut my teeth in politics, Dewsbury was the first seat that I fought. A number of friends said to me, "Come on. Why not take a fortnight off and have a go at Dewsbury?" Little did I know that I would have to make several rearrangements to my life at the end of the fortnight. My hon. Friend did better than I; he managed to achieve a notable victory. I have known him since he was "nobbut a lad" and I know his family. I welcome his presence here. I thank him for the notable way in which he presented his speech.

My hon. Friend the Member for Batley and Spen (Mrs. Peacock) had a tough fight against a good opponent. None the less, through her own efforts—I saw something of the work that she did—she succeeded in winning the new seat and in holding on to a section of the constituency of Brighouse and Spenborough. She managed to retain Spenborough for our cause. I hope that she will continue to represent the area with knowledge and enthusiasm.

My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Merchant) took over the constituency from a well-loved Member, as the hon. Member for Wallsend (Mr. Garrett) said. Judging from what the hon. Gentleman told us, our old friend Sir William Elliott has passed his constituency on to a worthy successor. We welcome my hon. Friend here.

Dr. Keith Hampson (Leeds, North-West)

I take the first public opportunity to add congratulations to the new Members of the House and to offer congratulations to my hon. Friend's predecessor and friend, Sir Donald Kaberry, on his elevation to the other place which gave great pleasure to his constituency and friends. We all look forward to his continuing the good judgment and sound performance that he has shown in the past.

Sir Michael Shaw

I am grateful for the fact that my hon. Friend has raised this matter. Sir Donald Kaberry's elevation to the other place was welcome to every Member of the House. We send him our congratulations and good wishes. We hope that it will not be long before we see him among us in this great and historic building.

Fridays are essentially days for discussing local issues. This morning the speeches have, unusually, dealt with a more general concept of the problems that affect regions. It is encouraging that there is broad agreement on the many themes that have been introduced on both sides of the House. The necessity for change stands out. That need was realised during the election. I went to help in various seats—not only in my constituency but next door in the seat of the hon. Member for Rotherham (Mr. Crowther), my hon. Friends the Members for Dewsbury and for Batley and Spen. The people on whom I called made it clear that the difficulties experienced during the past four years were not caused just because a Conservative Government had come to power. It was accepted that, sooner or later, difficulties would arise and that changes had to occur. We could not continue along the old lines. The old answers were not good enough. However, it was not accepted that some of the arguments that were put forward by the Labour party were answers to our problems.

We must look at these matters again. As has been mentioned many times during the debate, we must work to conquer the inflation from which we have suffered. Having lowered the inflation rate and achieved more confidence, we must do everything possible to increase national production. If there is not a general increase in production throughout the country, despite what we do in the regions, our policies will be unsuccessful. During the next four or five years we must ensure increased production and ensure that it is shared in a fair measure within the regions and not just, as my hon. Friend the Member for Dewsbury said, in the southern and more favoured parts of the country.

I have said, and I shall continue to say, as will many other hon. Members, that it is vital to keep down interest rates. Nothing is more discouraging to people setting up businesses or those wishing to expand businesses than to find that intolerable interest rates are being demanded by Governments or banks. When we earn more through leaving money in the banks than by putting it into active investment, incentive is killed. Furthermore, if we extend our resources in investment to their limits, higher interest rates will ensure, first, that we will not make any profits that can be ploughed back into business; secondly, that we remain entirely in the hands of the banks; and, thirdly, that our existence will depend upon the continuing confidence and sometimes the whims of the banks. If business men are to be encouraged to develop their businesses, it is vital that bank interest rates should not be increased. I hope that they will continue their downward trend.

I believe that there is more optimism in my constituency, which has been engendered by better order books and the like, than there has been in the past. My constituency, as with many others, has a continuing unemployment problem. In Whitby male unemployment is as high as 28.9 per cent. This is due partly to the fact that job opportunities further north in the Middlesbrough area and such places are no longer available. I hope that continuing efforts will be made to start small businesses. The hon. Member for Leeds, West (Mr. Meadowcroft) mentioned the small businesses in the small works units. These are admirably suited for places such as Whitby.

I welcome the special investigation that has been set up by the North Yorkshire county council into the problem of unemployment in Whitby. I hope that it will be brought to a speedy conclusion and that when its recommendations are known the Government will give every possible assistance to any subsequent actions proposed by the county council.

Infrastructure was mentioned by the hon. Members for Middlesbrough and for Wallsend. On the east coast we have suffered in the past from a lack of good roads. It is important to remember that the good road system that has been set up in the northern area is to the credit not just of one party or Government, but of several. That is the way it should be, and it is the proper way forward.

In my constituency the roads are being improved all the time, but one facet—the moorland roads—worries me. As they are improved, the traffic becomes faster and heavier and there is still the rural way of life on either side of them. There is a problem for the flock masters and their sheep wandering on the moorland roads. For example, unless there is a quick decision on whether the A169, the Pickering to Whitby road, should be fenced, sheep will no longer graze beside the road because it is becoming more expensive and the losses in sheep are becoming greater.

Hill sheep farming is a hard way of life and has a low profitability rate. The farmers cannot afford to fence the long stretches of road. Their problem results largely from the fact that the roads are being improved. I maintain that part of the roads' improvement should be the erection of fencing to stop the sheep coming on to them. Therefore, I hope that early decisions will be made in that regard for the sake of both the farmers and the tourists. Many people have written to me saying that as they had gone through the area they were horrified to see the casualties lying on the roadside. I hope that there will be a favourable decision on that.

My other point concerns ports and fishing. The future of small ports is good, but if the most is to be made of it much work has to be done. Incidentally, I forgot to mention one transport problem. The railway and the "recommendations" of the Serpell committee were mentioned by the hon. Member for Middlesbrough. They were not recommendations. They were proposals about how one could get round certain problems. I have no doubt that the hon. Gentleman will take the same view as me, that in our area it is essential to maintain the railway services, certainly the service to Whitby and Scarborough. I intend to do my best towards that end, as I know the hon. Gentleman will for his area.

There is one pressing problem for the port of Scarborough. At last we have a Community agreement on fishing. There are problems about herring, and doubtless others will crop up. There will continue to be problems, but we shall have to overcome them. However, there is now a sound and expanding future for the fishing fleets at Scarborough and Whitby. If that future is to be safeguarded, we must ensure that there are proper facilities in our ports for the needs of the fishing fleet.

I have already done my best to try to get additional space within Scarborough. I got agreement and a promise of help. Alas, for various reasons, which I shall not go into and which I fully understand, the council felt that it could not proceed. However, the matter must be reconsidered. Modern and sufficient facilities must be available for selling and processing at a fishing port. In modern terminology, that means that there must be bigger landings. If there are bigger landings, there must be more room for boats. I have already done my best. I pressed strongly for a new jetty. I fully understand why the council could not agree. Discussions are now going on. I do not know what the details are, but the council and the fishermen are discussing the matter together now that we have the Community agreement. I hope that a constructive decision will be made as a result of those consultations. I hope that they choose either to revive the old scheme of a new jetty or to make better use of existing jetties.

Whatever happens, a considerable amount of money will be needed. I hope that the practical sympathy shown by the Government in 1981 will be shown when the decisions are made in, I hope, the not too distant future. Now that we have a sound basis, it is not good enough to say that one can help with boats and so on, but the other facilities in the harbour need practical assistance from the Government.

Those are local points. In looking at the local details and the problems that affect the communities in many areas of the country we can bring practical help that will be of lasting benefit. People do not wait simply money. They want to stand on their own feet, and they want their businesses to stand on their own. However, initial help in, for example, transport and port facilities is essential if progress is to be made.

12.17 pm

Mr. Mike Woodcock (Ellesmere Port and Neston)

It is with pride and pleasure that I rise to deliver my maiden speech in this important debate as the hon. Member for the new constituency of Ellesmere Port and Neston.

The constituency is to be found at the southern end of the Wirral peninsula, sandwiched between the waters of the Dee and the Mersey. It has three main parts. The first is the town of Ellesmere Port, in which two thirds of my constituents have their homes. It is a town created by the industrial revolution and the Manchester ship canal. In the 1950s and 1960s it was one of the nation's boom towns, when its population almost doubled, The town hosts a wide cross-section of industry, including the massive oil refining complex at Stanlow, a major factory of Vauxhall Motors, a power station, fertiliser plants, several chemical works, a paper mill and the headquarters of several major building firms.

The second part is the town of Neston and villages of south Wirral. Burton, Neston and Parkgate were each in their turn the principal port for the Irish trade before the silting up of the Dee estuary. Neston now contains the Morgan Crucibles factory, and the Marconi underwater systems plant which was opened by the Prime Minister in 1981. These first two parts of the constituency form the borough of Ellesmere Port and Neston, which, while containing less than 10 per cent. of the population of Cheshire, provides 15 per cent. of jobs in that county.

The third component of my constituency is the Cheshire villages to the west of the city of Chester from which many constituents commute to Merseyside and Chester but which also house in the village of Capenhurst and uranium enrichment plant of British Nuclear Fuels.

In the previous Parliament, Ellesmere Port was represented by my hon. Friend the Member for Wirral, South (Mr. Porter). Neston and the villages of south Wirral were represented by my hon. Friend the Member for Wirral, West (Mr. Hunt), and the Cheshire villages were represented by my hon. Friend the Member for City of Chester (Mr. Morrison) to whom I extend my heartiest congratulations on his recent appointmet as Minister of State, Department of Employment. Each of those hon. Members is held in the highest esteem in the parts of my constituency that he formerly represented. I shall need to work extremely hard to match their reputations.

I spoke earlier of the boom years of Ellesmere Port. Regrettably, those boom years and the recession have now combined to present the constituency with some formidable employment problems. First, the functional landscape contains almost the reverse of the national ratio of employment in manufacturing and service industries. In the last year for which comparisons are available, 61 per cent. of local employment was in manufacturing, compared with a national average of 32 per cent., while only 38 per cent. of local employment was in the service industries, compared with a national average of 65 per cent. Nationwide, manufacturing industries have been hardest hit by the recession and are finding recovery most difficult. The predominantly manufacturing base of the local economy also provides less opportunity for female workers. My predecessor, my hon. Friend the Member for Wirral, South, in his maiden speech on 16 May 1979 said: Ellesmere Port is a bustling modern town with a diversity of industry which has not to date suffered the ravages of unemployment which are all too common in the north-west… But I fear that the clouds are looming on the not too distant horizon."—[Official Report, 16 May 1979; Vol. 967, c. 253.] How right he was. Those clouds were looming. In the intervening years, unemployment has taken its toll, with more than 7,000 job losses in the town. The Burmah Castrol oil refinery has been closed, there have been major redundancies in many other industries, and just over the constituency border lie the gaunt remains of Shotton steelworks, where many of my constituents formerly worked. Added to that, the Government's recent decision to phase out lead in petrol poses another threat to more than 2,000 employees at the plant of Associated Octel within my constituency. My hon. Friend the Member for Wirral, West, in his maiden speech on 12 April 1976, said: It is youth unemployment that must have the concern of us all. For school leavers to move from the classroom to the dole is for them to understand in accordance with the education that they have been given, that they have failed."— [Official Report, 12 April 1976; Vol. 909, c. 970.] Since that time, the problem of youth unemployment in my constituency has worsened considerably. In part, that is a result of the dramatic increase in the population of Ellesmere Port which occurred up to 1970 and has produced a high ratio in the 16 to 20-year-old band who are today finding it so difficult to obtain their first job.

However, I am pleased to say that employees, managements and local authorities in my constituency have not been slow to respond to the problems. In particular, the local authority was the first in the northwest to take advantage of Government job creation schemes. It carried through an ambitious scheme to convert 40 former houses into workshop and commercial units. New industrial estates have been created, significant land reclamation schemes have been embarked upon and excellent communication links have been further improved. Companies are diversifying and investing in new technology. Managers in our industries are learning new skills, improving training practices and increasing the competence of employees at all levels. They realise that the Government cannot do for industry those things that it needs to do for itself. They realise that in the final analysis the road to success is to provide the right products at the right time and at the right price.

Innovation, efficiency and hard work are the essential ingredients, and they must come from within our industrial organisations. Managers also realise that some of the underlying problems are national and international in character. They realise that many local initiatives have only been possible and will only continue to be possible if the Government create the conditions in which industry can flourish.

Much has been done and much remains to be done, but it must be done in partnership. That is why I urge the Government to ensure that the current review results in a bold regional industrial policy which will tackle the underlying problems.

We need a policy that strongly favours the creation of jobs in manufacturing industries; that directs assistance in areas of high unemployment towards labour-intensive industries; that does more to alleviate the tragedy of youth unemployment; that relieves the burden on those who want to start or expand businesses by cutting the burden of rates, taxes and unnecessary bureaucracy; that rewards initiative, flair and imagination; and, finally, that offers help and relief to firms that face difficulties that are not of their making.

The people in my constituency are hard working, innovative, resourceful and sensible. They know that the Government alone cannot solve industrial problems; that there must be a partnership. My constituents will be bold and imaginative in responding to the challenge. I urge the Government to be equally bold and imaginative when formulating their new industrial policies.

12.25 pm

Mr. Michael Fallon (Darlington)

Those of us, Mr. Deputy Speaker, who are towards the end of this beauty parade of maidens are at a real disadvantage. So forcefully have others spoken in the past few weeks that if we are conventionally uncontroversial we run the risk of being unconventionally unapplauded. I warn the House that, although I might be uncontroversial today and I might sit down in silence, the time may come when I shall be interrupted.

It is an honour and a privilege to represent Darlington. It is one of the great towns of the north. It has a proud history and a real community. It is the home of large companies such as Whessoe, Cummins, Carreras Rothman and Cleveland Bridge, which played a major part in the construction of the Thames barrier which does much to keep the heart of Government dry and the House free from damp.

This year, Darlington contributed its own footnote to political history in the recent by-election. I say no more about that except to tell Opposition Members who invoke the spirit of Darlington that I am the proof. I understand that I am the 14th hon. Member for Darlington. I follow in an honourable tradition that has been laid down by Sir Fergus Graham, Tony Bourne-Anon, Ted Fletcher and Ossie O'Brien. Whether their period of service lasted 20 years or 20 working days, it was given with commitment and in sincerity.

The most colourful Member for Darlington appears to have been a free trader after my own heart. I am sorry that the hon. Member for Leeds, West (Mr. Meadowcroft) is not present, because he would be interested to know that Ignatius Trebitsh-Lincoln won the seat of Darlington for the Liberals in 1910 on a free trade platform. He lost it the same year, was later convicted of treason in the first world war and died in Shanghai, accused of collaboration with the Japanese during the second.

Today's debate has been about the problems of the north. Many better analysts than I have described them. They are well known to the House and the Government. There is a real shortage of small businesses—about 40 per cent. less in the north than in other parts of the country. Out of 1.25 million small businesses in the country, a bare 58,000 are to be found in the north-east. There is very little new technology—the industries of the future—on Teesside.

For at least 20 years, the industrial base of the northeast has been shrinking and job losses continue. I refer to the industries that have served the north so well—the traditional industries of coal and steel, British Rail and heavy engineering. They were the fruits of the first industrial revolution. That revolution was not instigated by regional policy or sectoral aid, but it was successful, none the less. Those industries are now in decline. The problem in the north-east is that we lack an adequate stake in the industries of the future. We appear to be missing out in the second industrial revolution.

I come to the role of regional policy. It seems to me that the north-east has had a very great deal of regional policy. It has had regional policy under the last six Governments—Governments of all political persuasions. Even in the last 10 years, of some £3.3 billion worth of grants, the north-east has had £1 billion—30 per cent. —even though the region constitutes a bare 5 or 6 per cent. of the working population. That expenditure on regional development grants now amounts to about £160 for every employee in the region, which is twice as high as the average in the north-west and higher than in Scotland. We have had plenty of regional policy. Unfortunately, we have not had economic development, and my request to both central Government and local government would be that of the reply by the philosopher, Diogenes, to Alexander: Just stand out of the sun a little. Far too much public money has gone into the older industries—the sunset industries—and not into the newer sunrise industries. Governments have pumped billions of pounds into uneconomic industries whose capacity has not been rationalised. There has been plenty of regional policy. Some of it in the very early days—in the late 1960s and early 1970s—has had a quantifiable effect, as anyone who has studied the Department of Industry's papers on the subject will know. But since 1973 or thereabouts the north-east appears to have fossilised.

The real tragedy of the north is a simple one. It is not that a reallocation of labour has occurred. It is that it has taken time. It has taken far too long. Because Governments have continued to misallocate resources, they have prolonged the distortions in our regional economy and they continued to make the ultimate adjustments in the north much more painful than they need have been.

It is a criticism of all Governments that by crude macroeconomic management they have denied the north the full benefit of the natural advantages of the region. The north has good communications. It has the space. It has attractive countryside. It has a skilled work force. Above all, it has cheap associated labour costs, by which I mean not cheap wage rates but the associated costs that are an important input to wage rates—the cost of housing and of land.

The Government have admitted these differences. Government figures show that the cost of providing Civil Service jobs is much lower in the provinces than it is in London. There is a difference in the amount of money needed to maintain an assistant secretary of £8,298; a principal of £6,758; and of a typist, more than £4,000. That is the difference between servicing a Civil Service job in the provinces and in London.

I may be asked, "It is time to be constructive. What would you like to see the Government do?" I should like the Government to take action on five counts. I should like them in the very near future to bring to an end national wage bargaining—not to induce lower wages or lower wage increases in areas of high unemployment but to allow companies considering expansion to tak,, advantage of the lower total labour costs which reflect the relative cheapness in the north-east of housing, land and the other input components.

I should like to see the Government develop a proper coherent and logical taxation policy which would help smaller businesses: raising the VAT threshold to £50,000 would take about half a million people out of VAT altogether; instructing the Inland Revenue to make qualification for schedule D for the self-employed the norm rather than a hard-won privilege; raising tax allowances for the lower paid as soon as resources allow; and, lastly, announcing and publishing a medium-term taxation strategy alongside the medium-term financial strategy, so that taxpayers can see a steady and gradual reduction in the regular rates as expenditure is brought under control and other resources allow.

Small businesses must be fostered. They are being fostered by the Government and I pay tribute to the attention that they are now paying to them, but I am deeply sceptical of the value of some of the enterprise zones that are currently being operated, and very suspicious of some of the local distortions that they may be inducing in the regions in which they are sited.

The package of measures, while welcome, is not sufficient. I would far rather have every small company and every small business declared an enterprise zone of its own. For all small companies employing fewer than 50 people, there should be an absolute minimum of regulation, taxation and bureaucratic requirement. We must not forget that most small businesses do not begin in the industrial units allocated by local government or central Government. They begin in the home, in a garage, in the studio, underneath the arches.

We are told that the Government are currently reviewing their regional policy, and it is very difficult to get details of the review that is now under way. I would welcome a little more openness on the part of Government. I see no reason why the comprehensive review that was produced before the general election—or at least the analytical sections of it—should not be published as a consultative document, thus improving the Department's contribution to the requirement of the Croham directive on open government. As to the conclusions to which that review will lead, I should like to see Government concentrate on one or two essentials.

To remove some of the discrimination, I see no reason why Darlington, inside the north-east region, should be at a disadvantage as against the rest of the northern region. There is a case for helping industrial sectors selectively rather than regions as a whole. I am delighted to see that my hon. Friend the Member for Rossendale and Darwen (Mr. Trippier) advocated precisely that point from the Back Benches less than six months ago. I am sure that he has carried that conviction with him into government.

I should like the criteria applied to the regional programme to be fully consistent with developing and changing Community criteria. There is some reason to believe that we are in danger of losing effectiveness in the way that our programme is constructed and submitted to the Commission, as compared with the way in which other countries form their regional policy criteria.

I should like to see the regional programme encourage the local agencies—not the large development agencies, the super quangos, but the local business trusts and enterprise agencies—and to develop much more local awareness of the advantages inside particular towns and communities of local purchasing arrangements.

Government can do a lot more to change attitudes. As one who was brought up and educated in Scotland—much further north than my constituency—I am amazed to see the attitudes in London towards the north, Scotland and Wales. Those are attitudes that the French would no longer tolerate and that the West Germans would find ridiculous. We are not only over-centralised but absurdly metropolitan in attitude. Everyone seems to want to live and work near London. Civil servants, we are constantly told, must work as near as possible to their Ministers. I should like to see Government making a much greater effort to put more of their work, functions and staff into regions such as the north. The Fleming and Hardman dispersals were never carried through to their logical conclusion, and we still lack an adequate proportion of Civil Service jobs in the north-east.

The attitude must come from the top. If it does so, it will percolate to the bottom. Instead of treating our regions as forgotten parts of our country, instead of treating any sign of good news, good industrial recovery in the north, as the first flutterings of life on a dead planet, the Government should encourage a policy of rejoicing in our regions, rejoicing in the strength and variety of the regions. Such strength and variety are nowhere better demonstrated than in the town of Darlington, which I have the honour to serve.

12.40 pm

Mr. Stuart Holland (Vauxhall)

I much regret that I was not here for the earlier part of the debate, due to a prior engagement in my constituency. However, I was glad to have the chance to hear several maiden speeches, and in particular, those of the hon. Members for Ellesmere Port and Neston (Mr. Woodcock) and for Darlington (Mr. Fallon).

The hon. Member for Ellesmere Port told us that his constituency had formerly been a boom town, but that it now faced major industrial problems, having been so dependent earlier on manufacturing industry. He stressed that there was now less opportunity for women workers, and that for school leavers to move from the classroom to the dole was, in their eyes, a failure. I share his regrets at the formidable problems that the area now faces. I was interested, as I am sure were other hon. Members, to hear him say that the Government should create conditions in which industry could flourish.

The hon. Member for Darlington told us that he intends to be controverial. We, in turn, assure him that we shall fulfil his expectation that he will be interrupted. He said that the debate so far had been about the problems of the north. Perhaps my contribution will, in part, offset that. He also mentioned, in brief, the outstanding contribution of former Members, including Ossie O'Brien. If I may say so, the hon. Gentleman's own contribution to the debate was outstanding. How long he will retain his seat will depend in large part on whether the Government and their Front Benchers listen to the recommendations that he and the hon. Member for Ellesmere Port made for a more active regional policy. Whether that can be done, as he hopes, as a complement to the Government's financial strategy, is in question, because their financial strategy, their monetarist experiment, contradicts the possibility of industrial regeneration and renewal.

We no longer have a regional or industrial problem; we have a major economic and social crisis. Its problems are not only industrial and regional, but structural and social, both global and local. It is conventional to refer to the crisis as the worst since the 1970s, but in many respects it is more profound than the 1930s, when the case for an active regional industrial policy was accepted by both sides of the House. Conservative Members will be well aware that the then Member for Stockton, Mr. Harold Macmillan—later Conservative Prime Minister—argued that Baldwinesque policies of laissez-faire, business confidence and reliance on the initiative of entrepreneurs would not be adequate to restore anything like full employment in this country, and that his major contribution to the evolution of policies in the post-war period, published in his book "The Middle Way", adopted a Keynesian general framework for industrial and regional intervention.

The path-breaking report on regional policy that was accepted by both sides of the House for 35 years after the war was the Barlow report. It argued that free market forces could not be relied upon either to ensure that workers moved to where jobs were available, or that firms moved to where there was available labour and high unemployment. In other words, the Barlow report was the contradiction of a certain adage recommended by a Tory right hon. Member that if people could not find work they should get on their bikes and find it. The direction of industry, either by incentives or by locational controls in the form of industrial development certificates, was accepted for decades after the war by Governments of both political complexions.

We must take the chance offered by this debate to try to analyse why it was that, in many respects, former industrial and regional policies were handicapped, and why they came into disrepute. Most such policies assumed a competitive market model, and that firms, through the market, made normal profits. Therefore incentives, whether capital grants or regional employment premiums, would enable a firm either to make a larger profit, generating higher self-financing for a higher rate of investment in the region, or they would enable firms to reduce prices against firms in more developed regions or in the international economy equivalent to a national or an international devaluation effect. This reasoning relied essentially on the assumption of normal profits being earned by firms.

As we saw in two reports from the Trade and Industry Sub-Committee of the Expenditure Committee — the sixth report from the Expenditure Committee 1972 "Public Money in the Private Sector" and the report in 1972–73 on regional development incentives from the same Committee—it was evident by the late 1960s and early 1970s that firms were not responding to regional development incentives, even though some of these were major grants. In the late 1960s, investment grants in regions could total 45 per cent. of capital outlay. The regional employment premium was much smaller as a share of wage costs, but nonetheless also appeared to have no effect.

Company after company giving evidence to that Committee—the names amounted to a roll-call of the leading names in British business—could not confirm that the available regional incentives had had a determining effect on their location decision. In other words, when they moved north, away from the south-east and the midlands, they did so for reasons of labour availability, not because of the pull effect of incentives. Those on both sides of the House who are concerned for an active regional policy, including hon. Members making their maiden speeches today, should remember that it is important to analyse why regional incentives have not pulled investment and jobs into the regions on a major scale.

One of the reasons, referred to earlier by my hon. Friend the Member for Middlesbrough (Mr. Bell), is the availability of labour in parts of the Third world, especially south-east Asia and Latin America, at nominal wage costs that are only one tenth of those obtaining in Britain. With due respect to the point made by the hon. Member for Darlington—on the indirect wage costs, or social costs that are underwritten by local authorities in some areas—the important implication of this is that direct wage costs none the less clearly count.

From the 1950s and 1960s companies were first locating in southern Europe, having for many years invested in southern Africa. In the 1960s and 1970s they increasingly located in the labour havens in Latin America and south-east Asia, where the cost saving on wages was equivalent to 90 per cent. of their wage bills in British regions.

Even allowing for a 45 per cent. investment grant, which sounds massive, average investment costs as a share of total costs were only one fifth. Investment in manufacturing industry was about 20 per cent. of total costs. Forty five per cent. of one fifth of total costs is 9 per cent., which is less than one tenth of total costs. Savings on labour costs by going multinational in Third world countries gives gains of between 35 per cent. to 45 per cent. on total costs.

It is clear that it is impossible for any Government to subsidise labour up to 90 per cent. of the cost of production, just as it should, in principle, be impossible for a Government to subsidise capital investment to 100 per cent. or more—although it has been identified in some European countries that the range of subsidies available to enterprise have exceeded 100 per cent. of the capital costs of investment. We must take account of the multinational trend of manufacturing industry and the extent to which it is the outward flow of investment by our own industry that has tended to undermine investment in the United Kingdom.

Dunlop is a clear example of that. It submitted to the Expenditure Committee that there was no way that modernisation of its investment in the United Kingdom could be advantageous to the company. It continued to produce in Britain, where it had tied up a certain section of the market. It continued to produce tyres with equipment that had been bought second hand on lend-lease in 1948. That equipment was still being used when the plant was closed. Yet in its foreign expansion, when it penetrated the German market on a major scale with a plant at Aachen, aided by the regional incentives available from the Federal Government, it undertook new investment and bought new equipment that would give higher productivity levels than in Britain. That also meant that it had no interest in responding to devaluation of the currency as an incentive to export more abroad, because it followed that, through the lower prices arising from devaluation in Britain, it would have undercut its production from its Aachen plant and its West German subsidiary in the West German market.

Those are some of the respects in which the general context of industrial and regional economic policy is critical. The structure and location of production of some of our big businesses are also crucial. That has policy implications for regional urban location that must be addressed by any Government seriously wishing to confront the growing social and economic problems being faced in the northern regions and inner city areas such as London.

Regional policy has failed to take account of what, in effect, amounts to unequal competition. Paeans of praise come from Conservative Benches about the competitive process and the return to market forces, but in reality competition is already unequal and uneven— and not only between national and multinational capital. Small enterprises, whether in inner city areas or the regions, cannot compete with wage costs in the Third world. They cannot penetrate key markets because of insufficient financial backing and insufficient organisational skills, often lacking even the basics of a multidivisional management structure which, for half a century, has been recognised as the principle of modern corporations.

Small finns cannot enter markets that are increasingly dominated by large firms. They have been squeezed in their share of the market by large firms. Familiar figures on manufacturing industry show that concentration is less than in servicing in banking. None the less, the share of the top 100 companies has grown from about 20 per cent. of manufacturing output in 1950 to almost one half of manufacturing output today.

That increased share of the market by big business increasingly promoted a dualism in our industrial structure —established big business being able to undertake and in many cases to self-finance ventures; small firms being unable to do so. Big business was especially multinational in operation; small firms were increasingly backwashed by that activity in local areas. They were forced to adopt defensive market strategies of holding off the competition and holding on to what they had, rather than the offensive entrepreneurship, open in many cases only to larger companies, of breaking into new markets.

I touch here on the problems of London. The outflow of multinational capital from inner city areas has substantially contributed to employment loss in such areas. A pioneering study for Canning Town by the community development project shows that, over more than a decade, more than half the jobs lost in manufacturing in the Canning Town area were due to the migration of six large multinational companies.

With migration of big business, and with the change in the structure of competition, there is also a break-up of the satellite effect for small and medium firms.

Many small and medium size firms survive not by being final producers but by being component producers to other enterprises. With internalisation of production and economies of scale in large firms, small and medium size firms have been left behind. As firms move out, whether to the new towns, other United Kingdom regions or increasingly abroad, the fabric of small and medium firms is undermined and one sees major losses — of up to 90,000 firms in the west midlands—as they go to the wall.

What of the EC and its regional policy? In many ways the problems of conventional, traditional policy in the United Kingdom context are writ in the European Community. There are major disparities—for example between Calabria and the Republic of Ireland and between Paris and Hamburg. The disparities have in recent years moved from being one to five against Calabria and the Republic of Ireland to one to six against. They are increasing. What is the Community doing about it?

As hon. Members will be aware, the Community's total budget is just under 1 per cent. of Community VAT, which itself is a minor share of 1 per cent. of Community GDP. Only about one twentieth of that is spent on the regional policy and only one tenth of that is redisributed between regions. The Community is redistributing between regions less than one two hundredth part of 1 per cent. of its gross domestic product. This is not only negligible, it is derisory and cosmetic. Pierre Mathijsen, formerly director-general for competition policy in the community and later director-general for regional policy, admitted that the system is a charade and that the fund itself had been set up as a political device, inter alia, to placate Britain, Ireland and Italy, the poorest members.

Can we be content with such cosmetics in regional policy or should we be pursuing a more varied and more interventionist policy? What are the social effects of the industrial-regional crisis?

The effects on inner city areas have been devastating. In London, for example, the demand for labour in the 1950s was high, especially in the public services—the Health Service and transport. Service employment rather than manufacturing employment has increased. The problem is now compounded by cuts in the construction industry and in public expenditure. Why is that important? It is important because those who are unemployed are not the more skilled or the professional grades but semi-skilled and unskilled workers. The hon. Member for Ellesmere Port and Neston referred to unemployment for women workers. We also have a low pay syndrome for women workers. Those are compound problems, leading to multiple deprivation in inner city areas.

For example in Lambeth, in which the constituency of Vauxhall lies, we have the highest male manual unemployment in London; the largest number of school leavers unemployed for more than a year—25 per cent; the highest share in London of those earning less than £90 a week; the highest ethnic minority unemployment—nearly 5,000 in the borough; and three of the wards in my constituency — Ferndale, Larkhall and Vassall — are among the top 20 in terms of the highest unemployment in London as a whole, approaching 20 per cent. unemployment.

Mr. John Maples (Lewisham, West)

The hon. Gentleman speaks of the loss of jobs in London. Would he agree that one of the major causes of job losses in London is the appallingly high rates, particularly in his borough, which suffers from one of the worst levels?

Mr. Holland

No, I would not agree with that. I visited IBM's headquarters, as did some other London hon. Members, this week, and it was pointed out to me that one reason why it had moved to Lambeth was that the rates were considerably lower than they were across the river in the City of London. That must be taken into account in relation to the office service sector, which is heavily concentrated in the north end of the borough.

There are profound structural long-term reasons why there has been job loss from inner city areas and the regions. If Conservative Members continue to peddle the myth that the issue is local taxation alone, they will not be able to address themselves to the underlying problems, and will not resolve them. If they intend to be here for five years—in view of the majority they have—then as the next election approaches—with rising unemployment in the regions, no light at the end of the tunnel and no upturn in the economy — they will be in real difficulties. I therefore encourage them to keep their minds open to the argument rather than simply repeat the myth of high local rates.

The real problems will get worse because of technological unemployment. Predictions have been made by the Manpower Services Commission, the Nora and Minc report in France, for Siemens in Germany and the late and, on the Labour side, lamented, Central Policy Review Staff of chronic structural unemployment in the next 10 to 15 years due to the introduction of new technologies such as word processors, data processors and robotics. The predictions of losses in the office sector by a wide range of international studies are of between 30 per cent. and 40 per cent. of staff over 10 to 15 years. They will affect not just typists and filing clerks but designers, draughtsmen and technicians.

In robotics, a 1978 report from the Central Policy Review Staff predicted that within 20 to 25 years, by the end of this century, structural unemployment in industry could be 90 per cent. and that we should need only one of the present 10 workers employed in industry to meet all our expectations in terms of industrial goods.

If the House does not address itself to that kind of chronic structural unemployment and to these trends, there will be nothing to redistribute in terms of regional policy. There will not be the jobs in London and the south-east to redistribute to other regions. Whether or not the predictions are precise or accurate on technological unemployment, these problems should be addressed.

I expect that my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) will speak of the positive decisions that we would like to see made in relation to the regional problems. Unless there is a reversal of the financial strategy, to which the hon. Member for Darlington referred, and unless there is a reversal of the monetarist policy of the Government overall, there will be no hope for a relocation of industry policy working in Britain.

Unless we restructure industries and the relation between industries and services and re-establish the targets which were set for 25 to 30 years after the war to try to secure a balance in the industry-service mix in certain regions, we shall repeat the problems to which the hon. Member for Ellesmere Port and Neston referred —the over-dependence in his constituency on manufacturing, which employed two thirds of the labour force. Now there is chronic mass unemployment there.

We must redistribute resources socially and regionally. In the regions with high unemployment the semi-skilled and unskilled workers tend to become the chronic, long-term unemployed. Unless we redistribute both jobs and incomes we shall not solve the problem. We must take into account in our policy the fact that the regional problem is not simply local or national. It has an international dimension. Our policy must reflect the multinational trend of capital, which has substantially contributed to the crisis in many regions.

This means joint international action, supported rather than opposed by this Government, for the recovery of spending and trade in the world economy, especially in the OECD economies. It means a real budget. Instead of the derisory Community budget of one two-hundreth part of 1 per cent, it means a 3 per cent. to 4 per cent. increase in the gross domestic product of OECD and western European countries on an annual basis over 10 years. That is needed to create the 20 million jobs in western Europe which alone can offset the predicted 20 million to 25 million job losses that will occur in the next 10 years, even if these economies grow at 1½ per cent. to 2 per cent. a year.

Such a policy means endorsing local and regional enterprise agencies. It means supporting roles such as that formerly played by the National Enterprise Board, without which the restructuring of defensive, reactive industries cannot be achieved. Our major industries cannot be turned round within three months or 12 months simply by making redundancies in the MacGregor manner.

Such a strategy means supporting the Scottish and Welsh Development Agencies and enabling them to have the capacity of Scottish and Welsh enterprise boards, similar to the Greater London enterprise board which has come under attack from some hon. Members. The Government plan to abolish the Greater London enterprise board. If they do they will turn their backs on the fact that no Government right of centre in the rest of Europe would consider scrapping such an agency. Such Governments realise that such intervention is not of itself Socialist, but intelligent intervention by the state in a capilatist economy. It is intelligent state capitalism. If the Government neglect that and scrap the agency, as they approach the next election they will have to seek a new industrial and regional strategy, and the opportunity offered by today's debate will be lost.

Government Members should be warned. Monetarist policies are sowing the seeds of major social discontent, with poverty, low pay and unemployment. If the Government cannot tackle the problems and relate their structural and industrial policy to the redistribution of jobs and income they will reap the harvest of that discontent at the next election.

1.8 pm

Mr. Barry Henderson (Fife, North-East)

Two features strike me forcefully today. First, a number of my hon. Friends have described their constituencies as being in the north. It would take the best part of a day to travel from their constituencies northwards to mine and therefore I am not a regular contributor to Friday debates. The hon. Member for Vauxhall (Mr. Holland) made an erudite speech, but it illustrated something that I have noticed about Friday debates. They tend to be characterised more by light than heat, which is not true of some of our other debates.

The second matter that struck me was the large number of my hon. Friends who have attended to talk about regional policy. That gives the lie to nose who say that Tories stop at High Barnet, or some other northerly outpost of London.

It was encouraging to hear the excellent maiden speeches of my hon. Friends. They spoke with sincerity, conviction and knowledge about their areas. It gave me particular pleasure to hear my hon. Friend the Member for Darlington (Mr. Fallon) since he is zi graduate of the university in my constituency. He showed the benefits of a broad and deep education. He illustrated the point that if someone has never been outside the confines of Greater London he finds it more difficult to comprehend the great scope and opportunities for the development not only of the regions but of the country as a whole.

I am grateful to my hon. Friend the Member for Dewsbury (Mr. Whitfield) for tabling the motion and for the intelligent and enlightened way in which he introduced the debate. "Regional policy" is one of those glorious phrases which has become a bit of a sacred cow but has attracted a bad press. Not many people believe that what was understood as regional policy in bygone years has been successful.

The regions to which we are giving attention today are those which are considered to be underdeveloped and depressed. We have had regional policies to solve regional problems for nearly 50 years. The fact that thousands of millions of pounds and much effort and brainpower have gone into resolving the difficulties of those areas, yet, 50 years later, we have the same list of problem areas, suggests that all is not right with what we have come to think of as regional policy.

The hon. Member for Rotherham (Mr. Crowther), in a thoughtful speech, said that we must be a good deal more radical. I agree with that, but he spoilt his case. He felt that being radical meant returning to Socialist ideas—long since disproved—about more spending by what he called public enterprise. I do not think that that is a radical way to solve the problems of the regions.

Another problem with regional policy, because of the sacred cow element, is that anyone who questions whether we should have a regional policy or whether it should be changed significantly is in danger of being misunderstood at best and vilified at worst. Insofar as regional policy has been successful, many of the the greatest successes have occurred in Scotland. That is not just because a large amount of money has been spent on regional policy but because of the structure of Government and Government agencies in Scotland, and because some of the characteristics of the Scottish economy are different from some of the English regions.

A large proportion of the employed Scottish population live in an area which has some sort of development area status, in marked contrast to most of the rest of the country. My constituency is not one of those areas. A tiny part of my constituency is a special development area, largely for bureaucratic reasons because it is attached to the Dundee employment exchange area. Part of my constituency has intermediate area status and part has no development area status. In a constituency that does not receive the automatic grants that go with regional development area status—when substantial areas of the country are designated as development areas — one studies what has been good and what has been unsuccessful in regional development policy to see whether there are some lines which we may pursue more fruitfully if we are to do our duty by the regions.

The Scottish Development Agency has been more helpful following the redefinition of many of its functions since the Government took office in 1979. One of its most important characteristics is that it has played a pan in those areas which are not specifically classed as development areas.

One of the great mistakes which have been made—I am sure that the House will agree — in regional development policies in the past is the emphasis which has always been placed on manufacturing jobs rather than on the quality of jobs or whether there might be better jobs outside manufacturing. That emphasis has been a positive disadvantage. It may be one of the reasons why regional policy has been so unsuccessful in improving the quality and prospects of employment in some of the development areas.

Manufacturing is a shrinking sector of the economy throughout the Western world. However, that is what we have been directing to those areas of the country which most need the expanding and developing sectors of the economy. It is also a section of the economy which is peculiarly susceptible to branch factory operations. It does not bring the major headquarters, the original thinkers and the support staff that are often a characteristic of service industries.

If we were to encourage more service industries to develop in areas of poor and low employment, there would be a greater prospect of all types of employment. We might have seen more manufacturing jobs in some of the development areas as a spin-off from such service industries. It is becoming increasingly difficult to justify automatic grants to manufacturing industry based solely on their location, when few parts of the country are unaffected by high unemployment.

In the regions there are problems, but there are also opportunities. It is important that we sort them out. Many of the areas we think of as the "regions" have a high proportion of yesterday's industries and a low formation rate of new locally based industries and services and consequently low employment in the fastest growing sectors of the economy.

The movement of the ownership of industry away from the regions towards the centre—in this case London—troubles us all in the more outlying areas of the country. One of the consequences is often a reduction in support services and the closing of what then become production limbs.

More serious than that in the long term is the movement away from the regions of the more able members of the local community with the new headquarters jobs and new centralised organisations. The ability of the people of the regions is the best possible basis for the future development of the regions.

In addition to the talents of the people, there are space and environment in the regions. There is often a curious contrast of an unattractive urban environment set in the midst of a beautiful rural environment. It takes about 10 minutes to get out of the heart of the great city of Glasgow to some of the finest countryside in the world. That is a characteristic of many of the regions. We could do much more to take advantage of it. Not least in the regions are the education facilities. Often we educate people who then go away to find jobs elsewhere. We should take advantage of the fact that they are available to work in their own locality.

We should consider phasing out the regional development grants, which are automatically given to firms based in a development area. RDGs and selective employment measures accounted for about £877 million in 1981–82. Such resources should be released so that we take a new view of some of the things that will help to create employment in the regions. That would be a radical step forward.

There are two main ways in which we should go in the future. The first concerns what the economists would call the macro considerations. In each of the main regions we have to develop the concept of a heartland and encourage and sustain within those heartlands all the facilities, services and infrasructure that will make it a magnet for other operations and facilities. The heartland could operate as a catalyst for providing employment prospects. It could counterbalance the great magnetic force of London and the south-east. Each one might have variations and different styles, with emphases on the things in which it is interested, but all should aim to be centres of excellence in their regions. They should be places in which the regional strengths, initiatives and talents of the people can be fully developed.

If we are to do that, we need to correlate more the operation and interests of the Government, local government and their agencies. In Scotland the mechanics almost give a model for how things might be done in English regions, but even in Scotland there are opportunities to improve the way in which we organise and administer the facilities that will help to further regional policy. There has been wide agreement on this in the debate. Most important is communications between the heartland of the region and its hinterland, between the heartlands throughout Britain and between them and the continent of Europe. The business of Government must be to create the environment in which industry and commerce can be effective rather than to intervene directly in particular firms.

Secondly, there is the macro side of regional development. We must encourage maximum local initiatives. It is on local initiatives backed up by local pride and by the local facilities that serve one another that much of the future depends. Tourism is often undervalued but it is of great importance in the regions. We sometimes forget that more people are employed in the tourist industry than in the National Health Service and that tourism brings in more foreign money than the banking system. It is a substantial generator of revenue and provider of employment. My hon. Friend the Member for Bradford, North (Mr. Lawler) referred to Civil Service jobs and the way in which they are dispersed. My right hon. and learned Friend the Member for Hexham (Mr. Rippon) mentioned the way in which the local offices are operated and organised. There must be quality of service as much as quantity, and small can be as beautiful in the operation of the Civil Service as it can in commerce and industry.

My hon. Friend the Member for Scarborough (Sir M. Shaw) spoke of the infrastructural considerations in fishing facilities and harbour development. I should like to see such developments in my constituency. The Government must play a part in that sort of infrastructure so that indigenous industries can develop. The Government can prime the pump. Most of all, they should provide the infrastructure for the environment within which the regions can develop the talents and opportunities available to provide hope for the future.

1.27 pm

Mr. Alan Williams (Swansea, West)

I had not originally intended to take part in the debate, but as a regional policy addict I could not resist the opportunity of listening to some of the speeches, and the inevitable consequence is that some random thoughts arise from what I heard.

I intervene because in the 1960s, when I was at the Department of Economic Affairs, and in the 1970s, when I was at the Department of Industry, I had responsibility for regional policy.

Some things must be understood and confusions disposed of. The hon. Member for Fife, North-East (Mr. Henderson) said that regional policy tends to have an ambivalent image. In some areas it is the sacred cow, and in others it has a tarnished image. In part, that is because we have not always been sure what we expect of regional policy or we have expected from it that which is more appropriately supplied by national economic policy, such as full employment. That was not the aim of regional policy initially.

The concept of regional policy started in 1936 and it has been a success, as we see when examining how it has progressed in the past 20, 30 or 40 years. Its success has been diversifying the industrial base of the regions.

The industrial picture of south Wales, Scotland and the north of England compared with the industrial structure of 20 years ago shows that regional policy has achieved a considerable plus. Conversely, it has failed to the extent that the introduction of new employment into the regions has not matched the job losses in the old industries. That does not mean that regional policy has failed or that such a policy was not worth pursuing.

Before we write off the achievements of the past 20 or 30 years, we must ask: what would have been the fate of Wales, Scotland, the north of England, Lancashire and Yorkshire had successive Governments not followed a regional policy? I suggest that we can project that question 30 years into the future and ask: what will be the fate of those areas if we do not have an appropriate regional policy in the immediate and medium-term future? We must be careful not to blame regional policy for sins of which it is not guilty.

My hon. Friend the Member for Vauxhall (Mr. Holland) understandably concentrated on the problems of inner cities, but it is important to remember that only 15 per cent. of the jobs that were lost from inner London were lost to new towns and regional policy. More than 50 per cent. of job losses in inner London were the result of the activities of planners who, for good environmental reasons, bulldozed and cleared areas without any regard for the need to replace the factory premises that they demolished.

Against the background of 3 million unemployed, we have to ask whether we still need regional policy and whether it is still relevant. Contrary to the ominous prevailing views of the Government, I believe that we do need such a policy. If we do not continue with regional policy and establish a more effective policy, the south-east will face an increasing problem of congestion of resources, as people move to that area with its better job prospects.

One of the main reasons for regional policy has always been to stop the movement of population away from Wales, Scotland and the north, thereby denuding those areas of their young people, but also to stop an influx into areas such as London, Reading and Slough, which would saturate the services of those areas and put extra pressure on housing, schools, health services and so on. Therefore, despite the fact that we have 3 million unemployed, we need regional policy.

We also need regional policy 'because we are establishing the long-term industrial base of our regions. The fact that we are suffering what we hope will be short-term hyper-unemployment does not mean that we should ignore the fact that it is important to get a healthy industrial mix in our older industrial regions. It is tragic that at the time when the new technology — the new industrial revolution for the next two generations — is being established, regional policy is effectively being abandoned. The result is a concentration of the development of new technology not in the areas that need new jobs, but in southern England. There is the occasional island of success in the regions, but those areas are in danger of losing out on the new technology which mill be the income provider for the future. It is essential to continue regional policy so that we can avoid further congestion in the south and establish a healthy, long-term technological industry base in the regions.

No doubt my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) will argue from the Opposition Front Bench that every region should have its own development agency. I share that wish, because such agencies could help to bridge the gap between macro and micro development in the regions.

Successful regional policy depends on the achievement of growth. There is a correlation between general growth in the economy and the success of regional policy. The double condemnation of the Government is that they have abandoned regional policy at the time when it is most needed and frittered away the North sea resources which could have been used to generate industrial growth. By doing that, the Government have ensured that no regional policy could work successfully at present.

1.33 pm

Mr. John Prescott (Kingston upon Hull, East)

My right hon. Friend the Member for Swansea, West (Mr. Williams), with his long experience of regional policy, provided a successful conclusion to an important debate launched by the hon. Member for Dewsbury (Mr. Whitfield).

As the hon. Member for Dewsbury said, his maiden speech was another example of a convention of the House being broken. I hope that he does not think that, by attempting to intervene in his speech, I was also attempting to break with a convention, although it is clear that our conventions, whether controversial or not, are regularly broken. I congratulate the hon. Gentleman on his maiden speech and will comment on it later.

My right hon. Friend the Member for Swansea, West reflected what most hon. Members said today — that there is no desire to conclude regional policy. Hon. Members on both sides of the House have impressively expressed the reality of the problems. No hon. Member has failed to express deep anxiety about problems in the regions. As a Labour Opposition spokesman, I have been considering them for the best part of 18 months, and I am conversant with them as I come from Humberside, which suffers from such problems. With my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry), I have had more than 300 meetings on these problems. I have been extremely interested to hear many of the conclusions that the Opposition have arrived at being expressed by Conservative Members.

When I read the motion, I wondered whether it had been changed. The hon. Member for Leeds, West (Mr. Meadowcroft) suggested that it had been. I was curious to discover what words had been taken out. Whereas the new motion calls for "a radical approach", the earlier one called for "a very much more radical and bold approach''. Whereas this motion calls for "urgent steps", the earlier one simply says "take account of'. There have been changes. I hope that that is not a result of the Whips working in their normal way.

Nevertheless, the motion is critical of the Government's approach to regional policy in the past four years. It encompasses the very analysis that Opposition Members and, today, Conservative Members have expounded. The policies that the Government have pursued for the past four years will not settle the problem of high unemployment in the regions or the de-industrialisation that is taking place on an unprecedented scale.

The hon. Member for Dewsbury said that Socialism had failed in Yorkshire and that there was a broad band of blue in the area. Much of that band of blue was brought about by the intervention of the Social Democrats rather than by the conversion of the people to Conservatism. That is a powerful lesson to us all. Nevertheless, in the past four years, under the Tories, unemployment in Yorkshire and Humberside has increased from 110,000 to 280,000. In other words, 170,000 more people are now unemployed because of four years of a Tory Government who deliberately induced the collapse of the economy and a high level of unemployment. That has been the Government's policy. They believe that by pursuing such policies the country will achieve more sustained development and growth. My right hon. Friend the Member for Swansea, West rightly pointed out—we all agree with him—that regional policy on its own cannot solve the present scale of problems in the regions. They must be put right by Government policy. In that respect, there is a distinct difference between the Government's and the Opposition's policies.

We have heard a remarkable number of maiden speeches today. The hon. Member for Newcastle upon Tyne, Central (Mr. Merchant) is not present. I am afraid that I shall break another convention. If hon. Members are not here, I should not refer to them. Another convention seems to be being broken, because hon. Members tend not to be staying to listen to the wind-up speeches. I have noticed that as much among Labour Members as among Conservative Members, and it could do with changing. The hon. Member for Newcastle upon Tyne, Central called for a super national economic development council. In our manifesto, we called it a national planning commission. The hon. Gentleman can join us in proposing the policies that we presented to the electorate in our manifesto. He also asked the Government to take a major initiative to sustain economic development in his area.

The hon. Member for Batley and Spen (Mrs. Peacock) made several interesting points and showed, as did other maiden speakers, that she had done much research. I thought at one stage that she would call for so much Government intervention that the Government would be asked not only to design new suits but to make sure that everyone wore them to create demand in the textile industry. That is a scale of intervention that the Opposition are accused of, but I do not believe that the Tories have got that far yet.

The hon. Member for Bradford, North (Mr. Lawler) said that he could not stay because he had to go to Bradford to meet the Home Secretary. As his choice of profession is public relations, he probably has his priorities right.

The hon. Member for Ellesmere Port and Neston (Mr. Woodcock) is not present. That is a pity, because I wanted to comment on his speech. I went to school in Ellesmere Port. I appreciated the hon. Gentleman's industrial analysis of the area and the problems beginning to come to it with its substantial manufacturing and chemical base.

The hon. Member for Darlington (Mr. Fallon) is probably better known to us from his appearances on television and the exciting debates that went on and the challenges that were thrown out during the Darlington by-election. He reminded the House that the Cleveland Bridge company, in his constituency, is a very important employer. It was also important in building the Humber bridge, about which I have more information. But I point out to the hon. Gentleman that that work resulted from a Government decision and represents considerable public expenditure which provides jobs. That is an essential feature of Government strategy if the hon. Gentleman wishes to see jobs created. In that, the element, size and quality of public expenditure is all-important.

Hon. Members will be aware, especially after yesterday's announcement and the discussions now going on, that public expenditure is not exactly close to the Government's mind when it comes to attempting to save jobs. It is not Government policy to use public expenditure to achieve that purpose. It is the attitude by the CBI. We heard the Prime Minister endorse it fully earlier in the week, saying that there had to be more public expenditure cuts. The Government view, not being that increased public expenditure will create more jobs, is that it should be cut ideologically to save the private sector. That is how the president of the CBI puts it. The Opposition believe that the emphasis should be on the creation of employment.

Another new element in debates about the north-east has been the Latin and poetical quotations. Perhaps we see a greater intellectual ability coming to the House from that region. However, all today's maiden speeches reflected—

Mr. Fallon

Does the hon. Gentleman agree that the greatest sign from the north-east is the ability to distinguish between Latin and Greek?

Mr. Prescott

I take the point readily. I do not know the difference. If the hon. Gentleman's intervention is meant as a criticism of anyone who succeeds in getting to the House without a classical upbringing, so be it. Moreover, I intend no reflection whatsoever on the intellectual ability of colleagues from the north. I merely point out that it has been a feature in today's debate that we do not often hear. However, I assure the hon. Member for Darlington that I shall not make it my business to discover the differences between Latin and Greek. Frankly, there are higher priorities than that.

Today's debate is about regional policy, and it is clear that we all feel that there should be a regional policy. We have debated the subject frequently in the past. The last occasion was on 4 March, when we discussed Yorkshire and Humberside, thanks to my hon. Friend the Member for Huddersfield (Mr. Sheerman). On that occasion, many of the topics raised in this debate were brought out, especially those relating to the textile industries.

A year ago the House debated regional policy as it affected all parts of the United Kingdom. The Opposition also initiated a number of regional debates, so much so that the then Minister, the hon. Member for Norfolk, South (Mr. MacGregor), was heard to complain that there were too many regional debates and that they merely demonstrated the Opposition's desire to moan about problems and not put forward alternative constructive policies. I do not know what the hon. Member for Norfolk, South would have thought about a motion on regional policy moved by one of his own Back Benchers. But that should not deter us. We have a new Minister and we know that a review of regional policy is under way.

It has become clear that there is a call for a radical change in regional policy. My hon. Friend the Member for Rotherham (Mr. Crowther) said that there needed to be a radical change, and the Labour party included in its manifesto a radically different regional policy. It provided Labour's alternatives, which saw an important role for central economic policy, with the Government playing an important role, with development agencies increasing resources, with planning and intervention in the economy and with direct intervention in industrial policy, be it in textiles or in steel, as my hon. Friend the Member for Middlesbrough (Mr. Bell) reminded us.

In all the areas where hon. Members have called for Government policy, the Government response in their election manifesto was really more of the same with more being done for small businesses. If that is the case, judging by the Government's record on regional policy over the past four years, we are likely to see increasing unemployment and ever-increasing deindustrialisation in regional areas continuing apace.

The alternative that we provided to the electorate was one that analysis and time will show to have been correct. Nevertheless, we lost emphatically, and I do not want to spend time dealing with our alternative strategy. But a great deal of work was done on an alternative regional strategy and "Alternative Regional Strategy" is available for the Minister and for hon. Members to read if they are interested in our ideas.

As the Government, with their majority, are likely to be in office for four or five years, the more pressing need is to hear from the Minister the policies that he envisages and the preliminary thinking of the Government. I understand that the first stage of their review is now complete. Presumably we can expect a report shortly. I support the suggestion of the hon. Member for Darlington, that it would be useful to have the first part of the analysis so that we may know the Government's approach to the problem.

Regional policy requires wide-ranging decisions. That is far better than the Government taking a decision and then giving us a White Paper, so that we argue whether the proposals in it are acceptable. Will the Minister tell us how he envisages the continuation of the debate? Will there be a Green Paper or some other indication of Government thinking, or shall we have a policy paper presented for acceptance or rejection?

The Opposition congratulate the Minister on his new responsibilities. I understand from the press that he made a name for himself in developing some of the private enterprise units in local areas, thereby emphasising the role of local and regional areas, rather than simply leaving matters to central Government to determine.

I hope that the Minister has as much faith in local authority enterprise boards as he has in private enterprise units. Some of the local authority boards can be shown to be better than many of the private ones. I do not seek to suggest that there is not a proper role for both. There is no doubt that the West Midlands, the GLC, Sheffield, Hull, Tyne and Wear and other local authorities have been responsible for a great deal of innovation. I hope that they will be actively encouraged, although the Government's policy seems to be to attack many local authorities and, indeed, to dismantle some of the metropolitan authorities which have carried out much of the work. It is possible to use the rate support grant to achieve those objectives. We should like to hear from the Minister in that respect.

I feel bound to point out that the Minister has been in the House for four years and has co-operated with a policy that has been disastrous for Britain. However, I noted that the hon. Member for Darlington referred to the principles in which the Minister believed when he was a Back Bencher, and it will be interesting to see whether he still holds them.

Inevitably, the last four years of the Government's regional policy have increased unemployment to over 3 million. I shall not argue about the extent to which it can be blamed on an international depression. That subject was debated in July. My view is that at least 1.5 million of the unemployed are without work because of the Government's policies. That can be seen by looking at the OECD averages.

We have heard a great deal from previous Ministers about international depression. The Government's economic policy, followed over four years, has meant considerable public expenditure cuts and a great waste of money, because North sea oil revenues have been used to pay the unemployed. We believe that the public expenditure cuts have contributed to the high level of unemployment, whether on the capital side, housing, education, heath, or in the nationalised industries.

British Rail workshops are being closed in order to save £33 million and 3,000 jobs. There has been underinvestment in British Rail for almost a decade, under not only Conservative but previous Labour Governments. The Government are now considering making £180 million available for 3,000 Nissan jobs. The scale of capital expenditure per job needs to be considered seriously if we are to get our priorities right. As we have elected a Tory Government, I assume that Nissan will be coming to Britain. At any rate, the final decision of the company will be awaited with interest.

Against the background of massive deindustrialisation and unemployment, we see the scale of the review of regional assistance that the Government said they were conducting. Unemployment has increased from 5.3 per cent. to 11.8 per cent. There has been a massive number of bankruptcies—the highest ever. The west midlands was reduced to claiming assisted area status, and qualified to get it. In the southern part of the United Kingdom, there are over 1 million unemployed, as my hon. Friend the Member for Vauxhall (Mr. Holland) said. Unemployment is 10 times greater than it was under Labour. Indeed, another fact of the election was that when the Labour Government left office nearly 500,000 more people were in jobs then when they came to office. This Government could not say that. However, it is true that we did not create jobs fast enough to meet the decline that was occurring. To that extent, there is justification for the criticism of regional policies in past years, although, as my right hon. Friend the Member for Swansea, West said, they helped to transform the situation. The scale of the problem is so great now that, frankly, regional policy on its own cannot hope to solve it. That is why we are convinced of the necessity for a national policy.

Let us look at the Government's analysis of the problem in 1982—two years after they came to office. They said, "We want to reduce by two thirds the area covered so that about 26 per cent. of the population will now be covered by regional grants." The area covered by assisted area status in Yorkshire and Humberside and the northwest went down from 34 per cent. to 17 per cent. In the 1960s regional policies led successive Governments to give priority to assisted areas when the unemployment level was about 4 per cent. That justified the establishment of development agencies. Now every area has about 12 per cent. unemployment. In the 1980s, which are very different from the 1960s, unemployment is three times greater. The absolute amount of unemployment is six to seven times greater than the 500,000 that we had in the 1960s, which led to regional policy development, particularly in the north, Scotland and Wales.

Against that background, the Government announced that they intended to cut regional area status. Their argument was that they wanted to spread fairly in smaller areas the limited amount of money available. The reality was that, in 1981, £850 million as given in regional aid and policies. In real terms, that is equivalent to £147 million, which is exactly what we gave in 1967, when only 500,000 people were unemployed. Therefore, the scale of the resources that are available for regional policy, in a much greater crisis, is reduced in real terms.

The new Minister will have to fight for a policy that is very different from the one that we have had so far. I know it is said that things are getting better. Indeed, the right hon. and learned Member for Hexham (Mr. Rippon) told us that things are a little better. I assume he meant that unemployment is not increasing as steeply as it was before. I did a calculation while I was sitting here. It would appear that in the three years of Tory Government up to 1982, unemployment increased by 2,500 a month. That rate has been reduced in the past 12 months to an increase of 1,000 a month. Clearly, that is better than 2,500, but unemployment is still increasing and adding to a record number of unemployed people in these areas.

At national level, unemployment has gone up again. There have been another 200,000 in the last year. In one of the first questions to which the Minister replied, my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) was told that, since the Tories came back to office, about 20 factories had closed—one a day—involving about 500 jobs a day. So the scale of unemployment, closures and bankruptcies continues apace, even if the scale is not as great as it was in the first two years, and it is still adding considerably to the problem.

The west midlands now becomes a new candidate for a Minister. Liverpool has its Minister. The west midlands has its Minister. In an answer given to the House—I think, by the Minister—it was said that the idea of a new Minister for the west midlands was not to create innovations but to co-ordinate policies. If that is the case, every region in the United Kingdom has a legitimate claim for its own Minister to co-ordinate. It was a sop for the election—something for the west midlands to show that the Government were concerned—and no doubt it will go at some stage. I have not seen the Minister here during today's debate—

The Under-Secretary of State for Trade and Industry (Mr. David Trippier)

He is in the west midlands.

Mr. Prescott

No doubt he is co-ordinating again. Other regions that have a legitimate claim should have more marginal seats so that the Government will pay more attention to them. We accuse the Government of gimmickry, and their statement proves it to be gimmickry.

A number of points have to be taken on board about the decline in the regions. One is the scale of decline experienced in the textile, steel, metal manufacturing and production industries, which have been savaged. They are concentrated in certainn areas so that a decline, particularly in manufacturing, has affected some areas more than others. As we have seen from what my hon. Friend the Member for Middlesbrough said, whether it be on taxation of the chemical industry, the EC policy on steel, or the steel industry, the Government cannot stay out of economic policy. They are inevitably involved in industrial policy.

The hon. Member for Dewsbury said that the textile industry was calling out for a plan and wanted the Government to restrict imports and to give more subsidies. I intervened in the speech of the hon. Member for Dewsbury to ask him how much his plan would cost, because he started his speech by saying that the Government should not be involved in giving subsidies. The reality, which the textile industry recognises, is that we have to deal with richer countries, many of them EC countries, which have exported more to this country. Therefore, industrial policy requires us to meet these legitimate calls from industry to maintain our industrial base, and to have an idea of its size.

The Government should recognise the important point that when one cuts one does not cut evenly everywhere. Much work in the north, particularly on strategic reviews, shows that many of these areas with a low GDP are dependent upon public expenditure. If we cut back by 5 per cent., 10 per cent. or whatever, we affect some regional areas more than others.

Mr. Garrett

Does my hon. Friend agree that the recent plea by the chairman of the CBI that the Government should cut public expenditure is very shortsighted, as the members of the CBI whom he is trying to protect would lose contracts and their position would be worsened?

Mr. Prescott

I agree with my hon. Friend. No Labour Member has been able to understand why the CBI has not understood the connection between the public and private sectors. The latter, far from being squeezed out by the former, is supported by public expenditure. That is where most of the demand comes from, and it is one of the near-fatal flaws in the thinking of the CBI that it does not recognise that fact. The growing disparities between the regions mentioned in the motion are often brought about by the public expenditure cuts upon which the Government are embarked.

I want to make it clear to the Minister, as I have every time I have come to the Dispatch Box, that past regional policies, whatever their worth—they were successful in some areas—need to be changed. There are a number of criticisms to be made of them and I have made them, as have others. In the past few decades £20,000 million has been spent, but we have not reduced the disparity; we have concentrated on capital-intensive industries. The manufacturing decline has not changed and the industrial mixes in the various parts of the regions are so different that we can no longer envisage growth on the scale that we had in the 1960s and 1970s — which was so important for any effective regional policy—and industry is not as mobile as it was. The southern part of the country now has over 1 million unemployed and the regions have over 12 per cent. unemployed, so it is no longer a minority problem. It is no longer a case of two thirds of the unemployed being concentrated in one third of Britain.

We must ensure that indigenous enconomic growth in the regions is developed by the regions themselves. That is why the Opposition believe that a central economic policy, with planned trade, is essential. Some might call that import control, but it is exactly what the textile industry wants. We must provide for strategic basic industry sizes in steel, shipbuilding, cars and textiles. We need to plan for that strategic objective.

We need to decentralise power. We believe in regional planning that is accountable within the regions. We believe in development agencies, as the Government must also because they have retained them in Scotland and Wales. We believe in developing organisations within the regional areas, whether public or private, to develop local economic activity and to create jobs.

The policies that the Opposition put forward both in their documents and during the election are quite clear. We must prevent the growing imbalance. During the 1960s and 1970s we did not reduce the disparities between the regions, but they did not grow either. They are now growing. Some poorer areas are becoming poorer while other richer areas are becoming richer.

The Minister has said that he believes in an effective regional policy. He said that he wants to consider a policy designed to meet the need for employment opportunities. He must recognise that every area has at least 12 per cent. unemployment. What does he now call priority areas? In the 1960s the base was 4 per cent. It is now 12 per cent. Will future regional policies be designed only to help areas with 15, 17 or 18 per cent. unemployment because, as he has said, he does not want to spread the policy too thinly?

Against that background, with the Government calling for expenditure cuts and with ever-increasing unemployment, we must recognise that the Government's policy is anti-regional. It attacks local authorities and increases central Government power over the areas. They have their black spots approach to free trade areas and enterprise zones. A report on enterprise zones produced by another Department shows that they required about £70 million of public money to get them off the ground, which is £22,000 for each job created. No policy can be effective without the backing of a great deal of Government money, and there must be a clear idea of what we seek to achieve with that money.

The difference between the Opposition and the Government is that the Opposition believe in regional economies. We believe that all parts of the United Kingdom have a legitimate claim to regional development. There must be radical change in regional policies relevant to all areas. There is a role for the Government in both central and regional policy. Public expenditure has a positive role, together with private expenditure, to exploit the potential of our regions. There is a role for planning and intervention, and the bodies and agencies for planning should be accountable in the regions.

Our analysis of the matter now is no different from that which we put forward during the election. We may have to wait for a number of years to know whether that analysis is right. We give the greatest priority to reducing mass unemployment. The consequences of massive public expenditure cuts in the hope that it will reduce inflation and regenerate the economy will prove 1:0 be false.

There is a basic difference between the Opposition and the Government on central economic policy. Regional policy cannot survive unless it has the appropriate backing of central economic policy. I hope that the Minister will give some encouragement to the many millions of people who are unemployed in the regions that the review planned by the Government means a fundamental and radical review, as called for by the motion. I hope that it will be a departure from the past policy that has produced mass unemployment in even the most prosperous areas and turned whole areas into industrial deserts.

2.4 pm

The Under-Secretary of State for Trade and Industry (Mr. David Trippier)

I begin by thanking my hon. Friend the Member for Dewsbury (Mr. Whitfield) for initiating the debate. I congratulate him on his good fortune in the ballot and on his maiden speech. His constituents in Dewsbury will, I am sure, be proud of the fact that he has so ably represented their interests at such an early stage of his parliamentary career, and the whole House will look forward to hearing him on many future occasions.

I should like also to compliment the other hon. Members who made their maiden speeches, my hon. Friends the Members for Newcastle upon Tyne, Central (Mr. Merchant), for Batley and Spen (Mrs. Peacock), for Bradford, North (Mr. Lawler), for Ellesmere Port and Neston (Mr. Woodcock) and for Darlington (Mr Fallon). Their speeches were no less distinguished than that of my hon. Friend the Member for Dewsbury, as will be realised by their constituents who, I hope, will have an early opportunity to read for themselves the impressive contributions that were made during what has been a most interesting and wide-ranging debate. I am also grateful to my hon. Friends who have said that I am aware of the problems of the north, as I am a Lancastrian. We are both enormously proud to be so.

Our discussions today concern regional policy, particularly in the Yorkshire and Humberside region. Inevitably, the issue of disparities between the north and the south—the north-south divide—has been raised, but it is important not to fall into the trap of accepting a superficial distinction. It is one with a number of misleading implications. The hon. Member for Leeds, West (Mr. Meadowcroft) touched on that point.

The north is not homogeneous. It covers three large regions: the north-west, the north and Yorkshire and Humberside. In different parts of the north different industries predominate. Some areas are still predominantly agricultural; others are heavily industrialised. The south is no more homogeneous than the north. In terms of south as opposed to north it embraces areas as different as rural Cornwall, Birmingham and Greater London. The industrial base is different in such contrasting areas.

The variety and contrast within the north spring frorn different cultural and industrial traditions. They are an important part of the quality of life in the north. We do not want simply to level out everything that is different. I wish to discuss Yorkshire and Humberside in terms of opportunity. To discuss it only as a problem does it a disservice. It has been my experience that officers within my Department's regional offices become despondent when it appears that an area is blighted as a result of a debate in the House of Commons. That is not the view of my hon. Friends the Members for Darlington and for Fife, North-East (Mr. Henderson). I agree with them.

Some 23 per cent. of the working population of Yorkshire and Humberside are employed in growth sectors. The service sector accounts for 56 per cent. of total employment in Yorkshire and Humberside. ft grew by 15 per cent. between 1971 and 1981. Its industrial base is diverse. The decline of traditional Yorkshire and Humberside industries—textiles in west Yorkshire and steel in south Yorkshire—has been partly redressed by the expansion of office and service employment. Urban decline has to some extent been offset by increases in jobs in the region's small towns and rural areas.

Yorkshire and Humberside has plentiful energy resources, as has been pointed out by some of my hon. Friends. Yorkshire coalfields account for about 27 per cent. of national output. Humberside is a landing point for North sea oil and gas.

Yorkshire and Humberside has a working population of about 2 million. There is no disagreement about the fact that an unemployment rate of 13.6 per cent. represents a terrible waste of human resources. The problem of unemployment is serious. The Government are most concerned about the difficulties in Yorkshire and Humberside because of the decline of traditional industries and the rise in unemployment. That is why we are providing help for the region in a number of ways. Hard-hit areas such as Humberside, Mexborough and Rotherham are already assisted. More than 36 per cent. of the region's working population is within assisted areas. That compares with 27 per cent. for the country as a whole.

Yorkshire and Humberside received £53 million in regional preferential assistance during 1982–83 and the Department of Trade and Industry is contributing £163,000 in the current financial year to the budget of the Yorkshire and Humberside development association. More than 5,800 people in Yorkshire and Humberside are benefiting from the community programme and community enterprise programme. Over 10,400 people there are covered by the temporary short-time working compensation scheme.

Several speakers, particularly the right hon. Member for Swansea, West (Mr. Williams), spoke about technology, and modern technology has much to contribute to traditional industries. It is not concerned solely with the industries of the future; modern technology can greatly improve the production methods of many traditional industries, including textiles. I emphasised that when I visited Yorkshire three weeks ago.

The Government can make schemes available, but it is up to industry to make use of them. Yorkshire and Humberside is the only region not to have taken full advantage of the microelectronics industry support programme, which has been in operation since 1978. Neither has it taken advantage of the fibre optics scheme, which has been operating since July 1981. These schemes have much to offer companies in growth sectors, which, as I have said, employ over 20 per cent. of the Yorkshire and Humberside work force. But they can also be used to assist production methods in existing industries.

The region faces considerable difficulties, but its industrial base is diverse and it has considerable potential, as exemplified by several notable successes, including, I am pleased to say, export successes. The Government are providing considerable assistance to the region to help it, but in the end the people of the region will make it a success. That is why I remain optimistic in the long term about the future of Yorkshire and Humberside. Its people are practical and hard-headed. My hon. Friend the Member for Newcastle upon Tyne, Central referred to this in relation to Tyneside, and other hon. Members raised the subject. The region will recover through the efforts of the people who live there rather than anything else.

I was pleasantly surprised at the number of hon. Members, in particular my right hon. and learned Friend the Member for Hexham (Mr. Rippon), who referred to communications. The hon. Member for Wallsend (Mr. Garrett) and my hon. Friend the Member for Scarborough (Sir M. Shaw) referred in particular to roads, which give easy access to the various parts of Great Britain. Most hon. Members acknowledged the importance of motorways, including the MI and the A1 and the M180, giving access to regional ports such as Hull, Grimsby, Immingham and Goole. The M62, with which I am particularly familiar, provides a fast and beautiful route across the Pennines to south Lancashire. The region now has fast rail links with Scotland and the north, the north-west and the west Midlands, the south-west and the south.

I can comfort some of my hon. Friends by saying that while the regions have airports which, as they know, handle passenger transport—and I am pleased to learn that the Leeds-Bradford airport makes a profit—it is the Government's policy to encourage the fullest possible use of regional airports. We are committed to adopting policies designed to shift the burden away from the London area, so we wish to maximise the potential of the English regional airports as well as that of those in Scotland and Wales. My right hon. Friend the Secretary of State for Transport will look with favour at proposals to expand capacity to meet demand at airports such as Manchester.

Mr. Garrett

Will the Minister bear in mind what I said about the need for the Government to reject advice about the development of airports in the south and southeast? Is the hon. Gentleman aware that Manchester, Prestwick and Newcastle could absorb some of the capacity?

Mr. Trippier

The hon. Gentleman has been vociferous on behalf of his constituents on that matter and his concern for the region is well known. His remarks will be taken into account.

It is no surprise that hon. Members have called for increases in assisted area status for the Yorkshire and Humberside region. We are committed to promoting industrial and economic development in the areas of greatest need. We shall continue to keep a close watch on all parts of the country. It is important to maintain stability in the assisted areas to preserve the continuity of regional incentives.

Yorkshire and Humberside's unemployment rate is 13.6 per cent. compared with 12.3 per cent. for the country as a whole. Considerable disparities occur within the area. Places such as Rotherham and Mexborough have unemployment rates considerably higher than the average for the region. In rural north Yorkshire, for instance, the unemployment rates often compare favourably with those in the rest of the country. I refer to places such as York, Harrogate, Skipton, Malton and Pickering. A ranking of travel-to-work areas by their average unemployment in 1982, showed that the region contained seven areas in the lowest 10 per cent.

It is easy simply to call for assisted area status to be granted here, there and everywhere, but those who do so should bear in mind several facts.

First, the more areas that are assisted, the less benefit there is in being assisted. That is why the Government reduced the percentage of working population in assisted areas from 44 per cent. to 27 per cent. in the last Parliament. Secondly, increases in the coverage of the assisted area map are detrimental to the areas worst affected by unemployment and structural decline. The Government wish to concentrate scarce resources on the areas that stand in greatest need. Thirdly, non-assisted areas would naturally feel that they were being unfairly discriminated against if the coverage of the assisted areas were expanded.

A balance must be struck between not discriminating against non-assisted areas and helping areas most disadvantaged. A barrage of special pleading for assisted area status ultimately is in nobody's interest.

Mr. Crowther

Will the Minister consider what I said about Rotherham? For almost 20 years Rotherham has had assisted area status, but its unemployment level is still as far above the national average as it was when it began to be an assisted area. Does not the Minister reach the conclusion that something more than the traditional policy of assisted and development areas must be introduced if we are to cure the disparity between the more favoured regions and the less favoured regions?

Mr. Trippier

I have acknowledged that the Government support regional policy. I have to balance what the hon. Member for Rotherham (Mr. Crowther) has said with those who say that, without assistance, the situation would be much worse. It is important to concentrate not just on regions and sub-regions, but within the sub-regions. That already happens and it will be dealt with in our report.

Regional policy is important, but there is a limit to the resources that we can devote to it. To throw money around like confetti would damage national economic policies. National economic policies in the long run determine the health of all regions, including their rates of unemployment. We believe that our policies are the only ones that can restore the country to economic health. Governments must find resources not only for regional policy but for national support schemes for industry. The regions that we have been discussing benefit from those national support schemes in exactly the same way as any other regions.

I refer—unfortunately briefly because of the lack of time — to the wool textile industry, which is incorporated in the motion of my hon. Friend the Member for Dewsbury. The Government understand the serious problems that have faced and continue to face the wool textile industry. About 70 per cent. of the industry is situated in west Yorkshire. The sector has been in steady decline since the mid-1950s. As hon. Members have said, the number of people employed fell sharply by 34 per cent. between June 1979 and December 1982. Many mills have closed. The Government are doing all that they can in the framework of their domestic economic policies and international obligations to create the right environment in the longer term for an efficient economy in which this sector of industry and others can compete internationally and domestically. We acknowledge the sector's good export record.

I was heartened to see recently a report showing that the United Kingdom wool textile industry is in better heart than it was a year ago. That was the message given by the president of the Confederation of British Wool Textiles, Mr. J. Alan Clough last month when he said: We are definitely off the bottom—there's no doubt about it. Order books have improved and some company results are reflecting an upturn in trade. However, at this early stage there is clearly no room for complacency about this improvement, although I am pleased to record a welcome note of optimism originating from the hub of the industry.

Mr. Prescott

The report circulated by the industry to us made it clear that unless the Minister acts on the scale of imports it is likely that by 1988 the industry will lose another 150,000 jobs.

Mr. Trippier

In his speech the hon. Gentleman failed to acknowledge the enormous success that the Government have achieved in renegotiating the multi-fibre arrangement. They did that with the support of right hon. and hon. Gentlemen. This significant achievement was lauded by the textile industry. The agreement still applies, and it will last for another four years. It in no way detracts from what Mr. Alan Clough said in his recent report.

In March this year the Confederation of British Wool Textiles presented a report to the Government setting out the industry's economic and trading circumstances and proposing action to rebuild confidence. The document, "A Plan for Action" which has been referred to on a number of occasions during the debate, presented a reasoned and detailed case. It was studied carefully by my ministerial predecessors in the Department. My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), who was then the Secretary of State for Industry, met a delegation from the confederation at the end of March for preliminary discussions. That has been followed by a series of working meetings between the Government and the confederation. In turn, I have read the report with great interest. I shall consider most carefully this valuable contribution to our understanding of the issues and the lessons and conclusions to be drawn from it.

The most important thing is that we must create the right environment for industry. The Government have a vital part to play in supporting industry's endeavours. They can best support industry by creating that environment, maintaining sound financial policies conducive to lower inflation, reducing public expenditure, exposing nationalised industries to market forces through a reduction of monopoly and privatisation and making the need for lower pay settlements clear. The Government's policies are the only sensible way forward. We are interested in long-term sustainable recovery, not short-term palliatives. There are no quick-fix cures for unemployment. The Government's policies are working. Economic recovery is under way and the outlook is for continuing improvement.

Mr. Prescott

Is it?

Mr. Trippier

Listen to the figures. Total output—the gross domestic product — has risen 3.5 per cent. since 1981. Industrial output, in the three months to April is up by 3 to 3.5 per cent. on spring 1981. Retail sales in the three months to May are up almost 6 per cent. compared with a year earlier. Fixed investment in the private sector is set to rise to 3 per cent. to 4 per cent. in both 1983 and 1984. Government borrowing is among the lowest in the industrial world.

My right hon. and learned Friend the Member for Hexham said that against that background we should improve our advisory services to draw the attention of industry to the benefits that are available. He and other hon. Members referred to the range of benefits and schemes that were introduced by the previous Administration — the 108 measures. I agree with my right hon. and learned Friend's point. He is perhaps right in saying that more money should be spent on advisory services than on grants, particularly for small businesses.

The 108 measures are now available, but there is a strong case for publicising them more widely because if we introduce more measures we shall be in danger of confusing the people whom we are seeking to help. I am aware of that problem in my capacity as Minister responsible for small firms. I am anxious to improve the advisory services, but a great deal has been done through the small firms service and the development of local enterprise agencies. The hon. Member for Kingston upon Hull, East was extremely kind when he referred to what I had already done in my constituency. He was correct in assuming that I would wish to see that extended throughout the country, wherever applicable.

So far the successes among the enterprise agencies have been predominantly those that are in the private sector and not the sphere of local authorities.

Mr. Prescott

What about the local authorities?

Mr. Trippier

I shall consider them. I am interested in and enthusiastic about developing local enterprise agencies throughout the country.

Many schemes have been introduced and some overlap, which is a problem. Without detracting from the debate on regional policy I shall mention some of the most successful, which have been the loan guarantee scheme, the business expansion scheme, the small engineering firms investment scheme and the small firms technical enquiry service. Much more needs to be done to publicise those benefits more widely. I shall apply my mind to that.

I know that the hon. Member for Kingston upon Hull, East would wish to paint an entirely different picture. He and his colleagues had an opportunity to do just that only a matter of weeks ago at the general election. At least the hon. Gentleman was fair and honest enough to say that his party's proposals were rejected. At the moment there is no alternative to the Government's economic strategy. We are fully committed to regional policy.

I wish to close by saying to my hon. Friend the Member for Dewsbury that one of the aims of the Government's regional policy is to remove, on a stable long-term basis, unacceptable geographical disparities in employment opportunities as far as is consistent with the development of a sound and prosperous national economy. I assure the House that the Government, in their approach to regional policies, will continue to take particular account of the prospects of traditional industries such as the textile industry in Yorkshire and Humberside, and their importance to areas dependent upon them.

Question put and agreed to.

Resolved, That this House urges Her Majesty's Government, following the completion of its current review of regional industrial policy, to adopt a radical approach in its policies towards the regions, so as to effect a reversal in the drift to and concentration of resources in the South and South East of the country; and in particular to take account of the long term future of the textile industry which forms a substantial, vital and traditional part of the manufacturing base in the Yorkshire and Humberside Region.