HC Deb 29 June 1983 vol 44 cc560-1
2. Mr. Arnold

asked the Secretary of Trade and Industry if he will make a statement about the future of regional policy.

The Minister of State, Department of Trade and Industry (Mr. Norman Lamont)

The Government are reviewing regional policy. Officials made a first report early in the year. We asked them to do further work. When they report, we will wish to consider carefully what changes might be made. We will make a statement in due course.

Mr. Arnold

Does my hon. Friend agree that regional policy now distorts competition and that there is clear evidence of serious anomolies, particularly in Greater Manchester? Does he agree also that we need a fundamental review of the aims and objectives, to get rid of those difficulties?

Mr. Lamont

I agree with my hon. Friend that regional policy has had a distorting effect in many cases. That is why one of the first things that we did in the last Parliament was to reduce the area of the country covered by regional policy from 44 per cent. of the population to 27 per cent. [HON. MEMBERS: "Not enough."] Some of my hon. Friends say that that is not enough. We are now considering further changes in regional policy. I assure my hon. Friend that the review is fundamental and considers the issues from the point of view not just of the regions but of the impact of the policy on the national economy.

Mr. Loyden

Is the Minister aware of the devastating effect that the Government's policy has had on employment in Liverpool and Merseyside? When will the Secretary of State make a statement to the House on when the Government will do something to deal with the collapse of industry on Merseyside and the destruction of jobs?

Mr. Lamont

Merseyside is an example of the expenditure of large sums of money by the Government, but that has not solved its problems. A large amount of Government aid has been injected into the area. The Merseyside task force and its approach are matters for the Secretary of State for the Environment.

Mr. Silvester

Does my hon. Friend recognise that in any radical approach to this problem he must consider the impact of expenditure by Departments other than his own? Will he assure me that those Departments are included in this review?

Mr. Lamont

I give that assurance to my hon. Friend. The interface between my Department and the Department of the Environment is one of our major concerns. The inner cities programme has an enormous impact on regional policy. That is one of the major points that we have in mind.

Mrs. Renée Short

Is the Minister aware of the acute difficulties that we in the west midlands have faced since 1979? Does he realise that in my constituency there is almost 20 per cent. unemployment and that redundancies are being declared every week? What does he intend to do to see that industry in the west midlands is rejuvenated and that the old factories that have disappeared are replaced by new industries? What does the Minister plan to do to co-operate with the local authorities, which can do much to stimulate jobs in the area?

Mr. Lamont

First, we have removed the penalty that was levied on the west midlands by the IDCs. By removing those restrictions we are helping the west midlands. We have also put enormous sums of money into that area, via the help given to British Leyland and the areospace industry. A lot of money has gone into the west midlands. As the hon. Lady also knows, the Under-Secretary of State, my hon. Friend the Member for Coventry, South-West (Mr. Butcher) has been given special responsibility in the west midlands. He is having discussions with the CBI and local businesses about the way in which our national schemes of assistance can be deployed to great advantage in the west midlands. The best thing that local authorities, especially Labour-controlled local authorities can do is to keep their rates down.

Mr. Bill Walker

When my hon. Friend considers changes in policy, will he bear in mind the problems of the rural areas, where the small business is the only employer left? Does he agree that we must ensure that small businesses continue to provide employment in the sparsely populated areas?

Mr. Lamont

Of course I shall bear that in mind. The activities of COSIRA, which are specifically geared to the problems of rural areas, are important.

Mr. Orme

What will the Minister do for the regions? Every region in the United Kingdom is suffering from the Government's overall economic policy. With unemployment rising, what does the Minister plan to do?

Mr. Lamont

If the right hon. Gentleman is suggesting that spending bigger and bigger sums on regional policy is the way to tackle unemployment, he is grievously mistaken. We are already spending nearly £800 million on regional policy. Our view is that that sum of money must be spent much more effectively, and with much more discrimination. The way to deal with unemployment is to keep inflation and interest rates down, and to keep Government spending under control.