HC Deb 16 November 1983 vol 48 cc840-2
12. Mr. Bruce

asked the Secretary of State for Trade and Industry if he is yet in a position to say when he will publish the Government White Paper on regional development grants.

14. Mr. Hicks

asked the Secretary of State for Trade and Industry if he is now in a position to state when he hopes to announce his proposals following his review of regional policy; and if he will make a statement.

Mr. Tebbit

On 2 November, in answer to a parliamentary question from my hon. Friend the Member for Bromsgrove (Mr. Miller), I announced my intention shortly to publish a White Paper on future regional industrial policy. This will set out the Government's proposals for the framework of a new structure for regional industrial incentives.

Mr. Bruce

I thank the Minister for that reply, but I am sorry that he is not able to give a more precise date for this keenly awaited White Paper, as there is a great deal of concern about the implications of it. Will he confirm that such a review will be used as an opportunity not to cut regional aid but to redeploy it more effectively to create jobs? Is he aware that under the present system many large capital projects that produce relatively few jobs receive disproportionately large capital grants, while projects that would create many jobs are often denied assistance?

Mr. Tebbit

The hon. Gentleman refers to the balance between the subsidisation of capital projects and of those that are more job-intensive. He makes the point well, and it is one that we have taken into account. As for the total of aid, we should look at the problems with which we must deal and the instruments that we devise and then decide how much money the economy can afford to devote to those instruments and policies against all the other demands on the public purse.

Mr. Hicks

Does my right hon. Friend agree that if the level of economic activity in certain peripheral and less well endowed areas of the United Kingdom is to be maintained, with the possibility of a reduction in the level of unemployment, regional policies must continue? In that context, is it not a fact that regional aids serve a function of job maintenance as well as of job creation?

Mr. Tebbit

If I did not think that regional policy had a role to play in maintaining levels of employment in the country's more disadvantaged parts, I would not even be talking about publishing a White Paper dealing with the way in which regional policy will be conducted. There is a whole raft of policies to help to maintain jobs. Among the most important of those policies are the battle against inflation and the battle to keep down interest rates. That implies that we must be very careful to maintain a tight hold on public expenditure.

Mr. Martin

Is the Secretary of State aware that the shipyards that specialise in building small fishing craft and ferries have declined to such an extent in Scotland that only two are left? One of them is in Campbelltown and the other is McCrindles in Ardrossan. Does the right hon. Gentleman realise that those shipyards complain that Norwegian companies are receiving excellent subsidies, which mean that the Scottish companies are unable to win contracts despite their competitive tenders? Some local authorities are even giving contracts to Norwegian companies in preference to British-based companies.

Mr. Tebbit

In this wicked world it is not uncommon for a number of countries to subsidise their shipbuilding industries. We do that as well.

Mr. Henderson

Will more emphasis be placed in the review on the importance of the role which service industry can play in creating jobs? Will my right hon. Friend ensure that, when assistance is given from public funds, more attention is paid to the quality of the proposed scheme and the number of jobs created, rather than merely to the geographical location of the firm?

Mr. Tebbit

My hon. Friend has raised two important points. I hope he will find that they are dealt with in an interesting way in the White Paper.

Mr. Ashley

Does the right hon. Gentleman realise that north Staffordshire badly needs regional assistance, as it has one of the fastest rates of increase in unemployment in the country? It would be wiser to give assistance now, when recovery is possible, than to wait until the area has been completely devastated.

Mr. Tebbit

The right hon. Gentleman will have gathered that the White Paper is to be published shortly. It will deal both with the measures that we shall use and with their coverage over the United Kingdom. No doubt the right hon. Gentleman will make his observations on both of those points when the White Paper is published.

Mr. Ward

Is my right hon. Friend aware that many Conservative Members believe that regional aid under all Governments has distorted management decisions, has led to investment where it was not needed, and has thereby slowed down efficiency? If he wants to help British industry, should he not abolish all regional aid and persuade our right hon. Friend the Chancellor of the Exchequer to use the equivalent amount to cut tax on industry?

Mr. Tebbit

My hon. Friend is correct to point out that regional policy involves an economic cost as well as benefits. We must ask ourselves whether, in the short run at any rate, my hon. Friend's recipe would not impose on those who live in the less advantaged areas additional burdens which could become intolerable.

Mr. Shore

I am glad that the Secretary of State resisted that siren voice from his Back Benches. Do the scope and terms of reference of the review of assisted area policy extend to the specific Department of the Environment schemes for aiding the inner cities?

Mr. Tebbit

The right hon. Gentleman will find that the White Paper makes some reference to urban policy and, above all, to the need for it to move in harmony with other regional policies.