Regional Industrial Policy (Hansard, 10 December 1984)

§ 7. Mr. Ron Davies
asked the Secretary of State for Wales if he will make a statement on Government proposals for regional industrial policy in Wales.

§ 10. Sir Anthony Meyer
asked the Secretary of State for Wales if he will make a statement on the implications for Wales of the recently announced changes in the Government's regional aid policies.

Mr. Edwards
The Government's new regional policy arrangements are designed to create genuine and lasting 725 jobs cost-effectively. The revised assisted areas map covers nearly 90 per cent. of the working population of Wales and provides support both for needy areas and for key centres of growth. Wales will continue to offer an effective level of support and a comprehensive package of advice and assistance to all qualifying firms looking to invest in the Principality.

§ Mr. Davies
Will the Secretary of State direct his attention to mid-Glamorgan and confirm that in two constituencies—Caerphilly, and Ogmore—and the area of Taff-tly the grant to large areas will be reduced from 22 to 15 per cent. and that they will no longer qualify for automatic grants? Given the desperate need to attract employment into those areas, how does the Secretary of State expect us to compete on an equal footing with areas in the midlands, such as Birmingham or Coventry?

Mr. Edwards
The entire Heads of the Valley area of industrial south Wales, as a coherent block, receives the most assistance available in the United Kingdom. Therefore, it is in an especially good position to compete with other areas, including the west midlands. In the southern belt, where unemployment is lower and the attractions to incoming industry are already substantial, I am satisfied that the combination of assistance available — the selective financial assistance package, the European coal and steel aids, the Welsh Development Agency package and the assistance for small firms—will ensure that it continues to be a competitive and attractive area, and that it will continue to attract a disproportionate share of inward investment.

§ Sir Anthony Meyer
Is my right hon. Friend aware that the new arrangements command general assent, on the ground that they are likely to be more cost-effective in bringing jobs to the area? However, can he give any reassurance to the areas that have lost assisted status that they will not thereby forgo any call on EEC investment funds or other forms of aid?

Mr. Edwards
My hon. Friend will recall that after the downgrading of mid-Wales we had discussions with the European Commission, and ERDF assistance was later available in that area. I shall be having discussions with the Commission about the other rural areas that have been downgraded, but I can give no undertakings now on the outcome of the discussions.

§ Mr. Foot
What was the exact calculation of the sum that would be saved by the removal of special development area status from various areas in Wales? What account did the Government take of employment consequences when they embarked upon their policy? Have not the Government, and the right hon. Gentleman in particular, agreed to hitting even harder the areas that have already been hit the hardest? What was the exact calculation of extra unemployment at which he connived with the Government?

Mr. Edwards
I do not agree that the result will be extra unemployment. I believe that the regional package will be extremely effective. When it is combined with other Government measures, including lower interest rates and cuts in the job tax, which the right hon. Gentleman and the previous Labour Government imposed, it will attract investment. The right hon. Gentleman has taken an extraordinary position in the area which he represents, which has the highest level of assistance that is available 726 in the United Kingdom. That assistance has been extended to the Abergavenny area, which will be especially attractive for high-tech industry. He is, apparently selfishly, begruding areas to the west of Blaenau Gwent a level of assistance that is equal to that in his constituency.

§ Mr. Raffan
Will my right hon. Friend reassure the House that changes in regional policy will not put us at a disadvantage when they are set against aid packages from other European competitors, and will not prevent us from holding on to companies such as Laura Ashley, which has said that it might go to Holland because of the attractive aid packages on offer there?

Mr. Edwards
My hon. Friend's part of Wales remains an area with the highest level of assistance and — [Interruption.] The Opposition always hate good news. I am pleased to tell the House that Laura Ashley Ltd. is today announcing that its major new textile finishing project is to be undertaken in Newtown. Associated with this development will be a new garment-making unit in the north Wales development area. The two projects will together result in several hundred additional jobs, and the investment will consolidate and further develop Laura Ashley's British and Welsh operation. There was strong competition for the project from Holland and I am especially pleased that various authorities in Britain were able to put together a package that was attractive enough to persuade Laura Ashley to undertake the project in Wales.

§ Mr. Barry Jones
The news on Laura Ashley must be welcome, but I remind the right hon. Gentleman that he put himself into a ministerial flat spin on the issue by recklessly removing assisted status from mid-Wales in 1980. That is why he found himself in a mess, and that is what caused him to go cap in hand around Whitehall to get moneys for Laura Ashley. If the worrying £60 million cut in aid in last week's regional development announcement is not a public expenditure cut, will he tell us where in his budget he proposes to spend another £60 million?

Mr. Edwards
The hon. Gentleman appears to miss the point that if an area that does not have development area status is able to compete with a development area in Holland and attract major investment of the Laura Ashley sort, it means that in areas that have development area status we shall compete extremely effectively. I am satisfied that we remain competitive in Wales and will continue to obtain a good share of the investment that will be attracted there.