Regional Development

HC Deb 19 December 1984 vol 70 cc399-412 11.16 pm

Mr. A. J. Beith (Berwick-upon-Tweed)

When the Minister of State, Department of Trade and Industry came before the House on 28 November to announce his revised regional areas and regional development aid policy, he dealt a very cruel blow to a part of my constituency which suffers from very high unemployment. I was not the only hon. Member who had cause for concern and sorrow on that occasion. Many hon. Members rose to criticise the map which had been drawn while other hon. Members rose to praise it, including a number of hon. Members with constituencies in the west midlands. I described it then as a slapdash map drawn by somebody sitting behind a desk in London. I stand by that criticism. It applies not only to my constituency but to others. There may be other hon. Members who wish to speak in order to underline that point in relation to other areas. However, one factor that made that map more slapdash than it needed to be was the use of travel-to-work areas as a building block or as a unit by which to define the areas in which regional aid was to be concentrated.

The objective of the policy was that regional aid should be concentrated on those areas which most needed it. That is a laudable objective which I share entirely but which I contend was not satisfied by the way the map was drawn in relation to my own and certain other areas. The travel-to-work areas were controversial and contentious. They had been drawn up only a few months previously, in the face of very intense argument. The local authorities in my constituency and I protested at the way in which those areas were being drawn and the consequences which would follow. We saw that the next step would be that the redefined travel-to-work area would be regarded as having an overall lower level of unemployment and therefore would not qualify for aid.

On the day of the announcement the Minister tried to defend those new travel-to-work areas. He indicated that statistically they were fine because they included 70 per cent. of the people living in the area who travelled to work in it. If, however, the whole country were taken as a single travel-to-work area, it would satisfy the statistical criteria. If half the country were take as a single travel-to-work area it would satisfy the statistical criteria. In my own constituency, an area of hundreds of square miles has been taken as a travel-to-work area and, by what was a very shabby trick, an attempt has been made to conceal the unemployment problem in one community. I shall return later to that point in more detail. That is the fundamental error.

The determination of regional boundaries need not have had such a devastating effect. It was open to Ministers not to use the travel-to-work area as the definition of an area. In Manchester, the Government used ward boundaries and, under the order, that could have been done in other parts of the country where the travel-to-work area was such an unsatisfactory guide. The fact that the Government could vary the pattern only in Manchester shows that they had not adopted a flexible approach to areas of the country that most needed it.

The Under-Secretary of State for Trade and Industry, who is to reply to the debate, knows the circumstances, because the local authorities and I corresponded with him during the summer and he kindly saw a deputation of councillors from all the political parties in my constituency. The hon. Gentleman listened carefully, before the announcement was made, to a strongly pressed case. Yet that absurd announcement, which will have drastic effects on the community of Amble in my constituency, was still made. The Government got it wrong. They should admit that, and try to do something to put it right.

What sort of area is regional aid designed to help? I suggest that it is the sort of area where one in three adults has no job, over 80 per cent. of council tenants receive housing benefit, over 45 per cent. of owner-occupiers receive rent rebate, fewer than 50 per cent. of families own a car, about 25 per cent. of the children get free school meals, there has been a substantial reduction in employment in the coal industry and where, to take some of the wider social criteria, only 18 per cent. of children stay on at school after 16—compared with 57 per cent. in other parts of the county of Northumberland that are within the development area and are treated as being in greater need than Amble.

The general unemployment and social situation in Amble has been made much worse. For example, 150 men have been put on the dole since the Government's announcement because of redundancies in opencast coal mining. It is estimated that there will be about 470 redundancies in that industry by 1992. There is a steady rundown in employment, which is the natural consequence of sites being worked out.

Earlier this week, I tabled a written question to the Secretary of State for Energy about the rundown in opencast coal mining. The reply illustrated how out of touch the Government are. I asked what discussions the right hon. Gentleman had had with representatives of opencast workers about the redundant mineworkers payments scheme. Opencast workers do not benefit from the scheme. I was amazed to read the reply of the Under-Secretary of State for Energy, who said: my right hon. Friend has pointed out that the prospects for opencast mining appear to be good and unlikely to give rise to large-scale redundancies consequent upon restructuring." —[Official Report, 17 December 1984; Vol. 70, c. 26–27.] That was a week or so after the announcement of 150 redundancies and at the beginning of a period in which we expect many more.

The largest employer in Amble is the building trade. Where will that be left by the Government's recent announcement that local councils cannot use money that they have saved for house building and improvement grants? That will be yet another blow to the biggest employer in Amble. The prospects of an upturn for that trade have been effectively destroyed by yesterday's announcement, which was so vigorously challenged by Conservative Members when the statement was made and in today's debate.

The Government have added further blows since the regional development announcement. Last week, they closed the Amble training workshop, which operates under the special programmes. Without warning, consultation or discussions, we learnt a week or 10 days ago that the Government had suddenly closed the workshop which gives youngsters, some of whom have difficulty in fitting into normal employment, a chance of training. The workshop was closed and the staff were made redundant. Within that same period, the hours of the jobcentre have been cut to a minimum. The jobcentre was to be closed in an area with very high unemployment. We have now got it open for two half days a week, but I remind hon. Members that unemployment is way above the national average in that area.

This year, 163 pupils left Coquet high school in Amble. Of those, 143 are still looking for jobs, including 80 on Government programmes. I do not think that it was ever envisaged that the Government programmes would have to take well over half the number of school leavers, or that so huge a proportion of them—nearly all of them—would be out of a job by this stage in the year. [Interruption.] As the hon. Member for Jarrow (Mr. Dixon) is saying from a sedentary position, the nearest skillcentre, Killingworth, is also closing. It is not very near, but it is the nearest, and the only one that we have got.

Coquet high school's headmaster has made some despairing comments about the problem. He said: A considerable emphasis in this school is given to those activities which will equip young people with skills which employers will value, such as technological awareness. … To diminish opportunities further would intensify the frustration, bitterness and anger which is evident among many young people who already feel that society is treating them with a lack of concern verging on contempt. That is not an unrealistic comment when 143 out of 163 school leavers have no job. On every count Amble has an overwhelming case. So why is it being given the cold shoulder? The Government's excuse is that the new travel-to-work area that they have drawn up does not have high enough unemployment to justify special aid. They have pushed Amble into a huge area covering hundreds of square miles in the hope of concealing its problems. Of course, I and the local authorities protested vigorously about that at the time. But the Government's trick has not worked, because unemployment is now higher in the Alnwick and Amble total travel-to-work area than it is in the neighbouring Ashington and Morpeth area, which gets the full development treatment.

Unemployment is now higher even in the whole travel-to-work area than in the development area. On the November figures there is 16.3 per cent. adult unemployment in the whole travel-to-work area, as against 16 per cent. in the neighbouring area, which qualified for full development aid. Indeed, that is leaving on one side the fact that within the Amble employment exchange area unemployment stands, I believe, at about 33 per cent, or higher.

Even in the whole Alnwick and Amble travel-to-work area, unemployment is much higher than in relatively prosperous communities, such as Ponteland, which is also in the development area. Those who are not from the north-east will not realise that in mentioning Ponteland and Darras Hall I am talking about Newcastle's most favoured and affluent suburb. It is a very attractive area, much favoured by executives for housing purposes. House prices are high and it is very popular. It simply does not have the problems of a place such as Amble, yet it gets the full benefit of development area status. There is no logic in that.

The real unemployment figure for the Amble employment exchange area is at least one in three, and that amply justifies giving that area a status that is even above that of development status now being offered by the Government. It deserves even more help than that. We are already feeling the effects of the Government's callous decision. One firm that was set up in an advance factory in Amble has now moved to the Tyneside area, where grants are available. The firm T. A. C. Display, which started in small premises in Amble and was helped by the council, took on an advance factory of 5,000 sq ft, took an option on another 5,000 sq ft factory to expand, but has now uprooted and gone to the development area where the grants are.

Other employers in Amble are worried about their position and wonder what their future will be. A very successful firm in the area, Phoenix Mountaineering Ltd, says: When we look around at the inducements offered by other places, it makes us wonder if we made the right decision to come to Amble in the first place. Peter Cutts, a director of P. E. C. Furniture Ltd, says: If we were in the same position now as in 1974, we would probably never have come to Amble from Bedlington". Bedlington is in the development area.

The managing director of L. Animation, another local firm, says: Amble is suffering particularly today and will never recover unless measures are introduced which will positively discriminate in its favour. So many of the existing employers are worried.

How shall we persuade new employers to come to the area when down the road they can get substantially greater benefits in areas where unemployment is not as bad as it is in Amble?

An even more serious problem arises from the Government's decision. It is the exclusion of the area from EEC regional development aid. The firms and local authorities in my constituency are more worried about that than about the loss of limited assistance which will now flow to places in development areas under the Government's policies. They are worried that the European door is now being slammed on them.

That is in a situation where the local authorities have tried their best to mount projects to build up the infrastructure in the area seeking European and national aid. The local authorities in the area have undertaken a number of projects—a 48-acre industrial estate; a new electricity substation; a purpose-built workshop let to a successful manufacturer; the conversion of redundant lock-up garages to form five nursery units for small workshops, which was undertaken in partnership with the Development Commission; the reconstruction of the north and south breakwaters in the harbour; the construction of a major new distributor road to open up land for private sector housing; a running track and sports centre at the new high school; and the county has plans to improve roads into Amble. Such work will be frustrated in future if we have no access to the European aid and help which is available for such projects.

The local authority now wants to engage in other projects. One is for a marina, on which the local authority is working hard. Amble is increasingly popular as a sailing centre. It may be that we can get some of that project in before the axe falls and before the closing date. Local authority officers are working hard to do it, but, if they are not successful, that project, too, will fail to get the European aid that might be available. Road works are still essential to improve communications to the industrial sites in the area. Tourist projects could be undertaken in the area and EEC financial assistance could be obtained for firms.

Infrastructure work would help the fishing industry. Although we shall not lose access to FEOGA grants as a result of this decision, other works which could be of real help to the fishing industry and fish marketing in the area depend on European regional fund aid, which will no longer be available to us.

When the Government put forward their case, they come back again and again to the travel-to-work area issue. I had an oral question today, which was not reached and was therefore answered in written form by the Minister of State, Department of Trade and Industry, asking him again why Amble had been excluded. He said: Amble is part of the Alnwick and Amble travel-to-work area. That area certainly has an unemployment rate which is above the national average but that is true of many areas which are not included in the new assisted areas map … On the overall criteria used for making comparisons with the country generally, the Alnwick and Amble travel-to-work area did not justify assisted area status. That is no longer true, for the reason that I gave earlier. The travel-to-work area has a higher unemployment rate than the area within the development area. Even more significantly, the travel-to-work area conceals the reality that the level of unemployment in the Amble employment exchange area is so high by any calculation that it fully justifies the inclusion of that employment exchange area within a development area. I ask the Minister to accept that.

I want to make two proposals to the Government. The first is the simple, straightforward and only answer for a Government who got it wrong the first time. They should redraw the map and put the Amble employment exchange area into the development area where it should be. That solution relies on the method the Government used in the case of Manchester, not to rely on the travel-to-work area, and it is the obvious answer.

If the Government are not prepared to do that—I cannot understand why they should not—they should consider one other proposal to avoid the consequences of this appalling misjudgment. The Government could ensure that Amble remains eligible for European regional development aid by classifying the rural development area, of which it is part, as an assisted area for EC regional fund purposes. Rural development areas are established by the Development Commission, which is the governing body and gives a great deal of help to my constituency and other rural areas, mainly those with a small population. Therefore, they are Government assisted areas and should qualify for European regional development aid. If the Government were prepared to fight this battle and win the argument, they would bring the benefits of EC regional aid to rural assisted areas that they have omitted from their development areas. I emphasise that second possibility because it could be a powerful help in solving Amble's problems.

If the Government do nothing, they will be condemning one of our hardest hit areas to struggle against impossible odds, and bribing employers to go to far more prosperous areas. Amble is one of the hardest hit communities. The Government have done it a terrible disservice by their decision. It is not too late for them to put it right.

11.35 pm

Mr. David Penhaligon (Truro)

It is a pleasure to follow my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith). We represent almost the two extremes in England, in that there are only two constituencies beyond mine and none beyond his. However, my argument is similar to his. I wish to argue about the review, which is based purely and simply on travel-to-work areas and which ignores the reality of areas.

According to the statistics for November 1984, my dearly beloved county of Cornwall has 21.2 per cent. male unemployment and 15.8 per cent. female unemployment. Cornwall would qualify as a travel-to-work area on the basic definition of 70 per cent. going to work within the area. Indeed, the figure must be about 98 per cent. If Cornwall had been one travel-to-work area, the entire county would have received development assistance. However, one third of it is omitted. There are the travel-to-work areas of St. Austell and Truro, both of which are in my constituency, and of Launceston, which is not but which is part of my county.

The reason for that is easy to see. If one examines the crude unemployment figures for those areas, one sees that the figures are 14.4 per cent. for St. Austell, 12.2 per cent. for Truro, and 13.9 per cent. for Launceston. I recognise that they are lower than in the rest of the county. These are small oases of prosperity in the middle of a county that suffers from endemic unemployment and a low wage structure.

The brief provided by the Library puts travel-to-work areas in order of levels of unemployment. It shows how bad the general position is in my county. We have the highest level of unemployment in Great Britain. In Newquay, unemployment is 29 per cent. In this sad league, Falmouth comes 13th, Helston 14th, Penzance and St. Ives 15th, and Redruth 35th. We have five entries in the worst 35 in the country, and there are 322 teams in that league of agony.

Liverpool comes 28th in the league. No hon. Member believes that Liverpool deserves anything other than all the financial assistance that any Government may feel inclined to give for regional development. Indeed, many hon. Members would argue that it needs even more than that. Although Cornwall has four entries above Liverpool, it matters not one iota. The little cases of prosperity within my great county, which is about 100 miles long, have been left out. The position is even worse than that. The crude unemployment figures in my county are totally meaningless.

The Minister may have had drawn to his attention a question that I asked in January this year. It was an unusual question, in that, instead of asking the Minister to list the number of women unemployed in named travel-to-work areas, I asked whether, relative to the most recent census, the Minister could list, for each county in Great Britain, the number of women aged between 25 and 54 who were in paid employment. One would have thought that the number of women employed would have related in some way to the number unemployed, but that is far from being so. The answer revealed that only 46.1 per cent. of women in my county are employed. That is the lowest for Great Britain; it is lower than Merseyside, the Western Isles, the west midlands, the north-east, the north-west and certainly the south-east. Yet the unemployment figures suggest that female unemployment in Cornwall is not significantly worse than that in the rest of Great Britain. The figures showed that 46 per cent. of women in Cornwall worked, compared with 56 per cent. in Merseyside, 58 per cent. in the west midlands, and more than 62 per cent. in London. The figures are meaningless, yet that is what the analysis has been based upon.

My second reason is the general lack of prosperity in the county. Those of us who know the area, and who were born and brought up there, are often shocked by the prosperity of the south-east. But it is difficult to produce figures to demonstrate that air of poverty. The only statistic that we can use is the new earnings survey, which states that, for men aged more than 21, the average wage in England is 168.10. In Cornwall, it is £138.80. Again, that is the lowest in Great Britain. It is lower than on Merseyside, in the west midlands, the east midlands, the lowlands of Scotland, Glasgow and Liverpool. That figure is not something new, as the Minister would know if he examined the figures. Sadly, that has been the position for a long time. Yet that little oasis in the middle of Cornwall, in which by Cornish standards there is some sign of prosperity, has been left out and will receive no assistance. The average wages in Warwickshire and Merseyside respectively are £157 and £161.

What will be the effects of the Government's decision? One case that I plead, although the area is not in my constituency—this is more a countywide matter than a constituency one—is the development area of United Downs, of which I am sure no Minister has heard. It is at the centre of what used to be the mining area of Cornwall. A few years ago, Carrick district council decided, adventurously, at considerable expense—the irony is that it received some assistance from the Government—to fill in the mine shafts and try to reclaim that industrial desert, which is all that it can be called. United Downs is just four miles from Camborne, five miles from Redruth, and six or seven miles from Falmouth, which are in the top 35 travel-to-work areas in Great Britain in terms of unemployment. But sadly for United Downs—such is the way these things work—it is not in the Camborne travel-to-work area, to which it is closer physically but in the Truro travel-to-work area. Therefore, it has been completely cut off from assistance.

Given the Government's enthusiasm for travel-to-work areas, is there some way in which United Downs can be transferred from the Truro travel-to-work area to Camborne or Redruth? I should repeat that, although United Downs is not in my constituency, I consider the matter to be so outrageous that I must draw it to the hon. Gentleman's attention. The hon. Member for Falmouth and Camborne (Mr. Mudd)—this is not a party political point in my county — has tried to draw it to the Minister's attention, but I am using this opportunity to emphasise the lunacy of the decision. This is a blow to United Downs and to the Truro area as a whole. More than that, it is a blow to the St. Austell area. Truro is not an industrial town. The largest manufacturer there is Furniss biscuits. The biscuits are magnificent, should be tried by every hon. Member and make an extremely good Christmas present, should anybody want one. The last time that I checked, the firm employed fewer than 30 people, and as that is the biggest manufacturer in Truro, that shows that the loss of the status is not too important for that city.

However, for St. Austell, the loss is important because it is an industrial town. It is dominated by the china clay industry, which fortunately is extremely industrious and profitable. However, because of mechanisation and technology, the number of people that it employs is never likely to exceed the present number, and St. Austell recognises that. For a long time, it has been trying desperately to build an alternative industrial base.

Today, I had a letter inviting me to open a new factory site, which has come about as a result of the generous co-operation of local authorities and various Government agencies. Now, that factory site will receive no financial assistance. There is a feeling that the whole effort has been killed stone dead. How can somebody persuade a manufacturer to come to Cornwall, 300 miles from the centre of our commerce, when there are areas receiving the same assistance that are within seven, six or five or even half a mile?

We realise that our Government's assistance is limited, so one of the chief worries, as my hon. Friend the Member for Berwick-upon-Tweed said, is that we have lost access to Euro-money. The most important aspect of that for us is water money. For a while, it has been easier to get money from the European Community to help the water infrastructure in my county than it has been to get water from the reservoirs. I am sure that the Minister will recognise that to cut one third of my county off from the Euro-loans that have been giving it some hope for the rebuilding of its water and sewerage system is a sad blow.

The reality of what has happened — I can hardly believe it—is that the county with the fewest women in employment in Great Britain, with over 20 per cent. of its male population unemployed and with the lowest wage rate in Great Britain has lost development status for a third of its area. That is amazing and people in the county find it so. The more one studies this review, the more one feels that a group of fifth formers could have done a rather better job if they had spent a whole afternoon on it, using the available statistics in the Library, let alone what may be available to the Department. This is the most childlike response to the problem.

The Government cannot say that they did not know all the facts that I have set out, because the submission by the Cornwall county council includes them all. Therefore, there are two possibilities. One is that the submission simply was not read, studied, checked and thought through. The second is that all the figures were brought to the attention of the Minister, but then they were ignored, and it was decided that the only thing that counted was the travel-to-work area, and that the bare statistics available to the Government were all that mattered. I do not know which is the most charitable assumption to make—that the facts were not read or that that the Department chose to ignore the reality. However, there is enormous dissatisfaction in my county about what has happened.

I emphasise the point made by my hon. Friend the Member for Berwick-upon-Tweed. Is it possible for us to have access to European money through the rural designation? That would not solve all the problem, but it would help a large proportion of it. I look forward to detailed answers on those observations, if not now, then in correspondence.

I am sure that the Under-Secretary of State will not be surprised to hear that there is a wish for a delegation to come up from the west country to discuss these points with the hon. Gentleman face to face. The figures are known to the Under-Secretary of State, and he has received the county's submission. He has heard that my county was rejected. All he has to do is go to the files and open them at the right page, and he will be able to relate the rational, humane, sensible arguments that persuaded the Government to take this decision.

The Under-Secretary of State can give a detailed answer tonight, because the review took a year to complete, and the arguments and reasons must be available. I suspect that the best I can hope for is a letter arguing the points and the reception of a delegation from my county. We shall certainly look forward to that delegation. I look forward also to hearing the comments by the Under-Secretary of State.

11.50 pm

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

I congratulate the hon. Member for Berwick-upon-Tweed (Mr. Beith) on his continuing and uncanny luck in the ballots. On 7 December, the hon. Gentleman tabled a private Member's motion. That motion was drawn third, and, unfortunately, it did not reach a debate. Only 12 days later, he has repeated that remarkable feat.

Mr. Penhaligon

The Lord is on our side.

Mr. Trippier

In the spirit of charity, and as this is the season of good will, I am anxious to extend my congratulations to the hon. Member for Berwick-upon-Tweed and to make it clear that his feat was remarkable.

I welcome the opportunity to explain to the House, and especially to the hon. Members for Berwick-upon-Tweed and for Truro (Mr. Penhaligon), the basis of the new assisted area map. I recognise from their speeches—because the hon. Gentlemen are vociferous on behalf of their constituents, we are accustomed to hearing such statements — that they are upset about the recent announcement. Obviously, it is impossible, when dealing with regional policy, to please everyone. Sometimes I wonder, because I have had such a close involvement in this matter, whether one makes as many enemies as friends.

This opportunity to explain the basis of the new assisted areas map is welcome, because misunderstanding is rife. Whether the misunderstanding is genuine or wilful is immaterial, as, in the confusion that abounds, many seem to have come to believe that the new map is biased—although which way it is thought to be biased is never made clear. Certainly the bias is not in favour of this Administration. Thirty-two travel-to-work areas which were formerly assisted areas are excluded from the new map. The exclusions affect 41 hon. Members, and, of those 32 are Conservative Members.

Leaving aside the question of bias, how much of the country has been affected? The travel-to-work areas which were previously assisted but which no longer justify preferential treatment over the rest of the country cover less than 3 per cent. of the working population. By contrast, travel-to-work areas covering more than 10 per cent. of the working population have been brought into the new map. In fact, there has been a major increase in the coverage of the assisted areas map—an increase made possible by the support available from the European regional development fund.

The assisted areas map sets the geographical limits of our regional industrial policy. As we said in our White Paper "Regional Industrial Development", published a year ago, the aim of regional industrial policy is the reduction of regional imbalances in employment opportunities on a stable long-term basis. In that White Paper we noted that relative annual average unemployment rates had previously been the dominant factor in previous drawings of the asssited areas map. We recognised that there would be merit—we made this clear in the White Paper—in taking a more measured account of other factors, such as industrial infrastructure, an overdependence on tradition) industry, peripherality, occupational structure and other available forms of assistance.

Despite the arguments of the hon. Member for Berwick-upon-Tweed, we did not declare that the policy would concentrate aid on areas suffering the highest levels of long-term unemployment. However, we invited views on the criteria to which we had referred in the White Paper, and received them in more than 300 of the submissions that were sent to my Department. The support for continuing to have unemployment as the main criterion was overwhelming. Those arguing that long-term unemployment was an appropriate additional factor amounted to 18 per cent. — fewer than those who argued in favour of industrial structure or peripherality.

Taking account of those submissions, and strictly in accordance with the aims of the policy, our decisions on the map were based solely on areas' relative need for current and future employment opportunities. The main criterion was relative annual average unemployment rates. Relative long-term unemployment was also taken into account, although it should be noted that this is highly correlated to current unemployment. The coefficient of correlation is 0.92 per cent.

In making our decisions on the map, we also took account of factors such as, first, the relative pressures for new job opportunities expected to result from the varying age structure of the population in different parts of the country; and we also recognised that this may be affected by changes in local economic activity rates; secondly, areas' differing industrial structure and how this may put present employment at risk; thirdly, the occupations and skills of the population as they reflect the quality of local employment opportunities and the pool of entrepreneurial talent,; and fourthly, handicaps to economic recovery, such as great distances from main markets and peripherality and the general trend of industry to move out of the densely populated inner cities.

All those factors are objective criteria, but their relative importance is essentially subjective. We considered in great depth the scope for using a synthetic index, but concluded that no single index was capable of reflecting adequately the relative needs of areas, especially as account also needed to be taken of the relative positions of neighbouring areas.

Within travel-to-work areas there can be wide variations. I take and am fully aware of the point made by the hon. Member for Berwick-upon-Tweed. It may interest the hon. Gentleman to know that I took part in downgrading four towns in my constituency. That is courage. One town has unemployment far higher than the area that he has been describing.

I understand that the hon. Member for Berwick-upon-Tweed questions the use of travel-to-work areas as the building blocks for the assisted areas map. The building blocks used by successive Governments have been travel-to-work areas. I can assure the hon. Member that it is not for convenence that we use travel-to-work areas—far from it. People do not observe administrative boundaries when looking for or travelling to work. Therefore, it would not be sensible, and certainly it would not be cost-effective, for regional industrial policy to be based on administrative boundaries.

Successive Governments have used travel-to-work areas as the building blocks for their assisted areas map. We consider them to be the best basis as they are the closest available approximations to self-contained labour markets covering the whole country. For areas that fall well short of being self-contained, the relationship between unemployment and job opportunities is greatly affected by the situation in adjoining areas—too greatly for such areas to be useful as the basis for a cost-effective regional industrial policy aimed at reducing the disparities in levels of unemployment to which I referred before.

Furthermore, TTWAs are the smallest units for which nationally comparable unemployment rates are available. These unemployment rates are calculated for an area by dividing the number of unemployed who live there by the sum of the employees who work there and the number of unemployed who live there. This rate could be misleading for areas with a substantial commuting inflow or outflow. For example, for an inner city with a substantial commuting inflow, the rate would be artifically deflated by the many non-residents working there. Numbers of unemployed are known for various other areas right down to wards, but the ratio of unemployed to total residents does not give nationally comparable figures when calculated for areas that do not take into account normal commuting patterns. Such ratios are useful as indicators of social conditions in an area and how these are changing.

Mr. Beith

Does the Minister know the current unemployment rate for the Amble employment exchange area?

Mr. Trippier

Yes. The hon. Gentleman has referred to it this evening. He referred to it also when he brought his delegation to see me. I emphasise once more that there is a town within my constituency where unemployment is far higher than in the Amble employment exchange area, and it is just as widespread geographically as the area in the hon. Gentleman's constituency.

Travel-to-work areas have to cover a self-contained labour market area. The hon. Gentleman is known to be a fair man, and I am sure that he will accept that there will be critics of whatever assisted area map the Government produce and of whatever criteria we use. Those who fall below the line, as it were, will be dissatisfied and critical of any system, whereas those who are above the line, as the hon . Gentleman was with his constituency prior to the recent review, are well satisfied. As a result of the recent review, the coverage of the map throughout the United Kingdom is far greater than it was.

Regional industrial policy is about employment opportunities, and the unemployment data for the assisted areas map should be the best available measures of the local mismatch between labour supply and demand. In practice, it is not possible to divide the country into entirely separate labour market areas such that no one commutes across the boundaries of those areas. The Department's travel-to-work areas are the best approximation to such areas which cover the whole country.

The hon. Member for Berwick-upon-Tweed has referred to variations within travel-to-work areas. It would be surprising if they were homogenous. Our policy is based on the full recognition that any increase in jobs in a depressed area is likely to be taken up by residents of nearby prosperous areas. Regional industrial policy is not an appropriate instrument for tackling the problems of unemployment black spots. To be cost-effective, regional industrial policy needs to take account of the need for further employment opportunities across the area in which it is most likely that any new jobs will go to its residents.

The preparation of the new travel-to-work areas used 1981 census data so as to be as statistically valid as possible within England, Scotland and Wales. The basic criteria used were that at least three quarters of each area's residents should work in the area and that at least three quarters of the jobs in the area be taken by its residents, with slightly lower rates of self-containment being accepted for large areas.

The hon. Member has stated his belief — this followed the statement of my hon. Friend the Minister of State, Department of Trade and Industry — that the travel-to-work areas were drawn up in a slapdash manner by somebody sitting behind a desk in London". — [Official Report, 28 November 1984; Vol. 68, c. 940.] Nothing could be further from the truth, and I shall explain why. The travel-to-work area boundaries were first drafted by the Centre for Urban and Regional Development Studies at Newcastle university, which may surprise the hon. Member for Berwick-upon-Tweed. Those sitting behind their desks in London then sought the advice of those with local knowledge, particularly on any recent local developments that could have led to changes in travel patterns since the census. I am sure that that point will be of great interest to the hon. Member for Truro.

The time available for comments was limited as we wanted the new travel-to-work area boundaries for the new map of assisted areas so that we could end as soon as possible the uncertainty that precedes change. However, I understand that many useful and detailed comments were received and that all the new information was assessed alongside the census data to see whether the changes were on a scale to warrant modification of the draft boundaries; and in several cases changes were made in the light of that new information.

I understand also that many suggestions were made for alternative areas, which were assessed against the self-containment criteria, and that changes were made to follow district boundaries more closely where that could be done without affecting the validity of the travel-to-work areas. I fully appreciate the concern of hon. Members whose constituencies are no longer included in the map of assisted areas.

Mr. Beith

Does the Minister recognise how far all that verbiage is from the reality of the travel-to-work area that we are talking about— Alnwick and Amble? It is 50 miles across, and there is no public transport across it. More people commute to jobs over the boundary immediately to the south of Amble between Amble and the development area than commute across that enormous travel-to-work area.

Mr. Trippier

I am afraid that that applies in many other areas that have been covered by the boundary drawn under the travel-to-work area map. The hon. Gentleman is rehearsing the points that he put fairly to me when he came to see me with the delegation. I emphasised then, and I repeat, that the responsibility for the new travel-to-work area map is in fact not that of the Department of Trade and Industry. The hon. Gentleman knows that full well. We were waiting for the map to come from the Department of Employment, which was responsible for drawing it up. I am only sorry that the map took so long, although the census was taken in 1981. None the less, we had already committed ourselves to working on the travel-to-work area map, and, as I have already mentioned, it says so in the White Paper that we published 12 months ago.

I fully understand the concern expressed by, the hon. Members for Truro and for Berwick-upon-Tweed. I can assure them that we looked carefully at all such areas' cases for assistance to see whether they merited continued preferential treatment over the rest of the country. But, even with the substantially wider coverage of the new map, we could not justify continuing to assist all the areas that have benefited in the past.

However, we have brought in generous transitional provisions to ease the downgrading, as the hon. Member for Berwick-upon-Tweed was kind enough to mention. In particular, all applications for regional selective assistance received before the change will be negotiated on the basis of the old map for a further four months. Also, the European Commission will continue to accept applications for the European regional development fund quota section until March next year. I understand exactly what the hon. Gentleman means when he says that his local authority's officers are working hard to make sure that their application is in time.

Mr. Penhaligon

The Minister has explained the situation, and it is interesting to hear about the decisions that have been made, but was attention paid to the fact that few women in Cornwall are in work, or did the Government examine purely the out-of-work figures? I think that I demonstrated beyond any doubt that the two sets of figures are by no means the same thing. The fact is that the Government have left out one third of the county with the fewest women in work anywhere in Britain.

Mr. Trippier

I appreciate that the hon. Gentleman laid great emphasis on that. I do not know whether this helps, but, even when we looked at various synthetic indexes to see whether any one of them might apply, we looked at male and female unemployment together. We did not separate them. If one started on that, I do not know where it would end.

We believe that it had been a mistake on the part of successive Governments in the past to look only at unemployment levels and, in the submissions that we received in response to the White Paper published a year ago, the vast majority of people agreed with us.

In conclusion, I am confident that the House will agree that, with the new structure of regional industrial incentives, the Government have set about achieving the stated objective of reducing imbalances in regional employment opportunities in the most sensible manner possible.