Regional Industrial Development (Hansard, 1 February 1984)

§ 11. Mr. Phillip Oppenheim
asked the Secretary of State for Trade and Industry what views he has received on the White Paper on regional industrial development.

§ Mr. Norman Lamont
I have received a number of submissions on issues on which views were invited, including the assisted area map and activities which should qualify for regional development grant.

§ Mr. Oppenheim
Is my hon. Friend aware that millions of workers in areas which do not receive any assistance or regional aid deeply resent the assistance that is given to some areas because it creates unfair competition for jobs? Is he further aware that such workers look forward to the legislation that is proposed for the autumn?

§ Mr. Lamont
We are aware of that feeling. That is why the Government have reduced the area of the country that is covered by regional policy. It is also one of the reasons for reviewing regional policy. We want to reduce discrimination and distortion against non-assisted areas. My hon. Friend will recall, from my right hon. Friend the Secretary of State's statement, that the new system will produce some public expenditure savings. We believe that it will do less damage to non-assisted areas.

§ Mr. Bagier
Does the Minister agree that the White Paper on regional policy seems to be a White Paper of despair? Is he prepared to take notice of the fact that, since 1 January, 1,500 redundancies have been notified in the Tyne and Wear area and that since 1980 41,500 redundancies have occurred in that area? Where is the action from the Government, never mind the words?

§ Mr. Lamont
I do not accept that it is a White Paper of despair. It was designed to produce a more cost-effective regional policy that would give better value for money and do less damage to the non-assisted areas. The fact that the hon. Gentleman's constituency has suffered from persistently high unemployment, despite tens of millions of pounds of regional aid being poured into it, begs the question whether that regional aid is being effective. That is why we chose to re-examine it. We want better value for money.

§ Sir Raymond Gower
Will my hon. Friend take account of the fact that, in addition to any moneys that might be withdrawn from areas of greatest need, such as parts of Wales and Scotland, the White Paper will have repercussions on the amount of aid that may be available from the EEC? The reduction in aid from that source would have a harsh effect on areas such as Wales and Scotland.

§ Mr. Lamont
We are well aware of the point made by my hon. Friend. One of the important considerations in framing regional policy is that we should be able to maximise receipts from the European regional development fund. I assure my hon. Friend that, during the period of consultation, we shall take into account what he said.

§ Mr. Skinner
Will the Minister stop engaging in this bout of hypocrisy? Is not the truth of the matter, in respect of Amber Valley and other parts of Derbyshire that, as a result of lobbying by Labour authorities in the area, we managed to convince a Labour Government to give assisted area status to Erewash Valley? The Conservative Government, as one of their first acts in 1979, took away assisted area status from Amber Valley. That resulted in no grants being received after 1982. The Minister is now engaging in hypocrisy. He is trying to kid the nation into believing that the Government will be giving regional benefits to all those areas from which they removed them in 1979.

§ Mr. Lamont
The hon. Gentleman lives in his own small world of delusion, into which I do not wish to go. The decisions about regional policy were taken by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), then Secretary of State for Industry, based on objective criteria. I reject the suggestion that political considerations came into the decision taken about the hon. Gentleman's constituency.

§ Mr. Budgen
Will my hon. Friend take evidence from all those who have been affected by the great experiment in regional development at Linwood and make it available to all those who support the Nissan project?

§ Mr. Lamont
Attempts to steer large projects in the motor industry to particular areas have had an unfortunate history. We do not propose to repeat that.

§ Mr. Geoffrey Robinson
Does the Minister agree that the Government's unique achievement has been to turn the whole of the United Kingdom into a depressed region? Does he further agree that manufacturing industry in particular will not benefit from the provisions outlined in the White Paper? Will the Minister take note of the point made by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) and direct his attention to whole sectors of manufacturing industry, especially machine tools in Coventry, which are falling into a state of teminal decline?

§ Mr. Lamont
I do not accept what the hon. Gentleman says. The only point with which I agree is that it is an illusion to think that regional policy can bring about a revival of the economy. That revival will be brought about only through our becoming more competitive. The hon. Gentleman knows as well as I do that the signs of that revival are good, with inflation and interest rates down. Yesterday the CBI published its best survey for years, showing a strong expectation of growth in industry and the economy. That is what the regions need, not a bigger regional policy.

§ Mr. Grylls
Taking into account the all-too-modest changes proposed in the White Paper, can my hon. Friend be certain that taxpayers will get real value for money as a result of those changes?

§ Mr. Lamont
Yes, I am certain that taxpayers will get better value for money. There will be a smaller regional policy, which we believe will create as many jobs as the previous policies. Above all, this regional policy will be more job-related and will not throw away money on large, capital-intensive projects. That approach has damaged the economy of many of our regions.

§ Mr. Maclennan
I recognise the need for a more discriminating regional policy, but does the Minister accept that the circumstances in Scotland, particularly west central Scotland, have changed since the Government's proposals were published, and that the prospect of collapse at Scott Lithgow must lead to a reconsideration of the underlying premise of the White Paper? Does he further accept that the £400 million that it is now widely stated will be lopped off Scotland's regional aid must be replaced?

§ Mr. Lamont
It would be difficult to lop £400 million off Scotland's regional aid, because it does not receive that amount. I do not accept what the hon. Gentleman said about the premise being altered. What may have altered are the areas that should qualify for assistance. However, we are not yet taking decisions on the map. We cannot do so until we have the return from the Department of Employment on the travel-to-work areas, and that will be in several months' time. Obviously, I cannot anticipate decisions on particular areas.