HC Deb 02 May 1984 vol 59 cc331-3
3. Mr. Campbell-Savours

asked the Secretary of State for Trade and Industry what representations he has received from the northern region on the level of regional aid.

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

I received a number of such representations in response to the Government's White Paper on regional industrial development. I assure the hon. Gentleman that all representations received by 31 May will be given our fullest consideration before any final decisions are made on the future level of regional aid.

Mr. Campbell-Savours

Is the Minister aware of the deep concern in Cumbria and the northern region over the possible loss of regional assistance, arising from the statement that he made? Will the hon. Gentleman give us an absolute assurance that the cost-per-job ceiling which the Government propose will not prevent regions such as mine from attracting capital-intensive industries, particularly as during the past 10 years the only two major employers to come to my constituency, Thames Board Mills and British Leyland, were capital-intensive ventures?

Mr. Lamont

The hon. Gentleman will know that when we are in the middle of reviewing the map I cannot, unfortunately, give any assurances to any area. However, we are all well aware of the high level of unemployment in the north. As regards capital-intensive industries, we are introducing a cost-per-job limit. Very sensibly, I think, we want regional aid to be more job-related, but we have also said that we shall use selective assistance, where necessary, to attract projects that we want.

Mr. Fallon

Has not the northern region been more illserved by the mis-allocation of resources than any other region? Does my hon. Friend agree that it is surprising to see the Opposition concentrating more on capital than on jobs?

Mr. Lamont

I agree with my hon. Friend. One would have thought that the object of regional policy was to reduce unemployment differences. One can do that only by attracting firms and industries that create jobs. The northern region has been far too dependent upon heavy, traditional manufacturing, which is often capital-intensive. The region has also lacked service industries, which we intend to encourage in our new policy.

Mr. Wrigglesworth

Will the Minister acknowledge that no matter whether capital-intensive or labor-intensive industries are brought to the northern region as a result of Government policy, that policy should take into account the gross discrepancies between unemployment in the north and in other parts of the country?

In the northern region we all understand the feelings of the midlands and other parts of the country about their high unemployment, but will the Minister acknowledge that unemployment in the northern region is still the highest in the country, and that in the county of Cleveland it is higher than in any other part of the United Kingdom?

Mr. Lamont

Unemployment is highest in the northern region—that is one of the factors that we have to take into account in drawing up the map — but we are consulting precisely on what weight should be given to unemployment as opposed to other factors. The hon. Gentleman should notice and acknowledge that many parts of the west midlands have very high unemployment compared with some of the assisted areas.

Mr. Ward

Will my hon. Friend remember that some of us view all regional aid with considerable scepticism, not least because it has distorted management decisions — [Interruption] — unlike some Labour Members, I speak with experience in industry — and helped to preserve just those restrictive practices which have caused unemployment in many of the areas which are receiving regional aid funds?

Mr. Lamont

Undoubtedly the most important thing for the regions is to get national economic policy right, as we are doing. In view of what my hon. Friend has said, I am sure he will welcome the fact that we have reduced regional aid in real terms. I am sure that he will also welcome the fact that the measures that we are proposing will greatly lessen the amount of mere job shuffling around the country, which does no good to anyone.

Mr. Dormand

Is the Minister aware that one of the most significant contributions that could be made to aid the northern region would be for the Prime Minister to stop butchering the coal industry? Will the Minister, the Secretary of State for Energy and the Prime Minister take note of the announcement today of the large order that is being placed for Durham coal—the first for 10 years— by an American company? Does that not indicate that others have confidence in our coal industry, when the Government do not? When will the Minister help the miners?

Mr. Lamont

The Government have repeatedly made it clear that they think there is a tremendous future for the coal industry. I do not know how the hon. Gentleman can talk about butchering when we have poured money into the industry, unless he thinks that we can butcher with pound notes.

Mr. Williams

Is not a measure of the disastrous effect of the Government's policy on the north the fact that it would need more than 200 Nissan stage 1 developments just to replace the jobs that have been destroyed since the Government came to office? Is not the reality that there is no hope of replacing the lost 100,000 jobs when the Government, in their changed regional policy, are to take £180 million in regional development grants away from the north in the next five years? Does the Minister agree that the Government recognise that that change is so damaging that they are making a special dispensation to enable Nissan to take advantage of a scheme which they are dismantling?

Mr. Lamont

Is the right hon. Gentleman really suggesting that the northern region can attract jobs only provided that it has massive regional aid and provided that it is subsidised? We believe that much of the money has been wasted and that it is far better to reduce the level of aid and use the money to reduce interest rates and keep inflation down. That is the way to create jobs everywhere in the country.