HC Deb 16 May 1984 vol 60 cc351-3
7. Mr. Kirkwood

asked the Secretary of State for Scotland if he will make a statement on the implications for the Scottish economy of the White Paper recently published on regional development in the United Kingdom.

Mr. Younger

Regional policy has played an important part in restructuring the Scottish economy and in promoting the growth of investment and output in both new and older industries. The White Paper builds on this success and affirms the Government's commitment to maintaining an effective regional policy.

Mr. Kirkwood

Will the Secretary of State assure the House that when inevitably, he makes representations to the Secretary of State for Trade and Industry during the White Paper review, he will ensure that Scotland does not lose out, as some of us believe it will? Will he pay special attention to areas such as the Borders, which does not have development area assistance, which prejudices incoming industry and denies access to European infrastructure grants?

Mr. Younger

I am grateful for what the hon. Gentleman said at the beginning of his question. Of course I shall take a full part in all the consideration of regional policy, which is of immense importance to the Scottish economy generally. On his last point, I appreciate that areas which do not have development area status do not qualify for European assistance of many kinds. That is part of European policy on these matters. Regional policy make no sense if it did not concentrate the aid that it has available on the areas with the greatest need. The hon. Gentleman's area, the Borders, fortunately has a much lower rate of unemployment than almost all other areas of Scotland, except Shetland.

Mr. Henderson

Can my right hon. Friend say what part of the total employed population of Scotland is in the service sector? Does he agree that the White Paper could encourage the further development of that sector? Finally, will he consider carefully the Fife case for the redrawing of the regional development area map, with particular regard to the case for certain areas in north-east Fife being incorporated?

Mr. Younger

In regard to my hon. Friend's question about service industries, I can give him an accurate figure if he cares to put down a question. I think that the service industries currently cover about 65 per cent. of employment in Scotland. It has been a most interesting feature of the last few years of deep recession that the service industries have performed very strongly. I have doubts about what my hon. Friend says about north-east Fife. Of course, I shall consider that carefully in the course of the review.

Mr. Foulkes

Since the Secretary of State has confirmed that any area that loses its assisted status will lose not only United Kingdom regional aid but aid from the European regional development fund, will he give an absolute guarantee that when the review has been completed no area in Scotland will lose its assisted area status?

Mr. Younger

I do not think that any Minister could give an assurance that any part of the United Kingdom will never lose such status. Surely the hon. Gentleman knows more about reviews than that.

Mr. Maclennan

In view of the underlying fragility of the Highlands of Scotland, particularly the sparsity of the population and its distance from markets, will the Secretary of State listen to the plea of the CBI in the Highland area that no travel-to-work area in the Highlands should be exempted from assisted area status?

Mr. Younger

I note those views, which the hon. Gentleman and the CBI in the Highlands have expressed. I am looking forward to seeing all the representations, which we should have before the end of May, if possible. In regard to commitment to the Highlands, as the hon. Gentleman will know very well, the Government have handsomely fulfilled that commitment with a huge increase in funds to the Highland and Islands Development Board.

Mr. Budgen

Will my right hon. Friend at the same time make a statement on the effect of regional policy on the English west midlands—

Mr. Speaker

Order. That has nothing to do with the question.

Mr. O'Neill

When the Secretary of State comes to my constituency on Monday to open the new development at Paton and Baldwins mill, and when he remembers the welcome investment project which he opened last year at BP Chemicals in the constituency of my hon. Friend the Member for Falkirk, East (Mr. Ewing) at Grangemouth, will he think again of the consequences of the regional policy White Paper, which will specifically exclude, or place on a far lower level of emphasis, investment which seeks to maintain and protect existing employment rather than create new employment? Is this not a dangerous principle if applied to the Scottish economy, because we need considerable investment to ensure the maintenance of existing employment as well as the attraction of new employment?

Mr. Younger

I appreciate the point that the hon. Gentleman makes. However, a balance has to be struck between using the funds that we have to deal with the intensive problems of the worst areas and not spending those funds on areas that have sufficient strength to keep development going. It is that sort of balance that makes a good and sound regional policy, in which we are strong believers.

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