Commons Sitting of 17 January 1985

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    Surplus Grain
    Mr. Barronasked the Minister of Agriculture, Fisheries and Food how much of the EEC surplus grain is held in the United Kingdom.
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John MacGregor): Some 11·9 million tonnes of cereals were held in intervention in the European Community on 4 January 1985, the latest date for which figures are available. Of this, 2·9 million tonnes were in the United Kingdom.
    Mr. Barron: Does the Minister agree that it costs more to keep grain in Britain and the EEC than to give it to the northern region of Africa, to countries such as Ethiopia and to many others in that region, many of which are in dire need of that grain at present, and that to give that grain away is not only economic but humanitarian? What do the Government intend to do about the present need in that area?
    Mr. MacGregor: Unfortunately, I cannot agree that the economic cost works out quite as the hon. Gentleman suggests. It is more expensive. Nevertheless, I share his humanitarian objective. The United Kingdom Government are playing a major and leading part within the EC in the export of grain as emergency food aid. Substantial quantities of grain are supplied by the EC and the United Kingdom as food aid. The hon. Gentleman will know that the European Council meeting in Dublin agreed to provide 1·2 million tonnes of grain to the African countries before the next harvest, on top of substantial amounts that have already gone out this year.
    Mr. Leigh: Does my hon. Friend agree that cereal farmers need more certainty and that either we should get the grain out of intervention by more restitution and export credits, particularly to the eastern bloc, or, failing that, that farmers should be told that we now have a low input and output economy for cereals and that over the next five years there will have to be a cut in real prices?
    Mr. MacGregor: As my hon. Friend will know, we are exporting considerable quantities of grain. Indeed, exports of grain on the open market are cheaper than exports of grain in intervention. Therefore, there are limits to the extent to which one can increase export restitutions.
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    But my hon. Friend is right to be concerned about the surplus and its cost. Everything that has happened this year supports the Government's objective in the forthcoming price review of severe restraint on prices, coupled with the full application of the guarantee threshold, which will have something of the effect that he suggests.
    Mr. Geraint Howells: Has the Minister any plans to persuade his counterparts in Europe of the need to change the intervention system within the Community in the next few years?
    Mr. MacGregor: The most important thing that we can do, in order to get down the potential cost of the surpluses that we now have that could go into intervention, is to have restraint on cereal prices. Most of the other suggestions, which are not on the table for negotiation in the Community, such as quotas, are impracticable and would be wrong. The right objective is to tackle the problem through restraint on support prices.
    Mr. Ralph Howell: Does my hon. Friend agree that that is precisely what we were doing and what was being advocated before the milk crisis burst and quotas had to be imposed? Are we not going down exactly the same road as before?
    Mr. MacGregor: If the policy on milk prices that I have been advocating had been adopted, we might have avoided quotas. We made a significant difference in the price review last year in a variety of ways, which effectively brought cereal prices down in real terms, and we must build on that.
    Mr. John: Does the Minister agree that the figures that he has given represent a rise of a third in the grain in intervention in the past year? Does he further agree that if we are to consider a cut in the price of grain—what he calls price restraint—3·1 per cent. is unlikely to take any grain farmer out of the production of grain? Should he not press for a higher figure as a real cut to signal to farmers—in the words of his hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh)—that there is a different situation and they will have to cut the production of grain in Britain?
    Mr. MacGregor: We should certainly recognise that the amounts in intervention have gone up. To a considerable extent that is a feature of a remarkable harvest last year, for which we should pay great tribute to our farmers in the Community. Nevertheless, the price in real terms has come down quite a bit in the past year. We are arguing for price restraint, which will continue that policy. We should like it to continue for more than one year. I think that that will have its effect.

    Abattoirs
    Mr. Greenwayasked the Minister of Agriculture, Fisheries and Food if he will state the names and location of abattoirs in the United Kingdom which are European Economic Community approved for the slaughter of equines; and if he will make a statement.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): There are five such abattoirs. I shall write to my hon. Friend.
    Mr. Greenway: I look forward to receiving the letter. Is it not obvious that, with so few and such widely

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    dispersed abattoirs approved for the slaughter of equines, horses and ponies are being driven long distances, often for days and, it is reported, frequently without water, exercise or feed on the way to slaughter? Is that not disgraceful? Will my hon. Friend urgently look into the transport of horses and ponies to slaughter and the ability of local authorities to monitor their welfare on the way, because under present legislation it is virtually impossible to do so as so many of them are involved?
    Mrs. Fenner: I assure my hon. Friend that the welfare of animals is protected by comprehensive legislation. I have drawn to his attention before the fact that this is enforced by local authorities. Every local authority must, by law, appoint inspectors to enforce the transit legislation in its area. Those who see a potential welfare offence should report it immediately to the authority in that area. There may be scope for action by those authorities at loading or unloading points. I understand that the Farm Animal Welfare Council will be reviewing future activities and may wish to note my hon. Friend's comment about any future programme of investigation.
    Mr. Campbell-Savours: Is it not fair to say that cuts in local government budgets imposed by the Government restrict the ability of local authorities to monitor in the way that the Minister has suggested? Is it not nonsense to come to the Dispatch Box and say that the public interest and the interests of animals are safeguarded when everyone knows that it is patently true that the Government are preventing local authorities from carrying out their duties?
    Mrs. Fenner: No, that is not true. The hon. Gentleman cannot claim that any public expenditure cuts cover the whole range. Local authorities have the duty to carry out this enforcement, as they have a number of other duties.

    Milk Producers
    Mr. Colvinasked the Minister of Agriculture, Fisheries and Food when he next plans to meet the president of the National Farmers Union to discuss the problems of milk producers.
    The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling): I have frequent meetings with the president of the National Farmers Union, at which a wide range of subjects are discussed, including the problems of milk producers.
    Mr. Colvin: I am pleased to hear that my right hon. Friend has these meetings. Next time he meets the president, will he be prepared to discuss the maketing of quotas, by sale or by lease, so that next time he goes to Brussels for price fixing negotiations with our European partners we have firm proposals to put before them? As it seems, from estimates, that this country is likely to be the only one within its quota by the end of the year, are there not strong arguments for this country proceeding with its own scheme for the marketing of quotas, whatever our European partners may do?
    Mr. Jopling: I should not be so bold as to say that this country will be the only one within quotas by the end of the year, but I agree that there are strong arguments for greater mobility of quotas. Precisely how this should be achieved is the subject of detailed discussions which my Department is having with the milk industry, to which my
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    hon. Friend the Minister of State referred last week. I shall certainly discuss this fully with the president of the NFU when I next meet him.
    Mr. J. Enoch Powell: Has the Minister made any real progress in arrangements for making quotas surplus in one region available to other regions?
    Mr. Jopling: The right hon. Gentleman has no doubt spotted in the press that the Commission made proposals on Monday of this week which suggest that it is possible to make exchanges in this way between regions of a country. I ascertained from the commissioner that this was intended to embrace two regions of the country where one region is on formula A and the other is on formula B. The signs are hopeful, but I must stress that the arrangements are not yet finalised. We shall be returning to this in February.
    Mr. Latham: Before the first anniversary of the quotas, does my right hon. Friend expect to have sorted out all the bureaucratic hassles?
    Mr. Jopling: I would be a great optimist if I thought that we had sorted out all the bureaucratic hassles. As I warned the House before we embarked on the matter, it was inevitable that such a situation would arise. I pay tribute to the commissioner, so soon after taking up his post, for having suggested a number of alterations to the scheme, some of which will, I hope, be of great assistance to this country.
    Mr. Torney: When the Minister next meets the president of the National Farmers Union, will he also remember and consider the problems that face both the farm worker and the dairy distributive worker because of the milk quota system? Will he take action on those problems?
    Mr. Jopling: The hon. Gentleman has referred to this problem frequently in the past few months. We can find relatively few examples of redundancies among farm workers, but, as the hon. Gentleman and I both know, there are many redundancies in the milk processing industry. However, the Milk Marketing Board, for instance, has a redundancy scheme that is significantly better than the basic state scheme.
    Mr. Harris: Has my right hon. Friend had an opportunity to re-read the report of our debate last week on the outgoers scheme? If so, will he now agree to an increase in the sum of £15 million allocated to that scheme, so that more quotas can be redistributed to needy cases?
    Mr. Jopling: The amount allocated to the scheme is £50 million, not £15 million. I am afraid that I have nothing to add to the guidance that I gave to the House last week when I said that the Government had no intention of increasing the amount of money available.
    Mr. Home Robertson: When the Minister next meets the president of the NFU, will he apologise not only to the NFU but to all those employed in the dairy industry for his ham-fisted approach to the imposition of quotas, which has led to turmoil in the industry and—because the cut in production has been 43 per cent. greater than was agreed by the Minister in his sell-out last March — to the ludicrous result of a milk shortage?
    Mr. Jopling: As a farmer, the hon. Gentleman should remember, before he produces such ingenious statistics,

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    that there was a drought last summer. That was the principal reason why the reduction in production in this country was greater than in any other.

    Cereals
    Mr. Fallonasked the Minister of Agriculture, Fisheries and Food what were the totals of cereal exports to third countries in the 12 months to June 1984.
    Mr. MacGregor: In the year ending June 1984 the United Kingdom exported 1 million tonnes of wheat and 1·2 million tonnes of barley to third countries. In addition, some of the grain exported to other Community member states will then have been exported outside the Community.
    Mr. Fallon: Is my hon. Friend satisfied with the present level of export credit guarantees? Does he agree that there is a need to take all possible steps to get the grain out of intervention—out of the huge stores—and into the hands of those who want to purchase it at reasonable prices?
    Mr. MacGregor: Of course we wish to export as much as we can. We have had great success with our exports this year. There has been a doubling of wheat exports, and a near-doubling in barley exports, not just to third countries, but overall. Of course, there is still a considerable way to go. Most of the wheat comes not from intervention but direct from the open market, because open market prices are lower than intervention prices.
    My hon. Friend will have welcomed the Government's announcement on 3 December of improved arrangements specifically for export credits for cereals. However, we have to take account of the wider economic considerations applying to the Export Credits Guarantee Department. I would have expected my hon. Friend strongly to support me on this. He must remember that a large proportion of our exports goes to countries which pay in cash and do not want credit.
    Mr. Bellingham: Is my hon. Friend aware that many grain merchants cannot get export credits for the lucrative grain markets of Algeria, Tunisia and Morocco in north Africa, where we are losing out badly to the French?
    Mr. MacGregor: Bearing in mind the constraints imposed by, for instance, the credit-worthiness of the countries concerned, we have improved the export credit arrangements for such markets.
    Mr. John: Will the Minister recognise that it is better for grain to be used usefully, at whatever price, than to rot in stores? How much of the 12 million tonnes currently in intervention will be used, and how much of it will simply rot?
    Mr. MacGregor: I entirely agree that the grain should be used. We have substantial surpluses this year and we are fighting in world export markets, where there is also a surplus. The hon. Gentleman should recognise that there are considerable quantities of grain which we must still export or dispose of in other ways but which are not in intervention. All of that points to the correctness of our policies directed at trying to get overall support prices down. I am sure that we have the hon. Gentleman's support in that, as it would enable more consumers to use the product.
    Mr. Ralph Howellasked the Minister of Agriculture, Fisheries and Food what is the current level of imports of cereal substitutes into the United Kingdom from third countries.
    Mr. MacGregor: United Kingdom imports from third countries of the products generally referred to as cereal substitutes totalled just under 700,000 tonnes for the period January to September 1984.
    Mr. Howell: Can my hon. Friend list the principal cereal substitutes which are imported and give some idea of the price at which they enter the United Kingdom and the European Community, as paid by the compounder? Will he consider bringing them into a levy system so that they come within the cereal regime?
    Mr. MacGregor: I have the list in front of me. The principal ones are perhaps manioc and maize gluten feed, followed by brewing and distilling dregs and citrus fruit waste. It would probably be better if my hon. Friend tabled a detailed question on that matter and on prices so that I can ensure that full information is given. As to further methods of controlling imports of substitutes, we must consider our livestock producers who would find feedstuffs expensive without the impact of cheaper imports on feed compounders. Technically, we sometimes need those imports for feed compounds. We must also have regard to the dangers of incurring further trade wars in Third world markets.
    Mr. Deakins: Will the Minister do his best to ensure that we do not do anything like putting a levy on cereal substitutes imported into the EEC, as most of them come from Third world countries which have already been hard hit by other agricultural export practices of the EEC? That is one way in which we can do our best to help them.
    Mr. MacGregor: We have resisted, and will continue to resist, pressure for such controls. However, the hon. Gentleman will know that we have had to agree to engage in discussions with the United States, whence many substitutes come, on maize gluten feed. We believe that it is right to resist the overall approach of heavily controlling imports.
    Mr. Andy Stewart: In view of my hon. Friend's answer, is there not a case for the ingredients to be listed on the compounds which are sold to farmers?
    Mr. MacGregor: Answering off the top of my head, I suspect that it would be extremely difficult to do that, as feed compounders vary the mixtures substantially. I am not sure that such lists would be useful information for many people who buy the feed compounds. It is important to stress that, as part of the policy aimed at getting a better balance between cereals and livestock, we should not over-restrict the capacity of the livestock sector to get its feed compounds cheaply.

    Wheat
    Mr. Home Robertsonasked the Minister of Agriculture, Fisheries and Food if he will estimate what tonnage of wheat is likely to be carried over in United Kingdom intervention stores from the current year into the 1985–86 crop year.
    Mr. MacGregor: There were 2·3 million tonnes of wheat in intervention in the United Kingdom on 16

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    January 1985 and a further 200,000 tonnes had been offered for intervention on that date. The quantity to be carried over into next season will depend on developments in the domestic and export markets, which it is not possible to forecast.
    Mr. Home Robertson: Is the Minister aware that reliable sources have recently forecast that there could be a carry-over of 8 million tonnes of wheat into the next crop year in the European Community, including about 3 million tonnes in the United Kingdom? What is the point of spending up to £60 million on keeping that portion of 1984's bumper harvest in store, apparently indefinitely? Is there not an overwhelming case for shifting most of that surplus wheat to famine areas as soon as possible?
    Mr. MacGregor: As I have said, it is difficult to be certain at this stage about the forecasts. However, I have not disguised the fact that we are likely to have surpluses. Within the Community we have already committed ourselves to sending 1·2 million tonnes in this marketing year to Ethiopia and the other drought-stricken countries. That is a major contribution, and a sign that the Government are doing all that they can to make use of the cereals surplus in that direction.
    Sir Peter Mills: Would not my hon. Friend be wiser to express that tonnage in store in terms of weeks' supplies, so that we knew exactly what we had in this country? In the past there have been serious difficulties for the consumer when we have run out. Of course overseas aid is right and proper, and this country—in particular British farmers—has been extremely generous in giving aid in the form of cereals to those in need.
    Mr. MacGregor: I agree with everything that my hon. Friend has said. Indeed, the NFU's "Send a million tonnes of wheat to Africa" campaign is to be warmly welcomed.
    With regard to my hon. Friend's first point, it is certainly true that surpluses can erode quite rapidly in very bad years. Nevertheless, we face a substantial surplus this year. The important point about food aid or any cereal exports is that it is cheaper to export direct from the open market than through intervention. That is a very important point in connection with our policy on intervention.
    Mr. Weetch: Does the Minister realise that the annual review of agriculture, published quite recently, showed that wheat farmers—many of whom are to be found in East Anglia—had a substantial rise in income, which was well above 20 per cent., while they produced uncontrolled surpluses? Does he realise that those two things together do not make any economic sense? What steps is the hon. Gentleman taking to restore a balance in the grain market? Does he recognise that such uncontrolled expansion in East Anglia is leading to serious environmental problems?
    Mr. MacGregor: I believe that we are getting on top of the environmental problems. I hope that the hon. Gentleman will also pay tribute to the efforts of farmers, because most of the increases have resulted from productivity and technological improvements. It has been a great success story for the United Kingdom that, during the past 10 years, it has moved from being a major importer of cereals to being a major exporter. It is only right to pay tribute to that and to comment on its importance for the British economy. In real terms, the recently announced farm incomes remain about 8 per cent.
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    below the 1982 level, while cereal prices are below what they were when we entered the Community. However, all that the hon. Gentleman says supports the view of the British Government that we should have major restraints on cereal prices, supported by the full application of the guaranteed thresholds. That is how we want to tackle it.
    Mr. Maclean: Will my hon. Friend note that in 1985 we need not apologise for the fact that this country has food surpluses? As we consider it economically sensible to have six months' supply of oil and 12 months' supply of coal against the present emergency, surely it is not to be deplored that we have three months' supply of meat or two months' supply of wheat in storage. Will he emphasise to the Britain housewife and to all the people in this country that food surpluses are essential and better than shortages, and that we could not feed the rest of the world if we did not create surpluses?
    Mr. MacGregor: I have already paid tribute to our cereal farmers. I am sure my hon. Friend will agree that it is a notable achievement, and much to be welcomed, that our self-sufficiency in the products that we grow has increased from 59 per cent. about 10 years ago to more than 80 per cent. today. I can just imagine what questions I would face if this country had a major deficiency in cereals, if prices soared and if the effect on the consumer was the opposite of what it is because of our success.

    Milk Quotas
    Mr. Heathcoat-Amoryasked the Minister of Agriculture, Fisheries and Food if he has plans to allow interchange between direct sellers and wholesalers under the milk quota scheme.
    Mr. Jopling: Complete interchangeability is not permitted by the existing Community legislation. I have been pressing strongly for this at meetings in Brussels for some time, and this week the Commission put forward proposals which go some way towards meeting our needs. I shall now seek certain improvements on the proposals. In the meantime, I have introduced arrangements whereby a producer who has more wholesale quota than he needs but not enough direct sales quota, or vice versa, can apply to the Milk Marketing Board to exchange quota with a producer in the opposite position.
    Mr. Heathcoat-Amory: I thank my right hon. Friend for his reply and for his evident concern about the matter. Is he aware that many direct sellers are facing superlevy payments, not because they are producing too much milk, but because they are selling too much milk to the public? Does he agree that regulations designed to prevent cheating in Italy and elsewhere are having a damaging and perverse effect on the British market?
    Mr. Jopling: I am aware of those problems, which is why I have been raising this issue in the Agriculture Council since July, and why I was especially glad when the Commission appeared to be making some moves earlier this week to assist us in this matter.
    Mr. Wigley: Given the right of a producer who owns two holdings simultaneously to transfer a quota from one to another, what safeguards are there to stop producers, wholesalers or large companies from buying quotas, to the detriment of whole areas that may be in a disadvantageous position?
    Mr. Jopling: The hon. Gentleman's question is rather wide of the original question, which related to interchange of direct and wholesale quotas. However, I shall try to answer his question. If the hon. Gentleman reads the regulations, he will see that the quota is attached to the land and that the principal way in which it can pass from one person to another is if the ownership or tenancy of the land changes.
    Mr. Douglas Hogg: Does my right hon. Friend accept that because a direct seller can sell only what he produces, and produces only what he can sell, there is no merit in restricting him, and that the lifting of a restriction would not make a substantial increase in the surpluses? Will he, therefore, treat the removal of these quota restrictions as a major priority?
    Mr. Jopling: I forgot to say that that has been my major priority since the summer. If I may correct my hon. Friend, the restriction makes no alteration to the total amount produced. An interchange would take place in a mixed business between one type and another type of quota, within an overall amount, which stays constant. I am extremely pleased that, at last, with the new Commission we have a little movement on that important matter.
    Mr. Home Robertson: There is universal support for what the Minister seeks to do. Will he explain precisely how and when the proposals to which he referred in his written reply to the hon. Member for Gainsborough and Horncastle (Mr. Leigh) will be implemented?
    Mr. Jopling: The procedure which the Commission has proposed to deal with the matter is cumbersome, would only operate within a single 12-month period, and would have to be repeated each subsequent year. The details need to be examined carefully before we assume that it will be workable. The special committee on agriculture will consider this during the next few weeks. I hope that the matter will come back to the Council at its February meeting, and that we can settle it as soon as possible.

    Agricultural Use Land
    Mr. Chapmanasked the Minister of Agriculture, Fisheries and Food what is his definition of productive agricultural use land; and if such a definition includes upland heaths and undrained fenlands.
    Mrs. Fenner: Land is considered to be in productive agricultural use when it is being farmed. Large areas of upland heaths and lowland fens are used for livestock grazing.
    Mr. Chapman: Land use statistics are gathered by the Department of the Environment and show, broadly speaking, that during the last 35 years we have lost a quarter of our upland heaths and that more than half of our fenlands have been drained. Does my hon. Friend agree that liaison between her Department and the Department of the Environment is essential if we are to strike a sensible balance between the needs of agriculture and conservation of the countryside? While I welcome the setting up of the environment co-ordination unit in her Department for just such a purpose, but will she assure the House that the coordination and liaising will be at ministerial as well as official level?
    Mrs. Fenner: My hon. Friend will be aware that the Wildlife and Countryside Act 1981 took account of anxiety about natural habitat and landscape change. There is close co-ordination between the Ministry of Agriculture, Fisheries and Food and the Department of the Environment. Regarding habitat and landscape, the Nature Conservancy Council and the Department of the Environment are funding projects on habitat and landscape change, and MAFF hopes to undertake a survey of trees and hedges on farms later this year. I know of my hon. Friend's particular interest in that part of country conservation.
    Mr. Bill Walker: Does my hon. Friend agree that in the highlands of Scotland the land is used extensively for sheep farming, which is supported by the positive steps on conservation being taken by the Scottish National Farmers Union?
    Mrs. Fenner: Yes. My right hon. Friend the Secretary of State for Scotland will be exercising the greatest care in considering the compatability of agriculture and conservation, as we do in the rest of the United Kingdom.

    Meat Consumption
    Sir Peter Millsasked the Minister of Agriculture, Fisheries and Food what discussions he has had with the chairman of the Meat Promotion Executive relating to trends in meat consumption in the United Kingdom.
    Mr. MacGregor: None direct, although there is continuing close contact at ministerial and official level with the Meat and Livestock Commission, which has overall responsibility for meat promotion matters.
    Sir Peter Mills: Does my hon. Friend agree that there has been a serious drop in meat consumption lately, and that the promotion of meat products and meat should be conducted strongly in the future? Does he also agree that it is a mistake to believe that convenience foods are cheaper than meat, such as shin beef, best end of lamb and other cheaper cuts which are of benefit to the consumer?
    Mr. MacGregor: The overall consumption of meat is at about the same level as it was 10 years ago, but that hides the fact that there has been an increase in the consumption of white meat, especially poultry and pork, and frozen convenience meats. There has been a decline in the consumption of most carcase meats. My hon. Friend will know that considerable efforts go into the promotionn and marketing of meat, and I support those efforts. As to convenience foods, we must recognise that we are talking about consumer choice. Many consumers, especially the young, for a variety of reasons, buy convenience foods. That factor must be taken into account in the promotion of meat.
    Mr. Kirkwood: Does the Minister accept that the programme being organised by Food from Britain has an important part to play in increasing the consumption of meat? Will he ensure that the £15 million grant for that organisation is continued if the sponsoring organisations continue to be reluctant to take over the funding?
    Mr. MacGregor: I wholly support the efforts of Food from Britain, which are an important factor in promotion. The hon. Gentleman will know that that organisation is backed by substantial Government funds. Its programme will run for some time, and it would be premature to take

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    decisions now on the longer term. I hope that he also recognises that considerable funds, often from industry, are given for promotion through the Meat and Livestock Commission and the Meat Promotion Executive.
    Sir Hector Monro: In relation to meat production, will my hon. Friend consider the annual review and agree that, although the statistics are obviously right, the narrative gives a false impression of the well-being of the livestock industry, which is not as healthy as the review seems to show?
    Mr. MacGregor: Although some sectors of the intensive livestock industry did a little better last year than they did earlier, there has been a drop in income in other parts of the industry. I fully agree with my hon. Friend on that. I had hoped that the way in which we gave the figures had made that clear. There has been an increase, in farming terms generally, on 1983 levels, which means a reduction in real terms on 1982 levels. Within that, some sectors have done much worse than others.
    Mr. Mark Hughes: In those discussions, will the Minister consider the possibility of a change in the carcase specification for premium payments which takes into account low fat meat for dietary purposes? Will he especially consider giving farmers a premium for Welsh lamb with a low fat content, rather than the reverse at present, where the more fat there is on a lamb, the more money the farmer gets per pound?
    Mr. MacGregor: The hon. Gentleman will know that one recommendation by COMA to the Government has been along those lines. No decision has been taken, but the views of the industry and other organisations on the recommendation have been sought and are currently being considered. I expect to make an announcement shortly.

    Milk Quotas
    Mr. Ashdownasked the Minister of Agriculture, Fisheries and Food if he will consider the possibility of reopening the file on milk quota applicants who have accepted decisions handed down by his Department and from local panels and have subsequently discovered that different criteria have been applied for later decisions which could have enabled a successful appeal.
    Mr. Jopling: The system allowing for appeals against departmental and local panel decisions was devised to minimise variations and to be as fair as possible. It is also important to let producers know their secondary quotas as quickly as possible. Now that the local panels have virtually completed their work and the time alloted for appeals to the tribunal is past, I do not think it would be right to ask them to go over the ground again.
    Mr. Ashdown: Will the Minister reconsider that decision? He has said that he wishes to see justice done. Does he think that it is just that many farmers have accepted their quotas, without reference to appeal, on the basis of information given to them by his officials which has subsequently proved to be wrong? Is he aware, for instance, that one of his officials wrote to my local farmers on 4 November saying that cow variation numbers could not be taken as the basis of appeal, yet every subsequent appeal on that precise basis has been successful? Does he believe that that is fair or just?
    Mr. Jopling: If the hon. Gentleman has a particular point that he would like us to consider, we shall do that.
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    He should recall that the tribunal issued guidance to local panels on the criteria that were to be used in reaching decisions. It was recognised that, given the numbers involved, some variation in approach to different cases was inevitable. That is why the system of local panels with the right of appeal to the tribunal was devised.
    Mr. Hayes: If my right hon. Friend wishes to see justice done, will he remember that there are a large number of producers who feel aggrieved that the quota runs with the land, rather than with the producer, particularly when the producer has built up the business personally without the help of the landowner?
    Mr. Jopling: I am aware of that problem. It is a matter that is not appropriate to this question, but my hon. Friend will recall that we discussed it at considerable length in the House when I first announced the outgoers scheme last summer.
    Rev. Martin Smyth: Is the Minister aware that there is unrest? In a reply to my right hon. Friend the Member for South Down (Mr. Powell) he referred to the fact that there was a proposal by the Commission for change. Could he be more forthcoming and tell the House wherein lies the problem so that we have to wait until February for a decision that could go a long way to ease the problem?
    Mr. Jopling: I do not think that I can add anything. Again, this is a question that does not follow the main question. This was a proposal that was put before the Council on Monday. It was discussed on Tuesday. It was generally recognised that there were many complications which should be studied by the special committee on agriculture. I hope that it will get on with its work as quickly as possible and that it will be possible — I cannot guarantee it — to have a conclusive and final discussion about the matter at the February Council.
    Mr. Strangasked the Minister of Agriculture, Fisheries and Food what estimates have been made on how European Economic Community milk production will compare with the aggregate quota for the current year; and what is the comparable position in the United Kingdom.
    Mr. Jopling: On current trends, deliveries to dairies would be close to the wholesale quota at the end of the present marketing year, both in the United Kingdom and in the Community as a whole. However, I would obviously not wish to make precise forecasts at this stage.
    Mr. Strang: Are we not in danger of getting the worst of all worlds? On the one hand, hundreds of jobs in the United Kingdom may be destroyed as a result of the cutbacks here, while, on the other, because the scheme is not working sufficiently effectively throughout the Community, we shall continue to make a disproportionate budget contribution towards the huge EC surplus.
    Mr. Jopling: The hon. Gentleman may not have seen, but should study, what has already been done in other countries in the Community in getting production down to the quota for those countries. For instance, up to the end of December Germany had cut by 6 per cent. on last year, the Netherlands by 5 per cent., Denmark by 6 per cent. and Belgium by 5 per cent. Of course, the United Kingdom has cut by 8 per cent., largely because of the drought that we had last summer.

    Farm Machinery
    Mr. Colin Shepherdasked the Minister of Agriculture, Fisheries and Food when he will next meet the president of the United Kingdom Agricultural Engineers Association to discuss farm machinery sales prospects.
    Mrs. Fenner: My right hon. Friend the Minister of Agriculture, Fisheries and Food met the president of the United Kingdom Agricultural Engineers Association to discuss farm machinery sales prospects on 30 October 1984. A further meeting has not been arranged.
    Mr. Shepherd: Is my hon. Friend aware that considerable concern has been expressed within that sector of the agriculture industry because the changes in capital allowances, which will shortly come into effect, will have a distorting effect on machinery sales, which is likely to lead to a boom and then a bust? Will she bear in mind in her further discussions with the Treasury as well as with the Agricultural Engineers Association that this will not help the smaller farmers in the west and south-west who have suffered a squeeze?
    Mrs. Fenner: I would accept that the necessary contraction in the dairy industry has caused farmers to postpone new plant investment. I believe that some may even have over-reacted. In recent years there has been a general contraction in the industry, due to rationalisation and import penetration. I do not agree with my hon. Friend's views about next year's opportunities in agricultural engineering. They are a little pessimistic.

    Conservation
    Mr. Soamesasked the Minister of Agriculture, Fisheries and Food what progress his Department and the Agricultural Development Advisory Service have made towards further measures of conservation in agriculture.
    Mrs. Fenner: My Department's aim will continue to be that of developing agricultural policies and encouraging farming practices which take due account of the desirability of conserving the countryside. As far as ADAS specifically is concerned, its contribution includes giving advice on conservation matters to individual farmers, promoting conservation awareness amongst farmers through exhibits and displays at agricultural shows and similar events, widespread participation in the farming and wildlife advisory groups and advising farmers and the statutory conservation agencies on the management of environmentally sensitive land.
    Mr. Soames: I thank my hon. Friend for that commendably brief answer. Does she accept that many of my constituents are gravely concerned about conservation? Will she assure the House that everything possible will be done to ensure that farmers are given every facility to incorporate conservation measures in their future plans?
    Mrs. Fenner: I earnestly assure my hon. Friend that all his points are uppermost in the mind of the Ministry. I am sure that they have been confirmed in practical terms by the setting up of the environmental co-ordination unit.

  PRIME MINISTER

    Engagements
    Mr. Winnickasked the Prime Minister what are her official engagements for Thursday 17 January.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Winnick: When will the Government act over the suffering and misery of so many elderly people who simply do not have enough money to keep their homes adequately heated during the harsh winter? What sort of Government are they who last November reduced by £1 the heating allowance to the poorest pensioners. who are those between 70 and 85? Does the Prime Minister understand how many of those people have put their health seriously at risk by having insufficient money to keep their homes heated? Can we take it that the Government are concerned only with giving help to the rich and the prosperous?
    The Prime Minister: The hon. Gentleman will be aware that the changes in heating allowance enabled it to be given to more pensioners, and that was welcome. I note that the hon. Gentleman is quick to ask questions about heating allowance, but he is equally quick to support a strike deliberately aimed at cutting off heating to old people.
    Mr. Rhodes James: I ask my right hon. Friend a question with reference to the proposed commemoration of the 40th anniversary of the ending of the second world war. I remind her that the second world did not end in May 1945 and that tens of thousands of young people from this country and the Commonwealth, including members of my family, served and suffered in the campaign in the far east. If we commemorate the ending of the war, will it be said again that the 14th Army, which was the forgotten army, is to be forgotten once again?
    The Prime Minister: We are very much aware of the victory in August 1945 in the war in the far east and of the important and brave part played by so many people in that war. We shall, of course, remember both occasions in the commemorations.
    Mr. Kinnock: May I say, first, that I was glad to hear that last answer.
    In view of the extremely cold weather—[Interruption.] Conservative Members think that cold is funny. In view of the very cold weather and the promise of worse to come, can the Prime Minister tell us whether she believes that pensioners in all parts of the country should have the same entitlement to severe weather payments? Does she not agree that there is something fundamentally wrong with the system, introduced by the Government in 1981, which forbids giving help to people who are freezing cold this winter simply on the ground that they live in areas which are very cold every winter? In view of the inconsistencies and injustices of the present system, will the Prime Minister give us an undertaking that she will quickly change that system?
    The Prime Minister: I cannot give the right hon. Gentleman that undertaking. He will be aware that in

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    general heating allowances have gone up far more rapidly than the rate of inflation—something like 40 per cent. more than the increased cost of fuel—so that now some £400 million is spent on heating allowance of which £200 million goes to pensioners, so that is far better than anything previously. In addition, there is provision for single payments on the terms laid down in the order, which sets out a series of objective tests and leaves it to the chief adjudication officer. May I put it to the right hon. Gentleman that if he is really concerned he will tell the striking miners to go back to work so that we can have the future of heating assured, because people are out on strike to prevent heating from getting to old people and to industry.
    Mr. Kinnock: Why does not the Prime Minister, just for once, answer the question on the subject raised?
    On the subject of severe weather payments, does she not think that it is sensible to understand that bitter cold is bitter cold wherever it is felt, north, south, east or west? When her own Minister for Social Security can refer to the current arrangements as a "weird and wonderful construction", does she not think that there must be a better system of ensuring that those who have to endure very low temperatures on very low incomes should 12g helped, wherever they are? Will she please answer that question?
    The Prime Minister: The single payments order, as the right hon. Gentleman knows, does give different temperatures. I understand that my right hon. Friend the Secretary of State for Social Services is looking into the matter, but for the time being the objective tests laid down there will continue. I hope that the right hon. Gentleman will now urge the coal miners to go back to work, for it is surely ridiculous to express sympathy but to support a strike deliberately aimed at making it cold for people in houses in bitter weather.
    Mrs. Currie: Has my right hon. Friend noticed the allegations that The Observer has been paying large sums of money to encourage Whitehall leaks? Does she agree that leaks of this kind are frequently motivated, not by high-flown, but by misguided ideas of public information; nor, indeed, by baser party political motives, but by the oldest motive of all, greed on the part of both the newspaper and its informants?
    The Prime Minister: Whatever the reason for leaks and whichever Government are in power, no Government can carry on effectively unless they can rely on the trust and confidence of those who work in the Civil Service, and in the overwhelming number of cases they can rely upon that trust and confidence.
    Mr. J. Enoch Powell: In reflecting upon the commemoration, which has wide public support, of victory in Europe, will the Prime Minister direct her mind to the best way in which, in the framework of that commemoration, there can be a place for the representation of the Russian people, whose sufferings, whose fortitude and whose valour made our own survival and our victory possible?
    The Prime Minister: Yes, I shall of course bear that factor in mind. What we are planning is a commemoration in this country, but of course there will be many representatives in the country whom we shall expect, either as high commissioners or as ambassadors, to attend that commemoration.
    Mr. Dixonasked the Prime Minister if she will list her official engagements for Thursday 17 January.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Dixon: Is the right hon. Lady aware that the last shipyard in my constituency closes next month, that the last steel plant in my constituency closes at the end of the year, that the last pit in my constituency closed two years ago, and that one in three men in my constituency are out of work? When she ponders on the VE celebrations, will she bear in mind the fact that her Government's policies between 1979 and 1985 have stopped more industries than Hitler's bombers? What new year's message of hope has she for the 7,852 people in the Jarrow constituency who are out of work?
    The Prime Minister: I am aware of what the hon. Gentleman says about the shipyards in his constituency. We naturally appreciate his anxiety about the future of the yards. The Government stand ready to help in the usual way to secure any viable order prospects put forward by British Shipbuilders, but we cannot create orders where they do not exist.
    Mr. Freemanasked the Prime Minister if she will list her official engagements for Thursday 17 January.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Freeman: Is my right hon. Friend aware that two major unions representing the electricians and the engineers have decided to defy the TUC and apply for public cash assistance for secret ballots? Will the Prime Minister encourage other unions to follow that sensible and pragmatic decision?
    The Prime Minister: I noticed that decision. It is welcome. The provision is made for people to have postal ballots to enable them more easily to express their democratic views on decisions by officials of their union.
    Dr. Owen: If the Prime Minister wishes to give a constitutional safeguard to the people of the Falkland Islands, who are United Kingdom citizens, why does she not use the constitutionally proper form to do so by introducing a Bill in the House, as was done with the Northern Ireland Constitution Act 1973? Does the Prime Minister not recognise that this is a major issue of foreign policy which the House has not discussed, and that that runs counter to the recommendations of the Foreign Affairs Select Committee?
    The Prime Minister: I understand that the right hon. Gentleman is talking about the discussions that we are now having with the Falkland Islands Council about its future constitution. The right hon. Gentleman looks angered that we have had them. He would have thought it strange had we made, or attempted to make, any decisions without fully consulting the people who are most deeply interested in their own future. Of course we have been consulting with them. When we have reached a conclusion, details of it will be placed in the Library for hon. Members. When the new constitution and texts are ready, they will be introduced by Orders in Council.—[HON. MEMBERS: "Why?"] Orders will be made under the British Settlements Act, which provides for such orders then to be laid before Parliament so that they are in accordance with the constitution of the House.
    Mr. Geoffrey Robinsonasked the Prime Minister if she will list her official engagements for Thursday 17 January.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Robinson: Does the Prime Minister recall my intervention in the Chancellor's speech on Tuesday, when I took the liberty to put to him the serious point that the deutschmark was not under threat and that interest rates in Germany had not been raised in panic action similar to that into which her Government have been forced? His reply was that the deutschmark had a lower level of inflation than the pound. Will she come clean with the House and admit that the principal difference is that we are now seen as a one-product economy due to the fact that we have had the devastation of our manufacturing base and a deficit on manufactures in the past year of over £5 billion? Will she come clean with the House and, more importantly, tell us what she is going to do about it?
    The Prime Minister: The hon. Gentleman will be aware that oil constitutes about only 5 per cent. of the output of our economy, so no one should judge it a one-product economy. In regard to the deutschmark, I remind him that the Germans have been pursuing policies successfully to keep down inflation for many years and that it is now 2·5 per cent. They have also been pursuing policies to reduce public spending, and have cut their public spending in ways which I do not think would be acceptable to this House. They held up increasing pension provisions and managed to keep down their public sector
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    pay for a long time, so much so that they are now able to have tax cuts. As the hon. Gentleman is talking about industry, he should remember that the Germans did not have the degree of restrictive practices and overmanning that we had for years.
    Mr. Key: Will my right hon. Friend find time today to take note of the first report of the Historic Buildings and Monuments Commission for England and its important proposals for the development of Stonehenge as a major tourist site, and will she welcome that report?
    The Prime Minister: I welcome most reports in that guise. I cannot promise to look at that report today, but I promise to look at it at some time, though not this week.
    Mr. Barron: On a point of order, Mr. Speaker—
    Mr. Speaker: Does it arise directly out of this question?
    Mr. Barron: It arises out of Prime Minister's Question Time, Mr. Speaker, in that questions to the right hon. Lady began a few seconds before 3.17 as the result of a long answer that had previously been given by the Minister of Agriculture, Fisheries and Food. May we have 15 minutes of questions to the Prime Minister, and may I ask the right hon. Lady a question about the miners' dispute?
    Mr. Speaker: Order. The point to which the hon. Gentleman refers did not take up a full minute; I was watching the clock as carefully as the hon. Gentleman. That is why I called the hon. Member for Salisbury (Mr. Key) to ask a question after 3.30 pm.

Business of the House
3.32 pm
Mr. Neil Kinnock: May I ask the Leader of the House whether he will state the business for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:

MONDAY 21 JANUARY—Second Reading of the Hong Kong Bill.

Motion on the District Electoral Areas (Northern Ireland) Order.

TUESDAY 22 JANUARY — Debate on the Supplementary Estimate for the budget of the European Communities.

Second Reading of the Education (Corporal Punishment) Bill.

WEDNESDAY 23 JANUARY — Opposition Day (6th Allotted Day). Until about 7 o'clock there will be a debate on post office closures, on an Opposition motion.

Afterwards, motions on the Housing Support Grant (Scotland) Order, the Housing Support Grant (Variation) Order, and on the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order.

Proceedings on the Consolidated Fund (No. 2) Bill.

Motion on financial assistance to Opposition parties.

THURSDAY 24 JANUARY — Motions on the Rate Support Grant (Scotland) Order and on the Rating of Industry (Scotland) Order.

FRIDAY 25 JANUARY—Private Members' Bills.

MONDAY 28 JANUARY — Remaining stages of the Hong Kong Bill.

Mr. Kinnock: I thank the right hon. Gentleman for acceding to our request that the remaining stages of the Hong Kong Bill be taken on the Floor of the House.
When is it expected that the Government's expenditure White paper will be published? Will the right hon. Gentleman ensure that there is an early debate on that document?
We have been asking the Government for some time for a debate in their time on the threatened post office closure programme. As we have received no constructive reply, and as the matter is of great concern to rural and urban communities throughout the country, I hope that hon. Members on both sides of the House will note that we have decided to use our Opposition day to debate the matter next week.
Is the Leader of the House making arrangements to provide time in the House for the consideration of any legislation relating to surrogate parenthood? This is a matter of widespread interest on which a sign of the Government's attitude would be useful.
Mr. Biffen: On the last point, I acknowledge at once the very widespread interest aroused by the question of surrogate parenthood. The matter is still under very active consideration by the Government and the House will be informed of our decisions at the earliest possible moment.
In a sense of paternity, which I hope will not be misunderstood, I should say how much I appreciate the fact that we shall be able to have a debate on the post office issue in the terms that I have described with the cooperation of the Leader of the Opposition.
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The expenditure White Paper will be published on 22 January and I very much hope that we can proceed to debate it in the normal manner.
Finally, I note the right hon. Gentleman's comments about the decision that the Hong Kong Bill should be debated on the Floor of the House. I am sure that a Bill of such significance deserves that treatment.
Mr. Andrew MacKay: Can my right hon. Friend say when we are likely to have a full day's debate on foreign affairs?
Mr. Biffen: I shall certainly bear the request in mind, but no provision has been made for that next week. I would not wish to mislead my hon. Friend that it would be that early, but clearly it will be appropriate at some point.
Mr. David Steel: In view of the Prime Minister's reply to my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) and as an Order in Council is not automatically debatable on the Floor of the House, will the Leader of the House give an assurance that there will be a full debate on any future changes in the constitution of the Falkland Islands? In particular, can he give an undertaking that there will be no loss of sovereignty of this House on the matter of our future relations with the democratic Government of Argentina?
Mr. Biffen: I thought that my right hon. Friend the Prime Minister answered most comprehensively the points raised by the right hon. Member for Plymouth, Devonport (Dr. Owen), but I will, of course, bear in mind the points that have just been made.
Mr. Jonathan Aitken: Is my right hon. Friend aware that the position regarding the proposed constitutional changes for the Falkland Islands is highly unsatisfactory and causes anxiety among Conservative Members as well? Does he agree that it is quite wrong for changes such as the decision, apparently, to separate the administration of the Falklands from the South Sandwich Islands and South Georgia to be announced in the Falkland Islands without any reference to Parliament and then to be presented as a fait accompli in an Order in Council? Does he appreciate that that just will not do and will he arrange an early debate to discuss these measures?
Mr. Biffen: I am fully sensitive to the interest expressed by my hon. Friend. That is why I gave an answer of the character that I gave to the Leader of the Liberal party. Of course, these factors will be taken into account.
Mr. Tony Benn: Is the right hon. Gentleman aware that tens of thousands of miners campaigning in defence of their communities have been denied social benefits for which they have paid during their working lives and are now quite unable to find the money to feed their families or keep them warm? Is he further aware that at no stage from the beginning of the dispute have the Government ever given their own time to account for themselves and that the decision to ban negotiations in the hope that cold and hunger will gain the Government a shallow political victory is vicious and utterly repugnant to the majority of people in this country?
Mr. Biffen: In my view, cold and hunger are the weapons seized upon not by the Government but rather by those people who have been promoting and sympathising

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with the strike. No time has been provided in the business that I have announced, but clearly it is open to the right hon. Gentleman and others who wish to prosecute these matters before Parliament to take such opportunities as are available.
Mr. John Stokes: Is my right hon. Friend aware that the whole country will be grateful to our right hon. Friend the Prime Minister for her decision with regard to the commemoration of the end of the last war? Following the intervention of the right hon. Member for South Down (Mr. Powell), will the Government recall that if foreign countries are to be invited they should include not only Soviet Russia but Poland and other allies? Secondly, if there is to be a service either at Westminster abbey or at St. Paul's cathedral, will the Government do their best, in the most tactful way, to ensure that the Church does not let the nation down?
Mr. Biffen: There is only one safe and prudent reply that I can make: I shall draw the attention of my right hon. Friend the Prime Minister to the points so thoughtfully made.
Mr. Eric S. Heller: Has the right hon. Gentleman had early-day motion 266 drawn to his attention—"Those without shelter"?
[That this House is deeply concerned at the plight of those people without shelter or a roof over their heads at night at this time of intense cold and severe winter conditions; and calls on the Government to take emergency steps, in consultation with local authorities, to ensure that warm shelter and beds are provided for those in need by the taking over of buildings together with other emergency action such as the use of underground railway stations, &c.]
Is the right hon. Gentleman aware that thousands of people, in addition to our old-age pensioners, who are suffering because of the reduction in the heating allowance, have no shelter whatsoever? Are the Government prepared to allow tha appropriate Minister to come to the House, either tomorrow or on Monday, to state that the Government accept the motion and that they will take emergency steps to deal with the terrible problem of those who are without shelter? Secondly, responsibility for the continuation of the mining industry dispute rests with the Government. They should be prepared to try to settle the dispute at the earliest possible moment.
Mr. Biffen: On the first point made by the hon. Member, I shall draw his observations to the attention of my right hon. Friend for his decision on whether it would be appropriate for a statement to be made. On the second point of the hon. Member, I believe that the settlement concluded with NACODS provides a good framework for further discussions. One would welcome the clear and explicit commitment of the faction of the National Union of Mineworkers that is led by Mr. Scargill that they think likewise.
Mr. Robert Adley: Is my right hon. Friend aware that with railway investment by the Government at an all-time high and with no outstanding claims for investment by British Rail awaiting decision by the Government, many of those, particularly in the railway industry, who have the best interests of the railway industry at heart are astounded by the action that is being
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taken by a handful of people without a ballot? The words used a moment ago by the right hon. Member for Chesterfield (Mr. Benn) could be repeated to describe the action of these people. Is my right hon. Friend further aware that it was 10 years ago that I first mentioned the name of the man, Fullick, at Waterloo whose actions are totally deplored by ASLEF and NUM members throughout the rest of Southern region? Will my right hon. Friend therefore ask the Secretary' of State for Transport whether he will be prepared to make an early statement if there are further repercussions next week from this strike?
Mr. Biffen: I shall certainly pass on that request to my right hon. Friend the Secretary of State for Transport. I agree with my hon. Friend that those who seek to make the British public pawns in their industrial dispute will at the end of the day reduce rather than enhance their prospects.
Mr. J. Enoch Powell: Can the right hon. Gentleman give an undertaking that it is not his intention to table business motions to curtail the time which would otherwise be available for debating the Supplementary' Estimate or the Consolidated Fund Bill?
Mr. Biffen: I am grateful to the right hon. Gentleman for raising that point. It might be for the convenience of the House to have a structured debate of three hours on this topic. I shall give to the House an opportunity so to decide.
Mr. Eldon Griffiths: In the context of the view of all parties in the House that our membership of the European Community does not mean that the European Parliament should interfere in our domestic affairs, has my right hon. Friend seen the decision of the European Parliament to conduct an inquiry into the policing of the current mining dispute? Will my right hon. Friend find an opportunity for Ministers to make clear in the House the view of Her Majesty's Government and, I believe, of all parties that this is no business of the European Parliament and that if there is to be an inquiry it will be conducted here?
Mr. Biffen: I believe that there is a very simple message for the European assembly at Strasbourg: "Keep off the grass".
Mr. Dave Nellist: Is the Leader of the House aware that in the present severe weather it is estimated that 700 pensioners, both today and every day, will die from hypothermia while during the last 10 months his Government have spent £5,000 million of the wealth of this country upon the prosecution of a mining strike, money which could have saved the lives of those pensioners? Will the Leader of the House arrange for the Prime Minister to come to the Dispatch Box in Government time to answer the charge that the deaths of those pensioners should be set against the prosecution by the Government of the strike?
Mr. Biffen: I am sorry that the hon. Gentleman feels so distressed that the Government have not orchestrated a supine surrender to the demands of Mr. Scargill. That is precisely the reason for his discontent and the reason why I cannot take too seriously the claims that he is now making upon the time of the House next week.
Mr. Michael Latham: Rather than wasting the time of the House next Tuesday with the Education (Corporal Punishment) Bill, which has little

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public support or support in the House, will my right hon. Friend instead arrange for us to discuss early-day motion 235 which deals with the deplorable attack on the leaders of the Jewish community by Mr. Ken Livingstone, which he has not yet withdrawn and for which he has not apologised?
[That this House takes note of the reported remarks of the Leader of the Greater London Council in an interview published in `Davar' weekend magazine on 30th November 1984, in which he is quoted as saying 'The Board of Deputies of British Jews has in recent years been taken over by Jews who hold extreme right wing views…Besides, the big problem of the Board of Deputies has always been their soft and slow response to all forms of racism in this country…After Begin' s emergence on to the political stage, suddenly the Jews became reactionaries, turned right nearly to be fascists. I realise that this is actually something that is occurring in many countries, not just Britain'; is horrified at this reported accusation by a prominent political figure of near fascism against the leaders of the Jewish community in Britain, whose distinguished President is a Labour Member of this House; and trusts that the Labour Party leaders will either ask Mr. Livingstone to apologise to the Jewish community or to explain if he believes himself to have been incorrectly reported.]
Mr. Biffen: I recognise the undoubted attraction for the House of debating the early-day motion to which my hon. Friend refers, but the Education (Corporal Punishment) Bill, which has been set down for debate on Tuesday, is an important piece of Government legislation which, I have to tell him, will be proceeded with.
Mr. Terry Fields: Will the Leader of the House acknowledge the damage and dangers for which the Government are responsible as a result of their intransigence over the mining dispute and their interference in legitimate negotiations between the National Coal Board and the NUM? Will he also acknowledge that to a hell of a lot of people in Britain the Government are acting in a criminally insane manner with their despotic attitude towards miners and their families? When will the Government face up to their responsibility and discuss in their time the dispute and their interference in the negotiations?
Mr. Biffen: If there are guilty men in this matter, pre-eminently the guilty man is Mr. Arthur Scargill, who has damaged his industry, divided his union and wrought industrial havoc. Time will not be provided next week for a debate on the matter. If Labour Members are so determined and anxious to represent their parliamentary support for Mr. Arthur Scargill, let them find the occasion.
Mr. Tim Yeo: In view of the pace of change in the City of London and the shifts in ownership of leading members of the Stock Exchange, and in view of the absence from the Queen's Speech of any proposals to legislate on the basis of the Gower report, is it likely that time will be available for discussion of those important issues in the near future?
Mr. Biffen: I agree that those are important issues, but I regret that such are the pressures on Government time at the moment that it is not possible to feature them in the
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business for next week, or, I suspect, any time shortly thereafter. But I wish my hon. Friend every success in using his initiative in trying to bring the matter before the House.
Mr. Allen Adams: Is the Minister aware that last week Babcock Power Ltd. at Renfrew announced 500 redundancies at its factory? Will he give time for a debate in the House in the foreseeable future on the future of the fuel and power industry, not only in Scotland but in Britain as a whole? I am sure that he will appreciate that those highly specialised jobs, once lost, are difficult to regain. Will he make representations to or remonstrate with some of his right hon. and hon. Friends in the Government to bring forward replacement power stations and parts of power stations? Unless that is done within the next two or three years we shall lose a valuable and important industry which we shall have great difficulty in replacing once lost. Will he consider arranging a debate on the fuel and power industry within the next two or three weeks?
Mr. Biffen: I recognise the serious problems that are raised for west Scotland and the hon. Gentleman's constituency by the redundancies to which he refers. I shall draw the attention of my relevant right hon. Friends to the importance that he attaches to increased investment in the power industries.
Mr. Patrick Cormack: Will my right hon. Friend accept that it would be an error of judgment and entirely inappropriate for hon. Members to be Whipped on the Education (Corporal Punishment) Bill?
Mr. Biffen: Happily, those are arrangements which fall without my responsibility.
Mr. Martin Redmond: Will the Leader of the House reconsider his previous answers and allow a debate in Government time on the dispute in the coal industry? The Government are fond of preaching democracy. Why do they not practice it and allow a debate in Government time on the subject?
Mr. Biffen: That matter is kept under constant review and no provision has been made for such a debate next week. I do not wish to mislead any Labour Member that it was a near-runner that did not quite make next week. If they are so anxious that the case for the faction of the mineworkers led by Mr. Scargill be further portrayed on the Floor of the House, they will have their opportunities.
Mr. Tony Favell: In view of the fact that the House has recently debated wildlife in Northern Ireland and scented erasers, will my right hon. Friend accept that the country finds it difficult to understand why time should not be allowed to debate the demise of the pound note? Will my right hon. Friend give time to debate the country's coinage, as this affects the life of every person in the country?
Mr. Biffen: I shall bear my hon. Friend's proposition in mind, but I should have thought that this was the sort of subject that my hon. Friend might be prepared to chance his luck with on an Adjournment debate.
Mr. Frank Cook: Does the Leader of the House realise that the Department of the Environment failed to honour its commitment to respond to a consultative document on the disposal of radioactive waste? It failed to keep to its timetable of a reply in

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October and distracted attention from that failure by promising a statement by Christmas. Does the Leader of the House realise that it has failed to keep to that deadline as well? I get the impression that it will delay this as long as possible. Does the right hon. Gentleman realise how anxious my constituents are, and will he seek to allay that anxiety by pressing the Secretary of State for the Environment to make a statement soon?
Mr. Biffen: I realise the significance of this topic nationally and the great importance of it to the hon. Gentleman's costituency. I shall be in touch with my right hon. Friend the Secretary of State for the Environment to see how speedily we can have that statement.
Several Hon. Members rose—
Mr. Speaker: Order. I am always reluctant to curtail business questions, because they are a prime Back Bench opportunity. However, there is a very important debate to follow in which no fewer than 40 right hon. and hon. Members wish to take part. I shall allow questions to continue until 4 o'clock. and then we must finish.
Mr. Harry Greenway: Does my right hon. Friend recall that my right hon. Friend the Secretary of State for Transport promised me as long ago as last Monday that he would consider asking the London Regional Transport authority to open underground stations for homeless people in London, and making similar arrangements in the rest of the country where there are not underground stations, for protection during this bitterly cold weather? So far, nothing has happened. Is my right hon. Friend aware that today a firm has given 2,000 blankets towards the protection of those people and that many individuals are sending in gifts? The Salvation Army is prepared to provide free of charge staff to supervise people at one station. Could this matter be looked at urgently today?
Mr. Biffen: I realise that this is a serious matter, and I shall do what I can to assist my hon. Friend.
Mrs. Renée Short: In view of the massive law-breaking by private cleaning firms contracted to NHS hospitals—a fact that was exposed on BBC television last night—can the Leader of the House give an opportunity for the issue of privatisation in the NHS to be debated? Will he take immediate steps to ensure that this illegal practice of employing young people under school leaving age at murderously low rates of pay is ended forthwith, as this is a major scandal?
Mr. Biffen: I cannot promise the debating facility requested by the hon. Member, but I shall draw the attention of my right hon. Friend the Secretary of State for Social Services to the serious points that she makes.
Mr. Eric Forth: Can my right hon. Friend confirm that the debate next Tuesday on the EEC Supplementary Estimate is the one that will allow us to plug the gap between the EEC'S budget and required expenditure for last year? Will he also confirm what has already been stated, that the major request by the Government to the House to increase the level of resources of the EEC will not be brought before the House until the completion of the enlargement of the Community negotiations?
Mr. Biffen: The second point can be elaborated on in next week's debate. My hon. Friend's first point concerns the £190 million which was the separate Estimate that now lies on the Order Paper in the name of my right hon. and learned Friend the Foreign Secretary.
Mr. Robert Parry: Will the Leader of the House reconsider his decision not to call an emergency debate on the mining dispute? I speak as Chairman of and on behalf of the Merseyside group of Labour Members, and I think that I speak for most, if not all, of my colleagues in demanding such a debate. Merseyside has lost nearly 100,000 jobs since 1979. All five Liverpool Labour hon. Members support the miners in their battle to save communities and jobs.
Mr. Biffen: That may be so. However, there is an alternative view of the dispute, which is that sound judgment and sense lie with the miners who are working rather than with those who are on strike.
Mr. Peter Bruinvels: Has my right hon. Friend seen early-day motion 260, in my name, about the vile practice of commercial surrogate motherhood agencies?
[That this House deplores the introduction into this country of surrogate motherhood; hereby condemns such activities as unnatural and immoral; and calls upon the Secretary of State for Social Services to introduce immediate legislation to outlaw this unfortunate commercial practice in line with the Warnock Report recommendation.]
Is my right hon. Friend aware that at least four other surrogate babies are liable to be born within the next six months? Will he therefore, as a matter of urgency, arrange for my right hon. Friend the Secretary of State for Social Services to tell us when we may expect the legislation? As the Leader of the Opposition has also said, there is widespread concern throughout the country, cutting right across party lines.
Mr. Biffen: I take note of what my hon. Friend says, but I cannot add to the answer that I gave to the Leader of the Opposition.
Mr. Paddy Ashdown: The Leader of the House will recall that some weeks ago he undertook to consider the possibility of giving time for a discussion of the impact of the COCOM agreement before it came into effect. Has he reached any conclusions on the matter?
Mr. Biffen: No; but I will get in touch with the hon. Gentleman as soon as I can.
Mr. Nigel Spearing: While the House will realise that a business motion to suspend Standing Order No. 113 for the Consolidated Fund Bill debate on Wednesday may not be appropriate, does not the Leader of the House agree that a business motion in relation to the Supplementary Estimate, referred to in a previous answer, sets an unfortunate precedent? Will the right hon. Gentleman tell the House when that business motion will be debated?
Mr. Biffen: What is proposed is a reasonable device to enable the House to have a decent debate on the subject. It should appear on the Order Paper on Friday.
Mr. Ron Brown: As the Government are guilty of the wrongful arrest and

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imprisonment of Mr. David Hamilton and other NUM activists, will the right hon. Gentleman ensure that there is an early debate about civil liberties in this country?
Mr. Biffen: I am sure that in any debate that we may have on the mining dispute the points raised by the hon. Gentleman will be covered. The question whether there has been a case of wrongful imprisonment will doubtless be a matter of judgment, but I take note of what the hon. Gentleman has said.
Mr. Hugh Brown: Will the right hon. Gentleman sympathetically consider any request to debate the Manpower Services Commission's proposals to close skillcentres? Will he ensure that the Secretary of State for Employment makes no decision on the matter until we have debated the subject, including the Select Committee's report?
Mr. Biffen: I will pass on the hon. Gentleman's point to my right hon. Friend the Secretary of State for Employment.
Mr. Ernie Roberts: In view of the effect upon the pound and the economy of the mining strike caused by the Government, will the Government explain to the House why they are preventing proper negotiations from taking place between the National Coal Board and the miners? From time to time it is clearly stated in the press that the Prime Minister and the Government are responsible for holding up negotiations in the dispute.
Mr. Biffen: It is totally absurd to suggest that the Government are holding up any negotiations that might take place in the industry. If Mr. Scargill's faction within the NUM were to accept the basic principles of the NACODS agreement, further progress could be made.
Mr. Robert Hughes: Notwithstanding the helpful meeting earlier today with the Minister for Social Security about the question of extra payments for fuel bills, has the right hon. Gentleman realised that the problems are extremely serious? Can we have a debate next week?
Secondly, last night, allegations were made in a BBC television programme that a certain cleaning company was employing 14-year-olds. May we be assured that full investigations will be carried out and that, if the allegations are proved, there will be prosecutions? May we also be assured that the Government will not be deflected from either investigation or prosecution simply because one Conservative Back Bencher has an involvement in the company?
Mr. Biffen: The hon. Gentleman's last few words did not raise the level of this exchange. I am quite sure that those who are responsible for taking prosecutions in these matters will have regard to the appropriate facts. As to the wider issue, I do not think that I can go beyond what I said to the hon. Member for Wolverhampton, North-East (Mrs. Short).
Mr. Martin Flannery: Is not the fundamental problem that confronts all of us at the moment the mining strike? Is it not a fact that the Government's intransigence and their refusal to discuss the issue is lengthening the struggle? It has now reached the
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point at which a group of honourable people are struggling mightily for their right to have a reasonable job, but the Government will not discuss the matter. Should we not have a major debate on the strike?
Mr. Biffen: What really grieves the hon. Gentleman is the fact that working miners are every day and every week enhancing their position relative to the striking miners. I have already said that there is no question of the Government standing in the way of the resumption of negotiations. As to a debate, that is a matter to be considered from time to time.
Mr. Benn: On a point of order, Mr. Speaker. May I ask you to protect those of us who represent the miners' wives and families who are now suffering great hardship? When they go back to work, some working miners are put on cleaning police cars, as happened at Brodsworth colliery. The strike has now gone on for nearly one year. There has not been one debate in Government time in which Ministers have justified their position and there has not been a full day debate since 31 July. Many of us have been to you, Mr. Speaker, to try to get private notice questions and applications under Standing Order No. 10, but you have been tied by the Standing Orders. I ask you to consider that it is quite unacceptable to right hon. and hon. Members, who represent people who are now suffering great hardship, that the House should debate Hong Kong and corporal punishment next week and ignore the plight of those whom we represent and upon whose work the prosperity of the people of Britain has rested for many years.
Several Hon. Members rose—
Mr. Speaker: Order. The whole House accepts that I am not responsible for the organisation of business. The House will have heard what the Leader of the House has said—that there is an Opposition day virtually every week and that there are opportunities to discuss these issues. It is not a matter for me.
Mr. Heffer: On a point of order, Mr. Speaker. May I ask for your protection of all Back Benchers? Like you, Mr. Speaker, I have been here for many years and I have heard many demands from Back Benchers for a debate. On many occasions, the Government have at least given some indication that they will seriously consider Back Benchers' proposals, and a debate has been forthcoming. Today we have heard numerous right hon. and hon. Members asking for a debate next week, but we have had absolutely no sign from the Government that they are even contemplating such a debate. It is historically the case that the Chair protects the rights of Back Benchers. The request for a debate comes not solely from hon. Members who represent mining areas, but many other areas. We are all worried about the dispute. We want a settlement and we want to know the Government's stance. We want an honourable settlement. Will you, Mr. Speaker, put pressure on the Government seriously to consider the idea of a debate next week on the miners' strike?
Several Hon. Members rose—
Mr. Speaker: Order. I have already said that, in today's debate on regional policy, about 40 hon. Members wish to take part, so all of this takes time from them. The hon. Member for Liverpool, Walton (Mr. Heffer) is right: I do try to protect the interests of Back Benchers. However, he knows that I am not responsible for the

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timetable and for what is discussed here. All I can do is to give Back Benchers an opportunity to ask questions, and that, I think the hon. Gentleman must accept, I have done today.
Mr. Dennis Skinner: On a point of order, Mr. Speaker. Although I have taken account of what you have just said, Mr. Speaker, there is another area in which you have some responsibility. You will have heard the Leader of the House say today that, as near as dammit, we should use Supply time to have a debate. You will appreciate that has already been done. You will also have heard on Tuesday that Labour Members are not alone in talking about the massive costs of the strike, as an ex-Prime Minister—the right hon. Member for Old Bexley and Sidcup (Mr. Heath)—said that, around the world, most people are telling him that the escalating cost of the miners' strike is having an effect on the pound. Now I put it to you, Mr. Speaker—this is the point—that if it is right for the Leader of the House to say that we should use a Supply day because only Labour Members are interested. I suggest to the Leader of the House, through you, that he should use Government time, because some of us want to hear in more precise detail what the right hon. Member for Old Bexley and Sidcup had to say the other day.
On a further point of order, I have been to the Table Office. You are responsible for the Table Office, Mr. Speaker. We are having some difficulty because not only are the Government refusing to provide time for a debate —a matter over which you have very little control—
Mr. Speaker: I have none.
Mr. Skinner: No control, you say. That is a debatable point. In the Table Office, however, you have tremendous control. We are finding that it is blocking questions. For example, hon. Members have found that they cannot discover the estimated size of coal stocks after October, whereas previously we could. I want your help in that matter to enable us to table such questions.
Mr. Speaker: Order.
Mr. Skinner: I have not quite finished.
Mr. Speaker: Order. By raising points of order of this type, the hon. Gentleman is merely taking time out of an important debate. Others are likely to suffer as a result. Perhaps other hon. Members will note that, because I do not think that I can help them—[Interruption.] I am in the hands of the House. If the House wishes to take up time, that is a matter for the House. I cannot answer the hon. Gentleman's point of order. He says that questions are being blocked. If there is any question on which there is a query, that query is brought to my attention. None has been brought to my attention yet.
Mr. Skinner: That is why I am raising the matter now. I have been to the Table Office and—
Mr. Speaker: Order. Will the hon. Gentleman put his question to me succinctly? I shall then see what I can do.
Mr. Skinner: The questions are as follows. I want to know how much money has been spent on producing 1 tonne of coal during the strike—equivalent to £200 a tonne as opposed to £38 a tonne before the strike. I want the Government to tell me—they are refusing in the Table Office—whether they accept the point made by the stockbrokers that it is costing £86 million a week to
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finance this strike. That question is being refused. There are many other questions which affect the pound. I believe that the Table Office is blocking such questions because it is in cahoots with the Government. You, Mr. Speaker, being in charge of the House, have a responsibility to see to it that questions which are relevant to hon. Members, to miners and to all those people who are having to pay through the nose for the strike while watching the pound sink to the bottom of the Thames can be asked. Such people have a right to know the answers to those questions which the Government are not prepared to allow me to ask.
Several Hon. Members rose—
Mr. Speaker: Order. It might be quicker if I took all the points of order at once.
Mr. Mark Fisher: On a point of order, Mr. Speaker. Would you consider extending business questions today so that the Leader of the House might fully judge the weight of feeling on this side of the House about the important of discussing the need for negotiations to end the dispute? The Leader of the House is not a stupid man by any means, but he seems rather slow to take the point that many right hon. and hon. Members on both sides of the House believe that the dispute must end and that it can only end as a result of a negotiated settlement. The Government have a responsibility to make their view of such a negotiated settlement clear. They also have a responsibility to make ii clear whether they will take positive steps to achieve it. That should be in Government time, because you—
Mr. Speaker: Order. The hon. Gentleman is being very unfair to the House. If there are any other hon. Members who are seeking to do the same thing, I should point out that they are being unfair to their colleagues if they take up time in what almost appears to be an operation and if they put questions to the Leader of the House through me. I cannot answer those questions. They are not a matter for me.
Mr. Terry Fields: Further to that point of order, Mr. Speaker. You always place great emphasis on the need to uphold the credibility of the House. But when people outside accuse the Government, and ultimately yourself and us, of crimes against humanity, we have a duty and responsibility—without in any way interfering in the negotiations—to discuss the strike. If the Government are frightened of doing so, perhaps you would intervene on our behalf to open up the issue so that we can have a fair discussion.
Mr. Max Madden: We are in the midst of the most serious industrial dispute that the nation has witnessed for many years and the coldest weather that the country has experienced for more than 20 years. We are in the midst of an industrial dispute in which enormous questions have arisen about the way in which the law, including the Bail Act, has been operated, the behaviour and deployment of the police and the way in which many other matters arising from the dispute have been handled. For example, next week—
Mr. Speaker: Order. What is the point of order for me?
Mr. Madden: My point of order is that next week, for example, the Yorkshire power workers are considering whether to refuse oil supplies—
Mr. Speaker: Order. The hon. Gentleman is asking a hypothetical question.
Sir Kenneth Lewis: I speak for the whole House when I ask whether it is not an abuse of the House for Opposition Back Benchers to cover up for their Front Bench's failure to hold a debate on this subject. The shadow Leader of the House is sitting on the Opposition Front Bench saying nothing. He should be the one—[Interruption.]
Several Hon. Members rose—
Mr. Speaker: Order. I believe that this is an abuse of the House. I have made it plain that many hon. Members wish to take part in the subsequent debate, and I must say that in fairness to the whole House—I have a duty to be even handed—I am bound to have regard to the number of Opposition Members who are taking up time, and to give compensatory time in the subsequent debate to those who sit on the Government side. I shall so do.
Mr. D. N. Campbell-Savours: Mr. Speaker, may I ask you a question that relates directly to an area for which you have specific responsibility? I refer to the fact that if an application were made under Standing Order No. 10, you could grant us time. In so far as the country has been hit during the past few days by some very cold weather, which to some extent—
Mr. Speaker: Order. I cannot be held to be responsible for the cold weather.
Mr. Campbell-Savours: When an application is made under Standing Order No. 10, the hon. Member has to rise to his feet and point out why the debate should take place. He has to stress three principles, one of which concerns the urgency of the matter. Given the statement made the other day by a former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), to the effect that sterling was falling because of the Government's failure to intervene, that we are facing cold weather and that the drop in coal stocks may have some effect, there should be a debate on the strike. As the matter is urgent and arises from changing circumstances, you have the right to grant such a request. I am not asking you to go to the Leader of the House or to put any pressure on the Government, but rather to make a statement and decision yourself, as Speaker, and thus to protect our rights by allowing us that time for a debate.
Mr. Speaker: If I may say so, the hon. Gentleman could not have asked a more foolish question. He knows perfectly well the rules governing applications made under Standing Order No. 10. I have received no such applications today.
Mr. Kevin Barron: Can you, Mr. Speaker, give us some advice about business questions? Business questions have now effectively gone on for 15 minutes more than you intended. I do not want to take time from the later debate, but I and many other hon. Members are bothered because we have never had any Government time in which to debate the miners' strike. Many thousands of miners and their families are on strike in my constituency. Although the Opposition have given us several days, I have been denied the opportunity by the Government to stand up on behalf of my constituents in order to discuss what is happening to them. We should lengthen business questions today so that hon. Members
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can ensure that the Leader of the House finds Government time for a debate on this subject, in which we can represent those whom we were elected to represent.
Mr. Speaker: The hon. Gentleman has sometimes not been backward in criticising the number of hon. Members who have been called in a debate. If such questions continue, he will have every reason to criticise again today. I am afraid that he will only cause his own side to suffer.
Mr. Brian Sedgemore: In the constitutional textbook that I was reading last night, it said that that was a major principle of the constitution that the House of Commons should discuss issues worrying the people. Today you, Mr. Speaker, and the Leader of the House appear to be saying that that is not so. Why?
Mr. Speaker: I said that I would take all the points of order together, but the hon. Gentleman has asked such a —I was going to say inadequate—question that I must deal with it at once. I say to the hon. Gentleman, and to those seeking to prolong what I think is an operation, that I am not responsible, as they know perfectly well, for the organisation of business. I am responsible for protecting Back Benchers' rights and interests, and that I have always sought to do, as I hope the House appreciates. But I repeat that such an operation merely takes time out of a very important debate to follow. More than 40 hon. Members have so far intimated their wish to speak in the debate on regional policy. Many of the issues being raised now could easily be raised in that debate. That being so, I propose to take one more point of order on this subject.
Mr. Flannery: Although I accept that there is a remote possibility that you, Mr. Speaker, are not responsible for the cold weather, will you not accept that voices are being raised about something that is even more important than the subsequent debate? We are asking you to do what you can to ensure that a full debate is held on the terrible question of the intractable problem of the miners' strike. Will you use your influence to try to ensure that there is a full-scale debate on that subject?
Several Hon. Members rose—
Mr. Speaker: Order. Of course, I have regard to the strong feelings held, but I am not responsible for the organisation of debates and I cannot do much about it. However, in calling hon. Members at Question Time and in debates I can give hon. Members an opportunity—I shall have regard to this later—to put their points of view. That is the way in which we do things in our democratic system. We do not seek to disrupt our procedures with points of order that appear to me to be an organised operation.
Mr. Heffer: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing an important and specific matter that should have consideration, namely,
"the coal industry and the miners' dispute."
The matter is important because the entire country needs a statement from the Government giving the reasons why they are allowing the dispute to continue and trying to drive the miners back to work by starvation. The matter is urgent because of the extremely severe weather conditions and the effects of the dispute and the weather on the nation.

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Thirdly, the matter is specific because the dispute relates to industrial action that the Government are deliberately allowing to continue.
The nation deserves an answer. It needs to hear the Government's case and the miners' case put by hon. Members in the House. The people should have an urgent debate to lay the basis for an early settlement of the dispute.
Mr. Speaker: I have allowed the hon. Gentleman to move an application under Standing Order No. 10 in the hope that it will enable us to proceed to the next business. The hon. Gentleman knows perfectly well that the rules governing Standing Order No. 10 lay down that a new development must have occurred and that notice should be given to me before 12 noon. The cold weather did not start just after 12 noon.
The hon. Gentleman knows that the only decision that I take on these matters is whether the Standing Order No. 10 application should take precedence over the business set down for the day. I listened carefully to what he said, but I regret that I do not consider the matter appropriate for discussion under Standing Order No. 10. I cannot, therefore, submit his application to the House.
Several Hon. Members rose—
Mr. Speaker: Order. I am not taking further points of order.

Business of the House
  BILL PRESENTED

    PROHIBITION OF FEMALE CIRCUMCISION
    Mrs. Marion Roe, supported by Mrs. Ann Clwyd, Mr. David Crouch, Mr. Clement Freud, Ms. Jo Richardson and Mrs. Ann Winterton, presented a Bill to prohibit female circumcision: And the same was read the First time: and ordered to be read a Second time upon Friday 25 January and to be printed. [Bill 58.]
    Several Hon. Members rose—
    Mr. Speaker: Order. I am not taking further points of order on the mining dispute. We must now proceed to the debate.
    Several Hon. Members rose—
    Mr. Speaker: Order. I am on my feet.
    Several Hon. Members rose—
    Mr. Speaker: Order. This is extremely unruly behaviour. The hon. Members who are standing know that this is not the way in which we conduct our affairs in a democratic assembly. It is against all our traditions that hon. Members should seek to challenge the authority of the Speaker, whom they elected to keep order. I now ask the hon. Members who are standing to resume their seats. I repeat that I ask hon. Members who are standing to resume their seats.
    Grave disorder having arisen in the Hoase, Mr. SPEAKER, pursuant to Standing Order No. 27 (Power of Mr. Speaker to adjourn House or suspend sitting), suspended the sitting for 20 minutes.
    Sitting suspended at 4.23 pm
    4.43 pm
    Mr. Speaker resumed the Chair.
    Mr. Benn: With permission, Mr. Speaker, I should like to give notice that a substantial body of Members of the House are determined to secure a debate on the miners' dispute in Government time next week.

Regional Policy
Mr. Speaker: Before we proceed with this important debate on regional policy I should inform the House, in relation to it, that, because of the number of hon. Members who wish to speak, I intend to apply the time limit on speeches of 10 minutes agreed to by the House on 31 October last. On this occasion I shall apply the limit to hon. Members called between 6 o'clock and ten minutes to 8 o'clock and not between 7 o'clock and ten minutes to 9 o'clock as on previous occasions. The resolution of the House on 31 October authorised both these methods of limitation. It would be useful for the House to gain experience of how each method works.
4.44 pm
The Secretary of State for Trade and Industry (Mr. Norman Tebbit): I beg to move,
That this House takes note of the Government's statement on 28th November announcing changes in regional industrial incentives; welcomes the closer alignment of the new Assisted Areas map to areas' relative needs for increased employment opportunities; agrees that it is right at a time of high unemployment to relate assistance more directly to jobs; and notes with approval that the increased cost-effectiveness of regional assistance will enable the burden upon taxpayers to be substantially reduced.
Today's debate provides an opportunity for the House to give consideration and, I hope, approval to the changes in the thrust of regional policy—the change of emphasis away from automatic subsidy of capital expenditure towards incentives for employment—and the changes to ensure that our spending is undertaken in the areas that are most seriously afflicted by the combination of unemployment, industrial decline and structural change.
The new policy also does away with the unjustifiable discrimination against service industry, which now provides a growing proportion of jobs. None of these changes comes as a surprise to the House. They were foreshadowed in the White Paper "Regional Industrial Development" which was published in December 1983, debated to some extent during the passage of the Cooperative Development Agency and Industrial Development Act and set out in greater detail in the statement made by my hon. Friend the Minister of State on 28 November last year, together with the supporting documentation that was made available at that time. I shall, however, refer later to one aspect of the implementation of the policy which will be new to the House.
The House will recollect that the 1983 White Paper boldly faced up to the question of the justification of regional industrial incentives, regional policy for short, and concluded that there is no longer a clear-cut economic case for such a policy. I realise that that outrages the more conservative—with a small "c", I hasten to add—Socialists on the Opposition Benches, but I do not think they should become over-excited about it since we can, I believe, stand on the common ground of the justification of this policy primarily on social grounds. By that I mean that the Government accept the need to do what we can —and Government are not omnipotent in this matter—to reduce the imbalance between the prosperous and the most hard hit areas of Britain. There is, of course, a price tag, a cost, to such a policy and it would be foolish indeed to count only the benefit and not the cost, or vice versa.
Again, whatever views we might take about the scale of benefit or the cost that might be afforded, I hope we
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might, again, agree to stand on the common ground that the cost-benefit ratio should be as favourable as possible. There will be people who have to pay for this policy—the generality of taxpayers and, let it not be forgotten, also those whose businesses or jobs suffer subsidised competition; there will be people, too, who gain from the policy. I am sure we would agree that so far as possible the recipients should be in those areas that are most hard hit and that these should be established on sound criteria.
I hope, though it is only a hope, that one day we might agree that not every part of the kingdom can be a beneficiary area. In the White Paper we argued:
"The incentives must be made more cost effective…with greater emphasis on job creation and selectivity and less discrimination against service industry".
That major change won widespread support. Nor should that come as a surprise since examples abound of substantial grant payments that have been made as incentives to companies which would have located the investment in an assisted area in any event. In some cases those companies were themselves hardly pressed for cash and the investment produced few jobs, but the test, surely, for support for any project should be: what does it do for jobs, how many jobs and at what cost?
In some other cases, high rates of grant encouraged projects of marginal viability to concentrate in the assisted areas with the enhanced risk of multiple collapses during difficult times. Thus, past policies left the assisted areas particularly vulnerable during hard times. Perhaps, there is more than a little truth in the suggestion that major companies—not least multinationals—shopped around for the highest grant rates for their branch operations and that the assisted areas then suffered from the tendency for such companies to cut back on the more remote branches of their operations during recessions. At the same time, geographically mobile service industries which might have been attracted were denied incentives available to manufacturing industry to encourage their location in assisted areas.
I believe that these problems can be mitigated by the new policies. First, in most cases, the automatic grant will be related to jobs. The grant per job limit will avoid what one might call the Sullom Voe syndrome of high subsidy and disproportionately few long-term jobs. Even worse were the high automatic subsidies paid to investments which created no new jobs, or even reduced jobs, or merely shuffled jobs from one assisted area to another. Some have argued that automatic assistance should continue for job protection. I believe that that is best dealt with on a case-by-case basis.
In the past the abuses extended over a wide range. For example, a printing company could gain automatic RDG when it bought new plates to print a different book from the book it had been printing during the previous week. That was hardly related to job creation or even to job protection. Under our new policy, therefore, selective aid will continue to be available for the particularly desirable modernisation projects. Selective aid will also enable us to continue to compete effectively for internationally mobile projects.
The second major change is the fact that we have revised the geographical coverage of the assisted areas and moved from a three-tier system to a two-tier system. I am sure that there will be discussion today and later tonight on whether we have included a sufficiently large percentage of our working population in the assisted areas.

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I believe that we have included as many as can be afforded. It would have been difficult to persuade the European Commission that a larger percentage would not have taken the policy from one of assistance to less-favoured areas to one of illegal general subsidy.
Mrs. Elaine Kellett-Bowman: I am sure my right hon. Friend appreciates that the fact that the Lancaster travel-to-work area with its high unemployment of 15·3 per cent. ceased to be an assisted area was a great disappointment to the area. We hope very much that my right hon. Friend will mitigate the damage that would otherwise by caused to us and will make the area a derelict land clearance area. If that is done, we can reasonably continue with the progress we have been making during our time as an assisted area.
Mr. Tebbit: I can understand my hon. Friend's disappointment at the fact that Lancaster fell on the wrong side of the line we drew. I understand that my hon. Friend the Under-Secretary of State for the Environment—the hon. Member for Sutton and Cheam (Mr. Macfarlane) —has written to my hon. Friend and some other hon. Members. I hope that my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) will receive that letter either this evening or tomorrow telling her that Lancaster has been granted status as a derelict land clearance area.
Mr. John Prescott: What does that have to do with logic?
Mr. Tebbit: The hon. Gentleman clearly does not understand logic or he would understand the purpose of those clearance areas and the subsidies granted to them. I regret the fact that the hon. Gentleman opposes the grant of such subsidies to Lancaster. No doubt the Labour candidate for the area at the next election will be asked about his party's attitude.
Mr. Prescott: And that is what it is about.
Mr. Tebbit: If the hon. Gentleman makes a speech tonight I hope that he will make a point about the percentage of Tory-held seats and the percentage of Labour-held seats which are beneficiaries of regional aid. That would dispose of any suggestions of bias —[Interruption.] Having had this debate delayed once by unruly behaviour, I hope that will not be delayed again by unruly behaviour by the Opposition Front Bench.
The rapid restructuring of the economy had made a nonsense of the old map. Who could argue that the core of the west midlands, with unemployment rates of up to 21 per cent., should be excluded from benefits received by, say, Darlington with 15·2 per cent. unemployment, Durham with 14 per cent. unemployment or Oldham with 13·8 per cent. unemployment? Of course, current unemployment rates cannot be the sole criterion for inclusion in the assisted areas, but the west midlands stood out as an unfair exclusion.
Sir Reginald Eyre: How many applications for grants have been received in the west midlands area, including Birmingham, since the proposals incorporated in the scheme were first announced?
Mr. Tebbit: I cannot give my hon. Friend a precise answer, but I know that the level of interest expressed has been high. The last time I inquired there had been well over 2,500 inquiries and well over 100 applications were
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being processed. I believe that my Department has arranged more than 40 seminars for interested parties in the Birmingham-west midlands area to examine the opportunities opened up by the new status of the area. I hope that that will be helpful to the city.
Mr. George Park: Will the right hon. Gentleman try to satisfy the House about the scheme's flexibility? The right hon. Gentleman just answered a question about land clearance from the hon. Member for Lancaster (Mrs. Kellett-Bowman). An application for land clearance was made in my constituency, in some parts of which there is 30 per cent. unemployment. We received a reply stating that, looking at the city as a whole, there was no justification for granting land clearance status. Could the scheme be more flexible and more selective and take such aspects into account?
Mr. Tebbit: I am sure that the hon. Gentleman will want to take up that matter with my right hon. Friend the Secretary of State for the Environment, who is responsible for that scheme. I am not responsible for it —[Interruption.] The hon. Gentleman must take account of the fact that I am often aware of what goes on, even in other Departments, but I cannot take responsibility for the schemes they draw up.
Dr. Keith Hampson: Does my right hon. Friend agree with the answer that has been given in the newspapers, that there is a case for task forces, especially for cities with needs that do not fall within the prescribed assisted areas criteria, to pull together the various activities of Departments such as the Department of Trade and Industry and the Department of the Environment? I assume that my right hon. Friend's Department will have a major role to play in such task forces.
Mr. Tebbit: My hon. Friend puts a good point. I am not sure that we would necessarily create task forces as such. We seek to achieve much greater co-ordination between the regional offices and the Departments that operate in these areas, where several schemes of urban aid and regional industrial assistance overlap.
Mr. Tony Favell: Will my right hon. Friend give way?
Mr. Tebbit: This might be the last intervention I shall accept, or my speech will be rather long.
Mr. Favell: My right hon. Friend pointed out earlier that many well-run Conservative authorities have been excluded from the map. Is there not a problem with this policy in regarding development status as a reward to the prodigal son? Let us take the case of Manchester and Stockport. There is not a blade of grass between the two. Manchester city employs twice as many people per head of population as Stockport. Manchester thereby drives employment out of Stockport. Stockport is faced with the difficulty of Manchester city being aided to a large extent and Stockport not receiving that aid.
Mr. Tebbit: I can understand how my hon. Friend feels because I know that the local authority at Stockport has been assiduous in running a tight ship and giving good value to its ratepayers, which is more than can be said for a good many of the others nearby. But inevitably there are problems across boundaries of discrimination one way and

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another, and inevitably there are occasions when those who have looked after their financial affairs find themselves called upon to give help to those who have wilfully not done so. That is an inevitable consequence of some of these schemes.
In redrawing the map we have taken into account total unemployment, long-term unemployment, growth in labour supply, industrial and occupational structure, activity rates, peripherality and inner city problems. Even then we felt it necessary to take into account the relationships between neighbouring areas and, indeed, one might wax eloquent about what have become known as doughnut effects, where one small area is left unaided with a whole circle of aided areas round it. No doubt some hon. Member will touch on that later this evening.
Of course, we gave careful consideration to the many representations made to us. We have increased coverage to 35 per cent. of the working population and that will give us maximum access to the European regional development fund. Without that funding we could not have given such wide coverage. Thus we have been able to increase the areas eligible for regional selective assistance, too.
Within that wide coverage we have drawn a tighter group of inner tier areas, covering some 15 per cent. of the working population, on which to focus resources where they are most needed. In this inner tier we are concentrating assistance: not only ERDF and regional selective assistance, but the automatic RDG assistance. I realise of course that the former SDAs, whose 22 per cent. grants will go down to 15 per cent., will complain, but we are not setting out to give handouts to companies and in many cases it was simply not necessary to go to that level of subsidy to secure the jobs. I for one see no reason why we should add to the profitability of companies that were already adequately profitable and could have been induced to go on 15 per cent. or perhaps even less.
One consequence of these changes, as I have said, is that some areas will be downgraded or excluded from assistance. That will be a source of dissatisfaction. To minimise the pain, therefore, there will be transitional arrangements more generous than any offered before. These were described in detail by my hon. Friend the Minister of State last November.
That brings me to one matter that was not foreshadowed in earlier statements; nor is it so much a regional policy issue as a public expenditure issue that had to be faced by my right hon. Friends the Secretaries of State for Scotland, for Wales and myself. We agreed upon an approach—
Mr. Donald Stewart: "We agreed"?
Mr. Tebbit: Yes, we agreed upon an approach, which normally would have been announced at the time of the publication of the public expenditure White Paper. But my right hon. Friends and I thought it would be wrong for the House to debate these matters in ignorance of decisions that had been taken and that would shortly be public knowledge.
As I have explained, the transitional provisions protecting the decisions made on the basis of the old map and the old scheme will overlap the new policy and the new area coverage. In effect, two schemes will be running side by side with considerable overlap.
In 1983 we estimated that spending on regional industrial incentives in the year 1985–86 would be just
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under £500 million. It is now clear that, with the new policy and the transitional arrangements, that expenditure would have increased to well over £600 million and that bulge of expenditure simply could not be afforded.
We are therefore introducing today a four-month moratorium on the payment of the old style RDGs.
Mr. Dick Douglas rose—
Mr. Tebbit: If the hon. Gentleman will relax for a moment, I am sure that he would want to hear what the moratorium is and how it will operate. It means that there will be a four-month gap between the approval of an application and the payment and this will apply to the old RDGs until further notice. It will not apply to properly completed applications for grant which were either received or postmarked before midnight tonight; nor will it apply to the new RDG scheme. The moratorium will ensure that next year we spend no more on regional industrial incentives than we forecast in 1983.
Mr. A. J. BeithWill the right hon. Gentleman give way?
Mr. Jack Ashley: Will the right hon. Gentleman give way?
Mr. Dafydd Wigley rose—
Mr. Tebbit: It does not mean that there will be any substantive reduction in spend next year compared to the 1983 forecasts, nor will any grants be "lost"—they will only be delayed. So, while there may be some savings from the new policy as soon as 1986–1987, we still do not expect there to be any significant saving in regional policy spending until 1987–88, when we would have spent some £700 million if we had made no policy changes.
Mr. John Smith: Does the Secretary of State appreciate that extensive undertakings were given during the passage of the legislation about the transitional provisions, and assurances were given to those affected by regional development policy that great care would be taken? The result of the Secretary of State's announcement, although he claims that it makes no real difference to the national accounts—one wonders, therefore, why it is made—will mean that companies that have undertaken to purchase equipment and entered into contracts for it will be left with four months in which to find the money, and they will probably have to borrow it at the new rates of interest that the Government have introduced.
Mr. Tebbit: In the event that that is so, I do not think that there would be any great difficulty in the company being able to borrow the money against the security. The amount that we are discussing is something like 4 per cent. on the 15 per cent. grant so it is not a major element of the cost involved. I have to remind the House that overall the expenditure in the coming year is expected to be the same expenditure as would have been undertaken on the basis of our 1983 estimates. I think that the right hon. and learned Gentleman has slightly missed the point, and I am not trying to be funny at his expense. I want to make it absolutely clear that—
Mr. Ashley: Will the right hon. Gentleman give way?
Mr. Speaker: Order. The right hon. Gentleman can see that the Secretary of State is not giving way. I think that he may give way later, but not now.
Mr. Tebbit: I want to make it absolutely clear so that we can understand each other that there will be two policies, in effect running side by side during the transitional period. Therefore, in order to maintain expenditure at the level which had been forecast in the 1983 White Paper we have used a moratorium on the RDGs on the old system. The new system will go ahead untouched. That is the way in which we avoid the bulge of public expenditure. I can understand right hon. and hon. Gentlemen not liking it—I can understand companies not liking it—but on the other hand it may be rather more popular with taxpayers as a whole.
Mr. Wigley: On this point, will not the right hon. Gentleman appreciate that the cash flow problems for companies are as great as, if not greater than, the cash flow problems for Government? In these circumstances, can he give an assurance not only that a letter of intent will be issued to the companies to help them in getting the liquidity that they might need, but that the Government will consider reimbursing any interest costs in the interim period, given the current high rate of interest?
Mr. Tebbit: Let me take the hon. Gentleman's points one by one. First, there are many companies whose cash flow problems are considerably less than those of Governments—we would all like to be in the position of, for example, GEC, with a cash flow. Many companies do not have cash flow problems. The position of industry as a whole—its profitability and its liquidity—has vastly improved in the last year or so, and I believe that in general this would not be an unduly onerous burden.
Secondly, where a company's application is approved, a letter will be issued to it which will say, "Yes, you qualify for the grant. It will be paid, and it will be paid in four months from now," as opposed to today. I imagine that such a letter could be used in an application to a bank.
Thirdly, it would not be right for the taxpayer to carry the cost of the interest involved.
Mr. Ashley: Is the Secretary of State aware that his colleague announced a reduction in regional aid? The Secretary of State is now announcing a freeze on that reduction. Given the increase in unemployment and the fact that regional aid ensures equity, he is announcing an unfair policy that will hit those areas suffering high unemployment.
Mr. Tebbit: The right hon. Gentleman hardly expected me to come to the House today to announce an increase in expenditure on regional aid. For next year, expenditure will be maintained at the level that we forecast in 1983, but, because of the changes in policy, that expenditure will be more effective than it would have been under the old policy.
Mr. Churchill: The fact that the new regional development grants will be unaffected by this moratorium and that the overall volume is unaffected for the coming year is much appreciated. May I thank my right hon. Friend on behalf of my constituents in Greater Manchester for the fact that Trafford Park has been included in the regional assistance status area?
Mr. Tebbit: I am glad that that has happened. I should perhaps trespass upon the relatively quiet response that I have so far had and say that in 1987–88 there will be significant savings of about £300 million a year on what would have been spent under the old policy. I emphasise
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that that is justified because the money that will be spent will be spent much more effectively. The Chancellor will be happy, but not yet.
Mr. Beith rose—
Mr. Tebbit: Others of differing political views may want to be miserable, but I would advise them not to be miserable yet. I would counsel them against misery in any case.
Mr. Beith: Does the Secretary of State recognise that he is delivering a double blow to areas such as Amble in Northumberland, which he has excluded from regional development aid? Firms in those areas are seizing the last chance to obtain some help from the scheme. Those firms are now being told that plans that they have had to bring forward to come within the scheme will not be paid for another four months.
Mr. Tebbit: I understand that, but there has been a reasonable time during which people could apply for grants. We could not have told them in advance that there was going to be a moratorium or its purpose would have been frustrated. That is one of the consequences of changing the shape of the map and the policy.
Mr. Michael Grylls: While of course the moratorium may, as the Secretary of State has readily recognised, cause some problems to some firms, does he accept that the vast majority of British industry is much more interested in supporting him in keeping the general level of public expenditure under control because its greatest interest is in ensuring that inflation does not take off again? He has a great deal of support for trying to control public expenditure.
Mr. Tebbit: I am grateful to my hon. Friend. It is appropriate that the case for the generality of the population—the taxpayers—should also be heard in a debate when, not unnaturally, we hear a great deal about the case for those who are in assisted areas or who would wish to be.
Mr. John Prescott: They are taxpayers.
Mr. Tebbit: Yes, they are taxpayers, but they are beneficiaries, whereas the others are not.
Mr. Douglas rose—
Mr. Tebbit: Mr. Speaker, this is a short debate. I should have been able to give way to the hon. Gentleman had we not suffered from the vilely rude behaviour of some of his colleagues.
Regional policy should not be judged good if it costs a lot and bad if it costs rather less. It should be judged on what it achieves. Bluntly, past policies were not completely successful in the regions that they sought to help. In addition, they damaged some other areas, and the west midlands felt that strongly. They were expensive, thus causing a more general negative effect in the economy.
It has been estimated that the cost per net additional job created in the assisted areas in the 1970s was about £35,000 at 1982 prices. Many of those jobs would otherwise have come into being elsewhere in the country.
It will be some time before we know the cost per job of the new policy because such estimates must take into account the total effect not just on the firms that receive

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assistance but on their suppliers and competitors. Of course, new long-term stable jobs do not come into being overnight. I am confident that the new policy will be much more cost-effective than the old. However cost-effective the policy, it will still be a burden on the taxpayer. The new policy is expected to cost nearly £400 million a year in 1987–88. [Interruption.] The cost of the policy is imposed on industry. It is the wealth-producing industry of this country that provides the money to do it.
This is a considerable lightening of the burden on the country as a whole—a reduction of nearly £300 million from what would have been spent under former policies, and I make no apology for that.
The policies that I have outlined give the hardest hit areas the most help. They concentrate on job creation and not on how much taxpayers' money can be given away, sometimes to prosperous companies to subsidise them to do what they would have done anyway. The policy is to minimise job shuffling within assisted areas.
Mr. Douglas: The Secretary of State has said that three times.
Mr. Tebbit: I am sorry that I have had to say it three times, but it is possibly still not understood by the hon. Gentleman, and I might have to say it again.
The policies recognise more fully the role of the service industries as a provider of jobs. We look to better value for money and more jobs per pound of expenditure, because we recognise that regional policy has adverse effects on those who pay but do not receive, and their jobs matter too.
The Government do not turn their back on the problems of the regions, but we believe that as the traditional policy which has been followed for almost 40 years has not achieved what it should, new, more effective and less expensive policies are overdue. To suggest, as the Opposition amendment does, that the policy of spending some £480 million in 1985–86, £610 million in 1986–87 and £390 million in 1987–88 is destructive of regional policy is just plain silly. To deplore, as the amendment does, the changes — by calling them restrictions — to make that spending more cost-effective, is to support spending for the sake of spending and to oppose cost-effective policies.
As ever, the longer that the Opposition are out of office the fewer there are of them who remember what responsibility even felt like. The more distant their prospect of returning to office, the more ridiculous and irresponsible they become with this type of amendment. If there are credible alternatives to our policies they are not to be found in any of the Oppositions' policies. I commend the Government's policies to the House.
Mr. Speaker: I must announce to the House that I have selected the amendment which stands in the name of the Leader of the Opposition.
5.20 pm
Mr. John Smith: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"but deplores the destruction of regional development policy at a time of record high unemployment and steep industrial decline in the regions and nations of the United Kingdom, condemns the massive cut of £300 million each year in regional industrial assistance, the abolition of special development areas, and the
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new reductions and restrictions on regional aids and urges a programme of national economic recovery to rebuild the industrial base in which positive regional development is given a crucial role."
Before embarking on the debate on the policy changes, I must express the deep concern of hon. Members on this side — and, I suspect, in other parts of the House, although they have not yet revealed it — about the sudden announcement by the Secretary of State today of the moratorium on regional development payments.
As the right hon. Gentleman well knows, the effect will be to damage many projects which are dependent on regional assistance for their viability. Even if the grants are paid at the first opportunity — I do not know whether that, in all cases, can be guaranteed—there will be an obvious effect on the cash flow of the companies concerned.
After all, many of those companies will have entered into binding contracts with suppliers on the basis that they thought they had a genuine undertaking and guarantee from the Government that the money to which they were entitled would be paid on the date on which it was due. They may in some cases be able to borrow to cover the difficulty of receiving their money four months late, but those which do that will have to pay interest, and they will have to pay at a higher interest rate as a result of the Government's recent financial policies.
The Secretary of State has treated this matter far too lightly. He says airily that many companies will be able to face this problem. But many companies will not, and to those that will not the Government merely shrug their shoulders and say, "That is too bad."
It emerges, however—from the way in which the right hon. Gentleman explains the national accounts—that not much is involved. The explanation we are given is that there really is no change; the same money will be spent. If so, why on earth are we having a damaging moratorimum. The Secretary of State cannot have it both ways. If there is no real change in this magical creative accounting—in which I am not surprised the right hon. Gentleman is an expert—there should be no need for this moratorium.
Mr. Tebbit rose—
Mr. Smith: I am happy to give the right hon. Gentleman another shot at it, if he would like one.
Mr. Tebbit: I could not have made myself clear, although I hoped that I had. The combination of bringing in the new policy would have increased spending next year. By bringing in the moratorium, we have brought spending back on to the line that had been forecast in 1983. That means that we have a more effective policy for the same money.
Mr. Smith: The money must be paid anyway. It is clear however, that it will be paid next year instead of this year. It is being shifted from one set of accounts to another. That fact prompts me to take the point further. One would have thought that this resulted from some unexpected development that threw the Government off course. But that has not been the case. It results precisely from the way in which the Government have gone about it.
The Government were warned throughout the passage of the preceding legislation that there would be a need for proper transitional arrangements. When they announced

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reductions in regional development grants—there had been a shrewd suspicion by many people that they would — there was a bunching of applications. When the Government then, in the last Budget, changed the capital allowances, there was a further incentive for people to get on with their projects as soon as possible. Therefore, there was a bunching of applications, and that apparently threw the Government accounts out of line for this year.
Instead of bringing forward a Supplementary Estimate to deal with that entirely predictable problem, the Government are trying to move the money into the next year's accounts. That seems funny accounting to those who are trying to understand it, and certainly the public will be puzzled by it.
However, that is not so much the problem. People who have undertaken contracts and made purchases will be left in the lurch as a result of this change by the Government, and it is on their behalf that we complain today.
Mr. Douglas: My right hon. and learned Friend will recall that one of the bull points made by the Minister of State when introducing the transitional arrangements was that they would be extremely beneficial in helping to alleviate the problems of firms which wanted to go ahead under the existing scheme. Now, by this moratorium, the Government are welshing on that promise.
Mr. Smith: I am grateful to my hon. Friend for making that point. Perhaps, like me, the Secretary of State is at a slight disadvantage in not having taken part in the proceedings on the Bill.
Mr. Tebbit: Not at all.
Mr. Smith: I was being charitable to the right hon. Gentleman. If he chooses to reject my charity, another side of my attitude towards him may develop during my remarks.
My hon. Friend raises the important point that Ministers concerned with the matter at the time gave one assurance after another that there would be generous transitional arrangements and promised that the scheme would last for a year in respect of applications in transit. One understood why that was done. Indeed, I understand that a provision to that effect appears in the commencement order. Now we have a sudden change which will mean a four-month delay. For a company which may be struggling for its very existence, regional development assistance is essential to its investment decisions. All its calculations are being thrown off balance.
Mr. Barry Henderson: Does the right hon. and learned Gentleman not think that industry will feel that the careful consultation and consideration which has been given to these changes—[Interruption.]—and the two to three-year transitional arrangements compare favourably with the sudden ending, at a stroke, of regional employment premium by the Government of which he was a member?
Mr. Smith: If the hon. Gentleman thinks that today's sudden announcement is an example of careful consideration and consultation with companies, he has an odd view of consultation. I am not surprised that companies find that they are often not adequately represented by Conservative Members who, if a Labour Government were in office, would be telling tales of woe about companies being in terrible trouble, saying that my
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hon. Friends and I do not understand the realities of business, do not know how companies are run, and the rest of it.
We have in office a party which claims to speak for manufacturing industry and management, yet not one Conservative Member rose while the Secretary of State was speaking to complain on behalf of the managements of those companies and the difficulties into which they are being put by the Government. Tory Members should be ashamed of themselves for being such party political sheep that they put their prejudices—[Interruption.] We have a volunteer.
Mr. James Couchman: Is the right hon. and learned Gentleman suggesting that companies would have entered into firm, binding contracts before having their applications for grant acceded to by the Department? If so, that would be curious commercial sense. If not, I understood my right hon. Friend to say that applications which had already been agreed would not be affected by the moratorium.
Mr. Smith: The Secretary of State had better have a word with the hon. Member for Gillingham (Mr. Couchman), who clearly did not understand the argument. It is applications already granted in respect of which payment will be delayed. Almost by definition, therefore, the contracts on which they depend were entered into previously.
Mr. Tebbit: So that the right hon. and learned Gentleman does not give the wrong impression—I know that he would not want to do so—let me deal with that question which arises on the moratorium. I am anxious to be careful in the words I use because I want to get it absolutely right. The moratorium will not apply to properly completed applications for grant received or postmarked before midnight tonight. Let us be clear about that.
I believe that the other reason why there was not quite so much outrage from the Government Benches as there was from the Opposition Benches was that my hon. Friends may have done their arithmetic more quickly than the right hon. and learned Gentleman and his hon. Friends and will have considered that on a £100,000 project with a rate of 15 per cent. grant, those concerned with the project would be looking for £15,000, and the 4 per cent.—assuming they were paying that sort of interest rate—that it would cost over four months would not he a catastrophic amount. If they were caught for that amount of money, perhaps they were unwise to go in for the project in the first place.
Mr. Smith: We hear harrowing tales of woe whenever there is an increase in local authority rates. We are told that sometimes a company's whole viability is at risk In fact, local authority rates have a much smaller impact. The right hon. Gentleman had better be careful lest the response that he has just made is quoted against him. In effect, he said, "There is not much to worry about in the vast majority of cases." If it is that unimportant, why go to the fuss of making the announcement that the right hon. Gentleman has made today?
The Government are caught, on the one hand, by saying that there is no change of any consequence and we should not be particularly concerned about what is being done; but, when we look at it from the point of view of

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companies, we find every reason for them to be deeply concerned. That shows that the Secretary of State's announcement is so serious that we must protest profoundly and vigorously not only at the change that has been made, but at the sudden manner in which it has been made, which is all too typical of the lurching way in which Government policy develops from day to day.
The Secretary-of State sought to persuade the House that what was involved in regional policy changes was not really major departure of principle, but merely a wise redistribution of resources and an exercise in value for money, trying to hone regional development policy techniques to be a more perfect way of delivering the goods. That simply will not wash when, at a stroke, £300 million has been taken out of a budget of £700 million not just this year but for every year that the policy runs. In three years or so, that will mean £1 billion being taken away that would otherwise have been available for the regions. That is a crippling attack on regional policy as a whole. It is not the first attack. There were cuts in 1979 and in 1982. Between 1974 and 1979 regional development expenditure was £6.4 billion. From 1979 to 1984 it was reduced to £4·1 billion. In other words, there has already been a reduction of £2·3 billion, or 35 per cent., compared with the amount spent by the Labour Government.
The further slashing cut of £300 million makes it clear that the Government's purpose is not to deploy resources more efficiently, but to reduce the financial commitment to regional indistrial assistance. Indeed, that was openly stated by the Minister of State in a speech in Birmingham shortly after the policy statements were made. The press release sent out by the Department tells us that regional policy savings should be "welcomed" according to the Minister of State in
"a stout defence of the Government's regional policy".
Press officers at the Department are becoming somewhat deferential in relation to ministerial pronouncements. In that "stout defence" of Government policy the Minister went on to make a most surprising statement. He argued that the cuts were quite a good thing in public expenditure terms, but he then had some difficulty reconciling that view with any belief in regional development policy. He went on to say:
"What I am sure about is that lower public expenditure will help to create jobs. It is not Government spending money but Government not spending that creates jobs."
One wonders about the sanity of Ministers capable of uttering statements like that. The Minister of State is a perfectly intelligent person—[Interruption.] Perhaps I am being too generous. He is a reasonably intelligent person. His difficulty is that, like so many other folk in this country, he wants to keep his job. I dare say that he also hopes to improve his position. That is why he has to say these things. If it is not Government spending but Government not spending that creates jobs, there should have been a great leap forward in employment under a Government so dedicated to cutting public expenditure. Moreover, unemployment means higher public expenditure. If the result of Government policy is to put more people on the dole, and thus to increase public expenditure, one wonders at the logic of their statements. From the Minister's statement, that cutting £300 million from a £700 million budget will create more jobs, it
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follows logically that the total abolition of any regional development policy should be the greatest job creation exercise ever.
The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): Does the right hon. and learned Gentleman not think that £300 million in extra taxes also destroys jobs?
Mr. Smith: Perhaps some day the Minister will explain to me why £300 million not being spent creates jobs, but £400 million being spent destroys jobs. I find that difficult to understand when the £400 million is being used to create and finance projects which in turn create jobs and wealth. I am beginning to think that hon. Members who begin their political life as reasonably intelligent people should have the benefit of a Government health warning in their dispatch boxes to the effect, "Thatcherism damages the brain", as that is clearly what has happened to Ministers at the Department of Trade and Industry. If the Minister of State is right in his assumptions, we should be destroying regional development policy entirely.
Towards the end of the same speech in Birmingham, when his audience of business men must already have been fairly mystified, the hon. Gentleman realised that he had to justify the £400 million that was still to be spent, so he said that some areas had considerable problems and still needed assistance. He did not make it clear why the £400 million was good for those areas when taking away £300 million was good for other areas. At that point, one begins to lose sight of the logic that drives the Government on.
Mr. Tebbit: I was waiting to see whether the right hon. and learned Gentleman would either clean his spectacles or stumble across the truth along the way, but clearly I shall have to help. He seems to have forgotten that the prime justification for the regional spending policy is a social justification—[HON. MEMBERS: "Oh!"] That is what the White Paper says. [Interruption.] If hon. Members will just relax, I shall explain. Within the total of jobs in the economy, what that spending achieves is, not least, that jobs will be created in one place rather than another. The right hon. and learned Gentleman then confused that with the point that my hon. Friend the Minister of State was making in relation to the aggregate of jobs in the economy.
Mr. Smith: The Secretary of State is now having to come to grips with things and to listen to arguments that are probably not often articulated in the Cabinet. Debates of this kind can be an educative experience for Ministers, and I hope that they will learn something today.
The Secretary of State now says that regional development policy is merely a matter of shifting jobs from one area to another—the very reason for which he condemned Labour Government policy. He is now saying, "I have changed that wicked policy, but in fact that is all that one can ever do with regional development policy." That follows from his statement that regional development policy is merely social policy. He clearly does not appreciate the economic case for regional development policy—to stimulate growth in the regions and to create new industrial enterprises that would not otherwise have been created. Far from merely moving jobs from one part of the country to another, it is a matter, as much as anything, of generating new jobs.
That is the basic fallacy of the Government's approach, and it arises due to a number of forces. The first is the need

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to slash public expenditure, and there have been all too many victims of that. Because of the mounting bill for unemployment on the Government's back, they are forced to cut other programmes — and regional development policy has been one of the victims.
I am especially sorry for the special development areas —the areas of highest need. As Ministers well know, the highest grants went to those areas because they had the biggest problems. If we are redefining the tools of regional development policy, what sense does it make to take away the specialist operations of the special development areas? That gives the lie to the claim that there is a re-honing of the techniques involved.
Let me deal with the argument that this was justified because of the very large projects upon which a great deal of regional money was spent. We have heard endlessly about the Sullom Voe oil terminal. The money spent upon that was spent many years ago. I suppose that the Government have in mind the Moss Morran project, the grants for which were, I believe, sanctioned by the present Administration. There is a very simple answer. The Government claim credit for the support that they gave to the Moss Morran project when it suits them, but they try to run away from it when it does not suit them in the House of Commons. The Government know, as does the House, that if that is the problem, there is a very simple way of dealing with it—one declassifies some of those projects from the range of regional development assistance or makes them subject to ministerial discretion of some kind.
The Secretary of State knows that certain types of industry are unable to benefit from regional development assistance and that decisions have to be made as to which industries qualify for such assistance. One can easily move an industry from one column to another. However, that is no justification for raiding regional development funds for public expenditure reasons that the Secretary of State has advanced today.
These changes, and also the Budget changes, will be very much to the disadvantage of certain industries which are struggling to survive. Those Conservative Members who take their constituency responsibilities seriously know that many companies, some of them old-established companies, are struggling to survive. They are struggling to survive on low profits and against the heavy tide of imports. Their only hope for survival is to invest heavily in new products and processes. I should have thought that any intelligent Government would wish in particular to give as much assistance as possible to companies which are situated in high unemployment areas. I fear that the consequences of these so-called job-directed changes and of the changes made in the Budget to capital allowances will hit precisely those industries and companies. They will suffer greatly from the present and continuing decline.
As the Secretary of State revealed in his intervention, the truth is that the Government do not believe there is an economic case for regional industrial policy. The White Paper is in line with the Chancellor of the Exchequer's famous and fatuous remark, that unemployment is a social, not an economic, problem. That is at the same intellectual level as the Chancellor's other famous observation, that the trend of future employment is not so much low-tech as no tech. What an ambition for the Chancellor to have for the people of this country. The Government have deluded themselves into believing that regional development policy is a social matter which verges on charity: that they must be quite nice to those who
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live in disadvantaged areas and give them a handout from time to time in order to keep the social fabric in good repair. That is a departure from the policy followed by previous Conservative as well as Labour Governments.
Thatcherism does grave damage by inculcating the inability to grasp the point that unemployment is a waste of resources, both physical and human. Failure to deploy those resources in our regions will condemn us to economic and national decline. If we persist in this waste, we shall fail to create the wealth which can truly guarantee the social fabric of this country. I regret that that decline is well advanced in many regions of the country, but it has spread more widely than the areas which are traditionally defined as being in need of assistance.
The Secretary of State has today had the sauce to try to claim some credit for bringing the west midlands into the range of reginal industrial assistance. He has got hold of the wrong end of the stick. The Government should be condemned for causing such destruction to the once great industrial powerhouse of the west midlands. Since 1979 the Government have brought the west midlands to its knees — to the condition that fulfils the criteria for regional industrial assistance. However, when the Government seek to assist such regions, they give to difficult areas within areas like the west midlands—for instance, the centre of Birmingham — far too little assistance.
Miss Betty Boothroyd: Four hundred thousand jobs have been lost.
Mr. Smith: My hon. Friend speaks eloquently of the problem in that area. As the Secretary of State knows, it is not an area with which previous Governments had to deal as a matter of policy.
Mr. Kenneth Hind rose—
Mr. Smith: The hon. Gentleman can leave, if he wishes, but I am not going to give way to him.
What will be the effect of all these changes in policy? Inevitably, they will accelerate both job losses and industrial decline in the hard-pressed areas. Scotland will lose £100 million, Wales will lose £60 million and England nearly £150 million in each year of the operation of this policy. It is not as though these areas have not been suffering. Since 1979, Wales has lost 83,000 jobs, the north 100,000, the north-west 250,000, Yorkshire and Humberside 162,000 and Scotland 150,000. On top of that there has now been the chopping almost in half of regional development industrial assistance. In every area where there has been a reduction in assistance as a result of this policy, from the south-west of England to the north of Scotland, there will be added the almost direct stimulation of unemployment. For those reasons we condemn the changes that have been introduced.
May I remind the House of what the Conservative party has said. I can do no better than to quote the words of the present Prime Minister during the 1979 general election campaign. Speaking in Bolton on 1 May 1979, she said:
"Of course, we will continue with regional aid. We have always given special help to the regions".
That was a regional development policy of much greater extent and capability than the one we are discussing today.
In case there is any doubt about the intentions of the Conservative party, on 16 April 1979, in Coventry the Prime Minister said:
"Labour's latest smear suggests that the next Conservative Government would cut off all state help for industry and the

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regions—and thus destroy jobs. This is a wicked lie … We are committed to the maintenance of a strong and effective regional policy."
Hon. Members who seek to try to escape from the consequences of that quotation by referring to all the help that has been given must bear in mind that the Prime Minister said:
"We are committed to the maintenance of a strong and effective regional policy."
The Prime Minister did not say, "We shall have to take the interests of the taxpayer into account." Anybody who describes these changes as making regional policy stronger and more effective does not understand what the policy is about.
At the heart of this matter there is a fundamental problem, namely that the Government cannot see the economic case for it. If we continue to neglect the economic case, the creation of wealth in this country will depend only upon the more prosperous areas in the south. The rest of Britain will be relegated to competing with low-wage countries for routine assembly type production. That can never be a proper policy for the whole of this country which Parliament has to represent. Parliament represents those areas which are well off as well as those areas which are not so well off.
The great opportunity to redesign our regional development policy in the context of the recession has been missed by the Government. They have perverted it into a cost-cutting exercise. No attempt has been made to integrate regional industrial assistance with other forms of social help and assistance and with the range of policies that the Government ought to be pursuing. They have made cuts there, too. In recent years local authorities have taken much more interest in the economic development of their areas. Many have been pressed to do so because this is the most important problem that faces their citizens.
There have been many imaginative developments. The enterprise boards are often able to create more jobs at a greatly reduced cost than the present Government or previous Governments have been able to create through their regional development policies. They are certainly very much cheaper than jobs created in enterprise zones. The Government are frightened to tell us how much they cost. I am not the only Member who has put down questions asking about the cost of jobs in enterprise zones. We have all received the same answer: the Government do not know. They prefer to use it as a technique of policy, but they do not know what such jobs cost, or they are frightened to say what they cost. Such a job is estimated to cost £50,000. We hear very little about the value of money in the context of the enterprise zone argument.
We have seen local authorities, many of them Labour-controlled, seeking to fill the vacuum created by the Government's withdrawal from action on and concern for economic development in their areas. There has been no new thinking and there is no new approach in this regional development policy. It is the same old story from the Government. The Government do not build for themselves; they destroy the work of others—not just the work of Labour Governments, but of Tory Governments in the past.
What is frightening is that the Government appear to be impervious to the damage that they are causing. As the economic storm clouds gather over Britain and become more serious every day, the Government plunge blindly on
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destroying as they go. When they are finally called to account, the missed opportunities and wanton destruction of regional development policy will, I hope, be high on the indictment.
5.50 pm
Mr. David Mudd: I hope that the right hon. and learned Member for Monkland, East (Mr. Smith) will accept that as I am not following him into the Division Lobby tonight I shall not follow the argument that leads him there, although he may find a certain identity of views on one or two aspects of the philosophy of failed regional policy. To reassure my right hon. Friend the Secretary of State and my hon. Friends, I shall not be following them into the Lobby either in support of this regional aid package.
However, I welcome two particular aspects of the policy relating to Cornwall. First, I welcome the tidying up of development areas in the extreme west of the county, even though that means a downgrading, and equally, I welcome the recognition for the first time of mining activities as qualifying for regional policy and grant aid.
Having said that, I must make the blunt point that regional aid in its original form, its modified form, its updated form, its improved form and now its new-look form has completely failed to serve the economic needs of the west country, particularly the far west of Cornwall, even at a time when parts of my constituency enjoyed special development area status.
If the present regional policy has succeeded, why do I have 2,500 men out of work in Falmouth—27·2 per cent. unemployment—1,500 registered as unemployed in Redruth, and 2,000 people registered as unemployed in Camborne, despite that being a small area that should be the industrial heartland and growth area of west Cornwall?
Falmouth, Camborne and Redruth, having failed to gain any benefit from special development area status, now find — surprise, surprise — that they have been relegated to development area status. We are entitled to ask what is the merit, value and point of that. What good will that do the unemployed in my constituency?
I must admit that I am not merely saying that it is Government regional policy, as embodied in the statement of 28 November, that is at fault. There is a shopping basket of failed Government regional policy that has impeded the regeneration of economic activity in west Cornwall.
The Department of the Environment would not allow Carrick district council to use £2·5 million of the £7 million that it had made in selling council properties to extend a new building programme that would help the elderly, the handicapped, single-parent families and young married people. That was Carrick's own money, brought about by its own judicious activities. As a result, the unemployed remain unemployed. Those who require housing have to wait still longer and a local authority is denied the ability to levy rent and rates on its own bricks and mortar. I criticise that policy and the effect it has on parts of my constituency.
It is the policy of the Department of Trade and Industry resolutely to refuse even to consider for one moment the possibility of the introduction of legislation on mineral rights. That would ease the way to the exploration and exploitation in the Cornish minerals industry in what happens to be the one growth industry in Cornwall in terms of an increased work force.

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The Treasury has now come up with a wonderful scheme effectively to reduce VAT collection in west Cornwall. Nobody likes VAT. Nobody likes having to pay it. But Cornish business men and small shopkeepers will now have to wait a long time for advice or will have to make costly phone calls which in no way assists the survival of the economy of west Cornwall.
Mr. David Harris: Will my hon. Friend confirm that both he and I and other hon. Members from Cornwall have written to the Minister and the Treasury on that point and that, despite our letters, we have been given no costings of the savings that the Minister claims will be made by this reorganisation?
Mr. Mudd: I gladly agree with my hon. Friend but that is a point that he will no doubt wish to pursue with Treasury Ministers rather than with the Department of Trade and Industry within the context of this debate.
The Government's policy wastes resources and effort by attracting the footloose into the far west of Cornwall —firms which may close quickly with no notice whatever in response to the faintest quiver of economic change, which may well founder as a result of new and changed technology and any changed pattern of economic activity. Those are the firms that I describe as the footlose or the bounty hunters. They have made the decision to come to Cornwall from afar. From the moment that they arrive they do not identify with the local communities and needs. Their particular interest in coming to Cornwall is purely an attempt to take advantage of such regional aid as their accountants assure them will be necessary and beneficial to them.
I have no doubt that the real way forward is to switch support to indigenous undertakings in Cornwall, including tourism; to remove the inhibitions that prevent local government from using its resources in the interests of its communities, and to look carefully and closely at one aspect of Government policy that I admit has succeeded in Cornwall—the community programme.
The community programme has genuinely introduced hope where it did not exist. It has helped to develop new skills, and above all it has created a new pride in community effort and activity. Steps should now be taken by the Government within the context of regional policy seriously to consider extending the scheme to something on the lines of a regional, county or district task force undertaking long-term projects such as the construction of houses, hospitals, roads, schools and other environmental works.
Although the community programme has succeeded, before long it will be seen as having been nothing more than a great deal of effort and generated activity. In the process of time the weeds will return to the churchyard that have now been cleared. The walls that have been restored will fall down again and our ponds and village streams will once more have the clutter of supermarket trolleys, pram bodies and mattresses. It will have been a good scheme which harnessed a great potential, but to no avail whatever.
As the Government consider what they should be doing for the regions, they should consider some way of harnessing the community programme to create long-term employment by creating community works of value to the infrastructure. In that way, even at this late stage, the Government's regional policy could, while helping the
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unemployed, give positive and lasting value to the industries, firms, businesses and people of our hard-pressed and neglected regions.
5.58 pm
Mr. Norman Miscampbell: I speak on behalf of an area which has lost its assisted area status and where there is now in Blackpool 20·2 per cent. unemployment. Taking an average over the last year from January to January, that is 17·8 per cent.
I understand the Government's difficulties, but neither I nor my right hon. Friend the Member for Blackpool, South (Sir P. Blaker) can support the Government in the Lobby tonight, for the following reasons. I used, the figures for the local authority area, but the Government have based their decision on the travel-to-work area.
The controversy between us is central to Blackpool's problem. On the criterion used by the Government—the travel-to-work area — we are linked with Lytham St. Anne's and between Blackpool and Lytham St. Anne's there is very little relationship. The latter is a wealthy retirement area. Most of those who work are in businesses in the north-west of Lancashire or travel to Manchester. The unemployment rate is about 9 per cent. These facts mean that the criterion, when rigidly applied, drags Blackpool down below the level at which it will qualify for assisted status.
I am not arguing for a black spot policy. I understand that one cannot have a piecemeal approach, but Blackpool itself would pass every criterion and every test to be a travel-to-work area on its own. We have 60,000 people working in the town and 70 per cent. of them work in the area of Blackpool local authority. On that basis, Blackpool constitutes one of the largest areas in the north-west of England, far larger than many travel-to-work areas that have been granted assisted area status. My right hon. Friend the Member for Blackpool, South and I are saying that Government policy should be more flexible than it has been.
The problem does not end there. Over the past year, there has been a steady decline in our town. The figures for the future are ominous. Taking the town of Blackpool alone—the local authority area—over the past year there has been an increase of 1·8 per cent. in unemployment. The travel-to-work area has shown an increase of 1·3 per cent. Unfortunately, that rate is well ahead of the Lancashire rate, which is running at 0·7 per cent., while in the United Kingdom as a whole it is 0·6 per cent.
Among the criteria that are used, do the Government take into account the fact of rapid deterioration and the fact that the figures show an ominous future ahead of us unless changes come? It is not as if Blackpool has been slow in facing up to competition. The tourist industry is now our main industry because our small manufacturing industries have suffered over the past 20 years. The tourist trade has been faced with fierce competition from the Costa Brava and other resorts in Europe. We have done our best, and we have done well. If British industry as a whole had done as well as Blackpool's tourist industry, we would be telling a different story tonight. We have changed in part from small boarding houses to self-catering flats. There have been massive changes and improvements in our hotel accommodation. We have embarked on leisure complexes of great size, some of them the biggest in Europe. We have done all that we can and, in doing so, we were among the prime areas attracting EEC money.

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One of the biggest complexes is being built in the constituency of my right hon. Friend the Member for Blackpool, South. Hon. Members will not be surprised to hear that, it being Blackpool, the area is called the Sandcastle. That rather odd name disguises a complex with £16 million of leisure facilities which will bear comparison with anything in Europe and many other places in the world. It has already attracted £1·6 million of EEC money, and we are grateful for that. However, that is only part of what we could and should be getting and what we shall lose.
For these reasons, and because of the lack of flexibility, we feel that we cannot support the Government. One thing has been said by everyone concerned, and that is that there should be a constant review of the problems that areas such as ours face. There certainly needs to be a review. I hope that it will be assiduous and careful, and in the end will help Blackpool.
6.5 pm
Mr. Bruce Milian: Even before today's announcement of the moratorium, we in Scotland had plenty to complain about regarding the Government's record on regional policy over recent months. On 28 November the Minister made an announcement about the new assisted areas and the new rate of grant of 15 per cent., compared with the 22 per cent. enjoyed in special development areas and 20 per cent. in ordinary development areas. When the new rules were introduced under the Co-operative Development Agency and Industrial Development Act 1984, there was an explosion of anger in Scotland at the loss of assistance to Scottish industry amounting to about £100 million a year out of the £300 million that the Government wanted to save. The announcement of a moratorium is simply twisting the dagger in Scotland's wound.
I have made speeches before about the new system of development assistance, and the move away from automatic grants to greater reliance on selective grants and dealing with matters on a project basis rather than on a straight capital expenditure basis. Tonight I do not have time to repeat the criticisms that I have made on a number of occasions, both in the House and in the Scottish Grand Committee. The new policy is fundamentally misconceived. The purpose of the policy is to save money, but it will also cause more bureaucracy and argument between Government officials and the individuals applying for project assistance. Once the new scheme is properly in operation, and industrialists who enjoy the benefits of the existing scheme see the implications of the new scheme—particularly the exclusion from the new scheme of modernisation and replacement projects—there will be another explosion in Scotland among many companies and individuals who are traditional supporters of the Conservative party and Government.
We have made these points on many occasions, and my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), in his excellent speech, has developed the case for regional policy as a whole. We base our case not simply on social grounds, but on economic grounds, and my right hon. and learned Friend disclosed some of the fallacies behind the recently announced changes in policy.
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I come specifically to what was announced today. When the Co-operative Development Agency and Industrial Development Act was going through the House, it was reported that the savings would be between £150 million and £200 million a year. Some of us said then that there would be considerable additional saving when a new map was published and the new rates of grant were announced, as they were on 28 November. At that time, I remember the Under-Secretary of State for Scotland with responsibility for education and industry specifically telling me that we should not make any assumptions that there would be any further saving, and that perhaps there would be only a redistribution of money. We were misled into believing that the savings of £150 million to £200 million would be the total, and we did not have to worry about anything that happened subsequently.
Mr. Norman Lamont rose—
Mr. Milian: No, I shall not give way, because the hon. Gentleman was not present when I had that answer from the Under-Secretary of State.
When the announcement was made in November, we found that the cuts would be not £150 million to £200 million, but about £300 million, with the cuts in Scotland at about £100 million. We were given no warning that there might be further cuts, like those that were announced this afternoon through the moratorium.
What do the cuts amount to? The Secretary of State gave many figures, but he was careful not to give a precise figure for the cuts. I understood him to say, however, that in 1985–86, after the cuts, expenditure would be £480 million, whereas before the cuts it would amount to more than £600 million. How much more? We do not know. However, we know that a cut of more than £120 million is to fall on industry in the development areas in 1985–86. I hope that the Minister will either confirm or deny my assumption when he replies to the debate.
Secondly, when is the moratorium to end? Has a decision been taken? The Secretary of State gave estimated figures not only for 1985–86 but for 1986–87 and 1987–88. He must be assuming either that the moratorium will continue indefinitely or that at some time it will be lifted. We are entitled to know what the Government's intentions are.
Industry has been misled not only by what Ministers have said in the House but by the commencement order itself. The commencement order for the Co-operative Development Agency and Industrial Development Act 1984 was published on the same day as the Government announcement and was to come into operation on 29 November. The transitional provisions in article 4 of the coommencement order led industry to believe that as long as the asset was provided within the period of one year from the appointed day — 29 November 1984 — everything would be all right and the grants would be paid. There was no question then of a moratorium or of any cut in the amount of money to be made available to industry under these provisions.
Because there is a transitional period, because the new system is much less favourable than the old, and because the Budget changes encourage capital expenditure for a limited period, expenditure will naturally and inevitably be higher than it would otherwise have been. Indeed, Ministers constantly boast about it. Earlier this week, the Chancellor of the Exchequer said that private investment

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is increasing by leaps and bounds. Yet, at the same time as he is taking credit for that, he introduces a moratorium to cut assistance to such capital investment in the existing development and special development areas—the areas of the country that need it most desperately.
We have been misled on numerous occasions. We were misled when the Co-operative Development Agency and Industrial Development Bill was going through Parliament and we were deliberately misled at the time of the announcement on 28 November. Today, we have not so far been given the whole story.
The Secretary of State for Trade and Industry was honest on one point. He said that the Secretary of State for Scotland agreed with the contents of the announcement. I hope that that comment will prevent the Secretary of State for Scotland from briefing the press all over Scotland to the effect that he did not really approve of the changes and was, indeed, opposed to them.
Why is the Secretary of State for Scotland not here to take his share of the responsibility? The answer is that he is in Aberdeen. This evening he is to attend a banquet and to address the Aberdeen chamber of commerce. The title of his speech is to be "Scotland Tomorrow". I can tell him what Scotland tomorrow will feel about today's announcement. It will feel that the Government are once again giving every sign that they are abandoning the regions, and abandoning Scotland.
6.15 pm
Mr. Barry Henderson: Not so long ago the right hon. Member for Glasgow, Govan (Mr. Milian) had considerable influence on the management of the Scottish economy. During that period, the Scottish economy did not grow as it has done while my right hon. Friend has been responsible for it.
Recently, the New Statesman told us that Labour had lost the economic argument. On the form shown in the debate so far, Labour will not win the regional policy argument either. What was made clear by the speeches of the right hon. and learned Member for Monklands, East (Mr. Smith) and the right hon. Member for Govan is that they have nothing new to offer to regional policy thinking. It is the old, failed approach, except that it is now five years older and five years out of date. They are offering again—perhaps with a slightly more Left-wing slant—the old policies that under the Labour Government doubled unemployment, doubled prices, doubled taxes and in five years doubled the national debt. That was the achievement of the Labour policies, and they have not changed despite the fact that Labour Members have had five years in which to consider how to do better.
The only substantial argument that we have heard from the official Opposition is that the Government propose to reduce total expenditure on regional employment policy by £300 million, starting in three years' time. Should we not put that reduction in the context of the fact that the abolition of the national insurance surcharge—Labour's tax on jobs—has put £3,000 million back into industry and commerce? Industry has already benefited from regaining that sum, in three instalments—that may be one significant reason why industrial investment in this country is at an all-time high—and it will continue to benefit every year.
However, even that assistance to industry and commerce is not as important as the effect of controlling inflation, which has helped industry in terms of
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competitiveness and cost and has equipped it better to face competition in the world. No amount of expenditure on regional policy will help even those who benefit from it as much as the control of inflation has helped industry in general.
In their prejudice, the Opposition have ignored the real improvements in regional policy devised by the Government. We are reducing the extent of the most wasteful kind of regional policy expenditure—the kind exemplified at Sullom Voe — expenditure where the investment would have taken place regardless of regional policy and where substantial benefits would have resulted. There is fairly widespread agreement that the Government were right to take that step.
The Government should also be given credit for the fact that they are relating the help much more directly to jobs. The great issue of our time is coping with the problems of unemployment. Surely, therefore, it is right for the Government to emphasise and encourage the creation or defence of real jobs.
The third element of the policy, wholly ignored by the Opposition, is the Government's recognition of the role that service industries can play in job creation. Over many years and under successive Governments the great failure of regional policy has been the insistence on encouraging manufacturing industry in problem areas. That policy has done a positive disservice to the areas that it was intended to help, partly because, worldwide, manufacturing industry is in decline. It was not kind to send to the development areas a sector that was declining in importance.
Mr. Milian: It is not declining worldwide.
Mr. Henderson: Can the right hon. Gentleman tell me of any OECD country—
Mr. Milian: Japan, for one.
Mr. Henderson: The right hon. Gentleman will find that services in Japan are expanding significantly more than manufacturing. Services have an important role to play in job creation. The Government's policy will also help to provide flexibility in competing for mobile international investment, whether in manufacturing or service industries.
I hope that the Government will enhance their policy by having greater regard to the quality of the proposed investment and the activities being undertaken, whether they involve the transfer of technology or of management knowledge, skills, and technical knowhow. Such things would greatly benefit us, and some types of investment are not of such high quality.
Arguments on the map are inevitable. I am aware that some areas face special difficulties.
Mr. Bill Walker: My hon. Friend must agree that he cannot simply say that arguments about the map are inevitable. The area encompassing Blairgowrie, Pitlochry and Aberfeldy has been declared a travel-to-work area but no logical person imagines that people will commute on roads in that area during the winter. Indeed, I have invited Ministers to come with me and get stuck in the snow.
Mr. Henderson: I understand my hon. Friend's point, but he has questioned the definition of a travel-to-work area. I hope that none of us disagrees that the travel-towork area is an appropriate building block from which to

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construct the map. We all know of areas where travel-towork areas could be defined better, and I hope that the Government will continue to consider those problems.
Scotland's relative position in the United Kingdom economy has improved markedly in the past few years. I hope that the day will come when Scotland has no development areas, as that will be the day when we have achieved the object of regional policy, which is to iron out discrepancies. I understand that Scotland was eighth in the list of areas in the United Kingdom showing gross domestic product per head of population in 1971. We are now third. Average male earnings are now higher only in south-east England. These are substantial changes, and it would be surprising if they were not reflected to some extent in the map.
In the United Kingdom as a whole there has been continuous growth for three years. Unemployment has risen but, mercifully, the pace has been slower. In the past year there has been significant growth in the number of people employed. I believe that, were it not for the miners' strike, the 20-year trend of rising unemployment would have been reversed last year. I hope that the tide will be turned this year. I hope that the growth will help in every area, especially Scotland which has had enormous success in the new industries of the future. I also hope that help will be given to people in areas which, for social reasons, have been singled out for better targeted regional policy.
6.23 pm
Mr. Paddy Ashdown: The hon. Member for Fife, North-East (Mr. Henderson) might hear about the speech that he has just made when he fights the next general election.
Two great problems face Britain today. The first is that we are increasingly becoming a divided nation—between rich and poor, north and south and employed and unemployed—and the second is that our industrial base has been allowed to wither away. We shall not have the stability and prosperity of the past until we find the means by which to reverse that trend.
One of the greatest instruments, if not the greatest instrument, that the Government have to address both of those problems, and at the same time, is regional policy. Regional policy is at the centre of the current political debate. It is a talisman by which we might judge the Government's seriousness about tackling Britain's fundamental problems.
Many right hon. and hon. Members have spoken in intimate detail of the Government's new policy, and I gather that many more will do so today. I shall address myself to some of the broader issues. The first concerns what regional policy will do to the British economy. We must measure the scale of the problem before deciding whether the means tint the Government have chosen are appropriate and adequate. Britain has economic problems, but not because of the price of oil. Oil is the symptom rather than the underlying weakness. Britain's industrial base has been allowed to wither away since 1979. Non-oil trade was £2·75 billion in surplus in 1979 whereas in 1984–85 it is likely to be £11 billion in deficit, despite the fall in sterling. The world has suffered from the recent instability in currency rates, but once again Britain has suffered more. We have become a one-commodity economy—a kind of banana monarchy, the banana in
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our case being the price of oil. That underlying weakness in our industrial base, which the rest of the world recognises, makes us vulnerable to every new small wave that hits the monetary system. Manufacturing in the third quarter of 1984 was down 11·6 per cent. on the third quarter of 1979.
We can get by for a few more years on the temporary opiate of oil revenues, but the underlying weakness of our economy causes the greatest problems. What means have the Government chosen to overcome that? Not regional policy, as we heard from the Secretary of State. They have chosen the force of the market—what the Chancellor of the Exchequer describes as the creation of an enterprise economy. We do not see too much evidence of that bearing fruit. The International Monetary Fund's sixth annual report on international competitiveness puts Britain in 14th place out of 28 in a list that includes Mexico, Brazil, Portugal and Ireland. On the Government's criteria we are performing less well than the Netherlands, Norway, Austria, Saudi Arabia and Luxembourg. That is some enterprise economy.
In the area of enterprise that the Government consider most important — information technology — we have slipped from having a surplus in trade to a £150 million deficit. Moreover, it is predicted that we shall have a £1 billion deficit in 1990. It is a supposedly expanding area of our economy, yet, according to the National Economic Development Council's recent report, information technology, far from providing more jobs, will provide 2,500 fewer jobs this year.
Against that catalogue of decay and decline, we must review the Government's regional policy. It is clear that the Government are not matching their actions to the scale of the problem. They aim to reduce expenditure by £300 million. The cut is better expressed as nearly one half. Bearing in mind the scale of the problem, what Government would reduce aid to rundown areas—the very seat of our national decay? What Government would decide that there should not be more money to solve the problem but less? The answer must be only a Government who are blind, irresponsible or trapped within their ideology. Many of us believe that the Government show signs of all three, but I suspect that the chief reason is their ideology. They do not believe in regional policy. That is why they have cut spending by nearly one half. They have the spurious idea that the free market can be let rip—the very policy that has brought about the industrial decline from which we now suffer.
I believe in free market forces. They are there, and need to be manipulated and controlled for the benefit of society. But we cannot leave them totally uncontrolled. If we do so, they become the very instrument that widens the divisions in Britain. The south of England's free markets have become the north of England's lost hopes. That is why we must consider whether the Government's regional policy does anything to lessen those divisions. I believe that it will do little, because it will not meet the underlying necessity of getting the economy moving in the centres of decay, or of solving the problems of unemployment.
I am delighted that the west midlands is included, but the resources that the Government have put in are totally inadequate to the task. It has been calculated that one in every nine jobs there has been lost. That amounts to 250,000 jobs. The west midlands has declined more than

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any other region in Europe. West Yorkshire, included in the worst 25 per cent. of European regions, has now been gratuitously excluded from any access to EEC funds.
I have outlined the key points, but of course there are other points of detail. As my hon. Friends the Members for Berwick-upon-Tweed (Mr. Beith) and for Truro (Mr. Penhaligon) have said so eloquently on previous occasions when talking about Amble and Cornwall, the Government's policy is hopelessly inflexible. My hon. Friend the Member for Truro said that a sixth-former with a calculator and three or four hours in a library could produce a better scheme, and how right he was.
The shift from automatic to selective aid will produce a more bureaucratic system and will increase the power of civil servants over what happens. The £10,000 job limit that has been instituted for automatic aid is far too low. Indeed, in 1977 the Department of Trade and Industry itself set a limit of £7,000 for selective financial assistance. Thus, £10,000 is far too low.
We are also concerned about the missed opportunities. A regional policy could do so much. It could form the framework for local initiatives and community enterprise. It could specifically promote the new technologies to replace the old industries, along the lines proposed, I think, by the hon. Member for Thanet, North (Mr. Gale). It could encourage self-help and the self-employed, and improve labour mobility. It could build new hope where there is now despair. It could form a central pillar of a new strategy to regenerate Britain's industrial base.
I fear that the Government's policy will do none of that, for this Government have no commitment to the idea of regional aid. The real purpose of their policy is cost-cutting rather than industrial regeneration. These proposals will do very little to reverse the underlying decay of Britain's industrial base, and will do nothing at all to bridge the terrible divisions in Britain, which now threaten to tear apart our nation. That is why we shall vote against the proposals.
6.32 pm
Mr. Paul Marland: I find the remarks of the hon. Member for Yeovil (Mr. Ashdown) extraordinary. He seems to think that money grows on trees. It is a stale old argument to say that it is too little, too late. The hon. Gentleman seems to want to aid everybody north of Watford and west of Newbury. If one helps everybody a little, one ends up helping no one. It is quite right that the Government should have had a close look at a rearrangement of regional aid, because many taxpayers in this country rightly look to us to obtain the best value for money. We need to help those in need properly instead of helping everybody a little.
Mr. Ashdown: Will the hon. Gentleman give way?
Mr. Marland: I shall not give way, as I have only 10 minutes in which to speak. The hon. Gentleman had his 10 minutes, and I shall have mine.
My speech will be somewhat different from some of the contributions that have been made, because the citizens of Gloucestershire, West are well pleased with the announcement. They have received intermediate area assistance, and that puts them on an equal footing with south Wales. A lot of local effort has been put into achieving official recognition of our problems. Indeed, it has been a good year for the Forest of Dean, as that has
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also been designated an area of rural development by the Development Commission. I am confident that those two new sources of income will go a considerable way towards cutting our unemployment rate, which now stands at more than 17 per cent. That assistance has come in the nick of time. Several firms in the district had plans to move their enterprises away to adjoining assisted areas if that assistance had not been forthcoming. Now that we have that intermediate area assistance, those firms will stay put and expand in the Forest of Dean, thus creating more jobs for those in the area. I am confident that new firms will also be attracted to the area with the extra aid now available.
As other hon. Members have said, we are also now eligible for Euro funds, which will be of great assistance. Prior to the announcement from the Department of Trade and Industry, massive local efforts had been made by both local firms and the Forest of Dean district council to stem the tide of rising unemployment, but it was an uphill battle and unemployment now stands at more than 17·5 per cent. Now, by recognising our problems, the Department of Trade and Industry has given the local job and wealth creators great encouragement.
Since I was first elected in 1979, unemployment has been my biggest and most difficult ongoing problem. I have personally explored many schemes and ideas to get more job opportunities into the district. Some of that I did on my own, but more often others have been involved. The range of ideas has been enormous and ingenious. There have been individuals with ideas for making furniture and ornaments from scrapwood given by a local sawmill, and there has been the mighty Rank Xerox spending £500,000 on developing the Mitcheldean enterprise workshops, recently opened by the Duke of Kent. Actually, he could not get there because of the fog, but that was the original plan. In addition, the local authority was worried about financing and developing the Forest Vale industrial estate or running a spine road through its new development at Coleford.
Much courage and determination have been demonstrated in the Forest of Dean, and it is fitting that extra outside help should now have arrived. Many have been involved in winning that help. Gloucestershire county council has been actively involved in giving advice and support, especially in the preparation of formal submissions to the Department. However, by far the most constructive and consistent support that I have received has come from the Forest of Dean district council. My job as spokesman for the district has been made much more effective, thanks to its help and support.
I should like publicly to pay tribute to the senior councillors and council staff who have done so much to achieve this national recognition of our local difficulties. That recognition is made all the more significant by the fact that we are not, by any stretch of the imagination, all of the same political persuasion. But under the steady hand of the council chairman, Arthur Cooper, we have genuinely bridged the party gap to work in the best interests of the district. My hon. Friend the Minister of State, the hon. Member for Kingston upon Thames (Mr. Lamont), and my hon. Friend the Under-Secretary of State, the hon. Member for Rossendale and Darwen (Mr. Trippier), are only too well aware of the endless delegations that I have brought to see them to discuss the

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matter, and of my own persistent nagging in the Lobbies and elsewhere. I think that I have tried their patience to the very limit, and I thank them for being so tolerant.
I am especially grateful—indeed, we all are in the Forest of Dean—to my hon. Friend the Under-Secretary of State for the consistent and careful attention that he has given to us. On many occasions, in his role as Under-Secretary of State, he has visited the Forest of Dean, and on every occasion he has shown great consideration and understanding of our difficulties. On behalf of all my constituents and myself, I should like to thank him most warmly.
Mr. Colin Shepherd: Perhaps the thanks of those in the Ross-on-Wye travel-to-work area could be coupled with those of my hon. Friend. The coupling of the Forest of Dean and Ross-on-Wye travel-to-work areas is significant and important.
Mr. Marland: I know that our mutual hon. Friend took the opportunity to visit both places. I thank my hon. Friend for adding his thanks to mine.
I now take the opportunity to bring to the attention of the House a further problem that is causing anxiety in Gloucestershire, West and in other constituencies. It relates to the poor and underdeveloped infrastructure of the Forest of Dean. There is no doubt that that needs to be developed to sustain and cherish our new development status.
The council sought permission from the Department of the Environment for an additional allocation of funds for specific areas of expenditure in that regard, but was refused. As a matter of broad principle, I understand that refusal, but I am sure that the Forest of Dean is not the only district to become a special case regarding new development.
As the Department of Trade and Industry has decided to invest in the area and its development, would it be in order for it to steer the Department of the Environment towards having another look at infrastructure developments in development areas? For example, the Forest of Dean district council is sitting on about £2 million of frozen capital assets. Could they be unlocked for specific projects relating to infrastructure development? No further borrowing would be required and it would be an excellent way to use the money locally. I should be grateful if my hon. Friend would answer that point when he replies.
Today is a good day for the Forest of Dean. The national recognition of our problems is a great encouragement to the district, which has already done much locally to help itself. With these extra funds, much more can be done. I should like to assure you, Mr. Speaker, and all hon. Members that every penny will be spent wisely.
6.41 pm
Mr. Gareth Wardell: In the first quarter of last year the Select Committee on Welsh Affairs, of which I am privileged to be Chairman, examined the impact of regional industrial policy on Wales as a response to the Government's White Paper on regional industrial development. The conclusions and recommendations were based on the wider spectrum of opinion in Wales. It was clearly established that, while there was room for substantial savings by more cost-effective regional aid, a
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continuing commitment to regional policy would mean that the savings should be used to make more generous provision. The Committee recommended, for example, that assisted area status should be given to the whole of the Principality.
The Welsh Trades Union Congress, the Welsh Confederation of British Industry, local authorities and Government agencies are all dismayed at these measures. The consensus is that they have nothing to do with regional policy. Public expenditure cuts are the real motive behind them.
There is a desperate need for an effective regional policy for Wales. We need to attract foreign and British investment that will bring jobs and economic regeneration. Whereas nationally before 28 November 1984 special development area and development area status aid used to cover 22 per cent. of the working population, it will now cover only 15 per cent. in SDAs in Wales. Development area status aid used to cover 90 per cent. of the working population but has been cut to 35 per cent. That is a savage reduction and makes nonsense of the Minister's recent answer:
"Wales has been treated fairly." — [Official Report, 28 November 1984; Vol. 68, c. 941.]
The Secretary of State for Wales (Mr. Nicholas Edwards): I do not understand the hon. Gentleman's comment because approximately 90 per cent. of the working population of Wales are still within the areas covered by the regional assistance package.
Mr. Wardell: I understand the point of the Secretary of State, but there has been a massive shift from those areas that qualified for a high rate of assistance towards intermediate area status, which does not qualify for regional development grant.
Bridgend has lost its special development area status and has been deflated to intermediate area status. Other new intermediate areas that have lost their development area status include Swansea, Llanelli, south-west Dyfed, Cardiff, Newport and western Gwynedd. Most of those are the large areas of population in the Principality.
Former SDAs relegated to an inner tier category will have their capital grant cut from 22 per cent. to 15 per cent. That tier will carry an additional burden. Any firm employing fewer than 200 people — the majority of Welsh firms—will be limited to a job grant of £3,000 for each new job created. It is interesting to note that, in evidence to the Welsh Select Committee, the Welsh Development Agency set the appropriate and reasonable figure at £15,000 — a factor of five greater than the Government's figure. The figure is miserly in the extreme, especially when one remembers that it costs £6,000 a year to keep a person on the dole.
Even in those areas which will qualify for maximum regional assistance, aid is no longer automatic. A discretionary element has now been introduced, even into the formerly automatic regional development grant. Not only is it an increase in the centralisation of decision-making, which will complicate the forward financial planning of existing and prospective firms, but it leaves a tier open for further reductions in assistance.
Already there are delays in processing applications for aid, although the moratorium today may ease that. Yet the Government have not announced any plans to increase staffing levels in the Welsh Office and to invest to cope with administering the new layer of red tape.

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The policy represents a 20 per cent. cut in the Welsh economy—a figure that will save £60 million this year. The pill is all the more unpalatable because the Government have no plans to redistribute that amount.
At present, land reclamation schemes totalling £100 million have been submitted by Welsh local authorities to the WDA. Many of the schemes are geared to potential industrial use, yet WDA funds for the schemes have been cut to £39 million over the next five years. Will the Government use some of that saved Welsh regional aid money to restore the cuts? It is recognised that a massive training programme to update workers' skills is needed. Will the Government divert part of the £300 million saved nationally into this sector? No. Instead they are planning to close successful skillcentres, such as the one in Llanelli, which serve my constituency of Gower.
Furthermore, despite the stated intention of the Secretary of State for Employment to extend the community programme scheme, he has just changed the qualifying criteria for the MSC scheme which is geared to the long-term unemployed. In all but name, it is a cut that will mean that fewer people are able to take advantage of the scheme, and that the number of people who will be eligible to use their work skills as instructors for retraining others will be drastically reduced. The Government could redistribute some of the saved money into this sector to extend job creation for the long-term unemployed.
If the Government win the battle with the miners, almost all Welsh pits will close.
Mr. Nicholas Edwards: Rubbish.
Mr. Wardell: NCB Enterprise Ltd. will be given another £5 million, which will mean a total budget of £10 million for job creation initiatives in what will become economically derelict communities. How much of the £300 million saved will be reinvested in the mining villages of Wales? The Government cannot sell this programme as a new regional policy. It flies in the face of the economic and social hardship being experienced by the Welsh people as a direct result of the Government's obsession with spending cuts—
Mr. Nicholas Edwards: Rubbish.
Mr. Wardell: —and ignores the many measures that are needed to bring relief and to rebuild the Welsh economy.
Mr. Ray Powell: While my hon. Friend has been speaking, the Secretary of State for Wales has been shouting, "Rubbish". Could my hon. Friend clarify his statement about the closure of collieries in Wales?
Mr. Speaker: I should tell the hon. Gentleman that he has only one minute in which to do it.
Mr. Wardell: If my hon. Friend does not mind, I would rather continue my speech.
There is no effort in those measures to redistribute to other job creation and economic regeneration opportunities the £60 million a year that will be saved from regional aid. The Opposition believe that the change will be disastrous for Wales. It represents the death of regional policy, and I wonder whether all that the Government are saying is that this policy should rest in peace.
6.51 pm
Sir John Osborn: This debate must be taken in the context of the Chancellor of the
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Exchequer's statement on Monday, the debate on unemployment on Tuesday, and yesterday's debate on the rate support grant. It cannot be taken in isolation. My hon. Friend the Member for Fife, North-East (Mr. Henderson) mentioned the OECD. I should tell him that at the end of the month the Assembly of the Council of Europe will debate the economic position in Europe. That is an annual debate based on the OECD report. I am the rapporteur to that debate, and I have already sent a provisional draft of my report to my hon. Friend the Minister of State.
My contribution to the debate will be about Sheffield, which the right hon. and learned Member for Monklands, East (Mr. Smith) visited recently. All countries suffer from regional disparities and "jobless" growth and often the differences within countries or regions are as great as those between them. In south Yorkshire, for example, as against the north of Yorkshire, unemployment is almost 17 per cent., and in Sheffield it is slightly more than 15 per cent. About 44,000 people from a population of half a million are out of work. Those appalling figures must burn on any Member of Parliament who represents such an area.
After a period of high unemployment, regional discrepancies become even more marked and society even more divided between those with a job and those without, and, increasingly, between north and south. That is why people who live in different areas perceive the present economic position so differently. We have heard that theme often in the Chamber this week.
The Government's new regional policy, announced in November and explained today, is one that I welcome greatly, because I believe that it will lead towards more cost-effective, selective and job-related policies. However, with my hon. Frrend the Member for Gloucestershire, West (Mr. Marland), I am prejudiced, because I welcome the fact that Sheffield has been granted intermediate area status, which will enable the city to qualify for assistance from the Government and from the European regional development fund, with which I was much concerned when I was a Member of the European Parliament. My anxiety is that the new status should be used properly.
Important though regional policy is, it is wrong to expect too much of it. Some of the criticism that the policy has encountered arises perhaps from false expectations. Today we debated the moratorium, but I have noted that regional policy capital investment decisions made by the Conservative Government more than 20 years ago on such projects as Llanwern and Ravenscraig, and some of the car factories in Scotland, could be described today as not the best way of using limited capital resources.
High costs of wages and—this is especially true of Sheffield — electricity can precipitate decline. That is certainly true of the Sheffield steel industry. The whole industry has lost 60 per cent. of its work force since 1979. The consequences of unemployment and poverty are tragic. The bishop of Sheffield, in a well-thought-out address to his diocesan synod in November, the full text of which he sent to me, was concerned about the north-south divide. He achieved publicity for inviting the Queen to the Doncaster races. The gap is bigger than it was 25 years ago, and that is a fact from which no Government can run away.
Self-help is also important. I have been associated with the Sheffield industrial mission and Mr. Peter Lee, who is chairman of a surviving steel firm, happens to have made one of several contributions of interest. In his paper,

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he said that there was no reason for long-term pessimism that the nation has an unsatisfied demand for goods and services and that there is a supply of people willing to work —a point that I reflected in my OECD report.
In previous debates, I have given my analysis of the decline in the Sheffield steel industry and of why, because of cheap energy and the availability of raw materials, the industry has moved elsewhere in the world. However, a fundamental start in Sheffield would be to have hope for the area. Far too often, all that we hear from Sheffield is gloom and doom. That is not the case. It will be a surprise to many to learn that the chamber of trade, with which I have been in touch this week, has reported a boom in the retail trade, with sales before Christmas 15 per cent. to 30 per cent. up on last year, and record January sales. That means that there is purchasing power in Sheffield. It must be recognised that living standards have increased—the statistics show that they have. The EC and the OECD state that, on average, people in Europe are better off than they were five or 10 years ago. The citizens of Sheffield have purchasing power, despite the fact that they live in a depressed region, and the Government are rightly keen that this be channelled to the right areas of development.
The trouble is that Sheffield city council has followed a path of high current expenditure at the expense of capital expenditure. The policy has been disastrous to local industry. Rates have soared, and the chamber of commerce has urged me to do something about it. That is why I supported the Rates Act 1984. Rates have also driven residents out of the city, and migration from the cities is probably the biggest cause of regional disparity in Britain today. A wrong attitude of the council towards intermediate area status could throw away an opportunity, as was highlighted in an article in the Financial Times this week.
There will soon be a debate on Heathrow, Stansted and Gatwick airport policy. I have received representations from the North of England Regional Consortium. Fifteen years ago, I would have resisted a large expansion at Stansted, because I favoured Maplin. In 1976, the Labour Government introduced the Maplin Development Authority (Dissolution) Act, and it was a Labour Government who turned their back on the channel tunnel—two examples of capital projects that could have kept people off the dole queues for the past seven or eight years. It is good regional policy to expand air traffic from and to the north. I hope that the Minister of State and the Secretary of State will consult my right hon. Friend the Secretary of State for Transport and encourage him to increase flights to and from the north, which could well do more to help the area than would a regional policy such as the one outlined.
Today some Opposition Members asked for a debate on the coal strike. One tragedy is that Arthur Scargill, with the overt or covert support of Opposition Members—the demonstration in the Chamber today may have been an example, as was the appearance of the right hon. Member for Islwyn (Mr. Kinnock) on the Welsh picket lines and even the support of Sheffield city council for the NUM—has chosen a strike for political ends. Steel workers have learned to their dismay that a strike today can only accelerate an appearance on the dole queue tomorrow. I hope that this will not be the case with the railwaymen.
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The Labour party today, as exemplified by Opposition Members, has demanded from the Secretary of State a more active regional policy. They should consider the extent to which they are perhaps not so much destructive as lacking constructive opposition in their conduct and attitudes, particularly in an area like Sheffield. They are forcing the northern region to take two steps backwards for every step forward by my right hon. Friend the Secretary of State for Trade and Industry.
7 pm
Mr. John Forrester: When the Government announced that they would review the regional aid programme, they got a lot of support. Many people acknowledged that there were weaknesses in the previous system. In some cases too much money had been given to capital-intensive industries, with little effect on employment. There was some job shuffling between areas to take advantage of grants, although it is difficult to see how this could be eliminated.
Now we have had the review, which took a long time in coming. The Government seem to have pleased very few people, unless one lives in the Forest of Dean, when obviously it is a great advantage. It may be acknowledged that there was some success with previous regional policy if employment in some areas improved sufficiently for them to be taken out of these proposals. If that is so, it is most regrettable and beyond comprehension that regional aid should be reduced from £700 million to £400 million per annum. The Minister must accept that there is growing disappointment at the fact that the Government have lost a great opportunity to take positive steps forward.
I hope that the percentage of the working population to be covered by regional aid, 35 per cent., is not immutable and that the Government will be open to persuasion that other areas have a good case for inclusion. For a number of years, it was increasingly clear that something dramatic was happening in the west midlands. I am pleased that the Government have recognised that, although there will obviously be arguments about the size of the area and the amount of aid. Early-day motion 265, in the name of some Conservative Members who live in the area, extols the virtue of Government proposals and refers to how successful they have been in this short time in getting industry interested. The Government should take note of that, accept its wisdom and logic and bring forward proposals for a wider and more generous approach to regional aid.
The Minister of State and the Secretary of State have said that when the maps were being re-drawn, present and future employment prospects were taken into account. Forecasting the future can be a hazardous occupation, as any betting man will confirm. I cannot recall that during the 1979 general election today's level of unemployment was forecast by anyone in any party. The forecast can be only a rough guide. There will be local hiccups, some of which will be beneficial, while others will be disastrous.
To make a constituency point, in Stoke-on-Trent last week we suffered one of those disasters. The Michelin tyre company has announced 2,400 redundancies, with no time for alternatives; most of the people must be out of work by the end of April. In December 1984 unemployment in the Stoke travel-to-work area was 12·4 per cent. These redundancies will put the figure up to 13·6 per cent. and the knock-on effect will take it to at least 14·4 per cent.

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Stoke has had one of the fastest-growing unemployment rates in the country. Between 1979 and 1984 it rose by 173 per cent. against the national average of 140 per cent. In the city 45 to 47 per cent. have been unemployed for more than a year. The national average is 39 per cent. In some wards unemployment is nearly 20 per cent. Stoke-on-Trent is a typical old industrial area with too narrow an industrial base, depending on pottery, coal, steel and tyres. Over the past few years, we have lost nearly 30,000 jobs in those four industries. Nor does the city have any soft cushion of expanding service industries, because 48 per cent. of the working population are in service industries, against an average of 60 per cent. nationally.
The unemployment rate must be a major factor in deciding the amount of regional aid, but the infrastructure of an area is also a vital component. It will determine the ability of the area to attract new industries. Areas which have not experienced centuries of coal mining cannot understand how much underground dereliction there has been and the additional cost associated with any kind of building work, to guard against subsidence.
If a manufacturer learns that, as has happened in Stoke, a factory has subsided by 21 ft in 60 years or that a new factory has fallen by 12 in in one year and that it costs £60 per square metre to compensate for the possibility of subsidence when building a factory, then, all other things being equal, he is bound to think about going to an area which would not have those problems.
We are fortunate in having been chosen to host the 1986 national garden festival, which will take place on the site of the old steelworks. Without Government assistance that area would not have been reclaimed in this century. Even if the local authority had tried to find the money, I am sure it would have fallen foul of the rates legislation, which seems to change from day to day. Even in the Forest of Dean apparently councils cannot spend their own money on improving their infrastructure.
From the war to the recession, industries have been positively discouraged from coming to Stoke-on-Trent so as to maintain the labour force for the pottery and coal mining industries. That attitude might have been valid at the time but if such decisions are taken in the national interest, then when times are hard the Government have a moral responsibility to do something to help. By all accounts the decision on Stoke's appeal for regional assistance was marginal. I hope that the Government will accept that there is a new situation and that the case put forward by Stoke is beyond dispute.
Apart from the possible social consequences of decay and neglect, it is folly to allow old industrial areas to die a slow death. If the infrastructure is tatty and needs modernising, let us remember that those communities have evolved over the last 300 or 400 years. One cannot recreate on a green field site the qualities of stability of the people, the good sense and skill of the work force, and the commitment of workers and management alike to an area.
It is the Government's job to assist in repairing the damage to the old industrial areas of this city by providing a springboard for the city to advance into the future. We are not seeking charity or a meal ticket for life; we are asking for assistance now so that we can work out our own destiny.
7.9 pm
Mr. Michael Fallon: I am delighted to be the first speaker from the north-east to be called in this
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debate, because no region has seen more clearly than the north-east the failing of regional policy as practised by successive Governments. Year after year, our 7-egion has received between 20 per cent. and 30 per cent. of the resources made available in regional aid. Year after year, the decline in employment opportunities and the imbalance in our industrial infrastructure have continued. There has been a continued lack of home-grown entrepreneurship.
I applaud the White Paper and the background paper "Some Economic Issues" for widening the understanding of the failings of previous regional policy, for setting out the enormous costs of subsidising capital projects and for showing the statistical difficulty of calculating the cost of secondary employment lost elsewhere through high taxes and demonstrating the uncertainty that exists about whether the projects that were backed would have been located in those regions anyway.
There is now a recognition of those failings not just among industrialists and academics but among some surprising commentators. My hon. Friend the Minister might be interested to learn that Harry Meed, a commentator for The Northern Echo—by no means a Conservative paper, and usually a fiercely independent critic of the Government—said in an article about the Minister's statement in November headed "Cash move in right direction":
"the Government is surely right in claiming that most of the schemes now receiving grant support, like ICI's new £30m nitric acid plant at Billingham (ten jobs) would go ahead anyway.
Extra jobs for the future are unlikely to be created by the industries now mopping up the scarce Government cash. But most people will ultimately recognise that the Government's shift in policy is not merely correct but long overdue. At £35,000 for every new job created, the industrial-aid bonanza just had to stop."
That leaves the Labour party alone as the defender of the old system. It makes a pretty strange defender of some of the capital projects that have been backed in the past. The defenders of regional policy say only that the decline in our industrial areas might have been faster without the regional aid that has gone into them. In the meantime, the cost of £35,000 per job—the average cost of previous regional policy—to create jobs in some industries is paid for by other industries, including service industries, and other areas.
If my hon. Friends complain that other regions in the United Kingdom subsidise the north-east, I might well reply that Darlington is an intermediate area which in the past has subsidised the special development and development areas elsewhere in the north-east region.
The new policy will benefit my constituents in Darlington, first because the cost to Darlington taxpayers will be reduced, leaving firms in Darlington more to invest in our own area; secondly, because service industries in the north-east are to be included for the first time—that is a significant development in a region like ours which has been dominated by heavy industries — and, thirdly because we have retained our assisted intermediate area status, which will allow us to receive selective assistance of the kind that has benefited us well in the past and will continue to enable us to attract European investment and regional development fund money. I am grateful to the Government for recognising our case.
Criticism of the Government's changes has been ill-judged and, in the case of the chairman of the development committee of Darlington borough council, has been

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wrong. He was wrong to say that the policy means less aid. For a town like Darlington it will mean more money on the selective side. He was wrong to say that the policy will mean fewer opportunities, because hundreds more companies throughout the north-east in the service sector will become eligible for the first time. He was wrong to say that Darlington will lose to other parts of the northeast. It has always been true that a district such as Darlington has not done as well under these regional subsidies as other parts of the north-east. You, particularly, Mr. Deputy Speaker, will know that other parts of the north-east have been hit much harder by the imbalance in our industrial infrastructure and the recession.
Darlington has a responsibility for Shildon, to name but one area. It is right for more aid to go to where it is needed most. I am surprised that, of all people, a Socialist councillor, such as the chairman of my development committee, does not recognise that fact.
On balance, the Government have got it right. I welcome the switch from automatic to selective assistance—a switch in emphasis at least. I welcome the switch from capital projects to job creation. I congratulate my hon. Friends in the Department on their skill in ensuring that such a large area of the country is still eligible for European help and that that area is larger than it was.
It would be idle to suggest that £300 million, or even £3 billion, will restore the north-east to prosperity. In many ways, the best regional policies are the Government's general economic policies. The best regional policies include the policy of keeping the lid on inflation, and that is worth far more in financial terms to companies, industry and people in the north-east than regional development grants. The best regional policies include the policy of switching support from the loss-making old industries under the Department's budget to the new technology industries and to smaller businesses. That is worth more in financial terms to the north-east than regional development grants.
Our task in the north-east in bringing jobs into the region and in creating more jobs there is simply to make the north-east more attractive than any other region. That is the only reason why companies will come into and grow in the north-east. Instead of spreading doom and gloom about the region, as the series of reports by the North of England County Councils Association does, local authorities should start to guarantee lower rates than elsewhere. When Middlesbrough rates companies at £2·30 in the pound as against Mole Valley's rate of £1·64 in the pound, when Stockton rates companies at £2·13 in the pound as against Slough's rate of £1·52 in the pound and when Darlington imposes the highest rate in the county of Durham at £1·97 in the pound as against Bracknell's rate of £1·52 in the pound, is it any wonder that companies go on locating in the Thames valley and the south-east rather than in the counties of Cleveland and Durham?
Mr. Michael Meadowcroft: Will the hon. Gentleman give way?
Mr. Fallon: I am sorry. I shall not give way because I want to keep strictly to the ten-minute limit.
Instead of draining £350 million a year in rates away from business in the north-east it is time local authorities asked themselves why they have the highest proportion of
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council housing in the country—higher even than in the Soviet Union and Czechoslovakia—at 41 per cent. That is the highest proportion of public housing in England. What is the point of spending all those millions of pounds subsidising council housing and public transport and giving the unemployed cheap rented houses and free passes on the buses but not giving them jobs? Through local authority policies, other constituents in the north-east are becoming trapped in unemployment on huge council estates — away from the jobs to which they wish to move.
Trade unions and management in the north-east must do more to reduce the cost of labour. They must do so not simply by tackling demarcation, excessive overtime and the restrictive practices that have increased the cost of labour and kept other people out of work, but by looking again at the wages they pay. It is no accident that the most heavily unionised region in England has the highest unemployment. Ten years ago, the north-east had the highest average male earnings outside London and the south-east in the United Kingdom, and that remains true today.
If I have one regret about the debate on the White Paper it is that there was not more discussion on the extent to which wage flexibility might be encouraged to restore some of the imbalance in employment opportunities that the rest of the Government's policy seeks to reduce.
7.19 pm
Mr. Stan Crowther: The hon. Member for Darlington (Mr. Fallon) will understand if I do not comment on his speech.
The Secretary of State, in opening the debate, proved conclusively that he had not the slightest inkling of the real nature of the problem. In view of that, I suppose that we cannot really expect him to come up with a solution. To be fair, it has to be said that his predecessors have not come up with a solution either. The difference is that the Secretary of State is going to make it worse.
The purpose traditionally of regional policy has been to try to iron out the regional imbalances in the level of economic activity. It has to be said that, measured against that objective, regional policy has failed miserably ever since it was introduced. The differential in unemployment levels between the most prosperous and least prosperous areas of Britain is still much the same as it was except, of course, that the totals have enormously increased at each end of the scale. In my constituency, which I quote merely as an example, the unemployment level for at least the last 20 years has been about one and a half times the national average or more. When the national figure was 4 per cent., in Rotherham it was 6 per cent. Now that the national average is about 12 or 13 per cent., in Rotherham it is 21 per cent. Nobody can pretend that our past policies or existing policies have narrowed the gap.
Rotherham has been an assisted area since 1966. I make that point to show that our existing policies have certainly not solved the problem. I accept that the position would have got much worse had we not been an assisted area, and I certainly do not urge the Secretary of State to take away our status. However, I am saying that a policy which is based solely on the idea of giving financial inducements to persuade somebody to build a factory in one place rather than another has manifestly not solved the problem that we are debating. It does not work.

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There is therefore, in my view, an obvious need for a complete reappraisal of regional policy now, yet in spite of that the Government do not take this opportunity. All they can suggest as they stand at the bedside of a desperately sick patient is, "Keep taking the tablets but do not take quite as many as you did before and do not take them in the same place."
Mr. Gordon Wilson: There is rather a restricted list, too.
Mr. Crowther: There is indeed a restricted list, as the hon. Gentleman points out.
There must be no doubt, as my hon. Friends have pointed out, that the sole object of the changes announced on 28 November is not to make the policy more effective, but only to make it cheaper. I cannot understand why the Government should think that it is so desperately important to save £300 million in two or three years' time when that same Government have now been shown on the information which emerged only last week to have lost £4,000 million of the taxpayers' money on the sale of British Telecom. Are they getting their priorities slightly wrong somewhere?
I suggest that there is a need to re-examine not only the operation of regional policy but the philosophy that underlines it. Twenty years ago when the present regime of regional assistance came in, in about 1965, the object was to spread economic prosperity. At that time there were regions of the country which were grossly overheated. That was all right at the time, but today there is precious little prosperity to be spread.
In my view, a new regional policy needs to be developed which is an integral part of a national policy for economic regeneration. I refer to the economy here as meaning the real economy which is based on the production of goods and services and not simply moving money around in the City of London. The new policy needs to be based on bringing back into the service of the nation that great pool of skill and experience which is now lying on the waste heaps of unemployment.
In my own region of Yorkshire and Humberside, 13 or 14 years ago I helped with other people to set up the Yorkshire and Humberside development association. I was the chairman of it for some years before coming into the House. The Government, to their credit, are giving substantial financial help to that association in its efforts to promote the region overseas, as, indeed, they give help to other regional associations in other parts of the country.
The same Government who spend hundreds of thousands of pounds on helping regional associations to try to persuade industrialists in Japan, United States or Scandinavia to come and build their factories in Britain are quite happy to allow billions of pounds worth of capital to be exported from the country every year, creating jobs by the thousands in other parts of the world. I see a total inconsistency in this — in fact, the inconsistency is breathtaking.
For two centuries the Yorkshire and Humberside region made a massive contribution to the wealth of the country through its traditional industries—textiles and clothing, steelmaking, engineering, fishing, coal mining and agriculture—and in every one of those industries there has been a huge drop in the number of job opportunities over the past 10 to 20 years. I will not go through a lot of statistics; I mention only one. In the manufacturing
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industries in the Yorkshire and Humberside region in 1974 there were 764,000 jobs and by the middle of last year that number had dropped to 514,000—a loss of one third of the jobs in manufacturing. Those have not been replaced, of course, because of the failure of regional policies. That is the problem that we face.
I shall certainly not—and it would not be right for me to do so — go through the arguments that were advanced by my hon. and right hon. Friends in the debate in the House on Tuesday. But it is proper to mention that, if there were a plan for economic recovery in the country based on using the construction industry as the spearhead, which is what we were talking about on Tuesday, there would necessarily be a major regional dimension in such a policy because it happens that many of the areas with the greatest needs for investment in housing and other capital projects are also the areas with the highest levels of unemployment and the greatest potential for development. That is the kind of policy that we now need to be developing.
What I seek is a positive regional policy, not a negative one aimed solely at alleviating the misery. I believe that the Government today should be announcing the establishment of development agencies in the English regions and a massive programme of investment in those regions so that once again areas like my own and many more which are now suffering serious deprivation and unemployment could take their part in making this country once again a great industrial nation.
7.28 pm
Mr. David Sumberg: If ever there was an example of the positive way in which the Government have responded, in the words of the motion, to a
"closer alignment of the new Assisted Areas map to areas' relative needs for increased employment opportunities",
I would say that my right hon. and hon. Friends at the Department of Trade and Industry need look no further than my constituency and the metropolitan borough of Bury. I want to devote my remarks to the impact of regional policy on my constituency, because I think that what I have to say shows an interesting history and, indeed, that the Government are willing to listen to representations that are made to them.
In the past Bury was eligible for regional assistance, but, for reasons which are beyond me, it was withdrawn some years ago. As a result, the town, its commerce and employment prospects suffered immediately. Bury suffered not just because there was no longer any Government aid for projects, however worthwhile, or because it no longer had access to European funds, but probably because that there was a feeling of fundamental unfairness and injustice.
That feeling of injustice and unfairness stemmed directly from the fact that all the surrounding areas—Manchester, Rochdale and, in particular, Bolton, all constituent parts of Greater Manchester—were eligible for assisted area status in some form. As a result, because Greater Manchester is so closely interlinked with good travel facilities and communications, it became difficult, despite a local authority which pursued a policy of encouraging new business, particularly with its low rating policy, to tempt new business into the area and away from surrounding authorities.
An undoubted wrong therefore needed to be righted. If final proof of that were required, the recent publication of

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figures that showed an increase to over 17 per cent. in the level of unemployment in the travel-to-work area set the seal on it.
Local business opinion felt strongly that although it was more than content with and confident in its ability to compete with all corners, it was impossible to compete on such unfair terms. The community was outraged at the fact that the town remained an island in a sea of more advantaged areas. Therefore, my hon. Friend the Member for Bury, North (Mr. Burt) and I, helped tremendously by the local authority, the local business community and the trade unions, put the case to my hon. Friend the Under-Secretary of State for Trade and Industry. I appreciate, following the comments made by my hon. Friend the Member for Gloucestershire, West (Mr. Marland), that this may seem like the Minister's benefit match—I am sorry that he is not here—but I wish to pay tribute to his considerable patience, interest and, above all, understanding of the problems that I have outlined. The fact that he was a former pupil at Bury grammar school may have helped. but he saw the justice of our case.
The decision which was announced in the House on 28 November, which included the restoration of assisted area status for my constituency and the town which is part of it, was good news, because it recognised, after the unfairness that I have mentioned, that the constituency, with its over-dependence upon the paper industry and other traditional manufacturing industries of the northwest, was a classic case for some form of help.
I appreciate that, whenever one area receives assistance and others do not there is bound to be—my remarks have emphasised this—an element of unfairness. It is impossible to remove all inconsistencies, but the Government have tried to do that by their announcement. They have succeeded in many instances, and the fact that they have succeeded in the case of Bury has been received with considerable gratitude and relief in my constituency.
The people whom I represent undoubtedly have the skills, enterprise, energy and, above all, determination to succeed in the job of reviving their community. To adapt Churchill's words, they have now been given some of the tools by my right hon. and hon. Friends at the Department of Trade and Industry. For that reason, I shall have no hesitation in supporting the Government in the Lobbies tonight.
7.37 pm
Mr. Jack Thompson: I am sorry to see that the hon. Member for Darlington (Mr. Fallon) has left the Chamber, because he and I represent constituencies in the north-east of England. The hon. Gentleman and one of his colleagues have been critical of a document produced by the North of England County Councils Association. He said that nothing happened in the northern region in the time of either the Labour or Tory Governments in the 1960s and 1970s. I know that, like me, he received the document on the morning that he made a press statement about it. He could not have had the opportunity to read it in depth or study its implications.
I shall quote a significant part of the document which is important for the north:
"Regional policy has been highly successful in the past. The Northern Region Strategy Team estimated that over the decade
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to 1973 Regional Policy generated some 50,000 more jobs in manufacturing industries in the North than might otherwise have been expected."
That shows the significance of the programme that was established in the 1960s and carried through to the early part of the 1970s for the north of England.
During the time that I have been involved in pursuing the interests of the north as a Member of the House, as a representative of my county council, as a member of the executive body of NECCA and for the past six years a member of the Northumbria water authority, one thread has run through all the reaction to Government regional policies. I can define it in one word—"inconsistency". Year by year attempts by industry and local authorities to take advantage of the meagre and reduced support given to the regions suffering long-term decline have been constantly frustrated by significant changes in regional aid. The lack of confidence in regional policy because of that constant tinkering has been reflected in the attitude of potential sources of employment planning to expand,. locate or relocate in peripheral areas such as the north-east. Industrialists who have responded to the challenge to locate on a site qualifying for aid and setting up programmes for development and production are faced with a change in the rules which affects their ability to overcome the initial problems of starting or expanding their businesses. That is reflected in the November statement and even more so by the moratorium.
Before my election to the House I was leader of Northumberland county council and I had the opportunity to consult many industrialists in the north of England and not just in my community. Some were long-established in the region and some were enthusiastic newcomers. They generally all expressed the same view—they appreciated the enormous help given by local authorities but there was, and still is, a lack of confidence in long-term planning because of the constant changes in regional assistance which are usually to their detriment. I am sure that after today's announcement about the moratorium they will be sitting again with their calculators, computers and pieces of paper trying to work out what grants will be available from midnight tonight if they catch the last post.
Selected public expenditure figures for the United Kingdom covering regional specific measures were down from £1,065 million in 1978–79 to £715 million in 1984–85. Industrial measures fell from £3,351 million in 1978–79 to £1,886 million in 1984–85. Those years, 1978–79 to 1984–85, reflect a connection between the attitudes of the present Government and what actually occurred.
The reduction coincided with reduced opportunity for local government to increase its contribution to the improved infrastructure, to give direct assistance to job creation and to help with the expansion of the industrial base of their communities because of the penal rate support grant policies pursued since 1979.
I have been directly involved in that aspect as a member of a county council. I have witnessed the deterioration of the infrastructure of my county, and the local authority has been unable to do much about it. I congratulate local authorities on the splendid job they have done, taking account of the dramatic reduction in rate support grant.
My region is the one I know best and, from my experience there, I direct the attention of hon. Members to a fundamental issue which arises because my views conflict strongly with those of the Government. My hon.

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Friend the Member for Rotherham (Mr. Crowther) mentioned this aspect. During the first industrial revolution, many thousands of people moved about the north of England, taking up work in the expanding industries of coal mining, heavy engineering, shipbuilding and steel making. The Tyne, Wear, Northumberland and Durham became famous for those industries, basically because of the availability of raw materials and the inventive skills of the northerners.
The north of England during that period was a major producer of wealth for Britain. Indeed, it can rightly be claimed that the foundations of the present economic structure of the nation was strongly based on the rich seams of coal and iron ore and the skills in heavy engineering and shipbuilding of that era. My hon. Friend the Member for Rotherham made a similar point relating to Yorkshire and Humberside. What he said did not conflict with what I have said, because the area to which he referred was basically the north.
Since the second world war, the changing face of the economy has created a virtual vacuum in the north, although there is strong evidence that that sad state of affairs need not have arisen had different central Government policies been pursued, including those of former Labour Governments.
The fundamental difference between the situation in the 19th century and first half of the 20th century and now is that today there is less need for workers to move to other areas for jobs. In other words, it is not necessary these days for me to get on my bike. There is more opportunity for jobs to move to people. However, this requires a degree of national planning and regional organisation, and they have been sadly lacking in the Government's policies.
I have time and again quoted an example from my constituency — it is probably the best example of a development anywhere in Britain — of co-operation between Government, private industry, nationalised industries and local authorities. A company known worldwide, Alcan Aluminium, decided in the 1960s to come to Britain. It wanted to establish a smelter in this country. There were extensive discussions between the Labour Government of the day, local authorities and others, and the company decided to establish at a place named Lynemouth in my constituency. That smelter is now one of the most productive units in Alcan's international activities. It sets a standard for the company's other production units.
In no way could Northumberland be associated with the aluminium industry before Alcan came on the scene. All we knew of aluminium was as a component part of pots and pans and as used in parts of aircraft during the last war. Today, aluminium is an important industry in my constituency, employing 1,100 people. The majority of them, working in Alcan's plant, have been retrained from other work, and I am told by the management that the factory supports perhaps 5,000 other jobs in the area.
We want to see more of that type of development in the north. It has happened to a degree, a recent example being Nissan. The local authorities had more influence on Nissan coming to the north-east than any other factor, and I congratulate the North of England County Councils Association. I was involved at the time when the five northern counties—all Labour-controlled, incidentally—got together and decided which two sites to put forward
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to Nissan. The chosen site was in Sunderland. That type of regional planning should be provided by the region. It is an example of what can be achieved by planning.
I appreciate that we must have change, but some of the changes affecting local authorities are extremely worrying. My local county council has in recent years, because of circumstances, established an employment committee. It has invested in a business centre, supported by the two district councils in the south-east of the county, and the result has been the setting up of the south-east Northumberland enterprise trust, which has been officially opened today.
That reflects not only the efforts being made in Northumberland but those taking place in Durham, Cumbria, Cleveland and Tyne and Wear, though the Tyne and Wear area is likly to disappear, and that, too, will have a serious effect on the north.
I recall being in discussion with a Minister at the Department of Employment some years ago. At that time we in the north were advised to pull ourselves up by our own bootstraps. In those days we did not even have bootstraps. We have them today and we are pulling ourselves up by them. But we need help and support from the Government. We need a democratic regional body and, more especially, we need a Minister responsible specifically for the north.
7.47 pm
Mr. Richard Hickmet: It must be right that regions with high rates of unemployment and derelict industries cannot be left to languish. Some attempt must be made to iron out the imbalances in employment and industrial dereliction in those regions.
Some of my hon. Friends claim that regional assistance simply results in the movement of jobs from one constituency to another, but I do not accept that that is necessarily the case. Indeed, even if it were, it is no reason for not having a regional policy. Social consideratiions must play a part and it is particularly important that regions which have suffered a rapid and substantial decline in older and heavier industries should have effective regional assistance such as the Government are proposing in their new policy. That assistance can produce viable economic activity. I agree with my hon. Friend the Member for Darlington (Mr. Fallon) that such activity is, however, dependent on the national economy being in such a state that it can occur.
What is rapid decline and what regions come within that definition? It will help to answer that question if hon. Members consider the circumstances that apply in my constituency. The decline there has been rapid and substantial and to a large extent it undermined the economy of the region. The travel-to-work area of my constituency reflects that process in terms of unemployment and industrial decline. I suggest that the travel-towork areas must be the building blocks on which our policy is constructed.
This is a happy evening for me, because I am able to thank the Government for converting my constituency into a region with the most beneficial grants available, remembering that we in south Humberside are not in Scotland or Wales. We do not have a tedious lobby taking up the time of the House once a month. We do not have bodies such as the Welsh and Scottish Development Agencies. We do not have the time allocated to those vociferous areas.

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At one time Scunthorpe employed more than 20,000 men making steel. It was a boom town. Massive investment took place in the 1970s. But it was a one-industry town. Since then, the steel industry has faced problems of over-capacity both at home and abroad and between 1981 and 1983 11,000 men were put out of work in my constituency. I invite any of my hon. Friends who doubt the need for regional policy to drive past the steelworks that was closed. The consequences of that closure for the economic viability of the region, for employment and for the industrial base were severe indeed.
That region needs assistance. When limited resources are available to Ministers, judgments have to be made as to where assistance should go. I am bound to say, no doubt partly because it involves my constituency, that if any part of the country deserves assistance it is the steel closure areas of Scunthorpe, Corby, and so on. I welcome the decision of my right hon. Friend the Secretary of State to give us development area status. I am also grateful for the assistance given to me and to the deputation that I brought to the Minister, when two authorities of different political persuasions buried the political hatchet and put their case together most effectively. If the regions with development area status are to market themselves successfully they must bury their political differences. They will be far more successful if the political parties co-operate.
In my constituency we now have three enterprises, with all the benefits and incentives that they offer to industrialists. In addition, we are eligible for European regional development fund grants to improve our infrastructure and for non-quota ERDF funds to assist industry, as well as cheap loans from the European coal and steel fund to assist investment. A substantial factory-building programme has been undertaken by English Industrial Estates. I believe that south Humberside is now in a position to broaden its industrial base and gradually to attract investment.
Regional assistance must be cost-effective and I welcome the Government's decision to encourage investment in job-creating enterprises such as the service sector. There must be no more Sullom Voes. My constituency needs jobs. I urge my hon. Friend the Minister to bear in mind the effect that some other Departments have on the efforts of his Department and of local agencies to achieve those jobs. We have constant problems with the Ministry of Agriculture, Fisheries and Food over our proposals to develop the Trentside wharves because grade 1 industrial land is involved. We have to persuade the Department of Transport of our eligibility for freight facilities grant. We have to persuade the Department of the Environment that we are eligible for derelict land grant. When all those grants are available for regions such as mine, there is a clear case for some kind of co-ordination.
I have no doubt that there is a bright future for my constituency. Goodness knows, it has waited long enough to see the light at the end of the tunnel. I therefore welcome the Government's decision in terms of general regional policy. Although south Humberside has no Minister in the Cabinet and is not entitled to a day a month of parliamentary time, the needs of the region have at long last been recognised. I am grateful for that and I believe that a bright future awaits us.
7.54 pm
Mr. Gordon Wilson: The hon. Member for Wansbeck (Mr. Thompson) was clutching at straws when he referred to the advantages of having a territorial Minister. As a Scot, representing a country which has such a Minister, I should warn the hon. Gentleman off that prospect. When decisions have been taken by the Government, the Scottish Office has proved utterly impotent and ineffective. It certainly has not defended Scotland in any way at all. There are two reasons for that. First, the Secretary of State for Scotland is a minority of one in the Cabinet. He can be, and no doubt was, outvoted with regard to the moratorium announced today. Secondly, the Barnett formula limits growth in the Scottish Office to that of the comparable United Kingdom Department. In other words, it has very little power, so the hon. Gentleman should beware of that solution.
The hon. Member for Glanford and Scunthorpe (Mr. Hickmet) referred to the "tedious" Scottish and Welsh lobbies. As one who has to feature in them, I find them equally tedious. We should be far better off with our own Government and Parliament, able to take decisions sympathetic to the needs of our nation without having to explain them to people who know nothing and care less about our country. I assure hon. Members that neither forming part of a tedious lobby for the north of England nor having a territorial Minister to whom the tedious representations may be made would bring much advantage.
Strangely enough, in the current cold snap the south of England obtained the additional social security benefits of which the Scots have been deprived in the past. That just about sums up the political decision-making behind the changes in regional policy. The west midlands and one or two other areas, represented in glowing terms by distinguished new Members who came to the House after the last election and who are worried about keeping their seats, have received the benefits. To provide those benefits for the Conservative party, £100 million has been taken from Scotland and £60 million from Wales. Those moneys are to be transferred to the areas that the Government believe will be the cockpits of British policy in the future. In the decaying society of the United Kingdom where money is short, it is made available to those who will benefit politically—that is, the Conservative party.
The Secretary of State rightly referred to the role of multinational companies which sometimes come in where they can obtain the most cash, pocket the money and leave when times get hard. That is very much like the Government's policy. As the United Kingdom's economy goes down the plughole, money becomes short, public expenditure constraints are imposed, and money is taken from the periphery in the hope of sustaining the central core. Those are party political decisions, and they should be recognised as such.
I take exception, too, to the Secretary of State's analysis of regional policy as being social rather than economic, although I accept at once that regional policy is no substitute for relevant economic policy. When the regional aid schemes were developed and refined in the 1960s, part of the objective was to achieve economic regeneration when the national economy and the stop-go policy applied from the centre discouraged activity at the

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periphery when things were cold. National policies at that time thus benefited the overheated regions but did not affect the north of England, Scotland or Wales.
Unemployment in the small countries of Europe is between 4 and 6 per cent. That is the standard upon which we should set our sights. We should not just complain that unemployment exceeds 13, 14, 15 or even 20 per cent. It is a sign of how bad things have become when we are prepared to accept unemployment rates which none of us would have accepted a few years ago.
During his speech the Secretary of State for Trade and Industry said that industrial policy costs money and that, in a few years' time, he will save £300 million. He appears to hold the implicit view that regional policy amounts to no more than a row of nuts—that is social rather than industrial or economic aid.
The Government spend about £17,000 billion on defence. Scotland, however, receives less than 5 per cent. of defence expenditure. Therefore, Scotland loses out. Most of that money is spent upon the betterment of the south and the midlands. Too little attention is paid to defence expenditure in Scotland. Mr. Peter Balfour, the chairman of the Scottish Council (Development and Industry), said:
"Recent events have given the impression that higher education and regional industrial policy do not comprehend the needs of adjusting our industrial and commercial activities to the changing requirements of the market place."
There is deep dissatisfaction in Scotland — in industry, the trade unions and local authorities—about the changes that the Government have made. Scotland has suffered 30 per cent. of the cash cuts. It is not as though Scotland is a net debtor. If Scotland were an independent country, it would receive at least £11,000 million or perhaps £12,000 million in oil revenues. That is an expression of the deep ingratitude that is shown by the present Government towards Scotland. Members of Plaid Cymru have asked me to say that they will develop their own arguments about Wales in the Welsh Grand Committee, but that they take great exception to the huge cuts that will be suffered by Wales. There is controversy about the applicability of European grants to Wales and to Scotland. I hope that the Minister will say something about that matter.
The forecasts are that Scotland could lose up to half a million people during the next 25 years. That is not just the result of a drop in the birth rate; it is the sign of the gross ill health of our economy. Emigration is the surest possible sign that an economy is not doing well. I would point out to the Minister with responsibility for industry in Scotland that his Department has betrayed Scotland and the Scottish economy. It is supposed to protect them, but it does not. One of the slogans during the radical rebellions of 1820 was "Scotland free or a desert." We are reaching the stage where, without a change in Government policy, Scotland will be an industrial and economic desert. That is why the Scottish National party campaigns vigorously for a Scotland that, like other small countries in Europe, will be free and prosperous.
8.4 pm
Mr. Roger Gale: Like many Members, I suppose that I ought to be here tonight with a begging bowl because I represent part of a travel-to-work area which has the highest unemployment rate but which is not in receipt of assistance. However, I believe that we
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have sufficient natural assets in our harbours and coastline and in our proximity to the continent to be able to sort out our own problems and to create the new jobs that the area undoubtedly needs. To that end, the East Kent economic development group, an entirely private body that is backed by the county council, will achieve a great deal. However, we cannot do so with one hand tied behind our backs.
I am not asking for advantage. Equally, we cannot succeed if we are to be disadvantaged. Because of the assistance that my right hon. Friend the Secretary of State for Trade and Industry gave me in a skirmish in the midlands a couple of years ago, he knows that I have always believed that regional aid does not, in the long term, create jobs. It simply moves jobs from A to B. So long as south Wales, Liverpool and the north-east offer attractions which other areas do not offer, companies will move from my constituency, and others like it, to those areas
The hon. Member for Yeovil (Mr. Ashdown) drew attention to the remarks that I made on 28 November. However, he wrongly believed that I was advocating specific projects for my constituency. I was not. I have always advocated sectoral aid. In that debate, my hon. Friend the Minister of State indicated that the salvation of my constituency was tourism and that the proper way to fund tourism was by means of section 4 grant assistance. I agree entirely with my hon. Friend. On that occasion he said that we in Thanet, North could do much to promote tourism. I believe that that is not the only future for Thanet, North. We shall certainly attract new industry too.
However, to take the point made by my hon. Friend, if one looks at grants under section 4, one sees that in the past jobs have been created under regional aid by means of the expenditure of about £30,000 to £35,000 per job. On 28 November, my hon. Friend indicated that the Government wished that figure to be reduced to about £10,000. Under section 4, a new job in the tourist industry is created for expenditure of £4,500. Roughly 50 times as much is spent on regional aid as is spent on section 4 aid. Under section 4, we make available just £8 million for the whole of the tourist industry in this country. We have heard that regional aid is projected to be £400 million and that it is currently more than £400 million. I ask my right hon. Friend to consider reallocating some of the money that is now spent on regional aid to the tourist sector and to reallocate it as sectoral aid under section 4. In terms of job creation, that money would certainly be more effective. I also ask my right hon. Friend to try to cut some of the red tape which surrounds the award of section 4 grant. That would be of enormous assistance.
If emphasis is to be placed upon service industries and upon grants under section 4, will the Government consider making a declaration that section 4 money is aid money? If the Government were to make such a declaration, we should be able to compete on at least equal terms for the European assistance that is so very readily available.
I endorse entirely the measures that have beer taken by my right hon. and hon. Friends to reduce the waste in terms of the money that is spent on regional aid. I applaud the cut of £300 million that is to be made in regional aid if that money can be reallocated—
Mr. Austin Mitchell: The prosperous south-east is gloating again.
Mr. Gale: If the hon. Gentleman had been listening earlier, he would have heard that this particular part of the

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prosperous south-east has the highest unemployment in the country, apart from areas similar to his which are receiving assistance. That cut of £300 million would be well made if the money could be reallocated for a better purpose. I shall endorse that policy, as I shall endorse any policy which redirects money from capital expenditure under the old regional aid programme to sectoral aid and job creation.
8.10 pm
Mr. Robin Corbett: I am proud to speak for Birmingham and it will be noted in that city that not one Conservative Member from it is seeking to take part in the debate.
A brief circulated by the Regional Studies Association states:
"Regional disparities do not merely represent a 'social problem'; they involve the national economic interest".
If only the Secretary of State and his colleagues would understand that and stop treating the issue as something on the fringe of charity, how much better things would be.
There can be no proper economic recovery without the rebirth of the manufacturing capacity of Birmingham and the west midlands. The extension of aid to the service industry may help, but Britain has no proper economic future based purely or mainly on the service sector—taking in each other's washing, as the right hon. Member for Old Bexley and Sidcup (Mr. Heath) so rightly called it the other day. I assert the critical need for the renewal of our manufacturing base to safeguard our future.
Regional aid needs to be seen in a wider context—the spending by local authorities on housing, education, social services, and so on, because either that money creates jobs, or the absence of it destroys jobs. Under the Government less money means fewer jobs and poorer services in return for a doubling of the rates. It also has to be seen in the context of the state of the infrastructure of the region and the need for the repair, renewal and development of that.
In opening the debate the Secretary of State rightly said that we should ask what the policies do for jobs. I will tell him what they do for jobs in Birmingham. Second XI status for Birmingham, which is what we have, will do little or nothing to staunch the continuing loss of jobs in that great city. Unemployment in Birmingham is now one third higher than it was in 1979. In my constituency more than 7,000 people have been out of work for more than a year. Over the whole constituency, unemployment runs at 22 per cent. The Government deny jobs, hope and dignity to those people and to Birmingham in general.
Birmingham argued for development area status for its decaying inner city areas where up to 40 per cent. of people are jobless—areas such as Sparkbrook, Small Heath and Ladywood. The dangerous underlay in those inner city areas is that in many parts of them the ethnic communities make up around 50 per cent. of the population. For black and Asian youngsters in those parts of the city, leaving school almost certainly means immediately joining the dole queue.
During the argument over Birmingham and the west midlands the Government hid behind the new travel-towork areas—boundaries which the Government revised. The new Birmingham travel-to-work area is a complete farce and brings the danger of sucking jobs out of the inner city areas to greenfield locations on its edges. However,
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I must say that the miserable assistance offered to Birmingham reduces that danger because it is so inadequate.
In Manchester the travel-to-work area for the purposes of regional aid has been split and there is nothing in the legislation to prevent the Government from treating Birmingham in the same way and to define parts of those inner city areas for full development aid on a local authority ward basis.
The Secretary of State also said that urban aid should be taken into account. Of course it should, but his hon. Friend the Member for Ealing, Acton (Sir G. Young) at the Department of the Environment made it clear a few days ago that under the Government urban aid next year in real terms will be cut by 4 per cent. Therefore, there is no joy in that.
Birmingham has been shabbily treated. Our job loss has been among the highest in the United Kingdom and it is near the top in the Common Market unemployment black list. The dole queue is still growing. That is why the city council, on an all-party basis, Members of Parliament and the Birmingham chamber of industry and commerce, got together to argue the case for better first-class treatment for the inner city area of Birmingham.
Will the Minister give serious consideration to five quick points, which will test how serious the Government are about wanting to assist Birmingham properly to get back into business?
Firstly, given the will, there is nothing to stop the Government deciding to give full development area status to certain inner city wards as defined on the basis of local authority boundaries.
Secondly, they can give some assistance to work of regional importance—the development of a convention centre in Birmingham and the rapid transport system, the upgrading of Birmingham airport, the improvement of the rail link to London and all that that means, and the improvement of roads to east coast ports.
Thirdly. they can establish a high-powered, dedicated, committed, knowledgeable task force for Birmingham to knock heads together, to slice through the red tape and to see that the money that is available is spent in the most effective way.
Fourthly, the Government can increase the urban aid programme fund, and fifthly, they can create a special local authority power related to grant-related expenditure assessment for economic development in the surrounding intermediate area.
Birmingham will judge the seriousness of the Government by their attitude to unemployment and by their response to those and other points which have been made on behalf of the city. I have no real faith in a positive response from the Government because they have demonstrated that they just do not care about people being forced into, and kept in, the dole queues. Already, the Minister's colleagues are trying to cut the throat of the West Midlands county council which fathered the west midlands enterprise board, which has a record of creating real jobs through its activities, not at £10,000 or £50,000 per job but at about £2,600 per job. The tragedy is that such an organisation cannot create enough jobs to make up for the large-scale losses in the manufacturing sector. None the less, the abolition of the West Midlands county council at least puts a question mark over the future activities of that board.

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The Government have shown that they prefer to cut and destroy. I urge and plead with them to assist Birmingham to get back into business as a major manufacturing centre. That is what we are good at. We have been knocking metal about for a century and that is what we want and need to do if our battered city is ever to recover.
8.17 pm
Mr. Patrick Nicholls: My hon. Friend the Under-Secretary of State is well aware from correspondence that I have had with him, from debates in the House and from a delegation which I led to see him before the decision was made how I feel about the withdrawal of aid from my consituency.
Whatever objections my delegation might ultimately have had about the final decision, it is right that I should say that it appreciated the way in which it was dealt with. It is one thing to be given a decision which one does not like, but it is something to be given a decision by someone who is clearly on top of the issues with a grasp of the facts. I was told today—I have no knowledge of this myself—that there are Ministers who, when delegations are led to them, do not seem to have a grasp of the facts. That was not the position in this case.
I do not want to detain the House unduly by setting out the reasons why I object to what was done in my constituency. I have made my views on that known and there is no point in taking up time trying to urge the Government completely to change their policies to fit in with my views and predilections. However, the central problem with which we are dealing here, and the essential problem that affects my constituency, is that the principle of regional aid, as we are forced to operate it at the moment, rewards the profligate and, in the end, punishes the industrious. As long as we have a system that works primarily on the basis of unemployment statistics, without looking at why there is unemployment in that area, in the end the industrious areas are bound to suffer. It ill behoves Labour Members to refer to areas as regional deserts when vast amounts of public money have been poured into them through the years. For hon. Members to refer to their areas as regional deserts when in some cases they are nothing better than regional plug holes approaches cheek.
Mr. Austin Mitchell: Scroungers, eh?
Mr. Nicholls: I do not know whether the hon. Gentleman is trying to intervene, but from the way in which he is making interjections it is clear that he has recently come from a place where he finds the company more convivial. If he wishes to make his own speech in due course, I am sure that we shall be delighted to hear him. In the meantime, if he will contain himself and not waste other Members' time, that will be of assistance to us.
Even if my hon. Friend the Minister does not agree with the way in which I have set out the dilemma in which my constituency finds itself, he will agree thus far—it was not Teignbridge's fault. If there was ever an example of an area using regional aid well, effectively and to the benefit of the community, Teignbridge was such an example. In saying that, I pay tribute to the work that the Teignbridge district council has done in putting a range of schemes together.
If my hon. Friend the Minister agrees with that and he agrees that Teignbridge cannot be held at fault for what
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happened to it, it must be clear that he and I will be united on another point. If anything can be done in the ambit of the policy on which the Government have decided to mitigate the effects that Teignbridge will suffer, that should appeal to my hon. Friend. Therefore, to that extent, and perhaps only to that extent, I can bring him glad tidings from the west country, because there is one obvious way in which Teignbridge and possibly other such constituencies can be assisted.
Transitional plans are available for European funds. The worst vice in the way in which the system works at the moment is that if an area loses national aid, it loses access to European funds as well. The transitional arrangements have two basic ingredients. First, the application has to be made within the next four months, and, secondly, the majority of the expenditure concerned has to be made by 29 November 1985. Politics is the art of the possible. I suggest that to insist that applications should be made by the end of March is going a little too far. However, I concede that in many cases it might be possible to accelerate that application and to bring it within the transitional arrangements.
However, in the practical world in which we live, it is asking too much to insist on a concession that says that the majority of the expenditure has to be made within the year. The consequences of that were extremely well set out in a report prepared by the chief executive of the Devon county council and the property services manager, Mr. Macklin, and Mr. Smy, of the economic committee of the Devon county council. The report pointed out that, if that transitional arrangement is allowed to stand, in the next five years the west country will lose about £18,600,000 of European funds.
I can give one specific example from many possible examples. It concerns the Roadford reservoir. There cannot be one hon. Member who is not aware of the problems in the west country with the drought this summer and in 1976. Because we shall need access to European funds, the chances are that we shall lose about £9 million of European money to which we would otherwise be entitled. Perhaps, with creative accountancy, it would be possible to cobble something together and to say that most of the expenditure could be done by November 29. I do not know, but I doubt it. The position was summed up in the report to which I referred by a paragraph that read:
"Such an extension would enable many important schemes to be completed and thus provide a basis of infrastructure upon which to attract inward industrial and commercial investment, and therefore job opportunities in the future."
I do not believe that those transitional arrangements were put in as mere window dressing. They were put in for a very good reason—because it was admitted, even within the ambit of the Government's policies, that there had to be transitional arrangements. I do not think that it is too much to say that in this case it may be necessary for the Government to go back to the European authorities and renegotiate that part of the transitional arrangements that says that the majority of the cost has to be carried out by November 1985.
If those proposals are not mere window dressing, if their purpose is to take account of the fact that areas such as Teignbridge suffer through no fault of their own, it is not asking the Government too much to ask them to put the broad framework right, to go back and get another concession.

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If there is any way in which I can sum up why that should be done, it comes down to this—it is common justice. I hope that when the Government find that they have to operate a policy that is fundamentally flawed they will at the very least ensure that the transitional arrangements mitigate its effects.
8.25 pm
Mr. Robert N. Wareing: To call this a debate on regional policy is something of a misnomer. It is more a debate on a policy of sorts of one Government Department—the Department of Trade and Industry. The aim of the policy that we are being asked to endorse this evening is not to aid the regions but to help the Chancellor to make further cuts in public expenditure. We are being asked to endorse a reduction of 54 per cent.—from £643 million to £300 million—in expenditure on regional development grants and selective financial assistance between 1983–84 and 1987–88.
Since the mid-1970s, regional aid is one third down in real terms. Areas such as Merseyside require a comprehensive, interdepartmental strategy—the sort of strategy that was outlined for us immediately after the Toxteth riots when the present Secretary of State for Defence, then the Secretary of State for the Environment, came to Merseyside and established a task force. A number of hon. Members—the hon. Member for Leeds, North-West (Dr. Hampson), who intervened in the Secretary of State's speech this afternoon, and my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) — have asked for a task force. Merseyside's experience of the task force has led to disillusionment. When it was set up the present Secretary of State for Defence determined its role as being to deal with
"the overall deployment and effectiveness of public resources in Merseyside."
Under the present Secretary of State for the Environment, we have unco-ordinated, project-by-project overseeing. The task force on Merseyside is no more now than an outreach department of the Department of the Environment.
We do not want a task force such as that in an area with substantial unemployment. Merseyside now has about 50,000 or 60,000 fewer jobs than when the Secretary of State for Defence visited it in the aftermath of the Toxteth riots. We have 140,000 people unemployed and 195,000 supplementary benefit claimants. The deprived parts of Merseyside will now have to suffer a loss under the policies that we are discussing this evening.
It will lose its special development area status, and, in consequence, the regional development grant will be reduced from 22 per cent. to 15 per cent. Although new plant will qualify, replacement plant, which many firms require in order to replenish their resources, will not.
The regional policy that we are being asked to endorse has nothing in it to assist the port of Liverpool or the airport. Although no doubt there will be a few dissident voices from the Back Benches, the Conservative party is in the process of establishing a third London airport at Stansted and, to all intents and purposes, downgrading airports such as Manchester, which is already an established international airport. There is nothing in the Government's policy to help Manchester airport.
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Conservative Members may protest that Manchester is to be made an intermediate area. What God taketh away, he giveth back. It was the Conservative party that withdrew assisted area status from Manchester on an earlier occasion.
Liverpool airport has pleaded, month in. month out, for an upgrading of its status. It does not even have a duty-free shop, despite the fact that most of the people using it are about to take international flights. They make their way to Heathrow, Gatwick, and other international airports.
There is nothing in the regional policy to help tourism. The much-maligned Merseyside county council has taken very much on board the need to develop tourism in an area that — as the Government themselves recognise — has some tourism potential. Last year, the international garden festival was established. Merseyside county council has brought the tall ships race to the Mersey, arranged the Mersey river festival and developed the Beatles connection as one of the attractions of Merseyside. The area is close to the Lake District and to north Wales. Tourism is an area in which jobs can be created. If the Government looked more kindly upon those who are trying sincerely to develop tourism on Merseyside, we would do much better.
The policy is a loss to the north-west as a whole. The smaller amounts of aid to be made available for regional policy in the north-west are to be diluted. At the moment, 47 per cent. of the population live in assisted areas. Under the new policy, over 60 per cent. will be included. That is not a plus; it is a minus. In the case of Merseyside, pressure was doubtless brought to bear on the Government by the Tory Wirral borough council. As a result, the Chester travel-to-work area is now included in the Merseyside development area. The effect will be to dilute the capital injected into the inner city and the more deprived areas of the county of Merseyside.
Merseyside did not gain much from regional policy in the immediate past. Even within the more confined boundaries of the special development area, when regional development grants were paid to firms moving into Merseyside, most of the capital went to the more prosperous and peripheral parts of the region.
What Liverpool and Merseyside need is for all Government spending to have a regional dimension. It is no use the Government telling us that we are to have suchand-such a sum in regional development grants when, since 1981, they have denuded Merseyside county council of £76·5 million. That money would have been spent on building up the infrastructure on Merseyside. It would have enabled us to develop the area so as to make it more attractive to business men. Do not say that you are helping Merseyside through all your policies. I do not mean you, Mr. Deputy Speaker. I am referring to the Government. They say that they offer regional development grants to firms moving into the area, but, on the other hand, they are making the area a cultural desert by attacking art and culture there.
The Philharmonic hall is a place that many people would want to visit and where the executives, whom we hope to attract, might wish to take their recreation. The Philharmonic hall is under threat because the Secretary of State for the Environment is doing the opposite of what the Secretary of State for Trade and Industry tells us that he is trying to do, because he is taking money out of Merseyside.

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If we take all the districts in the county into account, we find that between 1981–82 and 1984–85 the districts and the county council have lost £136 million in terms of loss of block grant and penalties demanded by the Department of the Environment. That loss affects social, community and education services.
One cannot develop a comprehensive regional policy in a vacuum. This is a phoney attempt to lull the public into believing that the Government are making a real attempt to solve the problem of jobs. That claim is false.
The Government should not tell Merseyside to look to the private sector. Over the years we have witnessed the collapse of the private sector of manufacturing industry. When the present Secretary of State for Defence visited the city in 1981, he took a celebrated coach tour around Liverpool with some business men. They set up an organisation called Inner City Enterprises. I challenge the Government to tell me of £1 invested by Inner City Enterprises in any inner city. The Government pretend that they can solve the problem of the gap between the rich and the poor in this country by spending less than 1 per cent. of total public expenditure. That is a complete fallacy. Merseysiders know what the Government are about.
8.37 pm
Mr. Kenneth Hind: It is singularly appropriate that I should speak after the hon. Member for Liverpool, West Derby (Mr. Wareing), because his constituency and mine are in the Liverpool travel-to-work area. On behalf of the many honourable Conservatives on Wirral council, Sefton council, and West Lancashire council, I say that we in the Merseyside sub-region are sick and tired of hearing the Labour party whingeing on about the bad treatment that Merseyside has had from the Government. The Merseyside sub-region has benefited more from grants and Government investment than any other region in the country.
Furthermore, the hon. Gentleman conveniently forgot to mention the fact that freeport status was recently accorded to part of the dock area of Liverpool. That should certainly help to revitalise an undeveloped and unfortunately rundown part of the city.
I am not suggesting that everything in the garden is rosy. but opportunities have been put in Liverpool's way, perhaps more than in any other region. Labour Members should recognise that. It is regrettable that I must observe that if Labour Members who represent Merseyside were more co-operative with Conservatives who have the interests of Liverpool at heart, it would be a much better place. They merely knock and criticise and fight among themselves. They would do far more for Liverpool if they put over a good, progressive and dynamic image of the city, which will have a great future if we work for it.
Mr. Wareing: How many Tory Members are there in Liverpool? None.
Mr. Hind: There are at least three in the Merseyside region and there are others like me in the Merseyside travel-to-work area. Many of our constituents work in Liverpool. I am a member of the Liverpool chamber of trade and a member of the court of the university of Liverpool, so I have the interests of the city at heart.
I welcome many of the Government's proposals and was a member of the Committee which considered the Cooperative Development Agency and Industrial
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Development Bill. My hon. Friend the Minister recently visited my constituency. I must tell him that the people of Ormskirk and surrounding parishes, Up Holland and Skelmersdale are grateful for what the Government have done. People in Ormskirk and surrounding parishes are especially glad to have been given regional development status. It is a marvellous opportunity for an area that has had no assistance for many years to enable it to take advantage of manufacturing and service industry grants and those which are offered by the European regional development fund.
The most constructive aspect of these proposals has been ignored today. The area suffers 15 per cent. unemployment. The payment of grant has been divided into two categories. The first is based on selective assistance—the backing of winners. We want companies that will succeed to receive grants. The second takes employment into consideration. Unemployment is a burning issue in this Parliament and in the country. Grant is to be paid according to the number of jobs that will be created. Many people in the north-west will welcome the £10,000 per job limit and the £3,000 special job grant for labour-intensive industries. We must wave a welcome goodbye to the bad old system of automatic grants which created jobs at £35,000 each at 1982 prices. There will be an end to Sullom Voe projects and the like.
Mr. Henderson: We have seen not the end of Sullom Voe projects but the end of taxpayers paying money for them. The projects would have been developed anyway.
Mr. Hind: I am grateful to my hon. Friend. Grant is to be available only for the creation of new projects. People in the provinces, and especially in the north-west, are interested in the creation of new jobs. There is an enormous difference between such grants and spending £2 billion on training schemes. Jobs that result from inservice training would probably have come about anyway. We want jobs that would not have been created without grants. The Department of Trade and Industry should examine the recipients of grants and ask whether the company would have expanded without grant. It is no good giving grant to companies that will expand anyway merely because they happen to be in the right place.
Mr. Robert Hughes: How are jobs to be created without any money?
Mr. Hind: That is one issue on which I agree with the hon. Gentleman. There is deep anxiety about the level of unemployment in west Lancashire, especially in Skelmersdale. I could take Ministers to estates in my constituency where unemployment is as high as 40 per cent. That is devastating. It creates much suffering and hardship. My hon. Friend the Minister should re-examine the money that is being made available for regional development. People want employment.
The House's mind has been concentrated on whether the £1·5 billion that my right hon. Friend the Chancellor has mentioned should be spent on infrastructure or in tax relief. Most of those who have pressed for spending on infrastructure believe that that is the best way to create jobs. Like many of my right hon. and hon. Friends, I believe that people north of Watford want jobs. If it comes to making a choice between having a few extra pounds in our pockets and seeing our neighbours and friends in work, we would opt for jobs. The Government might think that

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giving £1·5 billion back in tax relief is a good way in which to create jobs, but if there is more it should be spent on job creation. An ideal vehicle for that is regional development grant.
Mr. Ashdown: The burden of the hon. Gentleman's speech appears to be that he disagrees fundamentally with the Government cutting regional aid by nearly one half. Is he aware that that is the central issue here? Can he not find the courage to represent his constituents by voting against the Government? If he really believes what he says, he will do that.
Mr. Hind: At this stage I believe that the programme being advanced by the Government is good. The idea is excellent. It removes the bad old system of automatic grants. I am glad to see the back of them. I can support the new system, but I am telling my hon. Friend the Minister—
Mr. Ashdown: That the hon. Gentleman will vote for the Government?
Mr. Hind: —that he should re-examine the amount of money that is being made available. This year's Budget could provide opportunities for job creation. Each Budget should be examined with that in mind. There is to be no cut in regional development grant this year. It stands at £640 million. We still have an opportunity to see whether more money can be made available. But those who criticise this system should bear in mind that it is a much better system than the one it supersedes. It is more likely to create jobs, and is much more understandable to the general public. They will understand that for every £10,000 spent, a job should be created.
Hon. Members may criticise because of the amount of money involved, but they should go into the Lobby to support this good new system of regional grants. They should make it their business if they so wish to write to the Ministers responsible and to the Chancellor of the Exchequer saying that they want more money for more jobs. That is where the pressure should be applied.
8.51 pm
Mr. Austin Mitchell: I shall not take up the remarks of the hon. Member for Lancashire, West (Mr. Hind), who has his own particular brand of Law Society economics, partly because he has not left me much time in which to do so. However, I must say that his desire to grovel before the Government seems to have overcome his economic sense.
The Government's measures demonstrate their brazen callousness. It takes real insensitivity, inhumanity and brutality towards those lesser breeds without the south for a Government who have decimated industry, brought down manufacturing employment by 22 per cent. in five years, put 1.7 million people in manufacturing industry out of work, increased unemployment to a level never before known in this country and who have generated long-term unemployment on a scale three times that which existed before the war, to cut £300 million off the budget for regional aid. That seems to be the entire aim of these measures. On 28 November, the Minister of State said their policy represents
"a considerable lightening of the public expenditure burden". —[Official Report, 28 November 1984; Vol. 68, c. 937.]
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That is the aim. Just when we need money spent on regional aid, the Government have cut the amount so that they can go ahead with tax cuts. The only consolation offered to the declining areas of this country seems to be that the more they decline, the greater the prospect of a visit from the Under-Secretary of State who is responsible for small businesses. To some areas that is more of a threat than a promise, yet that is the only consolation offered them today.
If this system of regional development and aid was necessary when unemployment stood at between 500,000 and 1 million, it is trebly necessary when unemployment now stands at 3 million. Yet the amount of money spent is being almost halved. Given the industrial disaster that the Government have inflicted on this country, the only logical step was to extend regional policy. If that policy is to be extended to other areas, such as the west midlands, as it should be—due to the damage done to the west midlands—and if the cake is to be cut into more slices, we must have a larger cake. It makes economic sense to spend more on regional policy to help those areas that the Government have brought to their knees through their economic policies. For them to cut back now demonstrates the callous heartlessness that is the economics of irresponsibility.
Mr. Michael McGuire: Will my hon. Friend give way?
Mr. Mitchell: I would rather not give way, as I should like to keep to the 10-minute limit, even if it does not apply.
In short, the Government are trying to have it both ways. They claim that they are bringing benefits to new areas. They also claim that areas such as Grimsby, which have their development area status cut, will not suffer any loss. The Government cannot have it both ways. Either there is a loss to areas such as Grimsby, or there is not much of a benefit to those areas such as the west midlands, which are supposed to benefit. The truth is that harm is being done to areas such as mine. As far as Grimsby is concerned, this is a kick in the private enterprise. It has been delivered by a Minister of State who comes from the town. It is a sad reflection that he should be grinning behind the Dispatch Box when he has done that to Grimsby.
Grimsby derived real benefits from development area status. That status was wisely and rightly, justly and fairly given to us by the Labour Government. It brought large sums to firms in regional developments grants for capital projects. It is merely quibbling to say that it has not stopped further decline. In Grimsby, male unemployment has hovered near the one man in five figure over the past few years due to the decline of basic industries such as fishing. In fishing, we are hamstrung because we fall between all possible stools. We do not qualify for help from the Common Market because we are north Britain, or for help from Associated British Ports because it has its own commercial objectives to pursue. The Ministry of Agriculture, Fisheries and Food has no money to offer us. We have no inner urban aid to use at discretion. Thus, that basic industry is declining. We have also seen a decline in the primary processing of fish, and large scale redundancies at Laportes at the graving dock and Courtaulds. The town's exporting industries have suffered because of the rise in the value of the pound, and food

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processing has suffered because of a decline in consumer demand. We have suffered all round, due entirely to the Government's policies.
Regional policy for us has prevented the decline from becoming worse and has prevented yet more unemployment in Grimsby. That might be a negative achievement, but it is still vital for the constituency that I have the honour and privilege to represent. The aid is vital, for all that its impact has been negative. Now we have lost that attraction.
As a result, we shall become vulnerable to the distortions of regional aid, which regional policy is meant to ease. I shall illustrate two of the distortions as they effect Grimsby. We have seen the closure of one of the Findus factories in the area, and the loss of about 1,000 jobs. They were effectively transferred to Longbenton in Newcastle, as the firm could get better regional incentives in a special development area than it could obtain for its existing operation in Grimsby. Thus regional policy in that area was effectively being used to destroy jobs in Grimsby.
When we saw the Minister to complain about that he said, effectively, "Hard fishcakes. That is the way the world is.." Now that Grimsby has been demoted to intermediate area status there will still be that gap between us and a development area, and the prospect of losing such jobs is still there. Therefore, we are hurt both ways. Our power of attraction is reduced, and we still have the potential for losing.
The Secretary of State, then the Minister of State, also effectively betrayed us over Nissan because he indicated that he would redress the gap between the aid offered to a development area and that forthcoming for a special development area. More than £20 million was involved. He certainly gave the impression to all at the meeting that the gap would be bridged. I think that all there will confirm that. He held out that implicit promise. As soon as he got Nissan's agreement to come, it did not really matter which part of the country it went to, and he found that he could save money by not offering that aid to Grimsby.
Mr. Norman Lamont: The hon. Gentleman may be confusing me but I think that he is imagining an entirely fictitious meeting and conversation.
Mr. Mitchell: I am sorry; like this Minister of State I was not at the meeting, but all those who were there agree that that promise was held out. The correspondence later bore that out. On the evidence of those who were there, I am right. The promise was held out, and once Nissan had been secured, and the Minister no longer needed to offer an inducement, he dropped it. Again, we suffered through the distortions of regional policy and are still open to suffer again in exactly the same way. The answer is not to eliminate these disparities but to give the areas more flexibility to attract the industries that they wish to attract.
Another problem is the disruption that the change in policy imposes on a place, such as, Grimsby. We need continuity. Just as we are getting going as a development area and getting the system into gear, it is suddenly brought to an end. Industry needs continuity and prospects to make investment decisions. Chopping and changing, as the Government do, inhibits that.
A further problem is that the measures are unjustified. Our problems are more severe than when the Labour Government gave us development area status seven years ago. We need that status to fight against the continuing
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decline. The Government are diminishing our ability to do so. During that period our unemployment rate has more than doubled. I am angry at the squalid measure and at the vicious demotion of an area that was deriving benefits, and needing more benefits rather than this cut.
It is as though the Minister were saying to a patient on a life-support machine—be it a heart-lung or a dialysis machine—"You have had your seven years and you are no better. We admit that it is our fault that you are worse, but get off the support system." The Government are telling us to make way for Birmingham, Scunthorpe and other areas that they have harmed more than Grimsby. That is not a regional strategy, but industrial homicide. The Minister is saying to us, "Get off the life-support system, the Prime Minister wants you to stand on your own two knees." We shall fight on, but it will be against greater odds. The Government have compounded every economic problem that Grimsby faces.
The measures are appalling. The cuts are appalling, especially their impact on my constituency. What appalls me most is the small-minded petty viciousness of the measures.
9 pm
Mr. Geoffrey Robinson: Before I come to the main part of my speech, may I say how pleased Opposition Members were to see the Secretary of State for Trade and Industry taking part for the first time in a full, three-line Whip debate, and returning to his former strength. I fervently hope for the full recovery of Mrs. Tebbit.
Immediately after the vote, we shall move to the orders, the first of which deals with the new map and qualifying activities. Hon. Members who did not have an opportunity to speak during this debate and who had important constituency-based speeches to make, could make them then. The map, the qualifying activities and the prescribed limits are important issues.
The wording of the motion attains the highest level of the Government's newspeak. John Hurt as Winston Smith in the film of the year could not have done better. We are asked to note
"with approval that the increased cost-effectiveness of regional assistance will enable the burden upon taxpayers to be substantially reduced."
In plain English that means that the purpose of the package is massively to reduce aid to the poorest region in order to make tax cuts available in the next budget for individuals who are already among the best off.
With the economy slithering out of control, the Government are desperately thrashing around to make any cut, no matter the social cost, and to sell any asset, no matter the commercial loss, to reduce Government expenditure. They have no other economic policy. That was the case with the panic sale of British Aerospace shares two days ago. We have heard today of the panic and the disgraceful moratorium imposed on the payment of development grant and on new applications not posted within the next two hours and 57 minutes. The countdown has already started.
In the 1985 version of newspeak, for "economic policy" read, "cut Government expenditure". The Government have no other policy. Public sector housing has already been hacked to pieces, and it is now the turn of regional policy. There is no question of this being a new more costeffective regional policy. Whatever the Minister says, he

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knows that that is not the purpose of the package. He admitted to the hon. Member for Wolverhampton, South- West (Mr. Budgen), who has been voted trouble-maker of the year — he will be rather pleased that I have mentioned him—that the main purpose of the package was to reduce Government expenditure. The Minister knows as well as I do that there were no new positive ideas in the White Paper. Nor was there one creative contribution from the Government in the debates on the Co-operative Development Agency and Industrial Development Act 1984. All that we have heard tonight—nothing will change when the Minister of State gets to his feet—is a repeat performance, redolent of the staleness of a Government who were self-avowedly devoid of idealism and who are now self-evidently defunct of ideas. Regional policy costs money, so cut it.
In the trenchant words of the right hon. Member for Old Bexley and Sidcup (Mr. Heath), the only answer that the Government have to any problem is to cut, cut, cut. At least they have been consistent in that. They have displayed not so much the smallness of mind that some associate with consistency as a narrowness of vision and an intensity of single-issue focus that have burned out the hearts of regions. Even by this Government's standards, the cuts in regional aid have been unmitigatedly savage. They are matched in their severity by what the Government, out of wilful prejudice, have done to the public sector housing programme. It is an insult to the regions that will never be forgiven by the people who live there that those massive cuts have been made when unemployment in every nation and region is at a record high—yet another unique negative achievement by the Government.
The statistics for the depressed regions speak for themselves. I give the figures in a slightly different form from that in which they were given by some of my hon. Friends, who have made such valuable contributions to the debate, but they are still staggering. In each case, I am comparing the figures for 1979 and 1984—the period for which the Government bear complete responsibility. In Scotland, unemployment has increased by 166,000, or 104 per cent. It has more than doubled. In Wales, unemployment has increased by 93,000, or 120 per cent. In the north of England, it has increased by 118,000 or 111 per cent. In the north-west, it has increased by 247,000, or 136 per cent. In Yorkshire and Humberside, it has increased by 177,000 or 160 per cent.
In the west midlands, that once-proud powerhouse of our industrial base, we find the most staggering figures. Unemployment has increased by more than 220,000 or almost 200 per cent. What sort of record is that? On what basis could any Government defend that record and excuse or explain those figures?
However, faced with those figures and the stark human tragedy that lies behind them, all that the Government did, perversely, was to make a second, even deeper, cut in regional development grant support. They cut £100 million a year from Scotland, £60 million a year from Wales and £150 million a year from the regions of England. All that they can do is to cut. Their logic was brilliantly exposed by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) at the beginning of the debate. The Minister of State said that Government expenditure destroys jobs. Therefore, if we reduce
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Government expenditure, we can increase jobs. However, he will not follow the logic of his argument and eliminate Government expenditure in the regions. He is not rushing to his feet to give an explanation of the logic of this part of the argument.
I was interested to hear the intervention of the Secretary of State for Trade and Industry, who came to the rescue of his beleaguered Minister. He said that we were forgetting the effect on aggregate employment. What he was really saying was that while they would tail it off as quickly as possible, the Government would continue the aid to the regions but that it should be understood that this would mean job losses in other areas which would not be assisted. If that is what the Goverment think, will the Minister of State have the frankness and honesty to say so? Will he say clearly that they are continuing regional aid for the moment, having cut it by over 60 per cent. since they came to office? They are not doing badly; they are well on their way to ending it.
I see in his place the hon. Member for Lancashire, West (Mr. Hind); he is disappointed that the Government have not stopped the provision of aid already. Let me reassure him that they have cut it by over 60 per cent. Of course, they cannot tail it off abruptly because they have certain commitments that they are legally bound to honour. Although they have gone back on commitments that the Minister of State gave repeatedly during the Committee stage on the transitional arrangements, they cannot break their commitment to make payments that are due. The cuts will come through and they will be felt in the regions. Cuts of £300 million will have been made in about two years' time.
Behind the heartrending unemployment figures that I have just given the House lies the devastation of the industrial base of the regions—nowhere more than in the west midlands where, as I know from personal experience because I represent a Coventry constituency, no less than one third of manufacturing capacity has been lost. The Government reply that we will probably hear tonight is that productivity in manufacturing has improved by 15 per cent. since 1979. Of course, if one third of the most threatened manufacturing capacity is eliminated, productivity is bound to go up. It is not much different from eliminating the bottom third of the first division of the football league and comparing its goal difference with that of the top two thirds of the league. That would show a dramatic improvement in the apparent performance of British footballers. By that method of accounting we should be favourites to win the world cup.
Nobody believes the Government's talk of an industrial recovery. The Minister of State shakes his head in surprise as if I were meant to believe it. How can anyone, least of all the regions, believe it when the deficit last year in manufactured goods on a balance of payments basis was £5 billion? How can we believe that we are in a position to compete in manufacturing when even now investment in manufacturing is down 25 per cent. on the level of 1979? How can the regions believe it when, within this overall pattern of decline, the disparities are greater and are intensifying all the time?
It is understandable that the Government have no positive or creative ideas on regional policy since they are completely schizophrenic about it, as we saw earlier in the debate. They do not believe in it, but they do not want to say so. They brought regional aid in as a social policy. Having cut it by 60 per cent. since 1979 they fatuously try

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to make it appear to be not too bad. They say that the regions will still get some help. No doubt we will hear again from the Minister to the effect that they will extend the aid to service industries. They are hinting that an increase in discretionary aid under section 8 of the Industry Act 1972 will make up for the massive cut of £300 million in regional development grant. By extending the map as widely as they can—we support the Government—they hope to maximise our take-up of the quota of the European regional development fund. That is about all that the Government have to say.
It is clear that, if the ERDF did not exist, we would not have a map or a policy. We would have nothing at all. As we all know, it is the existence of a regional policy that governs the general eligibility of a country to participate in the European regional development fund. We all know that the ERDF can never be a substitute for national policy. The Commission says that the ERDF shall not be a substitute for policy. The ERDF must reinforce strong national policy at a time when the regional disparities within the Community are worsening and when, in the Commission's words, these disparities are the greatest threat to that unity and coherence of the Community to which the Government pay such lip service.
In principle, we welcome each of the Government's policies. The problem is that their practice does not match up to their principle, and the limits unnecessarily imposed by the Government on those policies do not match up to the regional problems. The Minister has made a great deal of the point that the reduction in regional development grant may be made good—he has not said more than that—by discretionary assistance under section 8. That is fine if a company is a rich, strong multinational such as Datsun and does not really need the money. Datsun had the unique privilege of being sneaked in by the back door for regional development grant as well as discretionary aid. As the Labour party predicted at that time, Datsun is now recruiting some of Austin Rover's best production engineers.
For British companies, beleaguered in the most depressive regions previously benefiting from RDG of 22 per cent. — RDG that was automatically available and built into their cost structures—the reduction in RDG to 15 per cent. and the non-eligibility of modernisation and replacement schemes will come as a body blow as they fight to hold their market share and to increase their competitiveness. We know that competitiveness can be achieved mainly through the capital investment that is desperately needed. For those threatened British companies located in the assisted areas, looking for discretionary assistance from the Government will, I fear, be tantamount to pleading for mercy from Dr. Joseph Guillotin.
All the positive creative thinking in the debate has come from the Opposition. I should like to congratulate my right hon. and hon. Friends on their excellent contributions. In many ways, those contributions had different emphases, and I believe that my hon. Friend the Member for Rotherham (Mr. Crowther) would agree with me. My right hon. and hon. Friends all recognised the reality of the regional problem and the Government's responsibility to do something about it. The Opposition are attempting to do something about the problem. Conservative Members, especially those few hon. Members from Northern constituencies who have expressed their doubts about the
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policy, have shown a willingness to abstain. I note that the hon. Member for Falmouth and Camborne (Mr. Mudd)—
Mr. John Smith: He is not from the north.
Mr. Robinson: He is not; he represents Cornwall. That area, too, has been devastated by the Government's policies. The hon. Member for Falmouth and Camborne is going to abstain. I urge him to vote with us in the Lobby.
Mr. Mudd: I would be willing to do so, were it not for one salient fact. There is massive unemployment in Falmouth. About 1,300 Falmouth shipyard workers were placed on the dole as a consequence of British Shipbuilders' closure plans for Falmouth. Those plans were approved under the Labour Administration.
Mr. Robinson: I am quite sure that the job losses in that area, which are staggering already, will be greatly increased when the Bill to privatise the warship yards goes through and those competing in the commercial market are left to their own devices. We have not seen anything yet, in the words of one of my hon. Friends.
What we have had tonight, as we have had throughout this debate, is creative positive thinking from this side of the House and a simple policy from the Government which has been to say that, because Government expenditure is involved, because Government expenditure is wrong, regional policy must therefore be wrong and let us get rid of it as soon as we can and as soon as we dare.
Mr. Bill Walker: I would like the hon. Gentleman to be aware that other Conservative Members will be abstaining, myself included; The reason why I shall abstain is not that I think that principle behind the policy is wrong; it is just that I have never in my life supported anything that cannot happen. There is a travel-to-work area in my constituency and tonight it would be impossible to travel in that travel-to-work area. That happens riot on odd occasions, but every year the roads are blocked and public transport is non-existent, yet it is a travel-to-work area.
Mr. Robinson: I will explain to the hon. Member for Tayside, North the reason for that: it is that so badly has aid to local government, regional aid to local government and transport to local government been cut that they do not have any money to salt the roads. Conservative Members may be amused to know that it is rapidly getting to that point in Surrey where I happen to live. When hon. Members talk of the south-east, they should realise that the south-east under this Government has had the highest rate of unemployment increase second only to the west Midlands. It is a unique achievement of the Government that they have managed to turn virtually the whole of the United Kingdom into a depressed area. There is a strong case to be made out in the context of the European Community for classifying the whole of the United Kingdom with the mezzogiorno of southern Italy.
Mr. Hind: It is significant that the hon. Gentleman who is winding up lives in an area of relative affluence. While we who represent the Midlands and the north are fighting for a better situation, he is living in the soft southeast. Perhaps there is a lesson in that for his constituents.
Mr. Robinson: We could have done without that issue. It lowers the standard and the seriousness of the debate. The debate concerns not where I happen to live but the

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people of the regions of this country who are suffering from this Government's policies and will suffer even more severely when the cuts come into force. If the hon. Member for Lancashire, West had the courage of his convictions he would vote against the motion on these policies or abstain for the diametrically opposed reason that he does not think that they go far enough. There may be another chance—though I doubt it—to do completely what he wants and that is to cut this altogether. That is what the hon. Member said, as he will see when he checks Hansard. I hope that his constituents in Lancashire, West understand exactly where he stands.
The truth is that not only do the Government not believe in regional development assistance as a tool of economic policy but they do not really believe in social policy either.
With his customary air of nonchalant disinterest, the Minister of State spoke only last December to the industrial editor of The Observer, Mr. Adrian Hamilton. The article stated:
"'That regional assistance is being conducted at all,' says Lamont with a smile, 'shows that we are evolutionary, not dogmatic. If it works we'll keep it. It if doesn't, then we will have to look at it again."
That is not so much a policy, more a suspended sentence of death. The Opposition accept none of that defeatism. Unemployment in the regions is a social evil and an economic problem.
We must put the same questions to the Government as did the right hon. Member for Old Bexley and Sidcup in his Sunderland speech. How much longer can we afford to gamble with our social stability? How much longer are parts of Merseyside to be expected to put up with over 6 per cent. of their school leavers going into full employment? How much longer must there be 36 people chasing every job vacancy in the west midlands? How much longer must the north suffer an unemployment rate now approaching 20 per cent.?
As the hon. Member for Falmouth and Camborne argued, why cannot Devon and Cornwall have policies geared to their problems? How much longer must Scotland and Wales put up with a Government who have turned their backs on their special needs, and who have slashed Government aid to Scotland under the regional policy by £100 million and to Wales by £60 million per annum?
Do not the Government realise that that policy of nihilism is leading us into a dangerous future? Do they not realise that they are storing up for us perhaps unmanageable social problems and that they are storing up for future generations problems the extent of which we cannot yet see and solutions to which the Government have not provided?
Problems in the regions and in the inner city areas caused by these policies are bound to breed despair and to generate violence. The Opposition are committed to the expansion of public expenditure, and to a constructively selective public works programme that will get the regions going again. We believe in the people and skills of the regions. Each has its own distinctive contribution to make to the industrial recovery that the country needs desperately. We intend that regionally based organisations and local government will play their full role in the recreation of jobs, the rebuilding of our industries and the introduction of new technologies. The regions and nations
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of the United Kingdom are keen to play their full role in achieving the essential regional objectives that must form part of our overall national economic recovery.
We have heard nothing from the Government tonight that can hold out any hope to the regions. The Government have imposed upon this country the tightest regional policy regime that exists within the Economic Community. They have deliberately reduced RDG to 15 per cent. and the job grant to way below what it could be under EC rules and restricted policy in every conceivable direction. We shall see to it that the regions are given the opportunity to perform their role which is vital and fundamental to the rebuilding of the shambles of a nation that the Government have created.
9.30 pm
The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): I thank the hon. Member for Coventry, North-West (Mr. Robinson) for speaking so slowly in his peroration when he was in danger of running out of material about four minutes before the end of his speech.
This has really been two debates. On the one hand, we have had a debate between the Front Benches largely about the principles of regional policy and the announcements that I made. On the other, we have had a debate more between the Back Benches about the assisted areas map and how individual constituencies have been affected.
Inevitably, a large part of the debate has been dominated by concern with hon. Members' constituencies, and the reaction to the Government's announcement last November has been rather influenced by the effect it has had on their constituencies. My hon. Friends the Members for Bury, South (Mr. Sumberg), for Glanford and Scunthorpe (Mr. Hickmet) and for Gloucestershire, West (Mr. Marland) have given the Government's policy a warm welcome, and in particular I thank my hon. Friend the Member for Gloucestershire, West for what one might call his baroque welcome with a triumphant coda at the end. Unfortunately, other of my hon. Friends — for example, my hon. Friends the Members for Tayside, North (Mr. Walker) and for Blackpool, North (Mr. Miscampbell)—might be described as having received it with somewhat modified rapture.
I well understand the disappointment of some areas that have been downgraded or excluded. The Government had difficult choices to make, as my right hon. Friend said. Although one would not believe it from some of the speeches, not every constituency, not every travel-to-work area, can be an assisted area. Inevitably the Government have had some hard and difficult choices to make. We have made them, as far as possible, by objective criteria.
Inevitably, at the margin of the 35 per cent. map—which was the maximum coverage that we could go up to and the maximum that would be acceptable within a European framework—an element of judgment came in. But whatever decisions were made, there was bound to be disappointment among those of my hon. Friends whose areas were excluded. As I say, we could not expect to please everyone.
Mr. Bill Walker: I am not objecting to what the Government are trying to do. Indeed, I support the principle of it. However, in no way can one describe an area as a travel-to-work area when it is impossible to do so. COSLA—the Scottish local authorities—accepts that

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Blairgowrie is unique in this respect because there is no public transport and the roads are blocked every winter, being highland mountain roads.
Mr. Lamont: I appreciate that my hon. Friend's objection relates to the travel-to-work area, and I shall be coming to that because he was not the only hon. Member to raise that issue.
Some hon. Members—fortunately, not too many— alleged that there had even been some political bias in drawing up the map. [Interruption.] I am glad to note that the hon. Member for Kingston upon Hull, East (Mr. Prescott) thinks that that is an unworthy accusation, and it is. Of the 32 travel-to-work areas that were formerly assisted and that have now been excluded, those exclusions affected 41 constituencies.
Such was the Machiavellian influence and intervention of Conservative Central Office that 32 of the 41 travel-to-work areas turned out to be Conservative seats that were downgraded, though I do not expect that revelation to be greeted with cheers by my hon. Friends.
While 3 per cent, of the country was excluded by the decisions that were made, 10 per cent, of the working population were brought into the enlarged assisted area map. We were able to make this possible through the extension of the intermediate area status. That means that more areas will qualify for access to the ERDF. Many of my hon. Friends have been disappointed because their local authorities will not have access to the ERDF, but at least, with the decisions we have made, more areas than before will have access to it.
Mrs. Kellett-Bowman: Does my hon. Friend accept that the most serious deprivation is not the lack of access to the ERDF but the fact that those areas can no longer go to the European Investment Bank, which has been of great assistance in the past and for which there is no quota?
Mr. Lamont: That is true, but my observation applies both ways. Some areas will have more access while others have less.
An adjustment to the map was essential because the map was out of date. Some areas have improved relative to others while others have deteriorated in comparison with other parts of the country. Opposition Members have quoted unemployment statistics for their constituencies in absolute terms. But in regional policy we must base our decisions as to which areas should be assisted on the relative position of different parts of the country. The result is a map more closely aligned to the worst black spots. The reduction from three tiers to two allows us to concentrate regional development grants on the worst-hit areas.
Unemployment has been the main criterion, but not the only one. We have also borne long-term unemployment very much in mind. Other criteria such as geographical location and industrial structure were also considered. The average rate of unemployment in the year ended July 1984 for the development and intermediate areas that we have selected was 19·1 per cent, and 15·5 per cent, respectively. Those are average rates and some areas will have been excluded even though they might have qualified on the basis of unemployment statistics because they failed to qualify on other criteria.
Mr. Gordon Brown: If unemployment rates were the main criteria in updating the map,
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why were unemployment figures for travel-to-work areas calculated on data four years old? Is the Minister aware that unemployment in my constituency is not 16 per cent., as he claims, but more than 20 per cent.? Will he undertake to review the regional map when the new employment census appears and update it properly?
Mr. Lamont: The hon. Gentleman is not quite correct. Unemployment was calculated on the basis of long-term unemployment data, but also on data for the year ended July 1984.
My hon. Friend the Member for Tayside, North my hon. and learned Friend the Member for Blackpool, North and others criticised the decision to base the map on the building block of the travel-to-work area or the way in which the travel-to-work area chosen affected their constituencies. Travel-to-work areas are the smallest approximation that we can make to self-contained labour markets nationwide. It does not mean that people living at one end travel to work at the other end. It means that 70 per cent, of the people who work in the area also live there. That has always been a basic building block of the system and it provides reasonable confidence that the jobs created there as a result of regional policy will be taken up by local residents.
The hon. Member for Gower (Mr. Wardell) referred to the conclusions of the Select Committee. His conclusion was that the whole of Wales ought to be a development area. That is an unrealistic and unjustified suggestion on the basis of the unemployment rates in certain areas of Wales. In the period to August 1984, areas like Aberystwyth had 10 per cent., Brecon 9·1 per cent, and Carmarthen 7·1 per cent, unemployment. Despite that unemployment, 89 per cent, of the population of Wales will still be in assisted areas. I did not have the pleasure of hearing the speech of the hon. Member for Dundee, East (Mr. Wilson), but I can guess what he said. I point out to him that Scotland's share in the intermediate areas is unchanged and that Scotland's proportion of development areas has increased.
Mr. Bill Walker rose—
Mr. Lamont: I have many questions to answer and I have already given way three times.
The hon. Member for Dundee, East asked whether the Highlands and Islands Development Board area would continue to qualify for ERDF. The answer is yes.
Mr. Bill Walker: Is my hon. Friend able to give me his assurance that if Scottish local authorities show him that his own criteria do not apply to Blairgowrie he will accept that linking Blairgowrie and the travel-to-work area with Pitlochry and Aberfeldy is nonsense? I am not asking my hon. Friend for more money. I am only asking that there should be an objective and sane basis for what is done and that my constituents should be able to believe in the sanity of the policy.
Mr. Lamont: If what I have said does not achieve what is required, I shall discuss the matter with the Department of Employment which draws up the travel-to-work areas.
Many questions have been asked about the moratorium which was announced by my right hon. Friend. He emphasised that the purpose of the moratorium was not a cut but to get expenditure on regional development grants back to the level that was predicted in 1983. We shall

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continue to spend the same amount on regional development grants as we predicted in 1983 we should spend upon those grants.
The right hon. Member for Glasgow, Govan (Mr. Millan) asked, as a result of the overshoot, how much money we were hoping to prevent being part of that overshoot. The answer is £150 million. It is based upon the assumption that the moratorium lasts for 12 months. [Interruption.] Obviously the House is not clear about this. There is a four-month moratorium which means a four-month delay inpayments from the approval of RDGs. The figure of £150 million is based upon the assumption that that arrangement will last for 12 months. Since the Government have estimated the cost of their regional policy, it is important that we should be able to hold to it. It is important for public expenditure to be contained. That is absolutely vital to the Government's economic objectives.
Faced with the problems of sterling in the exchange markets, Opposition Members have sought during the past few days to argue that this is the result of a fundamental defect in Government policy, or of some perception abroad of a fundamental defect in Government policy. If, however, there is any fear abroad about Government policy, it is the fear that Government expenditure is shooting ahead of target. That is why it is all the more important for the Government to stick to their targets.
Mr. Geoffrey Robinson rose—
Mr. Lamont: I shall give way in a minute.
If only Opposition Members understood that — but they do not understand it in terms of their attitude to public expenditure. During the last few days we have seen in the foreign exchange markets a mere tremor of no confidence compared with the earthquake of no confidence which would take place if the Opposition were to implement their public expenditure policies.
Mr. Geoffrey Robinson rose—
Mr. Lamont: No, I shall not give way.
Mr. Robinson rose—
Mr. Lamont: No.
Mr. Speaker: Order.
Mr. Lamont: I have already given way four or five times, Mr. Speaker, so I shall not give way again.
The changes that have been announced will both improve the internal logic of our regional policy and give far better value for money than did the previous policy. Nearly half the £300 million savings will come from the requirement to link grants to jobs and the exclusion of replacement investment.
Surely the Labour party cannot believe that it was right to go on subsidising without choice or discretion large capital projects such as oil refineries and petrochemical plants—plants with little choice of location. That policy did the regions no good. It disrupted them and the effect was often simply to place large amounts of money in the coffers of the multinational corporations and large companies that Labour Members are so anxious to attack.
Labour Members do not like hearing about Sullom Voe, which in one year took one third of Scotland's regional aid and created jobs at a cost of £130,000 a time. But that was
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far from being the worst example. There were many large projects. At least Sullom Voe created some jobs. Many large projects subsidised by Governments in the past did not create jobs but reduced them.
We are not saying that for industrial or economic reasons the Government may not legitimately wish to subsidise some capital-intensive projects, but the point that we are making is that the Government should have the choice of whether they wish to subsidise those projects. That should not be done automatically.
Mr. Robert Hughes rose—
Mr. Lamont: As my hon. Friend the Member for Darlington (Mr. Fallon) pointed out, that change will be made easier by the change that we have made in the balance between selective and automatic assistance. There we follow a change forecast in the White Paper in that we are placing more of the emphasis on selective assistance.
I was asked how much selective assistance would be increased to compensate for the loss in automatic assistance. By 1987–88 we expect selective assistance to have increased by some 40 per cent., or some £50 million.
Mr. Geoffrey Robinson rose—
Mr. Lamont: The single most important change that we have made is to link regional policy and regional development grants to the creation of jobs. Our policy will be that if there are no jobs there will be no grant. As an alternative to capital grant companies will be able to choose a job grant of £3,000 for every new job created. The effect of that will be to encourage those projects which may involve little capital but will create many jobs.
Given that the purpose of regional policy is to iron out the differences in unemployment between different areas, and given that hon. Members on both sides of the House are concerned about the current high levels of unemployment, if we are to continue to spend large sums of money on regional policy, as these are, it must be simple common sense to link that expenditure to the creation of jobs. There is little point in spending money on automatic regional assistance for any other reason.
The Government's decisions announced in November were taken after an intensive period of consultation and a lengthy analysis of the effects of regional policy. After 50 years of regional policy it is surely right to re-examine and reappraise the policy. That inclination does not seem to be shared in any way by the Labour party which seems to think that the effectiveness of regional policy is simply to be judged by the amount of money that is spent on it.
Our White Paper suggested that regional policy had created some 500,000 jobs over 20 years in the assisted areas. That sounds a lot, but it is not such an impressive figure for the expenditure of some £20 billion. Many of those jobs would have come into existence anyway. Some are jobs that have simply moved from one part of the country to another. Many of my hon. Friends from the west midlands would say that regional policy had directed firms away from the prosperous areas and added to the problems of a region already burdened with an ailing motor industry.
Sometimes regional policy has diverted high-risk projects to areas where they would not have chosen to go. The simple result has been persistent loss and early mortality. Above all, jobs have been created at the ridiculous cost of £35,000 per net new job. There have

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been areas where regional policy has had its successes. Undoubtedly, it has helped with inward investment. It has helped to build up the electronics industry in Scotland and Wales. However, in the country as a whole, it is difficult to say that there have been great changes in the league table of unemployment.
The hon. Member for Rotherham (Mr. Crowther) said that the assisted areas map today is depressingly similar to that of five, 10 or 20 years ago, or even before the war. Given that fact, the answer cannot simply to be throw more money and to continue regardless with the same policy. The right hon. and learned Member for Monklands, East (Mr. Smith) asked how much unemployment would be caused by the cuts in regional policy that we have announced. We do not believe that there will be any rise in unemployment, for these reasons. First, the savings are, to a considerable extent, to be achieved on hitherto wasteful expenditure on large capital projects and on projects that did not create jobs. Secondly, all the calculations about the effects of regional policy on the creation of jobs ignore the adverse effects of regional policy, such as the effects that it has on non-assisted areas. We must be concerned about employment and unemployment on a national scale. Thirdly, if Labour Members think that £300 million savings will destroy jobs, why do they not think that £300 million extra taxes will destroy jobs as well?
The right hon. and learned Member for Monklands, East referred to a speech that I made in Birmingham, and to my observation that taxing or borrowing beyond the country's capacity could destroy jobs and that therefore savings in public expenditure could help to create and preserve jobs. He asked what was the difference between the £300 million that we are saving and the £400 million that we shall continue to spend on regional policy. The difference is that the £300 million that we are saving was being spent inefficiently and ineffectively. It was being wasted on subsidising non-job creating investment and subsidising replacement investment, whereas the £400 million that we shall continue to spend will be spent more cost-effectively.
My hon. Friend the Member for Fife, North-East (Mr. Henderson) referred to the fact that many of the jobs that had been created by regional policy were the wrong ones. As he pointed out, regional policy has concentrated on manufacturing, which has been in decline for some 20 years. While regional policy has continued to subsidise manufacturing and move it to the regions, service jobs have not been eligible for regional development grants and have continued to pile up in the south and in the south-east of England.
The hon. Member for Coventry, North-West said that we had not announced anything positive. I thought that he would have welcomed, as it has been welcomed everywhere and by hon. Members on both sides of the House, the fact that we have decided to extend automatic regional development grants to the service sector. That will be of special benefit to the north-east and to areas such as Merseyside that have depended far too heavily on the old traditional industries and on heavy manufacturing. Such areas need more research and development. They need more headquarters activities. The changes that we have announced will make such developments easier.
The hon. Member for Yeovil (Mr. Ashdown) suggested that our cost per job limit of £10,000 is too low. He will be aware that that is the cost to Government. It is 15 per
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cent, of the investment. A cost per job limit of £10,000 would mean a total investment for each job of £65,000. That is double the average capital intensity of British industry. Our aim has been to remove the bias in the system, which has been heavily geared towards capital-intensive industry.
Labour Members — especially those on the Front Bench—have refused today to face questions about the effectiveness of regional policy. The hon. Member for Coventry, North-West said that all the creative thinking had come from the Labour Benches, but the Opposition Benches have not produced a single idea during the whole debate. As my hon. Friend the Member for Gloucestershire, West said, Labour Members' deepest conviction is that money grows on trees. They believe that the more money one spends on regional policy the better, regardless of its cost-effectiveness.
The problems addressed in the White Paper have not always been ignored by the Labour party. In a document published in 1982 entitled "Economic Planning and Industrial Democracy" we find the statement:
"Although it is important to increase capital investment and productive efficiency in assisted areas, relying on capital subsidies as the major regional policy instrument is an extremely expensive way of creating jobs and is ineffective in tackling the serious differences in unemployment rates between regions and localities."
That was what the Opposition said. "Ineffective" is their word. How right they were. That is why they should welcome our policy, which is targeted much more directly on job creation.
In one of his few sensible utterances, the Leader of the Opposition said:
"We very much do want value for money, because it is our money."
How right he was. It is the taxpayers' money. Regional policy should attempt to get the maximum value in the form of new jobs, and the maximum value for the money spent.
Although in the past the Labour party has shown some recognition of the ineffectiveness of previous regional policy, its only response has been to suggest an enormous array of boards and controls. At the time of the last election, Labour proposed the creation of tripartite regional planning bodies in every region. That was on top of the sector planning committees reporting to the national planning councils, the agreed development plans, the product research unit, the foreign investment unit, the Energy Commission, the Price Commission, and the tripartite investment monitoring agency. All those bodies were to be overseen by some giant department of economic and industrial planning.
Such a policy would certainly have created jobs. It would have created thousands of jobs for bureaucrats and civil servants. It would also have meant six weeks and 10 committee meetings before a local manager was given permission to buy a packet of paper clips. It would have stifled enterprise and doomed the regions and the country to decline.
The fringe publications of the Labour party and of its militant supporters in the constituencies tell us that they do not wish to repeat the mistakes of the past. What they mean is that they will not learn any of the painful and belated lessons that the Labour party learnt in office. They mean that the Labour party should never again recognise the constraints that it was forced to recognise when it was in office. One of the things that the Labour Government

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learnt, to their cost, was that increased inflation and increased public expenditure result in increased unemployment. As those who are faced with the task of managing the economy always realise, Government expenditure does far more harm than good if the price is the resurgence of inflation.
We have explained why we think that the new policy is more effective in creating jobs. There is no reason to apologise for its producing savings of £300 million. That also is good for jobs. It is good news for my right hon. Friend the Chancellor, for the taxpayer and for everyone inside and outside assisted areas. I urge my hon. Friends to reject the amendment and—
Mr. James Hamilton rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly, That the amendment be made:—
The House divided: Ayes 195, Noes 260.

Division No. 69]

[10 pm

AYES

Adams, Allen (Paisley N)

Craigen, J. M.

Alton, David

Crowther, Stan

Anderson, Donald

Cunliffe, Lawrence

Archer, Rt Hon Peter

Cunningham, Dr John

Ashdown, Paddy

Davies, Rt Hon Denzil (L'lli)

Ashley, Rt Hon Jack

Davies, Ronald (Caerphilly)

Atkinson, N. (Tottenham)

Davis, Terry (B'ham, H'ge H'l)

Bagier, Gordon A. T.

Deakins, Eric

Banks, Tony (Newham NW)

Dewar, Donald

Barnett, Guy

Dixon, Donald

Barron, Kevin

Dobson, Frank

Beckett, Mrs Margaret

Dormand, Jack

Beith, A. J.

Douglas, Dick

Bell, Stuart

Dubs, Alfred

Benn, Tony

Dunwoody, Hon Mrs G.

Bennett, A. (Dent'n & Red'sh)

Eadie, Alex

Bermingham, Gerald

Eastham, Ken

Bidwell, Sydney

Ellis, Raymond

Boothroyd, Miss Betty

Evans, John (St. Helens N)

Boyes, Roland

Fatchett, Derek

Bray, Dr Jeremy

Faulds, Andrew

Brown, Gordon (D'f'mline E)

Field, Frank (Birkenhead)

Brown, Hugh D. (Provan)

Fields, T. (L'pool Broad Gn)

Brown, N. (N'c'tle-u-Tyne E)

Fisher, Mark

Brown, R. (N'c'tle-u-Tyne N)

Flannery, Martin

Brown, Ron (E'burgh, Leith)

Forrester, John

Bruce, Malcolm

Foster, Derek

Buchan, Norman

Foulkes, George

Caborn, Richard

Fraser, J. (Norwood)

Callaghan, Jim (Heyw'd & M)

Freeson, Rt Hon Reginald

Campbell, Ian

Freud, Clement

Campbell-Savours, Dale

Garrett, W. E.

Canavan, Dennis

George, Bruce

Carlile, Alexander (Montg'y)

Godman, Dr Norman

Carter-Jones, Lewis

Golding, John

Cartwright, John

Gould, Bryan

Clark, Dr David (S Shields)

Hamilton, W. W. (Central Fife)

Clarke, Thomas

Hancock, Mr. Michael

Clay, Robert

Harrison, Rt Hon Walter

Clwyd, Mrs Ann

Hart, Rt Hon Dame Judith

Cocks, Rt Hon M. (Bristol S.)

Hattersley, Rt Hon Roy

Cohen, Harry

Haynes, Frank

Coleman, Donald

Healey, Rt Hon Denis

Cook, Frank (Stockton North)

Heffer, Eric S.

Cook, Robin F. (Livingston)

Hogg, N. (C'nauld & Kilsyth)

Corbett, Robin

Holland, Stuart (Vauxhall)

Corbyn, Jeremy

Home Robertson, John

Cowans, Harry

Howells, Geraint

Cox, Thomas (Tooting)

Hoyle, Douglas

600

Hughes, Dr. Mark (Durham)

Powell, Raymond (Ogmore)

Hughes, Robert (Aberdeen N)

Prescott, John

Hughes, Sean (Knowsley S)

Radice, Giles

Hughes, Simon (Southwark)

Randall, Stuart

Janner, Hon Greville

Redmond, M.

John, Brynmor

Rees, Rt Hon M. (Leeds S)

Johnston, Russell

Richardson, Ms Jo

Jones, Barry (Alyn & Deeside)

Roberts, Ernest (Hackney N)

Kaufman, Rt Hon Gerald

Robertson, George

Kennedy, Charles

Robinson, G. (Coventry NW)

Kilroy-Silk, Robert

Rowlands, Ted

Kinnock, Rt Hon Neil

Ryman, John

Kirkwood, Archy

Sedgemore, Brian

Lamond, James

Sheerman, Barry

Leighton, Ronald

Sheldon, Rt Hon R.

Lewis, Ron (Carlisle)

Shore, Rt Hon Peter

Lewis, Terence (Worsley)

Short, Ms Clare (Ladywood)

Litherland, Robert

Short, Mrs R.(W'hampt'n NE)

Lloyd, Tony (Stretford)

Silkin, Rt Hon J.

Lofthouse, Geoffrey

Skinner, Dennis

McCartney, Hugh

Smith, C.(Isl'ton S & F'bury)

McDonald, Dr Oonagh

Smith, Rt Hon J. (M'kl'ds E)

McGuire, Michael

Snape, Peter

McKay, Allen (Penistone)

Soley, Clive

McKelvey, William

Spearing, Nigel

Mackenzie, Rt Hon Gregor

Speller, Tony

Maclennan, Robert

Steel, Rt Hon David

McTaggart, Robert

Stewart, Rt Hon D. (W Isles)

Madden, Max

Stott, Roger

Marek, Dr John

Strang, Gavin

Marshall, David (Shettleston)

Straw, Jack

Maxton, John

Thompson, J. (Wansbeck)

Meacher, Michael

Tinn, James

Meadowcroft, Michael

Torney, Tom

Michie, William

Wainwright, R.

Mikardo, Ian

Wardell, Gareth (Gower)

Millan, Rt Hon Bruce

Wareing, Robert

Miller, Dr M. S. (E Kilbride)

Weetch, Ken

Mitchell, Austin (G't Grimsby)

Welsh, Michael

Nellist, David

White, James

Oakes, Rt Hon Gordon

Wigley, Dafydd

O'Brien, William

Williams, Rt Hon A.

O'Neill, Martin

Wilson, Gordon

Owen, Rt Hon Dr David

Winnick, David

Park, George

Woodall, Alec

Parry, Robert

Wrigglesworth, Ian

Patchett, Terry

Pavitt, Laurie

Tellers for the Ayes:

Pendry, Tom

Mr. James Hamilton and

Penhaligon, David

Mr. John McWilliam.

Pike, Peter

NOES

Aitken, Jonathan

Clark, Dr Michael (Rochford)

Alexander, Richard

Clark, Sir W. (Croydon S)

Ancram, Michael

Cockeram, Eric

Arnold, Tom

Conway, Derek

Atkinson, David (B'm'th E)

Coombs, Simon

Baker, Rt Hon K. (Mole Vall'y)

Cope, John

Baker, Nicholas (N Dorset)

Currie, Mrs Edwina

Baldry, Tony

Dorrell, Stephen

Biffen, Rt Hon John

Douglas-Hamilton, Lord J.

Boscawen, Hon Robert

Dunn, Robert

Bottomley, Peter

Durant, Tony

Bottomley, Mrs Virginia

Edwards, Rt Hon N. (P'broke)

Brittan, Rt Hon Leon

Emery, Sir Peter

Brooke, Hon Peter

Fallon, Michael

Brown, M. (Brigg & Cl'thpes)

Fenner, Mrs Peggy

Browne, John

Fletcher, Alexander

Bruinvels, Peter

Fookes, Miss Janet

Burt, Alistair

Forman, Nigel

Butcher, John

Forsyth, Michael (Stirling)

Butler, Hon Adam

Forth, Eric

Carlisle, Kenneth (Lincoln)

Fowler, Rt Hon Norman

Carlisle, Rt Hon M. (W'ton S)

Fox, Marcus

Carttiss, Michael

Franks, Cecil

Cash, William

Freeman, Roger

Chalker, Mrs Lynda

Gale, Roger

Chapman, Sydney

Galley, Roy

Clark, Hon A. (Plym'th S'n)

Gardiner, George (Reigate)

601

Gardner, Sir Edward (Fylde)

Malone, Gerald

Glyn, Dr Alan

Maples, John

Gow, Ian

Marland, Paul

Grant, Sir Anthony

Marlow, Antony

Greenway, Harry

Marshall, Michael (Arundel)

Gregory, Conal

Mates, Michael

Griffiths, E. (B'y St Edm'ds)

Mather, Carol

Griffiths, Peter (Portsm'th N)

Maude, Hon Francis

Grist, Ian

Mawhinney, Dr Brian

Ground, Patrick

Mellor, David

Grylls, Michael

Meyer, Sir Anthony

Gummer, John Selwyn

Miller, Hal (B'grove)

Hamilton, Hon A. (Epsom)

Mills, Iain (Meriden)

Hampson, Dr Keith

Mitchell, David (NW Hants)

Hanley, Jeremy

Moate, Roger

Hannam, John

Monro, Sir Hector

Hargreaves, Kenneth

Montgomery, Sir Fergus

Harris, David

Moore, John

Harvey, Robert

Morrison, Hon C. (Devizes)

Havers, Rt Hon Sir Michael

Morrison, Hon P. (Chester)

Hawksley, Warren

Moynihan, Hon C.

Hayes, J.

Murphy, Christopher

Hayhoe, Barney

Neale, Gerrard

Hayward, Robert

Needham, Richard

Heathcoat-Amory, David

Nelson, Anthony

Heddle, John

Newton, Tony

Henderson, Barry

Norris, Steven

Heseltine, Rt Hon Michael

Onslow, Cranley

Hickmet, Richard

Oppenheim, Phillip

Higgins, Rt Hon Terence L.

Oppenheim, Rt Hon Mrs S.

Hind, Kenneth

Osborn, Sir John

Hogg, Hon Douglas (Gr'th'm)

Ottaway, Richard

Holland, Sir Philip (Gedling)

Page, Richard (Herts SW)

Holt, Richard

Parris, Matthew

Hordern, Peter

Patten, Christopher (Bath)

Howarth, Alan (Stratf'd-on-A)

Patten, John (Oxford)

Howarth, Gerald (Cannock)

Pawsey, James

Howe, Rt Hon Sir Geoffrey

Percival, Rt Hon Sir Ian

Howell, Rt Hon D. (G'ldford)

Pollock, Alexander

Hunt, John (Ravensbourne)

Porter, Barry

Hunter, Andrew

Portillo, Michael

Irving, Charles

Powell, William (Corby)

Jenkin, Rt Hon Patrick

Powley, John

Jessel, Toby

Price, Sir David

Johnson Smith, Sir Geoffrey

Proctor, K. Harvey

Jones, Robert (W Herts)

Raffan, Keith

Jopling, Rt Hon Michael

Raison, Rt Hon Timothy

Key, Robert

Rees, Rt Hon Peter (Dover)

King, Roger (B'ham N'field)

Rhodes James, Robert

King, Rt Hon Tom

Rhys Williams, Sir Brandon

Knight, Gregory (Derby N)

Ridley, Rt Hon Nicholas

Knight, Mrs Jill (Edgbaston)

Rifkind, Malcolm

Knowles, Michael

Rippon, Rt Hon Geoffrey

Knox, David

Robinson, Mark (N'port W)

Lamont, Norman

Roe, Mrs Marion

Lang, Ian

Rowe, Andrew

Latham, Michael

Rumbold, Mrs Angela

Lawler, Geoffrey

Ryder, Richard

Lawrence, Ivan

Sackville, Hon Thomas

Lee, John (Pendle)

Sainsbury, Hon Timothy

Leigh, Edward (Gainsbor'gh)

Sayeed, Jonathan

Lennox-Boyd, Hon Mark

Shaw, Sir Michael (Scarb')

Lester, Jim

Shelton, William (Streatham)

Lewis, Sir Kenneth (Stamf'd)

Shepherd, Colin (Hereford)

Lightbown, David

Shepherd, Richard (Aldridge)

Lilley, Peter

Shersby, Michael

Lloyd, Ian (Havant)

Silvester, Fred

Lloyd, Peter, (Fareham)

Sims, Roger

Lord, Michael

Skeet, T. H. H.

Lyell, Nicholas

Smith, Tim (Beaconsfield)

McCrindle, Robert

Soames, Hon Nicholas

McCurley, Mrs Anna

Speed, Keith

Macfarlane, Neil

Spence, John

MacGregor, John

Spencer, Derek

MacKay, Andrew (Berkshire)

Spicer, Jim (W Dorset)

MacKay, John (Argyll & Bute)

Squire, Robin

Maclean, David John

Stanbrook, Ivor

McNair-Wilson, P. (New F'st)

Steen, Anthony

Major, John

Stern, Michael

Malins, Humfrey

Stevens, Lewis (Nuneaton)

602

Stevens, Martin (Fulham)

Viggers, Peter

Stewart, Allan (Eastwood)

Waddington, David

Stewart, Andrew (Sherwood)

Waldegrave, Hon William

Stewart, Ian (N Hertf'dshire)

Walden, George

Stokes, John

Waller, Gary

Stradling Thomas, J.

Ward, John

Sumberg, David

Wardle, C. (Bexhill)

Tapsell, Sir Peter

Warren, Kenneth

Taylor, John (Solihull)

Watson, John

Tebbit, Rt Hon Norman

Watts, John

Temple-Morris, Peter

Wells, Bowen (Hertford)

Terlezki, Stefan

Wheeler, John

Thomas, Rt Hon Peter

Whitney, Raymond

Thompson, Donald (Calder V)

Wiggin, Jerry

Thompson, Patrick (N'ich N)

Wilkinson, John

Thorne, Neil (Ilford S)

Winterton, Mrs Ann

Thornton, Malcolm

Winterton, Nicholas

Thurnham, Peter

Wolfson, Mark

Townsend, Cyril D. (B'heath)

Wood, Timothy

Tracey, Richard

Woodcock, Michael

Trippier, David

Young, Sir George (Acton)

Trotter, Neville

Twinn, Dr Ian

Tellers for the Noes:

van Straubenzee, Sir W.

Mr. Michael Neubert and

Vaughan, Sir Gerard

Mr. Tristan Garel-Jones.

Question accordingly negatived.
Main Question put:—
The House divided: Ayes 261, Noes 192.

Division No 70]

[10.13 pm

AYES

Aitken, Jonathan

Forth, Eric

Alexander, Richard

Fowler, Rt Hon Norman

Ancram, Michael

Fox, Marcus

Arnold, Tom

Franks, Cecil

Atkinson, David (B'm'th E)

Freeman, Roger

Baker, Rt Hon K. (Mole Vall'y)

Gale, Roger

Baker, Nicholas (N Dorset)

Galley, Roy

Baldry, Tony

Gardiner, George (Reigate)

Biffen, Rt Hon John

Gardner, Sir Edward (Fylde)

Boscawen, Hon Robert

Garel-Jones, Tristan

Bottomley, Peter

Glyn, Dr Alan

Bottomley, Mrs Virginia

Gow, Ian

Brittan, Rt Hon Leon

Grant, Sir Anthony

Brooke, Hon Peter

Greenway, Harry

Brown, M. (Brigg & Cl'thpes)

Gregory, Conal

Browne, John

Griffiths, E. (B'y St Edm'ds)

Bruinvels, Peter

Griffiths, Peter (Portsm'th N)

Burt, Alistair

Grist, Ian

Butcher, John

Ground, Patrick

Butler, Hon Adam

Grylls, Michael

Carlisle, Kenneth (Lincoln)

Gummer, John Selwyn

Carlisle, Rt Hon M. (W'ton S)

Hamilton, Hon A. (Epsom)

Carttiss, Michael

Hampson, Dr Keith

Cash, William

Hanley, Jeremy

Chalker, Mrs Lynda

Hannam, John

Chapman, Sydney

Hargreaves, Kenneth

Clark, Hon A. (Plym'th S'n)

Harris, David

Clark, Dr Michael (Rochford)

Harvey, Robert

Clark, Sir W. (Croydon S)

Havers, Rt Hon Sir Michael

Cockeram, Eric

Hawksley, Warren

Conway, Derek

Hayes, J.

Coombs, Simon

Hayhoe, Barney

Cope, John

Hayward, Robert

Currie, Mrs Edwina

Heathcoat-Amory, David

Dorrell, Stephen

Heddle, John

Douglas-Hamilton, Lord J.

Henderson, Barry

Dover, Den

Heseltine, Rt Hon Michael

Dunn, Robert

Hickmet, Richard

Durant, Tony

Higgins, Rt Hon Terence L

Edwards, Rt Hon N. (P'broke)

Hind, Kenneth

Emery, Sir Peter

Hogg, Hon Douglas (Gr'th'm)

Fallon, Michael

Holland, Sir Philip (Gedling)

Fenner, Mrs Peggy

Holt, Richard

Fletcher, Alexander

Hordern, Peter

Fookes, Miss Janet

Howarth, Alan (Stratf'd-on-A)

Forman, Nigel

Howarth, Gerald (Cannock)

Forsyth, Michael (Stirling)

Howe, Rt Hon Sir Geoffrey

603

Hunt, John (Ravensbourne)

Portillo, Michael

Hunter, Andrew

Powell, William (Corby)

Irving, Charles

Powley, John

Jackson, Robert

Price, Sir David

Jenkin, Rt Hon Patrick

Proctor, K. Harvey

Jessel, Toby

Raffan, Keith

Johnson Smith, Sir Geoffrey

Raison, Rt Hon Timothy

Jones, Robert (W Herts)

Rees, Rt Hon Peter (Dover)

Jopling, Rt Hon Michael

Rhodes James, Robert

Key, Robert

Rhys Williams, Sir Brandon

King, Roger (B'ham N'field)

Ridley, Rt Hon Nicholas

King, Rt Hon Tom

Rifkind, Malcolm

Knight, Gregory (Derby N)

Rippon, Rt Hon Geoffrey

Knight, Mrs Jill (Edgbaston)

Robinson, Mark (N'port W)

Knowles, Michael

Roe, Mrs Marion

Knox, David

Rowe, Andrew

Lamont, Norman

Rumbold, Mrs Angela

Lang, Ian

Ryder, Richard

Latham, Michael

Sainsbury, Hon Timothy

Lawler, Geoffrey

Sayeed, Jonathan

Lawrence, Ivan

Shaw, Sir Michael (Scarb')

Lee, John (Pendle)

Shelton, William (Streatham)

Leigh, Edward (Gainsbor'gh)

Shepherd, Colin (Hereford)

Lester, Jim

Shepherd, Richard (Aldridge)

Lewis, Sir Kenneth (Stamf'd)

Shersby, Michael

Lightbown, David

Silvester, Fred

Lilley, Peter

Sims, Roger

Lloyd, Ian (Havant)

Skeet, T. H. H.

Lloyd, Peter, (Fareham)

Smith, Tim (Beaconsfield)

Lord, Michael

Soames, Hon Nicholas

Lyell, Nicholas

Speed, Keith

McCrindle, Robert

Spence, John

McCurley, Mrs Anna

Spencer, Derek

Macfarlane, Neil

Spicer, Jim (W Dorset)

MacGregor, John

Squire, Robin

MacKay, Andrew (Berkshire)

Stanbrook, Ivor

MacKay, John (Argyll & Bute)

Steen, Anthony

Maclean, David John

Stern, Michael

McNair-Wilson, P. (New F'st)

Stevens, Lewis (Nuneaton)

Major, John

Stevens, Martin (Fulham)

Malins, Humfrey

Stewart, Allan (Eastwood)

Malone, Gerald

Stewart, Andrew (Sherwood)

Maples, John

Stewart, Ian (N Hertf'dshire)

Marland, Paul

Stokes, John

Marlow, Antony

Stradling Thomas, J.

Marshall, Michael (Arundel)

Sumberg, David

Mates, Michael

Tapsell, Sir Peter

Mather, Carol

Taylor, John (Solihull)

Maude, Hon Francis

Taylor, Teddy (S'end E)

Mawhinney, Dr Brian

Tebbit, Rt Hon Norman

Mellor, David

Temple-Morris, Peter

Meyer, Sir Anthony

Terlezki, Stefan

Miller, Hal (B'grove)

Thomas, Rt Hon Peter

Mills, Iain (Meriden)

Thompson, Donald (Calder V)

Mitchell, David (NW Hants)

Thompson, Patrick (N'ich N)

Moate, Roger

Thorne, Neil (Word S)

Montgomery, Sir Fergus

Thornton, Malcolm

Moore, John

Thurnham, Peter

Morrison, Hon C. (Devizes)

Townsend, Cyril D. (B'heath)

Morrison, Hon P. (Chester)

Tracey, Richard

Moynihan, Hon C.

Trippier, David

Murphy, Christopher

Trotter, Neville

Neale, Gerrard

Twinn, Dr Ian

Needham, Richard

van Straubenzee, Sir W.

Nelson, Anthony

Vaughan, Sir Gerard

Newton, Tony

Viggers, Peter

Norris, Steven

Waddington, David

Onslow, Cranley

Waldegrave, Hon William

Oppenheim, Phillip

Walden, George.

Oppenheim, Rt Hon Mrs S.

Waller, Gary

Osborn, Sir John

Ward, John

Ottaway, Richard

Wardle, C. (Bexhill)

Page, Richard (Herts SW)

Warren, Kenneth

Parris, Matthew

Watson, John

Patten, Christopher (Bath)

Watts, John

Patten, John (Oxford)

Wells, Bowen (Hertford)

Pawsey, James

Wheeler, John

Percival, Rt Hon Sir Ian

Whitney, Raymond

Pollock, Alexander

Wiggin, Jerry

Porter, Barry

Wilkinson, John

604

Winterton, Mrs Ann

Young, Sir George (Acton)

Winterton, Nicholas

Wolfson, Mark

Tellers for the Ayes:

Wood, Timothy

Mr. Michael Neubert and

Woodcock, Michael

Mr. Mark Lennox-Body.

NOES

Adams, Allen (Paisley N)

Foulkes, George

Alton, David

Fraser, J. (Norwood)

Anderson, Donald

Freeson, Rt Hon Reginald

Archer, Rt Hon Peter

Freud, Clement

Ashdown, Paddy

Garrett, W. E.

Ashley, Rt Hon Jack

George, Bruce

Atkinson, N. (Tottenham)

Godman, Dr Norman

Bagier, Gordon A. T.

Golding, John

Banks, Tony (Newham NW)

Gould, Bryan

Barnett, Guy

Hamilton, W. W. (Central Fife)

Barron, Kevin

Hancock, Mr. Michael

Beckett, Mrs Margaret

Harrison, Rt Hon Walter

Beith, A. J.

Hart, Rt Hon Dame Judith

Benn, Tony

Haynes, Frank

Bennett, A. (Dent'n & Red'sh)

Healey, Rt Hon Denis

Bermingham, Gerald

Heffer, Eric S.

Bidwell, Sydney

Hicks, Robert

Boothroyd, Miss Betty

Hogg, N. (C'nauld & Kilsyth)

Boyes, Roland

Holland, Stuart (Vauxhall)

Bray, Dr Jeremy

Home Robertson, John

Brown, Gordon (D'f'mline E)

Howells, Geraint

Brown, Hugh D. (Provan)

Hoyle, Douglas

Brown, N. (N'c'tle-u-Tyne E)

Hughes, Dr. Mark (Durham)

Brown, R. (N'c'tle-u-Tyne N)

Hughes, Robert (Aberdeen N)

Brown, Ron (E'burgh, Leith)

Hughes, Sean (Knowsley S)

Bruce, Malcolm

Hughes, Simon (Southwark)

Buchan, Norman

Janner, Hon Greville

Caborn, Richard

John, Brynmor

Callaghan, Jim (Heyw'd & M)

Johnston, Russell

Campbell-Savours, Dale

Jones, Barry (Alyn & Deeside)

Canavan, Dennis

Kaufman, Rt Hon Gerald

Carlile, Alexander (Montg'y)

Kennedy, Charles

Carter-Jones, Lewis

Kilroy-Silk, Robert

Cartwright, John

Kinnock, Rt Hon Neil

Clark, Dr David (S Shields)

Kirkwood, Archy

Clarke, Thomas

Lamond, James

Clay, Robert

Leighton, Ronald

Clwyd, Mrs Ann

Lewis, Ron (Carlisle)

Cocks, Rt Hon M. (Bristol S.)

Lewis, Terence (Worsley)

Cohen, Harry

Litherland, Robert

Coleman, Donald

Lloyd, Tony (Stretford)

Cook, Frank (Stockton North)

Lofthouse, Geoffrey

Cook, Robin F. (Livingston)

McCartney, Hugh

Corbett, Robin

McDonald, Dr Oonagh

Corbyn, Jeremy

McGuire, Michael

Cowans, Harry

McKay, Allen (Penistone)

Cox, Thomas (Tooting)

McKelvey, William

Craigen, J. M.

Mackenzie, Rt Hon Gregor

Crowther, Stan

Maclennan, Robert

Cunliffe, Lawrence

McTaggart, Robert

Cunningham, Dr John

Madden, Max

Davies, Ronald (Caerphilly)

Marek, Dr John

Davis, Terry (B'ham, H'ge H'l)

Marshall, David (Shettleston)

Deakins, Eric

Maxton, John

Dewar, Donald

Meacher, Michael

Dixon, Donald

Meadowcroft, Michael

Dobson, Frank

Michie, William

Dormand, Jack

Mikardo, Ian

Douglas, Dick

Millan, Rt Hon Bruce

Dubs, Alfred

Miller, Dr M. S. (E Kilbride)

Dunwoody, Hon Mrs G.

Mitchell, Austin (G't Grimsby)

Eadie, Alex

Nellist, David

Eastham, Ken

Oakes, Rt Hon Gordon

Ellis, Raymond

O'Brien, William

Evans, John (St. Helens N)

O'Neill, Martin

Fatchett, Derek

Owen, Rt Hon Dr David

Faulds, Andrew

Park, George

Field, Frank (Birkenhead)

Parry, Robert

Fields, T. (L'pool Broad Gn)

Patchett, Terry

Fisher, Mark

Pavitt, Laurie

Flannery, Martin

Pendry, Tom

Forrester, John

Penhaligon, David

Foster, Derek

Pike, Peter

605

Powell, Raymond (Ogmore)

Skinner, Dennis

Prescott, John

Smith, C.(Isl'ton S & F'bury)

Radice, Giles

Smith, Rt Hon J. (M'kl'ds E)

Randall, Stuart

Snape, Peter

Redmond, M.

Soley, Clive

Rees, Rt Hon M. (Leeds S)

Spearing, Nigel

Richardson, Ms Jo

Speller, Tony

Roberts, Ernest (Hackney N)

Steel, Rt Hon David

Robertson, George

Stewart, Rt Hon D. (W Isles)

Robinson, G. (Coventry NW)

Stott, Roger

Rowlands, Ted

Strang, Gavin

Ryman, John

Straw, Jack

Sedgemore, Brian

Thompson, J. (Wansbeck)

Sheerman, Barry

Tinn, James

Sheldon, Rt Hon R.

Torney, Tom

Shore, Rt Hon Peter

Wainwright, R.

Short, Ms Clare (Ladywood)

Warden, Gareth (Gower)

Short, Mrs R.(W'hampt'n NE)

Wareing, Robert

Silkin, Rt Hon J.

Weetch, Ken

606

Welsh, Michael

Woodall, Alec

White, James

Wrigglesworth, Ian

Wigley, Dafydd

Williams, Rt Hon A.

Tellers for the Noes:

Wilson, Gordon

Mr. James Hamilton and

Winnick, David

Mr. John McWilliam.

Question agreed to.
Resolved,
That this House takes note of the Government's statement on 28th November announcing changes in regional industrial incentives; welcomes the closer alignment of the new Assisted Areas map to areas' relative needs for increased employment opportunities; agrees that it is right at a time of high unemployment to relate assistance more directly to jobs; and notes with approval that the increased cost-effectiveness of regional assistance will enable the burden upon taxpayers to be substantially reduced.

Assisted Areas
10.25 pm
Mr. A. J. Beith: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Assisted Areas Order 1984 (S.I., 1984, No. 1844), dated 26th November 1984, a copy of which was laid before this House on 29th November, be annulled.
Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take motion No. 3 on the Order Paper:
That a humble Address be presented to Her Majesty, praying that the Regional Development Grant (Qualifying Activities) Order 1984 (S.I., 1984, No. 1846), dated 26th November 1984, a copy of which was laid before this House on 28th November, be annulled.
Mr. Beith: The Assisted Areas Order concerns the list of places that are eligible for regional aid. The other Order concerns qualifying activities. Most of my attention will be directed to the schedule of places eligible for regional aid. That is where the Government have made their greatest mistakes. I believe that it is useful to take the two orders together so that any hon. Members who wish to refer to qualifying activities can do so.
The widening of the qualifying activities is one of the few parts of the statement that we welcome. The extension to service industries of regional aid is clearly sensible and more accurately deals with the development of an area in which the service industries are an important back-up to manufacturing industry and important providers of jobs. On the whole, we welcome the second order, but, none the less, we feel that it should be debated.
Our greatest reservations concern the map, the schedule, and the list of areas. Many hon. Members on both sides of the House have expressed reservations, many of which are well founded. There are not simply complaints from those whose areas have been excluded from development aid on reasonable objective grounds. There many cases of complaints from those who can point to areas that fulfil in every way the criteria which the Government have set out for inclusion in a development area. The map devised is most at fault.
The criteria that the Government set out and reiterated tonight for determining the places eligible for regional aid included such aspects as high unemployment, high long-term employment, high employment relative to other places, great distances from main markets—which the Government call, in a rather ugly word, "peripherality" —and industrial structure. According to those criteria, a number of places should have been included in the list of places eligible for development aid, but those places were not included.
Several of my hon. Friends have mentioned during debates or raised with me concern about some of these areas. My hon. Friend the Member for Truro (Mr. Penhaligon) has talked about parts of Cornwall which exactly fit those criteria. My hon. Friend the Member for Leeds, West (Mr. Meadowcroft) is concerned about, and, if he catches your eye, Mr. Deputy Speaker, will refer to, the area of west Leeds which meets these criteria, including the additional criterion the Government included about the drain from the centre of cities. On many occasions, I have raised with Ministers the problem of
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Amble in Northumberland which exactly meets the criteria of having high unemployment relative to the places adjoining it, of being at a great distance from the main markets and of suffering from the problems of an old industrial structure — old industries such as the coal industry having been a dominant employer in the area.
In so many of these cases, areas that have been left out of the list meet the criteria more effectively than the areas left in the list. My hon. Friend the Member for Leeds, West has referred publicly to the contrast between Leeds which is not in a development area and Pudsey which is placed within a development area. On any objective assessment, many parts of Leeds meet the criteria better than places within the development areas. On objective criteria Amble meets the argument far better, for example, than Ponteland which is in the Newcastle travel-to-work area.
The result of this decision is that some of these areas — the most hard hit, the ones upon which the Government claimed that they were going to concentrate their aid—have lost the direct United Kingdom regional aids and their access to EC regional aid, and for many of them that is the most important point. Frankly, they were expecting to get more out of the EC than they were ever hoping to get out of the United Kingdom Government.
But the story does not end there, because they now find themselves facing direct competition from neighbouring areas whose problems are often not as great as theirs. That is a point to which the Minister of State referred when he wound up the earlier debate, the competition between the areas which do have incentives and those which do not. I am sorry to have to tell the Minister that he has picked some of the worst hit areas and left them with precisely that sort of competition, a very unfair competition indeed.
Why should Government and European regional aid be denied to the sort of places that I have described? I think the Minister should get some idea of the sort of places about which I am talking when I refer to Amble, for example. It is a community where one in three adults is already without a job and where only 18 per cent, of pupils stay on into the sixth form. When one compares that with a community like Ponteland, it is interesting to hear what the reaction of one of a Conservative councillor in Ponteland was when he was told that his area was on the map and asked why it was. He said:
"You could not say we are industrial. I am not aware of an unemployment problem though there might be some youngsters out of work."
That was a Conservative member of the Northumberland county council commenting on the inclusion of his area in a development area whereas in Amble 160 youngsters leave the high school in search of their first job every year, and most of them will not find such a job.
The Alnwick district council in presenting its case locally and nationally has drawn attention to some of these youngsters. It picked out one of them, Susan Stewart, who sought to get a job which involved design work, in which she was hoping to specialise and train. The opportunity was there, and what did she find? She read in her newspapers that development aid was going to be lost for Amble. She read in the same newspapers that the firm with which she was going to get a job was moving on to another area where higher development aids were available. It is that competition from neighbouring areas which is now going to be so damaging. Of the 163 school leavers from the local high school last year, 143 are still without a

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permanent job. It is those sort of circumstances in which the competition from neighbouring areas will be insufferable and unreasonable.
Why is it happening? Why have the Government done such a monstrously callous and heartless thing as to exclude some of the areas that I have described, and others to which the Minister's hon. Friends have referred, from regional aid? Why have they delivered that blow to communities which deserve help under all the guidelines which the Government themselves have set out?
I think that the clue to the answer is given in a letter which was sent to my hon. Friend the Member for Leeds, West by the West Yorkshire county council. It makes this point and says:
"The Government's insistence that it cannot depart from the principle of defining Assisted Areas on the basis of Travel-to-Work Areas means that economic blackspots within the County have been ignored".
It is the insistence on using travel-to-work areas inflexibly as the boundary. The same point, indeed, was made by the hon. Member for Tayside, North (Mr. Walker) when he spoke. Indeed, he made the point that in his constituency Pitlochry, Blairgowne and Aberfeldy were so much set apart by hills that nobody travels between them for work and in no real sense are they a genuine travel-to-work area. So many of these travel-to-work areas conceal pockets of high unemployment. Some of them may well be appropriate for defining regional aid boundaries, but some of them manifestly are not.
The Government should have been readier to recognise that they have alternatives at their disposal if they do not want to use those areas.
In an earlier debate I said that the regional aid map which the Government have produced has been drawn by somebody sitting behind a desk in London who had never been to many of the places affected and did not understand their problems. I got an interesting reply to that point from the Parliamentary Under-Secretary. He quoted what I said, and stated:
"Nothing could be further from the truth, and I shall explain why. The travel-to-work boundaries were first drafted by the Centre for Urban and Regional Development Studies at Newcastle university, which may surprise the hon. Member".
It does not really surprise me—I used to work there. He continued:
"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 the travel patterns since the census." — [Official Report, 19 December 1984; Vol. 70, c. 410.]
I took the trouble to talk to the people at Newcastle university who had been involved in the process of defining travel-to-work areas. The first point that they were bound to make in their own defence was that they were asked by the Department of Employment to draw up areas which were reasonable units for the collection and reporting of unemployment figures. They were never asked to set out boundaries which might reasonably define where development aid should go. As reputable academic statisticians, they did the job assigned to them according to the proper criteria. They assessed what would be reasonable areas for reporting the figures of unemployment.
That was not the end of the story. As the Minister said, the next job was to seek the advice of local people as to whether other factors should be taken into account. The Minister responsible supposedly did so, but he gave the local authorities a week only in which to respond. That did
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not deter the local authorities in Northumberland, and I am sure that it did not deter those in areas such as west Yorkshire either. They made their responses and not the slightest bit of notice was taken of them. It was the contrary. The local authorities produced a far more reasonable proposition than we now have before us.
I shall deal more precisely with the case of the Amble and Alnwick area. The Minister may not realise—I am glad that the information is being hastily brought lo him—that the statistics produced by the centre at Newcastle university gave travel-to-work areas other than those that he has brought before the House. The travel-to-work area for Amble and Alnwick was not the large area that he has now. It was much smaller and excluded the whole of the western area and confined itself to the area from Alnwick to the coast. That was a much more reasonable unit.
The advice of the local authorities was to link Amble and the area immediately to its south. If the Minister had accepted the first suggestion from Newcastle university's centre he would have had a better map than he has now. If he had accepted the local authorities' advice he would have had a still better map.
None of the advice that he received from Newcastle university, people on the spot, or, I suspect, his regional officials led to the conclusions that he has now reached.
The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): I did not draw up the travel-to-work areas. It is done by the Department of Employment for a specific purpose other than regional policy. It is done to measure unemployment over the smallest most meaningful area that unemployment can be measured. Given that that is the purpose, it nevertheless makes sense to use it for regional policy.
Mr. Beith: The Minister has made my point. He did not define those boundaries, and the advice that 1 and others gave to him was that he should never have thought himself bound by them in the first place. He did not devise them and they were not devised for the purpose that has brought him to the House tonight. They were not devised to determine regional aid boundaries. They were defined by another Department for the reporting of unemployment figures. If I seem, by attacking collective responsibility, to be castigating him personally, that is not what I am doing. I was referring to his colleagues in his Department making such a spirited defence of the figures. I was trying to get to the facts which are that if we look at the original travel-to-work areas produced by the statisticians, they did not produce this crazy map.
Mr. Tony Speller: Is the hon. Gentleman aware of any case similar to that of Ilfracombe in north Devon, where in July the Department of Employment advised me that it was looking at the figures and moving two areas in together—one good and one bad one? We should have smelt the rat which was there to be smelt. A few months later the two areas lost all status at one blow. Has that happened to the hon. Gentleman's knowledge elsewhere, perhaps in his own part of the country?
Mr. Beith: The hon. Gentleman makes a sound point. His case is similar to mine. The advice that the Department of Employment took was not heeded. The Government have patched together a larger area to suit their own convenience. I have read the Adjournment debate that the

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hon. Gentleman raised on the subject of Ilfracombe. There is a remarkable similarity. The figures were produced by another Government Department. What should Ministers responsible for regional development have done? They should have looked at the map and said that it did not fit their needs; it did not correspond to the reality of high unemployment. They do not have the guts to stand up to their colleagues across the street or across the building in another Department and say, "You did a job for your own purposes; it will not do for ours." They should have devised a map which met their own purpose.
Mr. Norman Lamont: As the purpose they follow is to measure unemployment meaningfully, why is that wrong for regional policy?
Mr. Beith: It does not measure unemployment meaningfully.
Mr. Lamont: That is their objective. If that is their purpose, it is irrelevant for the hon. Gentleman to say that it has nothing to do with regional policy.
Mr. Beith: I have been trying to explain to the Minister why it does not work for that purpose, and he is getting restive about it. A travel-to-work area does not define levels of high unemployment. It is a way of reporting unemployment figures. It does not necessarily indentify unemployment blackspots. Indeed, if one takes the statistical criteria, one can use the whole of the country as a travel-to-work area because 70 per cent, of people come in under both headings; they work and live in it. The size of areas is very much determined by the administrative convenience of the Department of Employment, not to provide reasonable units for the hon. Gentleman to use for his purpose of regional policy.
Mr. David Penhaligon: It creates lunacies the other way about in that Stratford-on-Avon, Solihull and Sutton Coldfield are included for special development assistance when, by any judgment, they do not need it.
Mr. Beith: I ask the Minister to go to the Darras Hall estate in Ponteland, or to some of those places that got included in the west midlands area, and ask himself whether the exercise of using travel-to-work areas has successfully identified in those instances the places that are most urgently in need of regional aid.
Mr. David Alton: I intervene to illustrate my hon. Friend's point still further. The Bull Ring in inner city, Liverpool, in my constituency, where unemployment is running at 45 per cent., is now included in an area which also includes the constituencies of the hon. Members for City of Chester (Mr. Morrison), of Wirral, West (Mr. Hunt) and of Wallasey (Mrs. Chalker), all of which are represented in this House by Ministers and in all of which the rates of unemployment are only a fraction of that in central Liverpool. Does my hon. Friend think that that has anything to do other than with pork barrel politics?
Mr. Beith: A Pandora's box of places mysteriously included is being opened, but without my hon. Friend's local knowledge I will not begin to speculate on the reasons involved. Suffice it to say that the travel-to-work areas in a number of instances do not successfully identify
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the areas of greatest need. They embrace areas which do not have the same high needs and they exclude some areas which are in great need.
If the statutory framework within which the Minister was working had given him no choice but to work from the travel-to-work areas, it would have been another matter and we should be demanding that new legislation be introduced. But the House has only recently passed the Co-operative Development Agency and Industrial Development Act 1984, which sets out what the Minister can do. I do not know why the hon. Gentleman did not examine that measure and see the wide range of choices open to him.
The Minister could have made an order under the appropriate section describing a development area by reference towards, travel-to-work areas or
"any other area which has been created by or exists or existed for the purposes of any Act or Statutory Instrument, whenever passed or made."
Thus, anything that has ever been defined in a statute as an area he could have used; his choice was limitless.
In one case, in one city, the Minister had the sense to realise that he had to do something different, and that was in Manchester. There, he used local government wards to define the boundary. I am tempted to attribute it to an outbreak of wisdom on his part, but I know that the real reason was other than that. It was that when he and his officials got to Manchester they realised that they were pushing against the barrier of the total percentage that they would be allowed to claim for development assistance under the European development fund. Accordingly, they started somewhat to redefine in Manchester, which was not unreasonable, because had they left Bramhall in the regional development area they would have deserved the same criticisms as I am delivering to them in relation to a number of other places elsewhere in the country.
I do not complain, therefore, at that being done in Manchester. But why in only one place in one part of the United Kingdom did they use the flexibility available to them under the Act? They have handed over their duties to Ministers in other Departments, they have taken hand-me-down areas provided for a wholly different purpose and they have failed to examine whether they met the needs of the case. As my hon. Friends and I have sought to show on many occasions, the Government have made the gravest mistakes in the map by so doing.
The controversial points that have been raised today are deeply felt by Members who sincerely believe that the Government have excluded areas which fulfil all or most of the criteria and genuinely need that kind of help. There is still a chance to remedy the deficiency. The Undersecretary of State is reported to have said on a visit to the north-east that the map would not be set in concrete but subject to regular review. I ask the Minister to hold out some hope to school leavers in the communities that I have described and to local authority officials desperately trying to attract industry to their areas and to help industry to stay there in the face of competition from nearby areas receiving assistance but often without anything like the same problems.
The map contains errors. There may be members of the present Administration who regard themselves as infallible, but I am sure that the Minister is not one of them. I am sure that he recognises that even the passage of time can change these things, not to mention the original errors.
Mr. Paddy Ashdown: Does my hon. Friend agree that it would be useful to know how long the map is intended to remain in operation? I understand that it is intended to operate without further review for five years. Perhaps the Minister will tell us whether that is so and whether he agrees that as the 1979 map became out of date so quickly, regular and far more frequent reviews would be most helpful.
Mr. Beith: I am sure that my hon. Friend is quite right. Moreover, it would be entirely consistent with the Minister's earlier remarks about not hanging on to regional policies that were no longer working if he would guarantee that he will review the boundaries annually and that he will be prepared at any time to consider cases which clearly meet the criteria that he set out but which have so far not been included. I hope that he will give at least that much hope to areas which sincerely feel that he and other Ministers have delivered them blow after blow as they desperately try to fight their way out of difficulty and depression. The areas that I have described are trying desperately to help themselves, but the Government seem intent on hindering them.
As the procedures of the House do not allow us to amend the order, I ask my hon. Friends to vote against it, but I hope that the Minister will offer some hope by saying that he is prepared to reconsider cases which cry out as loudly as those that I have mentioned.
10.47 pm
Sir Peter Blaker: I, too, wish to refer to an area that I believe has been wrongly deprived of assisted area status—the town of Blackpool, part of which I have the honour to represent. My hon. and learned Friend the Member for Blackpool, North (Mr. Miscanipbell) mentioned this briefly in the earlier debate and I wish to elaborate on it.
Unemployment in the Blackpool local authority area in December was 20·2 per cent. The average for the whole of 1984 was 17·8 per cent. Those figures are a good deal higher than those for the generality of intermediate areas and for some of the development areas.
I cannot support the Government in the Lobby today because, although they are right to try to reduce the total cost of regional aid and to make the whole policy more job orientated, I believe that they have made a mistake in relation to Blackpool.
What matters more than anything else to Blackpool is the resulting deprivation of European Community assistance because it has already embarked on a number of very important projects and was about to embark on others which would have received assistance from the European investment bank or the European regional development fund.
The definition of travel-to-work areas has been discussed. I, too, have a criticism to make. Blackpool is part of a travel-to-work area that covers the whole of the Fylde. As my hon. and learned Friend the Member for Blackpool, North said, Fylde, just to the south of Blackpool, has relatively little unemployment—about 9 per cent. That totally alters the unemployment picture. Even though Blackpool is by far the largest local government unit in the Fylde area, the figures for the travel-to-work area are fundamentally altered, in a way that has deprived the area as a whole of its assisted status.
But even if one takes the travel-to-work area as a whole, the December 1984 unemployment figures were
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16·5 per cent. The average for 1984 as a whole was 14·9 per cent. That figure is higher than the figures for three of the intermediate areas in the north-west — Accrington and Rossendale, Manchester and Oldham. If one takes the main criterion, unemployment, which the Government have been using, and the travel-to-work area of which Blackpool is a part, it is hard to justify the fact that Blackpool and the Fylde do not qualify as a travel-to-work area.
I repeat the point made by my hon. and learned Friend the Member for Blackpool, North. The local authority area of Blackpool alone passes all the tests to qualify as a travel-to-work area. It has a potential working population of 60,000. It is larger than two-thirds of the travel to work areas in the north-west.
Relevant also is the speed at which the unemployment figures in Blackpool and the travel-to-work areas have increased. Between 1983 and 1984 they increased in Blackpool by 1·8 per cent., in the travel-to-work area by 1·3 per cent., in Lancashire by 0·7 per cent. and in the United Kingdom as a whole by 0·6 per cent. That is a very worrying trend for those of us who represent Blackpool and the Fylde. I do not know when the Government froze the figures in coming to their decision. If they had taken the figures a little later they might have made a different decision about Blackpool. I do not remember hearing my right hon. Friend the Secretary of State or my right hon. Friend the Minister of State spelling out fully the six criteria that they used. If they did, I apologise for not having grasped them. However, I wonder whether they took account of the trend in the different areas. If they had done so I believe that it would have been very relevant.
Blackpool and the Fylde have been trying to help themselves. They do not believe in relying principally upon handouts from the Government. They have been trying to compete with the Costa Brava by building their own indoor Costa Brava. It is already under construction and will cost £16 million. They still hope that they will be able to complete most of it in time to receive a very substantial grant from the European regional development fund. They have in mind other important projects, which are fundamental to the tourist life of Blackpool—still the most important part of Blackpool's livelihood. They include a road right into the middle of the town for tourist purposes, more car parks and coach parks and a 70 acre industrial site whose infrastructure has just been completed. Ironically, the first sod was turned at just about the same time as the Minister announced the change in policy. Important work has to be done for coastal protection. The storms in the Irish Sea do not take account of whether Blackpool enjoys assisted area status. The Winter Gardens, built about 100 years ago and still, in my view, one of the best conference halls in the country, will need to be modernised to match the modern conference halls being built in other parts of the country. Blackpool airport will need modernisation because the runway is getting old. The town had hoped to have an electrified railway link to Preston and Manchester. All those proposals could have qualified for aid from the EC. Now the prospect of getting that aid has been removed.
If such schemes are carried out most of them would have to be with money from the local authority. What will happen if the local authority does that? What will happen if it spends money repairing the airport runway? It will run into the problem that it will be penalised by my right hon. Friend the Secretary of State for the Environment for

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overspending. It does not wish to overspend and be penalised. It had expected to receive substantial grants, up to 30 per cent., from the EC, but it may not do so now for some of the projects. Therefore it faces the dilemma of deciding whether to scrap those projects, with all the attendant disadvantages, or to go ahead and risk the penalties that the Secretary of State would inflict.
The Government should think a bit more about their policy for the assistance of tourism. The Government say that tourism is increasingly important in our national scene. It is a great earner and saver of foreign currency. Industrial towns outside the assisted areas have enjoyed certain benefits by way of Government assistance, from urban schemes, and so on. But if a tourist region is outside the assisted areas it receives little help at all and has no recourse to the EC, which has been helpful to the British tourist industry. It can only go to the English Tourist Board if it is in England. The total grant available under section 4 of the Development of Tourism Act 1969 is about £8 million, and it is clearly not available for projects of the magnitude that I have been describing. So assistance from the EC would be available to develop tourism or conference facilities in sunny Wolverhampton or beautiful Oldham or Sheffield, but not in Blackpool. The Government really should re-examine that situation.
To sum up, I hope that the Government will bear in mind that Blackpool has all the qualifications for a travel-to-work area on its own. I should like the Minister to say whether, in examining the plans that the Government have announced, allowance was made for the speed of change to which I have referred—the speed of growth in the unemployment figures in different areas and the speed of change of different industries.
If the need to renew the industrial infrastructure was one of the criteria which the Government used, what about the need to renew the infrastructure of tourism? The changes in tourism have been more rapid than the changes in almost any other industry in the past forty years. I hope that when he replies my hon. Friend will say something about the Government's attitude to tourism in the context of the question that I put to him.
I also hope that my hon. Friend will answer the question put to him from the Liberal Benches. How long shall we have to wait for a review of the Government's policy? I hope that it is not true that we shall have to wait five years. That is much too long. It is possible that in some of the areas where unemployment has been increasing fast action will have to be taken much sooner.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. I appeal for extreme brevity. The Front Bench is hoping to catch my eye at 11.15.
11 pm
Mr. Tom Clarke: The interest that the House has in these orders is comprehensive. My interest is encapsulated in the explanatory note to the order dealing with industrial development in assisted areas. It says:
"The Order revokes all earlier Assisted Area Orders with appropriate saving provisions."
I shall try to be brief. My submission is that we have not given sufficient thought to existing policies before we have
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found ourselves rushing headlong into a new approach —an approach reflected in the debate earlier today and in the order itself.
I wish to draw to the attention of the Minister, as we consider the problems of travel-to-work areas, infrastructure and accessibility of European funds and the rest, the impact that these policies have on people and particularly upon the people of my region of Strathclyde. It represents half of the population in Scotland and has grave reservations about the policies that the Minister is adopting, which are reflected in the orders.
Strathclyde regional council published an excellent document, which I commend to the Minister, called "Strathclyde economic trends" in January this year. It made a number of interesting points, points that advance the case for increasing regional aid and public expenditure and not reducing them. Among the numerous points that it made, and which I commend to the Minister for his consideration, and to those Tory Members who spoke on the earlier debates, there is the comment that
"the Chief Executive's Department has estimated that were it not for the various governmental 'Special Measures', 37,100 more people would be unemployed in Strathclyde in October 1984."
That was the case under existing regional aid policy, so when Tory Members say, as they did today, that public expenditure does not lead to jobs, I suggest that the available evidence shows that that simply is not the case. It is astonishing, in the light of the orders, that the Tory party campaigned in the general election on the issue that our defence policies would cost jobs because of the reduction in defence expenditure. Today, we are being told that the reduction of expenditure in the public sector will not necessarily mean that there are fewer jobs. I do not accept that. I plead, as most people in Strathclyde do, for increased investment at a higher level than that envisaged in the order.
The report revealed that in youth unemployment, the ratio is 246 young people chasing every job. I am concerned about long-term unemployment, and in my constituency, the report shows that in Coatbridge, of those unemployed, 25·5 per cent. have been without a job for two years or more. In Chryston and Kelvin Valley, again in my constituency, the figure is 19 per cent. Surely the whole position calls for more public investment than the Government's figures, representing £100 million less in Scotland, would suggest.
The fact is that the order is a mean-minded order, representing the Government's mean-minded approach. That approach was made clear when the Minister made a statement on 28 November, on the same day that we heard about the abolition of skillcentres in Scotland. The hon. Gentleman said that there would be
"a considerable lightening of the public expenditure burden". —[Official Report, 28 November 1984; Vol. 68, c. 937.]
That is the point of the order. It is not about finding jobs or correcting regional imbalances—and in any case we have heard this evening about the anomalies that are being created. The Government's concern is to reduce public expenditure, and in reducing regional aid they have found a convenient policy.
In Scotland, the measures have been found to be almost universally unacceptable. The Fraser of Allander Institute, for example, states:
"We can expect no significant reduction of unemployment during the remainder of this decade".

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I suggest that unemployment in Scotland, with its frustrations and heartaches, is far too severe to permit us to consider the possibility even of its continuance at the present level, let alone an increase.
I hope that the House will reject the order, because the philosophy underlying it is not only repugnant but divisive. Speeches from the Government Benches have illustrated the arrogance of intellect coupled with the brutality of power. The Government's approach lacks both the sensitivity and the compassion of the Earl of Stockton, the right hon. Member for Old Bexley and Sidcup (Mr. Heath) and the Bishop of Liverpool, among others. Because of that lack of compassion, and because the British and the Scottish people have been misled about the Government's approach. I urge the House to reject both the orders and the Government's policies.
11.7 pm
Mr. Robert Hicks: I have always believed that the primary purpose of a meaningful regional policy—indeed, its justification—is to help to create a situation in which each region contributes to and shares in the nation's prosperity and advancement. However, the designation of the new assisted areas and the list of qualifyig activities, sadly, will not help us to achieve that objective.
We face a real problem of widening regional disparities. The nation as a whole has a responsibility to try to improve the level of activity in the less prosperous parts of the United Kingdom. Other hon. Members have already referred to the growing problems created by the rapid development of technology, the changing patterns of demand, and the difficulties created when, in certain regions, the industries that once formed the basis of economic activity start to decline. The country as a whole has an obligation to try to reduce the basic disparities that result.
The Government are right periodically to reappraise regional structures but on this occasion public expenditure considerations seem to have dominated, rather than the needs of the regions themselves. That is especially worrying, because we face both high unemployment and, in certain regions, reduced average incomes.
When I spoke in the regional debate in July 1979 I pointed out that Cornwall had an unemployment figure of 12 per cent. and that average earnings in Cornwall—at that time the lowest in the United Kingdom—were 83·8 per cent. of the national average. Today, the corresponding figures are 19·2 per cent. unemployment and 80·1 per cent. of average earnings. The gap has widened in both cases. The same trend has occurred in the great majority of peripheral and assisted areas.
The Government are less vulnerable on how they intend to spend regional aid. The suggestions are more sensible and cost effective, but the scale of resources that they intend to devote to regional assistance worries me. The orders do not suggest a strong commitment to less favoured areas at a time of widening social and economic disparities. We are reducing expenditure on regional policy from a projected £700 million to £400 million.
I am disappointed that the Government have not taken a more positive initiative in linking regional proposals with the responsibilities of other Departments of State which have a regional dimension. I refer to the work of the Development Commission, the various Manpower Service Commission schemes, inner-city policies, the vital need
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for improved infrastructure and, as my right hon. Friend the Member for Blackpool, South (Sir P. Blaker) said, the need to co-ordinate and integrate tourism policies into regional economies, because tourism is often one of the basic ingredients of regional economic structures.
I make no apology for referring to an amendment that I tabled and which appears on the Order Paper. It concerns the danger of a divided Britain—the greatest potential economic and social problem that faces the country. I ask my hon. Friend the Minister to remember that the decisions that we are making in respect of regional policies will, in the short and long term, have a real influence on whether we have a divided Britain.
Mr. Speller: Does my hon. Friend agree that part of the basic tenet of his argument is supported by the fact that when the orders go through, as inevitably they will, the time for people who have worked for improvements through assisted or development area status will be so short that it will be impossible for any useful purpose to he served during the three months for notification or until implementation in November? Does he agree that Britain is also divided in sheer fury at the fact that people have worked hard to improve matters with Government help, which has now been suddenly and completely withdrawn?
Mr. Hicks: I fully understand my hon. Friend's sentiments. I fail to understand the logic of the omission of north Devon as a designated assisted area.
These proposals, as outlined so far, do not constitute a meaningful regional strategy in economic or social terms for reasons that I have had to set out hastily. They are not consistent with the concept of one nation Conservatism to which I subscribe.
11.15 pm
Mr. Derek Fatchett: At this stage, I must be brief. However, the problem underpinning the orders is that the Government have used the travel-to-work areas as the building bricks of their regional policy. I can illustrate the problems involved in two ways.
First, anomalies are created by the fact that the travel-to-work areas include certain areas that should not necessarily qualify for regional aid. For example, in the Bradford travel-to-work area the Government include Pudsey, made up of the two metropolitan district wards. In Pudsey, the unemployment rate stands at 7·3 per cent., according to the most recently available figures. One can only speculate that it is blessed with regional aid because the Minister of State, Home Office represents that constituency.
Secondly, the new map shows that large sections of the south Yorkshire coalfield will be covered, while none of the west Yorkshire coalfields qualify. I think that my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) would have made that point earlier if he had been able to. In addition, the use of the travel-to-work areas does not reflect the problems of the inner city. My constituency of Leeds, Central has an unemployment rate of 21·2 per cent., yet it does not qualify, although Pudsey, which has an unemployment rate one third of that, and which is only four miles down the road, qualifies.
A system that produces those injustices and anomalies is wrong in practice and principle. We need a regional policy that is sensitive enough to recognise the real areas of difficulty in unemployment, and which pushes aid in that direction instead of using the present building blocks.
11.16 pm
Mr. Geoffrey Robinson: I am sure that many hon. Members regret the fact that we are having to discuss this most important issue of the map at this late hour, and under this time restriction. It is not what my right hon. Friend the Member for Swansea, West (Mr. Williams) and I had planned during the Committee stage, but it is not the Government's fault that the parliamentary tactics of other minority parties have meant that of the 40 hon. Members who wished to participate in the debate—many of whom no doubt have constituency interests and important points to make about the map's impact on their areas—only 25 hon. Members have been able to take part, including four Front Bench spokesmen. Probably fewer than half of the Back Benchers who wished to have taken part in the debate.
It is quite appropriate that we should have restricted our Front Bench to a few minutes. However, we shall need those few minutes, because it is clear that the map has everything to do with economy and nothing to do with regional policy. There is only a short time available to the Minister, but could he tell us the real reason—other than his insatiable appetite for cutting Government expenditure—for abolishing special development areas? I suspect there is no reason for doing that other than his appetite. After all, it is very flexible instrument for tackling those very pockets of unemployment to which the Secretary of State referred at such length.
We have already heard that the £300 million cut in the regional development grant will only be made good to about one sixth or some 14 or 15 per cent. by the increase in discretionary allowance. So the map has really been drawn so widely on the basis of the travel-to-work areas to enable as many areas as possible to qualify for the European Regional Development Fund. The Minister should come clean about that.
The question of travel-to-work areas is genuinely difficult, as my right hon. and hon. Friends in the Labour Government know. It gives rise to anomalies that are difficult to avoid and that put temptation in the way of Ministers, of whichever Government, to manipulate the building blocks to favour their electoral chances. The proposal is not the best. I would have thought that a Government who undertook a comprehensive review, about which we have been told so much, would have included in it, the alternative or additional ways available to or considered by them, in which the map could be classified. We did not hear about them in Committee or on Report. Perhaps the Minister will tell us about them in his reply.
It is clear that we could take a different basis for drawing up the map. In Manchester the wards were taken as the basis. We can point to many anomalies. Neither my right hon. and hon. Friends nor the Minister would wish me to point to an excessive extension in the west midlands.
I should like clear answers from the Minister on four points. Why were the special development agencies disposed of? Were the intermediate areas made only to make eligibility to the European regional development fund possible? Why were no alternatives or additional possibilities considered as a theoretical package or basis for the new map? I reject the idea of considering the matter annually. That is quite impracticable, and out of the
620
question. If, because of the existence of travel-to-work areas, it can be demonstrated that there are bad anomalies, will he consider them sympathetically?
11.21 pm
The Minister of State, Department of Trade and Industry (Mr. Normon Lamont): I shall try to answer some of the points raised but, alas, time will not permit me to answer all of them.
My right hon. Friend the Member for Blackpool, South (Sir. P. Blaker) asked what criteria were used, and whether we considered future trends in unemployment and industrial structure. He was especially worried that tourism in Blackpool would be vulnerable. Yes, we considered industrial structure and therefore, by implication, the trend of the local economy. Blackpool was not in the worst 100 travel-to-work areas for long-term unemployment, industrial structure or occupational structure. I know that my right hon. Friend disagrees with our decision, but I assure him that we addressed that point.
My right hon. Friend asked about tourism policy and said that those outside assisted areas could not receive help with tourism projects. That is true of the European dimension and the European regional development fund. The Community does not have a separate tourism policy, and all aid goes through the ERDF. However, as my right hon. Friend knows, tourism in the United Kingdom is administered on a national basis away from regional policy. That change was specifically made by the Conservative Government before the general election because the tourist industry wanted to get away from being linked to assisted areas. No one would wish to return to that linkage, although I know that my right hon. Friend says that the resources devoted to tourism are not large compared with the sums employed in regional policy.
The main point was raised by the hon. Member for Berwick-upon-Tweed (Mr. Beith) and related to travel-to-work areas. I cannot pretend to be an expert on the methodology of travel-to-work areas.
They are compiled for the specific purpose of measuring unemployment. TTWAs are groupings of local employment offices amalgamated in such a way as to represent reasonable labour market areas. I know that the hon. Gentleman would be much happier if I said that I was an expert on travel-to-work areas and knew everything about them. In future, I shall behave with just as much immodesty as he does.
Travel-to-work areas are only approximations to local labour markets, and I accept that, in reality, local labour market areas overlap. There is evidence that people in some groups seek work over wide areas, and obviously at any time the area in which residents of a locality seek work will depend upon transport and the pattern of employment opportunities. But, as I said in an intervention in the speech of the hon. Gentleman, the Department of Employment compiles the figures in that way for the specific purpose of trying to measure unemployment meaningfully. The Department does not believe that it can be measured on any other basis. Regional policy must have everything to do with measuring unemployment meaningfully, because that is central to its purpose.
There are many ways in which travel-to-work areas could be defined. People who are disadvantaged as a result of our decisions will complain when they see a relatively prosperous area, or an area with low unemployment, being included with another area. But we must accommodate

621
every area somewhere, and the little areas that some people do not want in their travel-to-work areas or constituencies must be fitted into the map. Of course, wherever they go, some people do not like them.
It does not make sense to measure unemployment on units smaller than travel-to-work areas. We could define smaller areas that have a higher percentage of people working and living in them. But travel-to-work areas are defined on the basis that 70 per cent. of the people who live there, work there, and 70 per cent. of those who work there, live there. People can travel to work in those areas. Of course, sometimes there are local black spots within those areas, just as there are sometimes small areas within them that have better than average unemployment. We must inevitably deal with some averages.
The result of our decisions was that the average for the intermediate areas for the year in which we measured unemployment was 15·5 per cent. Alnwick and Amble was 14·5 per cent., and Blackpool was 14·3 per cent. I could continue, but I know that the hon. Member for Leeds, West (Mr. Meadowcroft) wishes to speak briefly.
11.27 pm
Mr. Michael Meadowcroft: I am grateful to the Minister for allowing me to speak. Travel-to-work areas were always artificial, they are now nonsense, and they will he extremely damaging in terms of unemployment in the inner cities. With high unemployment so widespread, the travel-to-work area principle fails to address the problems of 1985 and beyond. The main problem is that, although in the south and the west there are pockets of poverty, in many of our inner cities there are no pockets of wealth. In that context, although 35 per cent. of the country is covered, some areas that have immense problems and huge unemployment are not covered.
What that means in my area is that the inner city of Leeds is the only major inner city that remains unassisted, although it has urban programme status and is in a metropolitan county. It is crazy. The Minister abandoned the travel-to-work principle in Manchester. If he is prepared to do that, the difference is one only of scale, not of principle. If he is prepared to do that in Manchester, I do not understand why he will not accept that the principle can be followed elsewhere.
My hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton) read out a long list of Ministers' constituencies that are part of his travel-to-work area. The same is true of Leeds. Pudsey—the costituency of the Minister of State, Home Office — has half as many unemployed people as does my constituency, which is next door, but almost twice as many people from Pudsey travel to work to Leeds than as the number who travel to Bradford. Pudsey constituency is now in a assisted travelfrom-work area. There is something sadly wrong with a policy of regional assistance that does not address the problems of inner cities but seeks to include the problems of suburbs, which are not nearly so strong.
Question put:—
The House divided: Ayes 113, Noes 179.

Division No. 71]

[11.30 pm

AYES

Alton, David

Barron, Kevin

Anderson, Donald

Beckett, Mrs Margaret

Ashdown, Paddy

Benn, Tony

Banks. Tony (Newham NW)

Bennett, A. (Dent'n & Red'sh)

622

Bermingham, Gerald

Jones, Barry (Alyn & Deeside)

Boyes, Roland

Kennedy, Charles

Brown, Gordon (D'f'mline E)

Kirkwood, Archy

Bruce, Malcolm

Leadbitter, Ted

Caborn, Richard

Lewis, Terence (Worsley)

Callaghan, Jim (Heyw'd & M)

Lloyd, Tony (Stretford)

Campbell-Savours, Dale

McDonald, Dr Oonagh

Canavan, Dennis

McKay, Allen (Penistone)

Carlile, Alexander (Montg'y)

Maclennan, Robert

Cartwright, John

McWilliam, John

Clark, Dr David (S Shields)

Madden, Max

Clarke, Thomas

Marek, Dr John

Clwyd, Mrs Ann

Maxton, John

Cocks, Rt Hon M. (Bristol S.)

Michie, William

Cohen, Harry

Millan, Rt Hon Bruce

Cook, Robin F. (Livingston)

Miller, Dr M. S. (E Kilbride)

Corbyn, Jeremy

Nellist, David

Cowans, Harry

O'Neill, Martin

Craigen, J. M.

Owen, Rt Hon Dr David

Crowther, Stan

Patchett, Terry

Cunliffe, Lawrence

Pendry, Tom

Cunningham, Dr John

Penhaligon, David

Davies, Ronald (Caerphilly)

Pike, Peter

Davis, Terry (B'ham, H'ge H'l)

Powell, Raymond (Ogmore)

Deakins, Eric

Prescott, John

Dixon, Donald

Radice, Giles

Dobson, Frank

Rees, Rt Hon M. (Leeds S)

Dormand, Jack

Robinson, G. (Coventry NW)

Dubs, Alfred

Sheerman, Barry

Dunwoody, Hon Mrs G.

Short, Ms Clare (Ladywood)

Eadie, Alex

Skinner, Dennis

Eastham, Ken

Smith, C.(Isl'ton S & F'bury)

Ellis, Raymond

Smith, Rt Hon J. (M'kl'ds E)

Evans, John (St. Helens N)

Snape, Peter

Fatchett, Derek

Soley, Clive

Faulds, Andrew

Spearing, Nigel

Fields, T. (L'pool Broad Gn)

Speller, Tony

Fisher, Mark

Steel, Rt Hon David

Foster, Derek

Stott, Roger

Freud, Clement

Strang, Gavin

Garrett, W. E.

Straw, Jack

Godman, Dr Norman

Thompson, J. (Wansbeck)

Hancock, Mr. Michael

Tinn, James

Harrison, Rt Hon Walter

Wainwright, R.

Hart, Rt Hon Dame Judith

Wardell, Gareth (Gower)

Haynes, Frank

Wareing, Robert

Hicks, Robert

Wigley, Dafydd

Hogg, N. (C'nauld & Kilsyth)

Williams, Rt Hon A.

Home Robertson, John

Wilson, Gordon

Howells, Geraint

Wrigglesworth, Ian

Hoyle, Douglas

Hughes, Robert (Aberdeen N)

Tellers for the Ayes:

Hughes, Simon (Southwark)

Mr. A. J. Beith and

John, Brynmor

Mr. Michael Meadowcroft.

Johnston, Russell

NOES

Atkinson, David (B'm'th E)

Forman, Nigel

Baker, Rt Hon K. (Mole Vall'y)

Forsyth, Michael (Stirling)

Baker, Nicholas (TV Dorset)

Forth, Eric

Biffen, Rt Hon John

Fox, Marcus

Boscawen, Hon Robert

Franks, Cecil

Brooke, Hon Peter

Freeman, Roger

Brown, M. (Brigg & Cl'thpes)

Gale, Roger

Bruinvels, Peter

Galley, Roy

Burt, Alistair

Gow, Ian

Carlisle, Kenneth (Lincoln)

Gregory, Conal

Carttiss, Michael

Griffiths, Peter (Portsm'th N)

Cash, William

Ground, Patrick

Chalker, Mrs Lynda

Grylls, Michael

Clark, Dr Michael (Rochford)

Gummer, John Selwyn

Conway, Derek

Hamilton, Hon A. (Epsom)

Cope, John

Hampson, Dr Keith

Currie, Mrs Edwina

Hanley, Jeremy

Douglas-Hamilton, Lord J.

Hannam, John

Dunn, Robert

Hargreaves, Kenneth

Fallon, Michael

Harvey, Robert

Favell, Anthony

Hawkins, C. (High Peak)

Fenner, Mrs Peggy

Hawksley, Warren

Fletcher, Alexander

Hayes, J.

623

Hayward, Robert

Powell, William (Corby)

Heathcoat-Amory, David

Powley, John

Henderson, Barry

Price, Sir David

Hickmet, Richard

Proctor, K. Harvey

Hind, Kenneth

Raffan, Keith

Hogg, Hon Douglas (Gr'th'm)

Raison, Rt Hon Timothy

Holt, Richard

Rhodes James, Robert

Howarth, Alan (Stratf'd-on-A)

Rhys Williams, Sir Brandon

Howarth, Gerald (Cannock)

Robinson, Mark (N'port W)

Hunt, John (Ravensbourne)

Roe, Mrs Marion

Hunter, Andrew

Rowe, Andrew

Jackson, Robert

Sackville, Hon Thomas

Johnson Smith, Sir Geoffrey

Sainsbury, Hon Timothy

Jones, Robert (W Herts)

Sayeed, Jonathan

Jopling, Rt Hon Michael

Shaw, Sir Michael (Scarb')

King, Roger (B'ham N'field)

Shelton, William (Streatham)

Knight, Gregory (Derby N)

Shepherd, Richard (Aldridge)

Knowles, Michael

Shersby, Michael

Knox, David

Silvester, Fred

Lamont, Norman

Sims, Roger

Lang, Ian

Skeet, T. H. H.

Latham, Michael

Smith, Tim (Beaconsfield)

Lawler, Geoffrey

Soames, Hon Nicholas

Leigh, Edward (Gainsbor'gh)

Speed, Keith

Lennox-Boyd, Hon Mark

Spencer, Derek

Lester, Jim

Squire, Robin

Lightbown, David

Stanbrook, Ivor

Lilley, Peter

Stern, Michael

Lloyd, Peter, (Fareham)

Stevens, Lewis (Nuneaton)

Lord, Michael

Stevens, Martin (Fulham)

Lyell, Nicholas

Stewart, Allan (Eastwood)

McCurley, Mrs Anna

Stewart, Andrew (Sherwood)

MacGregor, John

Stewart, Ian (N Hertf'dshire)

MacKay, Andrew (Berkshire)

Sumberg, David

Maclean, David John

Taylor, John (Solihull)

Major, John

Taylor, Teddy (S'end E)

Malins, Humfrey

Temple-Morris, Peter

Malone, Gerald

Terlezki, Stefan

Maples, John

Thomas, Rt Hon Peter

Marland, Paul

Thompson, Donald (Calder V)

Marlow, Antony

Thompson, Patrick (N'ich N)

Mather, Carol

Thorne, Neil (Ilford S)

Maude, Hon Francis

Thurnham, Peter

Mellor, David

Townsend, Cyril D. (B'heath)

Meyer, Sir Anthony

Tracey, Richard

Miller, Hal (B'grove)

Trippier, David

Mills, lain (Meriden)

Twinn, Dr Ian

Mitchell, David (NW Hants)

Waddington, David

Montgomery, Sir Fergus

Walden, George

Moore, John

Waller, Gary

Moynihan, Hon C.

Ward, John

Murphy, Christopher

Wardle, C. (Bexhill)

Needham, Richard

Watson, John

Nelson, Anthony

Watts, John

Neubert, Michael

Wells, Bowen (Hertford)

Newton, Tony

Wheeler, John

Norris, Steven

Whitney, Raymond

Oppenheim, Phillip

Wiggin, Jerry

Osborn, Sir John

Wilkinson, John

Ottaway, Richard

Winterton, Mrs Ann

Page, Richard (Herts SW)

Winterton, Nicholas

Parkinson, Rt Hon Cecil

Wolfson, Mark

Parris, Matthew

Wood, Timothy

Patten, Christopher (Bath)

Young, Sir George (Acton)

Patten, John (Oxford)

Percival, Rt Hon Sir Ian

Tellers for the Noes:

Pollock, Alexander

Mr. Tony Durant and

Porter, Barry

Mr. Tristan Garel-Jones.

Portillo, Michael

Question accordingly negatived.

Regional Development Grant
11. 41 pm
The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): I beg to move,
That the Regional Development Grant (Prescribed Percentage, Amount and Limit) Order 1984 (S.I., 1984, No. 1843), dated 26th November 1984, a copy of which was laid before this House on 28th November, be approved.
The Co-operative Development Agency and Industrial Development Act 1984 provided the structure for the new scheme of regional development grants. The affirmative order specifies the key components—the rate of capital grant, the amount of job grant, and the grant per job limit, called the prescribed limit in the order. Although the official Opposition spokesman appears not to be present, I take it that it is none the less in order for me to address the subject.
In setting the rate of capital grant—the prescribed percentage—the Government weighed, on the one hand, the risk of setting the rate so low that it would not be taken into account when investment decisions were made and, on the other hand, setting the rate too high with the risk that much of the amount paid would be dead weight. We also took into account previous rates of grant and responses made to the White Paper.
The job grant—the prescribed amount—has been set at £3,000. As the House will recall from our previous debates, from today and from the Committee stage, this is an alternative to the capital grant and, I must stress, is available where it is more advantageous to the applicant. Companies will automatically receive the most favourable of the two forms of assistance.
Hon. Members are aware from our debates during the passage of the Act that our regional aids are subject to limits laid down by the EEC which are binding on all member states. In respect of the amount which may be paid as job grant in development areas in Great Britain, this limit is 5,500 European units of account. When last notified by the EC Commission, this was £3,150. Given currency fluctuations, obviously it would not be desirable for the job grant to be set right at the EEC ceiling. Consequently, the limit was set at £3,000 to avoid such problems.
Before turning to the grant per job limit — the prescribed limit, as it is described in the order — I should say that job grant will be payable only in respect of net new jobs created by a project. Again this will be familiar to those hon. Members who served on the Committee which dealt with the legislation. For RDG purposes a net new job is a job created as a direct result of a project within a development area within the undertaking carrying out the project, net of any jobs lost elsewhere in the development area within the same undertaking also as a direct result of the project. Any jobs lost in an intermediate area over and above any jobs created in an intermediate area will also be netted off. Let me repeat that it is not the Government's policy to subsidise the shuffling of jobs between assisted areas. I do not think that that makes any sense.
Lastly, on the grant per job limit, I do not intend to repeat all the arguments which underline the Government's introduction of a grant per job limit into the RDG scheme. I have quoted one case many times, including this afternoon, and so I shall not name it again, but at least that project created jobs, albeit expensive ones.

625
Regional policy is about jobs, and the Government make no bones about the fact that our intention is that the policy should be more closely related to the creation of jobs. We have introduced a limit of £10,000. At that level only projects that cost more than £65,000 per job—above average capital intensity—will be affected by it. Therefore in many cases it will not bite and thus will not affect the predictability of grant. But where it bites it has the effect of considerably reducing what in the past has been excessive expenditure.
There is one exception to the limit. The first £500,000 of RDG eligible expenditure on a project undertaken by a small undertaking will be exempt from the grant-per-job limit. Where project costs exceed £500,000, grant on costs above that amount will be calculated in the normal way — the grant-per-job limit will apply. That provision will, we expect, exempt completely over 90 per cent. of small firms from the limit. But in the case of a small capital-intensive firm, there is that cut-off point above which the limit will apply.
As in the case of job grant, the grant-per-job limit will be applied to net new jobs created by the project. It will be our policy in currently forseeable circumstances not to approve projects undertaken by large undertakings which do not create jobs. However, there may in future be circumstances where such projects might be approved. I do not know what they might be, but if they arise we have provided in the order for a maximum grant of £500 to be payable on the project. Without that provision we should be required to pay grant at 15 per cent. on all capital expenditure under such projects with no limit. That, in our opinion, is a reasonable sum when viewed in the light of the stated policy—no jobs, no grant.
It is the Government's view that the rates of grant, together with the limit specified in the order, provide a sufficient incentive for both capital-intensive and labour-intensive projects, and that the scheme will retain a high degree of predictability. And of course regional development grant will continue to be automatically payable.
At the same time, the Government believe that they have curbed the worst excesses of previous policies. We hope that the result will be a system of grant which will be cost-effective and will free resources which can be used for the benefit of the country as a whole. I commend the order to the House.
11.49 pm
Mr. Geoffrey Robinson: I apologise to the Minister for being a few seconds late. I should point out to the House that the reason was the lack of response on the television monitor.
Mr. Nicholas Soames: That is no excuse.
Mr. Robinson: I was looking closely at the monitor and I do not understand the reason, but perhaps it could be brought to the attention of those in charge of the electronics of the building. It was still showing a Division several minutes, I understand, after the Minister had started his speech.
We are discussing three items—I am sure that the Minister will not mind me saying this — that we discussed at great length in Committee and at other stages of the Bill that will impose upon British regional policy
626
an immensely tight corset of restrictions and limitations that we need not assume. I hope that the Minister will be frank and come clean with us on that.
The 15 per cent. prescribed percentage, which is the new level of RDG that is down from 22 per cent. under the Common Market regime to which—the Minister has been clear about this — he has made our policy subservient. Under that regime the prescribed percentage of RDG can go from 25 to 35 per cent. for assisted areas. Clarification and confirmation of that point from the Minister would be of interest to the House and would show just how tight the regime is that he is imposing on us tonight.
The Minister will agree that there is no requirement in the EC regulations for a cost per job limit to be imposed. The £10,000 limit is too low. On reflection, the hon. Gentleman may agree with me and increase it. He said that it allowed for anything up to £65,000 capital investment per person to qualify. What is the average for our major competitors in the Common Market of capital employed per employee in manufacturing industry, because that is what we are talking about and we must reach their levels if we are to be competitive?
We have had too many arguments about restrictive practices and strikes and the rest, but setting aside those matters, about which the Government make so much play, capital employed per employee in British manufacturing industry today is way below the level of our major competitors in the EC, let alone in Japan.
When the Minister translates the £10,000 cost per job limit into the total amount available for investment per employee—per new job created—he will agree that it is an extremely low level. Indeed, it is almost an incentive to create low capital-intensity jobs, in itself part of the Government's plan. Be that as it may, this will not be an incentive towards the major capital investment that we need in many of our industries if we are to become and remain competitive.
The prescribed amount for job grant, at £3,000, is extremely low. I am sure that all Opposition Members would agree with that.
Mr. Soames: Where are they?
Mr. Robinson: The hon. Member for Crawley (Mr. Soames) is making sedentary interventions. I have not seen him in his place throughout tonight's debate. I am putting a few points succinctly to the Minister and I hope that they will be equally succinctly answered. We will do that much better without the hon. Gentleman's sedentary interruptions.
The £3,000—the job grant, to put it bluntly— is about 10 per cent. below the Common Market limit. I see no reason for that. We might as well use what flexibility exists within the Community regulations. I recall, during the Committee proceedings, reading a Community document which said that the EEC was reviewing the present limit of 5,500 ecus. When does the Minister expect the Community to take a firm decision on that, and does he know what level the ERDF officials have in mind for the job grant?
I have on many occasions raised with the Minister the question of the elimination of modernisation and replacement schemes, remembering that we seem to be one of the few countries that has yielded on the question of non-job-creating modernisation schemes, something that we shall bitterly regret.

627
My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) has raised with me a matter concerning the Tameside metropolitan borough. It is dealt with in a letter from the chief executive of that borough. The Minister will be aware that under the new regime that he has introduced, the Tameside metropolitan borough in its entirety has, for the first time, been brought into intermediate area status.
I will not read the letter but will pass it to the Minister, who I hope will bring it to the attention of the Secretary of State for the Environment. The chief executive refers to the restrictions that are now being made on capital spend, and this is not by any means a profligate authority.
This has nothing to do with savings or current expenditure but simply with cutting back on the capital spend of the borough, on the infrastructure of local government. The letter points out that the borough is being given access to the ERDF yet is unable to avail itself of the benefits of the fund. We have supported the Minister's efforts to get as many ecus as we can. That was the whole purpose of redrawing the map. Yet these constraints may make it impossible for us actually to take up anything like our full entitlement of ERDF funds.
It is vital that we clarify this as quickly as possible. As the Minister knows, 80 or 90 per cent. of the ERDF money last year was taken up by public authorities and local government. If those bodies which suddenly qualify for it cannot take it up, the whole purpose of extending the map to get at the El Dorado of Community funds will be frustrated. I have asked for straight answers to many of these questions many times before, put that point is a new one. I draw the Minister's attention to it at this early stage and make it clear that we intend to monitor the situation very carefully.
11. 56 pm
Mr. Ian Wrigglesworth: The Government claim that their new regional policy offers much better value for money. Towards the end of last year the Minister said that it would not be so easy to dig into the gold mine as some companies had found it in the past, and the order seeks to ensure that. The prescribed percentages, limits and amounts are one of the main instruments to achieve tighter restriction of the system and a reduction in the amount of regional aid paid out. In fact, however, the so-called gold mine had been rapidly run down under the old system.
In real terms, regional expenditure fell from £1·5 billion in 1975–76 to £917 million in 1982–83. In cash terms, the new scheme will reduce the total from £670 million in 1984–85 to about £400 million in 1986–87. In my region, the total fell from a peak of £483 million in 1976–77 to £109 million in 1982–83. Under the Government's scheme, the regional figure was halved in real terms between 1979–80 and 1982–83.
The ending of the 22 per cent. grant and the introduction of a uniform 15 per cent. grant for the development areas will be the Government's bluntest instrument for reducing regional expenditure. Why 15 per cent? We have listened to the Minister and read what he has said, but the reduction from 22 per cent. to 15 per cent. appears somewhat arbitrary and designed simply to achieve a cut in regional aid. I hope that the Minister will tell us today how he believes that that figure can be justified.
628
The Government have indicated that the overall balance between automatic grants and selective assistance will shift significantly towards selective assistance. One hopes that that means that major industrial developments, which are of great benefit to the country as a whole as well as to the regions, will still obtain aid from the Department of Industry and that they will be encouraged to develop in the regions, as so many of them have done in the past. It means that companies will receive severely reduced automatic aid and that they will have to press for additional support which will be at the Government's discretion. Both the CBI and others have argued that the shift towards discretionary aid, accompanied by bureaucratic delays, may deter both new and small existing businesses from moving to the regions.
The Minister says in a press release that
"the changes … will save a great deal of Government money which was doing virtually nothing to bring new jobs to the assisted areas."
In my own constituency there has been a substantial amount of regional aid for heavy industry. Bearing in mind the 20 per cent. level of unemployment there and the high level of unemployment that has persisted over a very long time, thank goodness that at least capital-intensive industries have been encouraged to come to the Teesside area—for example, ICI, Monsanto, British Steel and a whole series of petrochemical, oil and heavy engineering industries—which probably would not have come had it not been for the old grant system. Although in terms of capital and numbers employed that may not be a favourable balance in the eyes of the Minister, at least they are providing jobs in an area that desperately needs them. I hope that that will not be forgotten by the House when considering the order.
The argument that the old grant system did not help the regions has been proved to be without foundation. Studies show quite clearly that regional policy has had a substantial impact upon industrial location since the early 1960s, diverting about 250,000 jobs to the assisted areas, of which roughly 185,000 went to the four development areas. There is considerable evidence that although certain regions have not shown an improvement when compared with the more prosperous regions, those regions were nevertheless helped to keep up and not drop behind, as has happened in recent years.
The order sets a cost per job limit on regional development grants of £10,000 for capital expenditure and a £3,000 job grant as an alternative. Firms will automatically receive the greater of those two figures. The Government may be right to argue that the cost to the taxpayer of job creation under the old system—£35,000 to £40,000 per job—was too high, but in our view the new ceiling is too restrictive. It might have been acceptable if the savings produced by these limits could be used to finance other support for job creation in the regions—for instance, employment grants to encourage additional, highly qualified manpower to move to assisted areas, or some of the other suggestions that have been made about helping development in the regions. There should be increased sources of finance—for example, an industrial credit scheme and small firm investment companies, to channel preferential finance. Those schemes ought to have a regional dimension, which we believe should be funded by central Government. If some of the savings that the new scheme will bring about had been diverted in that way to small firm investment

629
companies or to enterprise agencies and co-operative development agencies in the development areas to help them to pump-prime new enterprises, some of the objections on the Opposition side of the House to the cuts would have been less vociferous.
The difference in the treatment of capital grants for projects that do not provide jobs seems quite arbitrary. It would be helpful if the Minister could explain why they were fixed in the way that they have been. Firms employing fewer than 200 employees have a limit of £75,000, or 15 per cent. of the capital expenditure of some £500,000. For larger undertakings the figure is a derisory £500, which the Minister mentioned when he opened the debate, or 15 per cent. of £3,333.
I take those figures from the report of the Joint Committee on Statutory Instruments, which, as the House will have seen, comments adversely on that rather farcical anomaly. It said:
"It seems surprising to the Committee that the Department contemplates a significant number of applications, if indeed any at all, where the expenditure involved in the project is so trifling a sum … it seems to the Committee that in the case of large undertakings section 4(1)(b) seems unlikely to operate so as to provide grant on a basis related to the expenditure on assets."
The Minister will have seen that report and I hope that he will respond to that criticism because the Department seems to have adopted the expedient as an alternative to a zero limit, which they have no power to set. I should be grateful if the Minister would respond to the criticisms and explain that further to the House. It is clearly a serious criticism.
We are opposed to the arbitrary and blunt instruments laid down in the order, largely with the objective of reducing public expenditure, not of helping the regions. Indeed, it has been done at their expense. I agree with the remarks of the hon. Member for Cornwall, South-East (Mr. Hicks) and others that this is one of the most blatant pursuits of divisive policies that the Government could pursue. It is dividing the nation further and for that reason we shall oppose the order tonight.
12.7 am
Mr. Norman Lamont: First, let me answer the questions asked by the hon. Member for Coventry, North—West (Mr. Robinson), at least one of which I had dealt with before he came into the Chamber.
The EC limit on grants for capital expenditure is 30 per cent., as the hon. Gentleman may recall from Committee. There is an alternative of a job grant and when companies choose that alternative that cannot come to more than 40 per cent. of the capital expenditure when it is in the manufacturing sector. The hon. Gentleman will recall that that was spelt out in some considerable detail in Committee. The EC capital limit is 30 per cent.
The limit on the job grant is £3,150 translated from ecus. We fixed a limit of £3,000 merely to allow some headroom for fluctuations in the exchange rate. We do not wish to be pushed up against the limit because of movements in the exchange rate. We are not far from it.
We have no information that the job grant is being reviewed by the Commission. I do not think that that would come under regional policy or the European regional development fund because those limits apply not just to regional policy but to state aid. So it is more a matter for the competition directorate.
We are all familiar with figures which demonstrate a high degree of capital behind each worker in a number of
630
competitor countries. I made the point that the £10,000 cost per job limit would support in total, when distinguishing between the cost to the Government and to the firm of the investment and then adding them, some £65,000—which is double the average capital intensity in British industry. We do not want to choose some degree of capital intensity that exists in some other country. I am talking, in relation to United Kingdom manufacturing industry, about doubling the average and, as we have said again and again, we are concerned to have a system that is more neutral between subsidising capital and labour.
The hon. Member for Coventry, North-West referred to replacement, but that is not in the order, although it is in the legislation. I shall take up with my right hon. Friend the Secretary of State for the Environment the point that he made about controls and capital expenditure.
The hon. Member for Stockton, South (Mr. Wrigglesworth) raised some other points. The choice between 22 per cent. and 15 per cent. is a matter of judgment, and, as I explained, it was our judgment that 15 per cent. would be a sufficient incentive to influence investment intentions. As the hon. Member knows, we have selective assistance available on top of that for inward investment. The hon. Gentleman's second point was about whether selective assistance would still be available to help with more capital-intensive projects that we thought were desirable. I accept that, for industrial and economic reasons, if not for employment reasons, many of the things that have happened in his part of the world are desirable, and they are projects to which we would consider giving help. The purpose of the changes that we have made is to enable us to have that choice and to exercise that judgment.
The hon. Member for Stockton, South compared the £10,000 cost per job with the £35,000 that was the figure given in our consultative document published at the time of the review as being the cost of the net new jobs in assisted areas that regional policy had created in the past. The two figures are not directly comparable. The £35,000 per net new job—a figure that we wish to lower—is the cost of all the instruments of regional policy, whereas the £10,000 applies only to regional development grants. There are other differences that work both ways, including the way in which job displacement affects our calculations. Perhaps the hon. Gentleman will accept my assurance that the two are not comparable.
The hon. Gentleman referred to comments made by the Joint Committee on Statutory Instruments about the limiting of capital grant to £500 in the case of projects of large undertakings that provide no jobs. The provision is in article 5(1)(a)(ii). The Committee has done this on the ground that section 4(1)(b) of the amended 1982 Act, which deals with projects that involve capital expenditure only,
"seems unlikely to operate so as to provide grant on a basis related to the expenditure on assets."
As the Committee pointed out in its report, in cases where expenditure on assets is less than £3,333, approved projects will receive grant on a basis which is related to the amount of capital expenditure. I have told the House on many occasions that our general policy is not to approve projects of large undertakings that will not create jobs, although any projects of this kind for which application is made will be considered on their merits. As regards projects that are approved, there will be a direct relationship with the amount of expenditure involved.

631
As regards projects where expenditure exceeds £3,333, it is true that there will be no such direct relationship. However, I do not accept—and I have firm legal advice on this point—that either the Act as a whole or the enabling power in section 5(1)(d) imports any requirement that the prescribed limit — £500 in this case— should result in the amount of grant payable in any particular circumstances being on a basis that is proportional to the expenditure on assets. The provision in article 5(1)(a)(ii) is therefore, in my view, intra vires the Act. I am confident of that. I reject the Committee's contention that there is doubt about the vires of the provision, and I commend the order to the House.
Question put:—
The House divided: Ayes 134, Noes 73.

Division No. 72]

[12.14 am

AYES

Atkinson, David (B'm'th E)

Johnson Smith, Sir Geoffrey

Baker, Rt Hon K. (Mole Vall'y)

Jones, Robert (W Herts)

Baker, Nicholas (N Dorset)

Jopling, Rt Hon Michael

Baldry, Tony

King, Roger (B'ham N'field)

Biffen, Rt Hon John

Knight, Gregory (Derby N)

Bosoawen, Hon Robert

Knowles, Michael

Brooke, Hon Peter

Knox, David

Brown, M. (Brigg & Cl'thpes)

Lamont, Norman

Bruinvels, Peter

Lang, Ian

Burt, Alistair

Latham, Michael

Carttiss, Michael

Lawler, Geoffrey

Cash, William

Leigh, Edward (Gainsbor'gh)

Chalker, Mrs Lynda

Lennox-Boyd, Hon Mark

Clark, Dr Michael (Rochford)

Lester, Jim

Conway, Derek

Lightbown, David

Cope, John

Lord, Michael

Currie, Mrs Edwina

Lyell, Nicholas

Douglas-Hamilton, Lord J.

McCurley, Mrs Anna

Dunn, Robert

MacGregor, John

Durant, Tony

Maclean, David John

Fallon, Michael

Major, John

Favell, Anthony

Malins, Humfrey

Fenner, Mrs Peggy

Malone, Gerald

Forsyth, Michael (Stirling)

Marlow, Antony

Forth, Eric

Mather, Carol

Freeman, Roger

Maude, Hon Francis

Gale, Roger

Miller, Hal (B'grove)

Galley, Roy

Mills, lain (Meriden)

Garel-Jones, Tristan

Mitchell, David (NW Hants)

Gow, Ian

Montgomery, Sir Fergus

Gregory, Conal

Moore, John

Griffiths, Peter (Portsm'th N)

Moynihan, Hon C.

Ground, Patrick

Needham, Richard

Grylls, Michael

Neubert, Michael

Hanley, Jeremy

Newton, Tony

Hargreaves, Kenneth

Norris, Steven

Hawkins, C. (High Peak)

Osborn, Sir John

Hawksley, Warren

Page, Richard (Herts SW)

Hayward, Robert

Patten, Christopher (Bath)

Heathcoat-Amory, David

Patten, John (Oxford)

Heddle, John

Percival, Rt Hon Sir Ian

Henderson, Barry

Portillo, Michael

Hickmet, Richard

Powell, William (Corby)

Hogg, Hon Douglas (Gr'th'm)

Proctor, K. Harvey

Holt, Richard

Raffan, Keith

Howarth, Alan (Stratf'd-on-A)

Raison, Rt Hon Timothy

Howarth, Gerald (Cannock)

Rhys Williams, Sir Brandon

632

Roe, Mrs Marion

Thome, Neil (Ilford S)

Sackville, Hon Thomas

Thurnham, Peter

Sainsbury, Hon Timothy

Trippier, David

Sayeed, Jonathan

Twinn, Dr Ian

Shaw, Sir Michael (Scarb')

Waddington, David

Silvester, Fred

Walden, George

Sims, Roger

Waller, Gary

Skeet, T. H. H.

Wardle, C. (Bexhill)

Smith, Tim (Beaconsfield)

Watson, John

Soames, Hon Nicholas

Watts, John

Spencer, Derek

Wells, Bowen (Hertford)

Squire, Robin

Wheeler, John

Stanbrook, Ivor

Wilkinson, John

Stern, Michael

Winterton, Mrs Ann

Stevens, Lewis (Nuneaton)

Winterton, Nicholas

Stevens, Martin (Fulham)

Wolfson, Mark

Stewart, Allan (Eastwood)

Wood, Timothy

Stewart, Ian (N Hertf'dshire)

Young, Sir George (Acton)

Sumberg, David

Thomas, Rt Hon Peter

Tellers for the Ayes:

Thompson, Donald (Calder V)

Mr. Peter Lloyd and

Thompson, Patrick (N'ich N)

Mr. Archie Hamilton.

NOES

Ashdown, Paddy

Lloyd, Tony (Stretford)

Banks, Tony (Newham NW)

McDonald, Dr Oonagh

Barron, Kevin

McKay, Allen (Penistone)

Beckett, Mrs Margaret

Maclennan, Robert

Beith, A. J.

McWilliam, John

Bennett, A. (Dent'n & Red'sh)

Madden, Max

Bermingham, Gerald

Marek, Dr John

Boyes, Roland

Maxton, John

Bruce, Malcolm

Meadowcroft, Michael

Campbell-Savours, Dale

Michie, William

Canavan, Dennis

Millan, Rt Hon Bruce

Carlile, Alexander (Montg'y)

Miller, Dr M. S. (E Kilbride)

Clarke, Thomas

Nellist, David

Cocks, Rt Hon M. (Bristol S.)

O'Neill, Martin

Cohen, Harry

Owen, Rt Hon Dr David

Cook, Robin F. (Livingston)

Patchett, Terry

Corbyn, Jeremy

Pendry, Tom

Cowans, Harry

Penhaligon, David

Craigen, J. M.

Pike, Peter

Cunliffe, Lawrence

Powell, Raymond (Ogmore)

Cunningham, Dr John

Radice, Giles

Davies, Ronald (Caerphilly)

Robinson, G. (Coventry NW)

Dormand, Jack

Sheerman, Barry

Dunwoody, Hon Mrs G.

Skinner, Dennis

Ellis, Raymond

Smith, Rt Hon J. (M'kl'ds E)

Evans, John (St. Helens N)

Snape, Peter

Fatchett, Derek

Soley, Clive

Fisher, Mark

Spearing, Nigel

Godman, Dr Norman

Steel, Rt Hon David

Harrison, Rt Hon Walter

Stott, Roger

Hogg, N. (C'nauld & Kilsyth)

Strang, Gavin

Home Robertson, John

Straw, Jack

Howells, Geraint

Wigley, Dafydd

Hoyle, Douglas

Wrigglesworth, Ian

Hughes, Simon (Southwark)

Johnston, Russell

Tellers for the Noes:

Kirkwood, Archy

Mr. Don Dixon and

Leadbitter, Ted

Mr. Frank Haynes.

Lewis, Terence (Worsley)

Question accordingly agreed to
Resolved,
That the Regional Development Grant (Prescribed Percentage, Amount and Limit) Order 1984 (S.I., 1984, No. 1843), dated 26th November 1984, a copy of which was laid before this House on 28th November, be approved.

Mr. John Bergelin
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]
12.25 am
Mr. John Watts: I am glad to have this opportunity of raising the case of my constituent, Mr. John Bergelin, and the difficulties that he had in his dealings with the Department of Health and Social Security.
I am a new boy to the case, because its origins go back to 1980, when it was first taken up by the late Sir Ronald Bell. Upon his sad demise, it was then pursued vigorously by my hon. Friend the Member for Beaconsfield (Mr. Smith). It was as a result of boundary changes in June 1983 that I became involved.
The essence of the case is as follows. First, between June 1980 and April 1981, the DHSS wrongly refused to entertain a claim in respect of interest on a second mortgage that had been taken out to fund renovations to Mr. Bergelin's house. Secondly, the Department failed to make payments direct to the Leeds Permanent building society in respect of the principal mortgage on the property, despite its having been requested to do so by Mr. Bergelin. Thirdly, in consequence of the arrears that accrued on both mortgages, Mr. Bergelin was forced to sell his house in order to meet his commitments, and to make a quick sale at a price well below its proper market value. Fourthly, his creditworthiness was undermined as a result of the arrears that accrued from the Department's failure to pay him the allowances that were his due. As a consequence, he was unable to raise funds that he had intended to use to purchase a business.
The case was referred to the Parliamentary Commissioner for Administration by Sir Ronald Bell, but the Commissioner was unfortunately unable to find in Mr. Bergelin's favour. From my reading of his report, that was principally because Mr. Bergelin was unable to provide documentary proof of his instructions to the Department which he claims the Department failed to carry out. I raised the matter last year with my hon. Friend the Member for Brent, North (Dr. Boyson), the then Minister of State, who gave long and careful consideration to the case but was ultimately unable to take the matter any further, for reasons that I shall explain.
I have sought this further opportunity to give the case an airing because Mr. Bergelin does not feel that he has had justice, and I am not satisfied that the loss and distress that has been suffered by Mr. Bergelin and his family is not the result of maladministration, for which he is entitled to be compensated.
I shall go through the facts of the case in more detail. In 1977, Mr. and Mrs. Bergelin bought a house for £18,500 with a mortgage of £12,500 from the Leeds Permanent building society. In 1978, they took out a second mortgage from Armitage Securities Limited in order to finance substantial renovation works. Mr. Bergelin worked as a self-employed credit manager, and became involved with a vending machine company called Flic A Mint Limited in which he made a personal investment of £3,000. Subsequently he learnt of Fraud Squad investigations into the company's affairs. I stress that there was no suggestion of any investigation into Mr. Bergelin's part in the company.
As a result of the failure of the company, Mr. Bergelin lost his investment and about £7,000 which was due to him
634
for work which he had done for the company. As a consequence of those problems, he ran into difficulties in meeting his mortgage commitments. In November 1979 he started work as credit manager for a company in Slough.
Sadly, arising from the strain of his financial problems and his continuing need to be involved in attempting to solve the problems of Flic A. Mint, coupled with the ill-health of his wife, which resulted in two major operations in 1980, Mr. Bergelin was unable to concentrate fully on his work, and in May 1980 he was asked to leave the company.
Before the loss of his employment, Mr. Bergelin advised both the Leeds building society and Armitage Securities of his financial difficulties. The Leeds building society accepted from him post-dated cheques to meet his commitment, but Armitage Securities was not prepared to do so. He therefore concluded that he could meet his obligations only by selling his house to raise the necessary funds.
In March 1980, Mr. Bergelin was offered £45,000 for his house, but unfortunately that sale fell through because of difficulties encountered by the would-be purchaser. Armitage Securities issued proceedings against him. In May 1980 the court adjourned the possession order for 60 days to allow him to complete a sale. At that stage he needed about £20,000 to clear his debts and intended to use the remaining £25,000 of sale proceeds to purchase a shop.
After Mr. Bergelin lost his job on 2 June 1980, he signed on at the Department of Employment. On 3 June 1980 he was interviewed by the Department of Health and Social Security office in Slough. He advised the interviewing officer of his mortgages, both that with the Leeds building society and the second with Armitage Securities. He was advised that the interest content of the Leeds mortgage could be paid by supplementary benefit but that the second mortgage was not eligible. He was asked to obtain from the Leeds building society confirmation of the amount outstanding, and of the interest rate applicable. He telephoned the building society and the following day received a letter with the details requested. The letter also advised him to consider whether to ask the DHSS to make payments direct to the building society. Accordingly, he forwarded the letter to the DHSS with the request that direct payments should be made to the society as suggested.
In November 1980 Mr. Bergelin received a summons from the Leeds building society for non-payment of his mortgage. That was the first intimation he received that the direct payments, which he had asked the DHSS to make, had not been made. Because of pressure from his major creditors and his need to sell his house to meet his obligations, he reduced his asking price from the £45,000 that he had hoped to obtain. In August he received an offer of £39,950, but to achieve a quicker sale he first reduced the selling price to £35,000 and finally accepted a cash offer of £30,000. That is well below the sums that he was previously offered. Contracts for the purchase were exchanged in February 1981.
By that stage Mr. Bergelin had commenced negotiations to buy a shop in Camberley and, because there were inadequate proceeds from the sale of the house, he arranged a loan with Charterhouse Securities. To save expense both to himself and, ironically as it seems to him now, to the DHSS, he decided that he and his family would camp in a tent on a campsite at Taplow until the purchase

635
of the business was completed. Accommodation went with the business. All the family's possessions were placed in store in Camberley.
For reasons of time, I shall not go into detail about the disputes which arose with the DHSS over removal costs, storage charges and assistance with the costs of heating while the family was camping. Suffice it to say that the sad outcome was that, because Mr. Bergelin and his family did not receive what was their due—that was accepted subsequently by the Department—he was unable to pay the storage charges, because he used the funds available to him to buy bottled gas for heating. The storage company was not prepared to wait any longer, and his possessions were sold at auction. Meanwhile, the finance for the purchase of the business at Camberley was withdrawn because the finance company became aware of the arrears that had accrued to the Leeds building society and Armitage Securities.
Through that sorry sequence of events, Mr. Bergelin lost his home, the majority of his personal and household possessions, and any immediate prospect of being able to establish himself in business.
The DHSS disputes, first, that Mr. Bergelin ever requested direct payment of interest to the Leeds Permanent building society, and further disputes that he mentioned the existence of the second mortgage before March 1981, or that he was advised that a second mortgage was not eligible for assistance. When the Ombudsman considered the case, he could find no record in the papers of the Department of the request for direct payment, nor any mention of the second mortgage until March 1981. Therefore, in the absence of documentary evidence, the Ombudsman was unable to uphold Mr. Bergelin's claim. But the Ombudsman's report concluded:
"I cannot say with certainty that Mr. Bergelin did not mention the second mortgage to the local office before 31 March 1981."
The Ombudsman records that when Mr. Bergelin was interviewed he said that the instruction to the Department regarding direct payments was either written on the letter dated 3 June 1980 from the Leeds building society, or was contained in a covering letter. He is clear that he advised the Department of his wishes for direct payments to be made, and of the existence of his second mortgage obligation, at his first interview on 3 June 1980.
However, at the time of the Ombudsman's investigation, Mr. Bergelin did not recollect the precise method which he used to convey his wishes. Nor could he produce documentary evidence. Subsequently, he has confirmed that the method he employed was a covering letter, and he has produced to me a copy of the letter dated 4 June 1980 from him to the Department, which bears the Department of Health and Social Security date stamp of 5 June 1980, as does the letter from the Leeds building society that he forwarded to the Department.
Clearly we must consider whether this copy letter is genuine. I hope that I am not naive about such matters; when I discussed it with Mr. Bergelin, I asked him whether it could be a fabrication that he had produced subsequently to give credence to his case. But in reply, apart from giving me an absolute assurance that that was not the case, he made the valid point that if he was prepared to be dishonest and to manufacture documents to support his case, would it not have been in his interests to have done so at the time when the Ombudsman asked him
636
to produce documentary evidence, rather than some considerable time later when he sought my assistance with his case?
Mr. Bergelin's letter to the Department reads as follows:
"Further to my interview of 3 June 1980 I enclose herewith the documents requested and would kindly ask that you make payment of my first mortgage direct to the Leeds Permanent Building Society as requested/suggested in their letter of 3 June 1980 in view of the arrears.
Regarding the second mortgage with Armitage Securities taken out for essential renovations and they are now pressing for payment. I was advised that you would not consider this matter. I enclose herewith the papers in respect of same, together with receipts for work carried out and as they are now taking legal action I would ask that you give this matter further consideration and advise me in due course."
It was the production to me of that copy letter that led me to write to my hon. Friend the Member for Brent, North (Dr. Boyson), who was then Minister of State, on 19 January 1984. I concluded my letter thus:
"It is my view that Mr. Bergelin has suffered injustice and financial loss. I consider the Ombudsman might have drawn a different conclusion if the additional information"—
by which I meant the letter—
"had been available for his consideration.…I would ask you to review this case carefully in the light of the additional information and to consider whether some recompense should be made."
My hon. Friend the Minister of State considered the case with the care that those who know him would expect of him. I had the opportunity to discuss the matter with him at some length. However, he felt unable to take it further in the absence of the original letter of 4 June 1980, either in Mr. Bergelin's records or in those of the Department. I understand my hon. Friend's reluctance to accept that the Department was at fault in the absence of totally conclusive evidence, but it seems that this places an impossible burden of proof upon my constituent, for there is no reason why he should have the original of a letter which he wrote to the Department. Such a letter would properly be in the records of the Department. Neither do I accept that the failure to find the letter in the Department's records provides any conclusive proof either that no such letter ever existed or that no such letter was received by the Department.
This is not to suggest that I suspect any overwhelming incompetence by the local DHSS office. Like other offices up and down the country, it is required to administer on behalf of many thousands of claimants an unwieldy and complex social security system, which, thankfully, we now have under review. It would be no surprise to me if on occasion mistakes are made or documents go astray.
In my dealings with the local office over the past 18 months I have been impressed by the readiness in many instances of that office to recognise when a mistake has been made and to provide a remedy. I like to think that I enjoy excellent co-operation with the manager and his staff in providing relief to many of my needy constituents.
The essence of my complaint is that in Mr. Bergelin's case the whole of the burden of proof is required to rest on him. He has not been given the benefit of reasonable doubt. There is no doubt that he has suffered great distress and financial loss. In my view, he has not received justice.
12.42 am
The Minister for Social Security (Mr. Tony Newton): My hon. Friend the Member for Slough (Mr. Watts) has indicated in his speech that this case has been

637
the subject of considerable and, indeed, anxious, consideration by successive Ministers in the DHSS. Of course, I have had an opportunity to study not only the papers concerning Mr. Bergelin's unfortunate circumstances but the correspondence that passed between my hon. Friend the Member for Brent, North (Dr. Boyson), my predecessor as Minister of State, and my hon. Friend as Mr. Bergelin's Member of Parliament.
I well understand the reasons why my hon. Friend has felt it right to bring this case before the House. Even though I am afraid I cannot be as encouraging as my hon. Friend would like, Mr. Bergelin has been fortunate in the vigour with which my hon. Friend and his predecessor as Mr. Bergelin's Member of Parliament have pursued this difficult case.
As my hon. Friend said, the circumstances of Mr. Bergelin's claim were also the subject of a thorough investigation by the Parliamentary Commissioner in October 1981. Again, I have read the report. It is from that point that I should start to explain the position as the Department sees it. The complaint made to the parliamentary commissioner was that,
"the local office in Slough refused to make Mr. Bergelin an allowance of Supplementary Benefit towards the repayment of a second mortgage on his house. As a result he had to sell the house at well below market value."
The complaint went on to say that Mr. Bergelin lost approximately £15,000 on the sale of his house, as my hon. Friend said, and incurred an additional expense of £7,000 in court costs. I acknowledge that those are not circumstances that any one could contemplate with equanimity. They would leave people feeling considerable sympathy for a person in the position in which Mr. Bergelin found himself.
As I understand it, and as my hon. Friend said, in 1977 Mr. Bergelin purchased a house in Slough with the assistance of a £12,500 mortgage. In November 1979 he took out a second mortgage. I understand that the purpose of the second mortgage was to make improvements to the house and, I am advised, in part to pay creditors of a company with which he was connected.
In June 1980, Mr. Bergelin became unemployed and made a claim for supplementary benefit. It is the normal practice of the Department where a mortgage or mortgages are declared to ask claimants to produce details of them, to enable their correct entitlement to benefit to be determined. There is common ground between myself and my hon. Friend about the fact that there is no record in my Department that Mr. Bergelin indicated either verbally or in writing at that time that he had more than one mortgage. Consequently, his benefit entitlement was calculated on the details he provided of the first mortgage and was paid on that basis.
The Department's submission to the parliamentary commissioner in connection with the investigation, stated:
"we can find nothing in our records to support Mr. Bergelin' s allegation that he mentioned the second mortgage when he was seen on 3 June 1980 or 9 December 1980. Nor is there any evidence that he mentioned it in any of the several letters he sent to the Department during that time".
My Department's records show that the first time we were made aware of the second mortgage was 30 March 1981, at which point Mr. Bergelin's benefit was reassessed to take account of the additional commitment. I recognise that my hon. Friend has acknowledged this point, but I
638
should like to place it firmly on the record that the full arrears of benefit amounting to £1,094·60 were paid on 27 April 1981.
The decision to pay the arrears in full was a decision by the independent adjudicating authorities and was based on the understanding that the second mortgage was solely for improvements to the house. To make the record absolutely clear, I must say that, had the adjudicating authorities been aware that part of the money was used to pay creditors of a business, their decision might have differed and a lower sum of arrears might have been paid. I do not wish to place a great deal of emphasis on that point. I wish simply to make it clear that, in terms of recompense for the arrears that were discovered, once the Department was clear that a second mortgage was involved, the decision and the Department's action following the decision of the independent adjudicating authorities would not be regarded as unfair or ungenerous.
Mr. Bergelin contends also that he requested my Department to pay that portion of his benefit attributable to his first mortgage direct to his building society. He claims that, as we did not do so, we contributed to his arrears of mortgage payments and ultimately to the financial problems that led him to sell his house at less than what he believes to be the market value.
As my hon. Friend rightly outlined, the points at issue seem to be as follows. First, did the Department fail to act on information provided by Mr. Bergelin about a second mortgage in June 1980? Secondly, did we fail to respond to his request to pay his first mortgage direct to the building society? Thirdly, did the late payment of benefit arrears on 27 April 1981 contribute to the financial difficulties that led him to sell his house? Fourthly could the Department be considered responsible for the price at which Mr. Bergelin sold his house?
On the first point, as I have said, the parliamentary commissioner conducted a full investigation and produced his report, a copy of which was sent to my hon Friend's predecessor as his Member of Parliament on 30 December 1982. The commissioner found that there was no evidence to suggest that Mr. Bergelin had told the Department that he had a second mortgage and concluded that it would be unrealistic to expect the Department to ask prospective claimants such a specific question as second mortgages are not a common occurrence among supplementary benefit claimants.
On the second issue, the parliamentary commissioner found that, having kept full details of his mortgage, including details of substantial arrears, from his building society it was unwise of Mr. Bergelin to assume that his first mortgage was being paid direct without specifically checking the position with it.
My hon. Friend has drawn my attention to a copy of a letter which Mr. Bergelin says he sent to the Slough local office on 4 June 1980. I can only repeat that the Department has no record of receiving such a letter. Moreover, I must also observe that, although Mr. Bergelin communicated with the Slough local office on several occasions, there is no evidence that at any time did he ask why he had not received a reply to such a letter. In those circumstances, I feel I must refer my hon. Friend as he himself quoted it, to what my predecessor said in his letter to my hon. Friend on 16 May 1984. He said:
"In the absence of an original document, in Mr. Bergelin's records or ours, I do not feel able to take the matter any further".

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On the third point, it is clear that Mr. Bergelin's financial problems pre-dated his claim to supplementary benefit. Indeed, at the time of his claim in June 1980 Mr. Bergelin stated that it was his intention to sell his property because he was being pressed by his creditors. Therefore, although there was a delay in the payment of benefit in respect of the second mortgage, it cannot be said that that led to him selling the house.
The fourth question, of the market value of the house at the time of the sale, is something over which the Department could not have had any influence.
As I have said, I very much understand why my hon. Friend has raised this case and I have real and genuine sympathy with the extremely difficult financial position in which Mr. Bergelin found himself. But the fact remains that the case has been very thoroughly investigated by the
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parliamentary commissioner, who concluded that there was no evidence of maladministration on the part of the Department and it is, I think, common ground that in terms of payment of benefit Mr. Bergelin has been paid his full entitlement.
I have listened very carefully to what my hon. Friend has said, including what he said about the letter of which, indeed, he had sent my predecessor a copy, but I think I must say, in order to avoid building up false hopes, that I cannot realistically hold out the prospect of being able to go beyond what my hon. Friend the then Minister of State wrote to my hon. Friend. In that sense, I feel that I cannot this evening add further to what has been said before.
Question put and agreed to.
Adjourned accordingly at seven minutes to One o'clock.