Regional Policy (Hansard, 21 January 1985)

§ 1. Mr. Roy Hughes
asked the Secretary of State for Wales what representations he has received from Gwent county council concerning the Government's review of regional policy; what reply he has sent; and if he will make a statement.

§ The Secretary of State for Wales (Mr. Nicholas Edwards)
The council has written to me about the results of the review as they affect Gwent. My reply makes clear the Government's commitment to a more cost-effective regional policy concentrating on the needy areas and the creation of jobs. Gwent will continue to be well placed to compete for new investment.

§ Mr. Hughes
Does the Secretary of State appreciate that Gwent cannot understand the logic of cutting £60 million from the regional aid budget for Wales merely to provide tax concessions for those in the south-east of England? As a result of the changes, will there not be increased competition from Bristol, Swindon and the west midlands? How on earth are we going to put those 180,000 people back to work?

§ Mr. Edwards
Many of the representations that we have received, including those from the Wales TUC, believe that financial assistance should be related to jobs rather than wasted on very large capital projects without any consideration of the relationship to jobs. We are 714 making substantial savings by not financing the renewal of plant, which should be funded by companies out of their normal expenditure. Gwent will be well able to compete, not only because of the many advantages that it has for incoming industry, but because its northern part has the top level of assistance available. Elsewhere, through selective assistance, it will be able to offer a very attractive package of aid.

§ Sir Raymond Gower
I agree that it is desirable that regional assistance should be geared to jobs rather than to capital exapansion. However, will the new arrangements be open to any reconsideration should the worst criticisms of certain people be realised in any respect?

§ Mr. Edwards
The Government will always keep the progress of their policies under review. The cost-per-job limits under the revised system are about twice the average level of investment by companies. Therefore, there should be plenty of scope for significant investment, even with those cost-per-job limits.

§ Mr. Gareth Wardell
As Newport, in the county of Gwent, has been demoted from development area to intermediate area status as a result of the recent changes and has consequently lost its regional development grant, can the right hon. Gentleman tell us what percentage of Gwent's working population were in receipt of, or eligible for, regional development grant before the changes, as well as giving the current figures? We know that in Wales the cut has been from 90 to 35 per cent.

§ Mr. Edwards
In making that last statement the hon. Gentleman has shown that he does not understand that we are now dealing with a two rather than a three-tier system. Therefore, such a comparison is not relevant. I cannot give the hon. Gentleman the specific figures that he seeks, but if he tables a question I shall try to provide the information. Since 1979 more than £23 million of selective assistance has been given in the Newport travel-to-work area for projects valued at more than £166 million in order to provide about 7,900 new jobs. That shows the considerable value of selective assistance in attracting new investment.