HC Deb 16 January 1986 vol 89 cc1195-7
4. Mr. Dormand

asked the Chancellor of the Exchequer if he will estimate the amount of new finance available for the northern region as a consequence of his autumn statement.

The Chief Secretary to the Treasury (Mr. John MacGregor)

It is not practicable to estimate the incidence of new finance over the whole range of Government expenditure on a regional basis.

Mr. Dormand

Is the Minister aware that I have asked a similar question on every Budget statement made since the Government came to office in 1979 and that each time I have received a similar reply? I expected something different for a change—that there will be an improvement in the northern region. What is different about this answer? If the Minister and the Government genuinely wish to make an impact upon the 230,000 unemployed people in the northern region, may I suggest that he takes the initiative and seeks to establish a northern development agency and—this is important—makes the same sums of money and resources available to it as are available to the Scottish and Welsh Development Agencies.

Mr. MacGregor

I do not know whether the reply that I shall give is the same as the one that the hon. Gentleman has received in the past.

Mr. Dormand

I hope not.

Mr. MacGregor

It is not possible to estimate the amount of new finance, because a great deal of public expenditure is demanded or comes from procurement policies which depend upon decisions about competitive tenders by firms in different parts of the country. There are many good reasons why it is not possible to estimate the range of new finance.

On the hon. Gentleman's second question, he will be aware that substantial sums—over £2 billion—have been spent in the northern region on many activities of the kind in which the SDA becomes involved—regional, development, industrial and urban grants, and so on. There has been substantial expenditure. I am well aware of the northern region's problems, which are long-term. To pour taxpayers' money on them is not the sole answer.

Mr. Forth

I congratulate my right hon. Friend on the consistency of his approach to this matter, as illustrated by his answer to the last question. Does he recognise that if there are to be any bids from regions for assistance, the west midlands region must also be considered because, regrettably, unemployment is still distressingly high there? He should not be allowed to get away with the idea that the problems exist only in the north or in the other fringe areas of the United Kingdom. The heart of England equally needs recognition of its problems.

Mr. MacGregor

I well understand that the problems of restructuring regional industrial areas, many of which are dependent upon traditional industries, are not confined to the northern region.

Mr. Wrigglesworth

Is the Minister aware that there has been a 57 per cent. cut in regional aid to the northern region since the Government came to office and that further cuts are forecast in the public expenditure White Paper published yesterday? In addition, a £2.6 billion cut in public capital expenditure is forecast in the White Paper. Will that not be further devastating to the northern region? Is not the truth of the matter that the Government have given up hope of ever helping the northern region?

Mr. MacGregor

Not at all, because substantial sums have been poured into the northern region. One of the key elements is the new jobs in the new industries coming to the northern region—some 21,000 in the electronics and pharmaceutical industries. It takes a long time to restructure an economy, but those things are happening. We have altered the course of regional development aid because there was no clear evidence that some of the money being spent was cost-effective. Since the northern region still has a high proportion of its area covered by assisted area status, proportionately it will benefit a good deal more from the new policy.

Mr. Bell

Is the Minister aware that the consistency to which he referred means that the north-east is continually going downhill? Whereas the Government say that 55,000 people are unemployed in the county of Cleveland, the figures released by the county council planning department show that there are 71,300 people unemployed. Is he aware of the study last year which found that £350 million needs to be invested in the northern region to cover the revamping of houses, roads and schools? Where is there provision for that?

Mr. MacGregor

If we are to maintain the downward pressure on inflation, which is important for northern region industries and those everywhere else, and if we are to contain the cost of public expenditure as a proportion of GNP, which is also important for those industries, there are inevitably constraints on the total level of public spending. In this White Paper we have increased public expenditure on housing renovation and roads compared with last year's White Paper.

Mr. Campbell-Savours

Is it not true that the Government intend to make a further 40 per cent. cut in environmental and industrial expenditure in the northern region by the time of the next general election? Is it not equally true that at a time when those cuts are taking place in the northern region, Northern Ireland, for some reason, is being insulated from public expenditure cuts? Why is Northern Ireland insulated in this way? Why is it intended that Northern Ireland should get an increase by 1988? Is it that violence in Ulster is paying? Is it that the Government are refusing to admit that the higher the level of violence in Northern Ireland, the more money the Government are willing to sink in? Is that not a disgrace?

Mr. Macgregor

The way in which public expenditure in Northern Ireland is calculated in the areas to which the hon. Gentleman refers is the same under this Government as it was under the Labour Government. It is done by a block formula arrangement which reflects the same trends in expenditure and income.

Mr. Philip Oppenheim

Is my right hon. Friend aware that any money spent on trying to create jobs in the northern region almost invariably means fewer jobs in other hard-hit areas like the east midlands, which have received virtually no Government aid?

Mr. MacGregor

It is important that we can at least say that any regional aid has some possibility of being cost effective in creating jobs. That is what we have done in our regional policy.