HC Deb 09 March 1987 vol 112 cc82-120 7.38 pm
Mr. Geraint Howells (Ceredigion and Pembroke, North)

I beg to move, That this House deplores the increasing disparity of opportunities among and within the constituent nations and regions of the United Kingdom, characterised by high unemployment rates, low job vacancy figures, and poor infrastructure and housing in the deprived areas, in contrast with lower unemployment, skill shortages, and congestion as well as high housing and living costs in the more advantaged areas; and calls for a strong regional policy spearheaded by regional development agencies aimed at making the United Kingdom a multi-centred society where every nation, region and travel-to-work area has an equal opportunity to invest in its own enterprise and provide training and job opportunities for its people.

Mr. Deputy Speaker (Mr. Harold Walker)

I must tell the House that Mr. Speaker has selected the amendment standing in the name of the Prime Minister.

Mr. Howells

Under this Government, Britain is fast becoming a bitter and divided nation. Far from creating one nation, under their present leadership the Tories have achieved small islands of affluence in a huge sea of disadvantage. Never have the haves and have nots been more widely spread and never has one part of Britain— the south-east—been so much the major recipient of the limited benefit of a monetarist policy, while other regions suffer unemployment, scarcity of resources and a declining economy.

The economies of Britain's regions have undergone more change in the last 10 years than in the whole of the last 30. In some communities, the painful change caused by the decline in the traditional manufacturing industries— some 30 per cent. of the manufacturing jobs have been lost since 1979—has been offset by new jobs in the service sector, but for a great many others, that has not been the case.

A third of all travel-to-work areas are now experiencing unemployment rates of 15 per cent. or more. A recent EEC survey showed that nine of the 15 cities in the Community with the lowest income, highest unemployment and greatest isolation in terms of business and tourist contacts were in Britain. Palermo in Sicily is now far better off than Liverpool, Manchester or Sunderland.

By contrast with other European countries, power in the British economy has been increasingly concentrated in London. France and Germany have a number of centres which can compete with their capitals, but in Britain only Edinburgh has avoided satellite status. Birmingham, Leeds, Manchester, Liverpool, Newcastle and Bristol used to be major independent centres, with their own economic power and cultural influence. The recent southern increase in inequality precipitated by the Government follows a longer, slower misguided pressure to centralise—most notably in transport policy.

The Government have refused to face up to the scale of the regional disparity in rates of growth and economic prospects. Once the differences between the communities exist, it becomes very difficult to reverse them. Local employment and output decline and it becomes less attractive to start new businesses. Workers have less opportunity or incentive to develop skills and qualifications. Young people emigrate, and potential new employers face problems recruiting qualified manpower.

The local housing market follows employment into decline. The disparity in house prices creates its own problems. The average price for a pre-war semi-detached house in 1986 in was £75,000 in the south-east, compared with £29,000 in the north. Average house prices have increased by over 50 per cent. since 1983 in the south-east, compared with 26 per cent. in the north-west and 27 per cent. in Wales.

That difference prevents population mobility, because even home owners cannot afford to move to the southeast. But it also creates congestion in London and the south-east, because people are unwilling to take jobs elsewhere for fear of jeopardising their investment. High prices in the south-east also create homelessness in the region.

Turning to unemployment—

Mr. Tony Favell (Stockport)

Indeed, higher house prices in the south-east may deter people from the the north and perhaps from Wales from moving to London, but what is wrong with moving jobs to Wales and the north-west, moving to that part of the world the sort of people who would create jobs—for example, the Civil Service? Surely the lower house prices there should attract people into the areas rather than lead to their leaving.

Mr. Howells

There is no point in trying to attract people from the south-east to Wales, Scotland or the north if they cannot find work. There is no work in those areas, as the figures that I will give later will show.

Other changes in the economy are likely to reinforce regional decline. Increases in service industry employment and a continuing shift to the south-east combine with an estimated further decline in manufacturing industry. Warwick university forecasts that 500,000 more jobs will be lost by 1990.

The problem of regional disparity is often seen as one of the north versus the south, but in reality that is extremely misleading, since many of the worst problems are located in the south-west, which has lower per capita GDP than some areas in the north. Even in the prosperous south-east there are some black spots, notably in Greater London—such as Newham, Lambeth and Bermondsey.

A glance at the unemployment rates in the 10 worst hit travel-to-work areas reveals that the worst is Newquay in Cornwall, with 27.8 per cent., and the eighth is Penzance and St. Ives, with 23.7 per cent. The best areas, and still rising, are Winchester and Eastleigh, with 5 per cent.; Cleethorpes, 5 per cent.; Clitheroe, 5 per cent.; Aylesbury and Wycombe, 5.9 per cent.; Cambridge, 6 per cent.; Tunbridge Wells, 6 per cent.; Slough, 6.5 per cent.; and Newbury, 6.6 per cent. But on the other side of the table, as I said, the worst of the lot and still rising is Newquay in Cornwall with 27.8 per cent. Cumnock and Sanquhar, in Scotland, has 26.9 per cent. Cardigan— in my constituency— has 26.1 per cent. South Tyneside has 25.7 per cent.; Skye and Western Ross, 25.3 per cent.; Skegness, 25 per cent.; Lampeter and Aberaeron—also in my constituency—24.8 per cent.; Penzance and St. Ives, 23.7 per cent.

There are also disparities within regions. For example, the south-west saw an increase in unemployment of only 2 per cent. between June 1979 and June 1986, but that concealed a total economic collapse in some areas within the region. The situation in Newquay may be contrasted with that in Exeter, where unemployment is under 9 per cent.

May I mention Cornwall, two days before the by-election? The main problem with regional development in Cornwall is that assisted area status was removed from Truro and St. Austell in 1984. That presents difficulities when trying to attract business to the region. Why go to Truro when Camborne down the road has assisted area status? The largest employer in Truro— Furniss, which makes biscuits— is in the process of leaving the city because it is not an assisted area.

The alliance would create a regional development agency based in the area to combat this problem.

Mr. William Cash (Stafford)

May I refer the hon. Gentleman to the most recent research notes on unemployment rates by constituency, a copy of which is in the Library? That shows that the unemployment rate in Truro is 14.1 per cent, which seems somewhat adrift from the figure that he gave for Newquay.

Mr. Howells

There are a few miles between Truro and Newquay, but I am grateful to the hon. Gentleman for his intervention.

Cornwall has a housing problem because it has the highest new dwelling prices in the country outside London and the south-east. House prices have been forced up by the second dwelling and holiday home market. The alliance wants to establish regional development agencies on the Scottish and Welsh models to help relieve the problems of the English regions. It is well known that many Conservative Members opposed the establishment of the Welsh Development Agency, the Development Board for Rural Wales, the Scottish Development Agency and the Highlands and Islands Development Board.

My constituency is in mid-Wales, and I recognise that the Development Board for Rural Wales has done excellent work to stem depopulation. The WDA is also doing excellent work in north and south Wales. I hope that the Government, in their wisdom, if they decide to use it, create similar agencies for the various parts of England.

We believe that people in the regions are best placed to understand and solve their problems.

Mr. Favell

Is the hon. Gentleman proposing the establishment of a regional development agency for every English region outside the south-east? If not, which regions would be excluded?

Mr. Howells

I want the Government to accept the principle, just as we do. After consultations with local authorities, we might decide to have agencies for the north-east, the north-west, central England, the south-east and the south-west. There is nothing wrong with such a proposal.

The agencies' role would be to attract companies from outside Britain, but their main objective would be to enable new industries to develop and existing ones to diversify. They would help indigenous industries and local enterprise rather than footloose large companies.

Whitehall-directed regional policy has clearly failed. It has also been costly. Each manufacturing job has cost £40,000 to create and sustain. The alliance work search project has demonstrated the low cost of creating jobs through local enterprise boards and agencies such as Lancashire Enterprise Ltd. which creates and sustains jobs for just £2,400 each. These local agencies would work in partnership with regional development agencies and help Britain to become a multi-centred society with prosperous regions again.

Mr. Gordon Brown (Dunfermline, East)

Will the hon. Gentleman explain the Liberal or Social Democratic party policy for a decentralised incomes policy? Does it set pay rates according to local conditions and does the local labour market affect the public sector as well as the private sector?

Mr. Howells

The hon. Gentleman is straying a little and getting worried about the effect that our policies would have on the nation. I am sure that the people will decide when the general election is called.

We also want a programme of investment in human resources among school leavers and young adults to raise skills and training. Universities and polytechnics should develop major new roles in the education and training of young adults so that we can compete with other countries in Europe which place skill training at a higher premium than this misguided Government.

The Employment Institute's report of last week says that unemployment in the north has increased from 10.4 per cent. to 18.9 per cent. during the 1980s. It insists that the Government should increase regional development grants to improve productive capacity. It also calls for more inter-agency co-ordination between Europe, the Government and development agencies.

The report joins the chorus of bodies which are demanding regional development agencies for depressed areas. It says: They should have wide-ranging powers to stimulate investment and employment along the lines of those already existing in Scotland and Wales. The allocation of funds between regions would have to be carefully controlled in order to provide the greatest stimulus to those regions with the most severe problems. Turning to farming, the sudden introduction of milk quotas in 1984 demolished confidence among farmers overnight. Confidence is now at a low ebb. Farmers have lost faith in the Tories and will not forgive them for their uncaring attitude during the past year.

Mrs. Elaine Kellett-Bowman (Lancaster)

Does the hon. Gentleman believe that the policy of two-tier pricing, which is said to be that of the Liberal party, will be advantageous to British farmers, bearing in mind the fact that farms in Europe are infinitely smaller?

Mr. Howells

I am sure that the hon. Lady has read the farming press during the past few weeks. It is very gratifying that leading agriculturists now suggest that the National Farmers Union, other organisations and the Minister should consider the possibility of a two-tier system. If the hon. Lady has a better alternative, I am quite willing to listen.

Mrs. Kellett-Bowman

The hon. Gentleman must know that the system would apply throughout Europe and that a small farm in Britain is considered relatively large in Europe, so we would catch the worst cold and the rest of Europe would benefit.

Mr. Howells

With respect, I am afraid that the hon. Lady has got it wrong again. Bearing in mind her background, I am sure that she agrees that the local farmer is important to the community. It is our duty and that of the Government to look after small and intermediate farmers, not just the cereal barons. That is the only way to ensure that small farmers survive into the 1990s.

We should consider having a Minister of State for Agriculture for Scotland and for Wales. Both countries have been neglected over the years. The Secretaries of State for Scotland and for Wales have not been to Brussels for many years. They are duty-bound to go.

The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay)

On occasion, especially on fisheries matters, I accompany the Ministers responsible for these matters to Brussels, and when important agriculture issues are dealt with in Brussels, my right hon. and learned Friend the Secretary of State accompanies the Minister.

Mr. Howells

I am grateful to the Minister for that intervention. I am sure that he is aware that the Secretary of State for Wales has not been there once during the past six years. I take the Minister at his word, but there are many Scottish farmers who are interested in beef and sheep farming—as well as fishing.

Mr. Keith Best (Ynys Môn)

Like me, the hon. Gentleman is concerned about farmers in Wales. From his profound interest in and knowledge of these matters, he will know that Wales is three times self-sufficient in sheep, beef and dairy products. It is often argued on behalf of British farmers that we should not take cuts because the United Kingdom as a whole is not self-sufficient whereas other countries are more than self-sufficient. How does the hon. Gentleman think agriculture in Wales would fare if he had his way and we had a separate Minister arguing for Wales?

Mr. Howells

It would do a power of good for farmers in Wales. We need somebody to represent us in Brussels. I am sure that the hon. Gentleman agrees that many farmers have criticised the Secretary of State for Wales for not going to Brussels and speaking and standing up on behalf of the farmers of Wales. The Government should persuade our friends in Europe to have a beef scheme similar to our sheepmeat regime.

I turn now to the cheap credit facilities that now prevail in Europe. There is a great deal of unfair competition in the Community because farmers in France and Germany get cheap credit rates. We should introduce an optional scheme for our farmers. At present, there are capital grant schemes for farmers here whereas in France there is a cheap credit scheme. That should be made optional, and it would help many farmers who are in financial difficulties at the present time.

We must improve our marketing within the Community. I blame the many Europeans who are in charge of marketing our surpluses. Something is radically wrong with a system of storing butter in intervention for four years. I am delighted that at last the Community is moving to rid itself of surpluses.

Mr. Churchill (Davyhulme)

A moment ago, did not the hon. Gentleman complain about the cut back in milk subsidies, yet now he is saying how marvellous it is that the butter mountain is being dealt with?

Mr. Howells

I never mentioned milk surpluses. With respect, the hon. Gentleman has got it wrong again. I do not know what has come over Conservative Members tonight.

This is a short but important debate. Finally, I turn to decentralisation. It is the only way in which the regions of England will survive. The nations of Wales and Scotland want their own Government and regional assemblies in England to make sure that the voice of our peoples are heard at local level and not only at this central level, which has proved misguided. Unfortunately, the people of Wales and Scotland and of various regions in England have not been properly governed during the past few years.

8.2 pm

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'notes that the United Kingdom has benefited from six years of uninterrupted growth; that over the last six months United Kingdom unemployment has fallen by 100,000; that employment has increased substantially since 1983; and that vacancies are at their highest level this decade; commends the efforts of the Government to develop a modern economy which is offering new types of opportunity; recognises in particular its work in launching the most extensive training programme in the country's history, and welcomes its commitment to the regions, underlined by carefully targeted investment and assistance; and further calls on the Government to continue with its present policy of seeking to spread throughout the country the economic conditions that bring prosperity and jobs.'. When I considered the selection of this debate, I was reminded that there is nothing like the onset of a Budget or by-election to provoke the Opposition parties, including the alliance, into trying to make clear again their employment and regional policies, no doubt on this occasion with half an eye to Truro and half to the forthcoming Budget. Given the Opposition parties have redefined their regional and employment policies on several occasions, it is always interesting to see what version will be forthcoming from the spokesman of those parties.

The motion on the Order Paper seemed to have the especially endearing quality that sometimes comes from the alliance, especially the part that was carried away on the question of regional policy and decentralisation, on which the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) has commented. The motion ends with the words calls for a strong regional policy spearheaded by regional development agencies aimed at making the United Kingdom a multi-centred society where every nation, region and travel-to-work area has an equal opportunity to invest in its own enterprise and provide training and job opportunities for its people. I have never heard that degree of local autonomy in investment and employment policy advocated before. As there are 334 travel-to-work areas, what is being advocated is a degree of Government decentralisation which has not hit England since the time of the Norman conquest. It seems incredible that that has been put forward by the alliance now.

The hon. Member for Ceredigion and Pembroke, North did not touch in quite so much detail on the employment policies with which the alliance parties would tackle the problems that he described. I realise that he is holding some of his party's fire for tomorrow morning's press conference, at which his hon. Friend the Member for Gordon (Mr. Bruce) and his colleagues will unveil an alliance plan for jobs and poverty. I refer to the press release that will be put out tomorrow by the alliance, because it is only there that one can find exactly what they advocate to tackle the problems that the hon. Gentleman has just described. The press release states The alliance package shows that unemployment can be reduced substantially without increasing inflation by means of a sustained incomes policy which reduces incomes growth by an average of one per cent. per year. It proposes a prudent and targeted rise in public spending in line with growth in the economy. In the first year gross public spending would be increased by £4.9 billion and the PSBR by £2.1 billion. The hon. Gentleman does not seem to have been let in to the secrets of the incomes policy, to which the alliance keep referring, because he was unable to answer a question about it fired at him from the Labour Benches.

So far as the second part of the alliance release is concerned, the increased public spending and increased PSBR are just the policies that led John Horam to leave the alliance recently because it has a mere pale shadow of the policies on public spending, taxation and borrowing that are so frequently put forward by the Labour party.

Opposition parties may try to redefine their policies, but there are some aspects of the motion upon which we can all agree. Nobody has ever denied that there is "disparity of opportunity" in different parts of the country. All parties share concern about what are regional differences or what are, as the hon. Gentleman has said, more localised differences in the levels of unemployment, investment and economic growth in this country. However, I do not agree that they are new or that they are increasing. There have been similar debates about regional disparities in the country at various times in this century, and similar things have been said. However, during this Government's period of office, the proportion of unemployment in the north as a proportion of the whole has fallen slightly and there has been a proportionate increase in total unemployment in the south.

However, I agree with the hon. Gentleman that depressed towns and inner city areas are to be found across the country and that the analysis that is often put forward turns all that into a crude north-south divide and is thoroughly misleading. One can find pockets of prosperity and poverty all over the country. I have no doubt that the onset of the Truro by-election is causing everybody suddenly to discover that those problems are not entirely confined to the north of England, as a few had complained only a few weeks ago.

Given that these disparities exist, we must tackle them realistically and practically. My first proposition on the Government's behalf is to assert that now that the national economy is performing so much better, the total level of employment in the economy is steadily growing and the level of unemployment is declining, the Government are obviously creating the conditions within which it is easier to tackle the problems of disparity than it has been for a long time. When one considers how those problems might be tackled, I have to say to the Opposition parties, having heard a speech from a Liberal Member and looking forward to a speech from a Labour Member in a few moments, that I suspect that their approach to the problem, which is not new, is that they go back to the old regional policies of the past few decades.

My limited experience of politics has made me steadily ever more sceptical of the old type of broad-brush regional policy and the prospects of it ever producing the result that we want. Years ago, in my reckless youth, I was the principal author of a Bow Group pamphlet entitled "New Hope for the Regions" in which I advocated regional government of the type that the hon. Member for Ceredigion and Pembroke, North has propounded. However, all my experiences since then of the growing expense and difficulty of the various tiers of local government that we have had have completely converted me. I do not believe that any of the regions would benefit from expensive new tiers of government, interposed in the present difficult relationships between national and local government. If regional development agencies are really being advocated by the Liberal party for each and every part of the United Kingdom, that would be self-defeating, especially when it comes to attracting inward investment from overseas, when no doubt the regions would act in competition with each other for overseas visitors.

Mrs. Kellett-Bowman

In the book that my right hon. and learned Friend and I wrote together — [HON. MEMBERS: "Oh."] We were co-authors of it — we advocated beefing up small firms—now a successful policy under this Government.

Mr. Clarke

We authors remember all our accounts. I was referring to an earlier essay— [Laughter.] Neither my hon. Friend nor I advocated regional government in the pamphlet that we both produced on regional policy in Europe shortly before the general election. Surprisingly, there are a few unsold copies of it on the book stalls and I commend it to all hon. Members. We advocated a policy aimed at encouraging small businesses in particular and we rejected the broad-brush policies which have not worked in the past.

I agree with one feature in a booklet put out by Mr. Nicholas Bosanquet on behalf of the alliance and its work search theories. It is called, "Turning the Tide of Decline in the Regions" and was published in March 1987. Indeed, the hon. Member for Ceredigion and Pembroke, North quoted it extensively without attribution, but he was quoting an ally. Mr. Bosanquet comes to the conclusion that regional aid on the old pattern has failed. That is where we should start from, as my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) and I did, when criticising the regional policies of the Labour Government.

Since then new ideas on regional policy and local employment have come from the present Government. It will be a pity if our entire discussion about regional employment turns on the simple issue of the level of regional grants and where the map is drawn, giving various areas assisted area status. We had a touch of it in the hon. Gentleman's speech. [Interruption.] The hon. Gentleman touched on that in his comments about Truro and Camborne. Too often that point is made by north country Labour Members who reduce the whole matter to an argument about broad-brush grants which largely do not work.

I return to the position from which I started in the pamphlet to which I have referred. The policy to rectify local differences in employment opportunities must be based on the need to help people in the regions to make their towns and cities more attractive to investment and jobs of the type that emerge in a modern economy. The Government's policies have concentrated on helping people in the regions to help themselves. We believe that that is best achieved by producing a partnership of effort between the public and private sectors, involving the Government, private industry, private developers and local government, where local government is prepared to participate. However, as we all know, the experience of the Government and the private sector is that in many inner-city areas Left-wing local authorities go more out of their way to drive away investment, work experience and training than to encourage them.

Hon. Members must appreciate that when that partnership gets under way the employment that we shall seek to attract will be different from that which many areas experienced in the past. The growth in employment will not be in the old, traditional industries with large factories producing traditional goods and owned by paternalistic employers. Obviously, we protect them where we can: the multi-fibre arrangement protects the textile industry, which is now becoming successful; and the Government stepped in to protect Rio Tinto-Zinc and its subsidiary in Cornwall to help the tin mines during a period when the market was unstable. We are looking for growth in new start-ups, small businesses that will expand and in service industries, as well as in manufacturing industries. We are also looking to encourage self-employment so that we can support people who work on their own. I am glad to say that that has happened to a considerable extent during the Government's period of office.

It is interesting to visit a town such as Sunderland. Most people there are aware that the flagship of redevelopment is to be found in Washington new town where Nissan has opened a large new car plant which it proposes to expand. What is often not appreciated by the local people is that, although the Nissan investment is welcome and has created many new jobs, twice as many new jobs have been created locally by the Government's enterprise allowance scheme, subsidising previously unemployed people who go into business on their own account. Self-employment has been expanding everywhere, but it has been expanding most rapidly in Yorkshire and Humberside which has experienced the greatest percentage increase in self-employment since 1979. Self-employment has increased there by no less than 78 per cent. That is only a whisker ahead of the south-west where the number of self-employed has increased hugely—by 77 per cent. between 1979 and now. Obviously, we must build on that and speed it up.

Some areas are still not sufficiently attractive to the new types of investment and employment that we need to draw in. Our answer, working on the local partnership principle that I described, is to continue to make them more attractive so that new investment and new jobs can be spread more evenly. Obviously, it is difficult. At present some areas are naturally more attractive than others. To use a rather fanciful illustration, at present it is easier to attract new investment and jobs to Bracknell than to Gateshead. The answer to that is not simply to complain about it; it is not unrealistic to see what can be done in Gateshead, not to make it identical to Bracknell—that is many years ahead—but to make it acquire more of the attractions that are drawing enterprise, investment arid jobs to Bracknell. It involves changing Gateshead so that it will receive more investment.

Mr. Geraint Howells

If the Minister believes that the Government policy for England at present is the best, has he any plans to abolish the Welsh and Scottish Development Agencies?

Mr. Clarke

I did not say that. I was pointing out that the creation of English development agencies to cover practically the whole of England, which the hon. Gentleman proposed, would greatly diminish the value of the Welsh and Scottish Development Agencies to Wales and Scotland. It would produce a confusion of agencies, using public funds to compete with each other for investment and that would cause confusion to the people whom we are trying to attract from abroad.

Mr. Gordon Brown

If the problem is the absence of sufficient spending on the infrastructure and inadequate levels of investment in the north and other areas, what sense does it make to cut rate support grant and regional development grant? If the Minister will not support a development agency for the whole of England, which is certainly not Labour party policy, but wants to give local people the chance to help themselves, why has he resisted the demands from the north for a northern development agency?

Mr. Clarke

I did not say that the problem was a problem of infrastructure generally. The road map of England is bluest around Merseyside and the north-east where motorways abound, but in themselves they do not bring new investment to those areas. The idea that more public funds through rate support grant should support the high spending activities of Left-wing councils will not lead to the regeneration of their areas. We are tackling the physical problems that exist in many areas directly and more selectively, for example by creating urban development corporations. At present we have two—one in the docklands of London, which I recommend any hon. Member to visit as it is a spectacular example of the transformation of a derelict area into a thriving, prosperous centre of activity—

Mr. Gordon Brown

Will the Minister give way?

Mr. Clarke

No, I will not give way. The Liberal spokesman took 25 minutes moving his motion, which he was entitled to do. If both the hon. Gentleman and I take half an hour each, we shall move to the replies without any Back-Bench speeches.

I was commending the London Docklands Development Corporation. The South Liverpool Urban Development Corporation is equally successful. My right hon. Friend the Secretary of State for the Environment has announced urban development corporations for Trafford Park, Teesside, the Black Country and Tyne and Wear. Their purpose is to speed up decision making, to attract private investment into derelict areas which with grant can be made usable, and to target infrastructure spending as is required. It is not true that broad-brush infrastructure spending everywhere necessarily attracts new jobs.

My right hon. Friend the Secretary of State for the Environment also has the system of urban development grant, developed by this Government. A 75 per cent. grant goes to those local authorities that will work with private developers to secure investment in inner-city sites. Since 1983, 228 projects have been approved, at a cost of £106 million to the taxpayer. That money has levered £440 million of private investment in factories, shops, offices and houses in inner-city areas. My right hon. Friend is now preparing his proposals for urban regeneration grant to take that further.

In those and other ways, we are tackling the physical problems of deprived areas. However, in many locations, the main problem is raising the skills, employability and motivation of people who live either in towns that are deprived because of declining traditional industry or in the inner-city areas of a thriving city, where the prosperity does not reflect on unfavoured districts.

The main agent for Government policy is the Manpower Services Commission, which, as every hon. Member knows, is engaged on the huge task of delivering the Government's jobs and training programmes, in which we continue to innovate in a whole number of exciting ways. This is not the debate for me to continue to describe to the House what we are achieving under the restart programme, calling for advice about people who have been unemployed for more than six months, and steering them towards a job. Other initiatives include the many schemes in the Action for Jobs package, and the innovation of the two-year YTS, which guarantees two years good quality training to every 16 and 17-year-old who is unemployed after Easter this year. There is the new job training scheme which we are introducing and which I announced to this House recently.

However, it is relevant to point out that we are concentrating the whole package of employment and training programmes heavily on those regions where they are needed most. We are putting a strong regional emphasis into the work of the MSC. To illustrate that, I shall quote the figures spent on the MSC's programmes in the financial year 1986–87. In the south-east of England, the MSC spent £59 per head of the total work force; in the south-west, £121 per head—more than twice the southeastern figure—in Scotland, as much as £143 per head; in Wales £161 per head; and in the northern region £179 per head on our employment and training measures. That last figure is three times as much per head of the labour force compared to what is spent in the south-east. People do not appreciate how much the extremely ambitious programme of employment and training measures that we have announced is targeted on the more disadvantaged regions.

All over the country, not just in the regions, we are giving high priority to the inner-city areas. The centre of Bristol, which is a prosperous city, the centre of London, which is a wealthy city. the centre of Birmingham, and other inner-city areas pose a whole range of social, employment and other problems. Inner-city areas have been made priority areas for our employment and training programme places. In the inner-city partnership areas alone, my Department and the MSC expect to spend £175 million in 1986–87 on employment and training measures.

In the same inner-city partnership areas, the enterprise allowance scheme, which supports self-employment, is expected to attract 4,500 people in 1986–87. We are still working at improving the delivery of training programmes for inner-city residents. We have discussed this problem with the MSC from time to time, and the chairman agrees with me that we should try to target the MSC's efforts increasingly on inner-city unemployed people.

In particular, we try to target more of the best employer-based YTS schemes on inner-city youngsters and ethnic minority youngsters. We are also seeking to tackle the higher rates of refusal to join YTS and early leaving, which are sometimes experienced in inner-city areas. We must tackle that now that we can guarantee a two-year YTS for all young people.

We are planning to have a drive to generate good quality work placements that will improve the motivation of youngsters in inner-city areas over the next year. We shall probably open more drop-in centres for YTS entrants, and we shall make sure that the best quality of the Government's employment training schemes are delivered in the inner-city areas as well as elsewhere.

We are concentrating all the efforts of the Government in an innovative way, particularly in the eight task force areas designated under the inner-city initiative. These areas are pockets of deprivation, and we concentrate all the efforts of Government through the urban aid programme, the MSC programmes and the work of the Departments of Trade and Industry and of Education and Science and of the Home Office to see what can be done by bringing them together more closely and targeting them on the gravest problems in those eight areas. On top of that, we are spending a small sum of money, £8 million, to forward particular projects in line with the Government's overall policies. We are beginning to tackle, in a much more forceful way than has been attempted for many years, the problem of the imbalance of opportunities within our cities and regions.

We are also tackling the problems of those places where large numbers of people have been displaced from the older traditional industries as a result of change. It is obviously necessary to target effort and money on those. Our policy is not to pretend that the coal mines will reopen, that the steel industry will employ thousands more people or shipbuilding will again he a massive employer. We seek to provide training for the redundant and support the new business that is being attracted to areas most affected.

For example, we have backed British Steel Industry, which had £50 million until it became self-supporting. In the past six months alone, it has assisted in 4,600 job opportunites. British Shipbuilders Enterprise Ltd. was set up with £6.3 million-worth of public moneys, and I am told that, as of 23 January 1982, of the 2,412 people made redundant when the company was set up, some 710 people have found new jobs, 522 have applied for training courses—254 of those are training—16 have opened new businesses, 165 more applications have been received by the company for assistance to start up new businesses, and 240 people have opted to retire.

British Coal Enterprise Ltd. had had £40 million of public money by July 1986. Some £20–8 million had been committed by the end of December 1986, and that stimulated £106 million of investment from other sources. The job opportunities involved so far amount to 13,077.

Recently, we made a contribution to the Northern Development Company, set up to stimulate inward investment in the north. A total of more than £1 million has been put into that very encouraging example of cooperation between private business and local government, including contributions from the City Action team.

I hope that I have shown that the Government are producing more new ideas on the problem that the debate addresses than we have seen for many years. It has been successful. Over the country as a whole, unemployment is down by over 100,000 in the past six months, which is the biggest six-monthly fall since 1973. Over the past 12 months, unemployment has fallen fastest in the northern region of England, in the north-west, in the west midlands and in Wales. The growth in total employment since March 1983 has taken place in every region of England.

The Government accept the reality of the problem, and are putting forward the most practical and realistic ways to tackle it. I contrast that with the attempts of all the Opposition parties to produce a credible policy of their own. Every time that they return to employment policies, all that happens is another attempt to produce new Mickey Mouse figures to which a veneer of policy is attached to try to make them appear credible.

8.29 pm
Mr. Gordon Brown (Dunfermline, East)

The purpose of the debate is not merely to illustrate the problems of the regions and the inner cities, but to demonstrate how a solution to the problems of the regions and the inner cities is in the interests of the shires, the suburbs and the southeast. Further, it is to make the case for regional policy, not as a response to the social problems of the north, but as a response to the economic problems of the whole country. It makes no sense to any hon. Member representing any constituency that we have, in parts of the south, the shires and the suburbs, congestion, overheating, escalating house prices, skill shortages and pressures on the green belt, yet in the north we have wasted infrastructure, unused resources, record unemployment, urban deprivation, forced migration and depopulation in many areas.

It cannot be right that unemployment affects 1,500 men and women in some of the constituencies of the shires and suburbs—that is bad enough—but 15,000 in some areas in the industrial regions. It cannot be right that unemployment is 3 to 4 per cent. in some of the constituencies that Conservative Members represent, but over 30 per cent. in some of the constituencies that Opposition Members represent. It cannot be right that house prices are now twice as high in the south-east as they are in many parts of the north, that the population of the northern region will fall below 3 million by the year 2000, Scotland's population will fall below 5 million soon after that, and yet there are enormous problems with population congestion in the south.

Therefore, we advocate policies for investment in training—not the old-style regional policies to which the Minister was referring. They are not just policies for the provision of grants, sites, investment in education and training in the inner cities and regions; they are policies for locating research and development in some of the hardest-hit areas of the country and for investment in infrastructure—not just the physical infrastructure, but the technological infrastructure of the regions. We are saying that our policies for the north will not be at the expense of the south. Our policy is for balanced industrial development in the interests of the north and south.

Mr. Favell

rose—

Mr. Michael Fallon (Darlington)

rose—

Mr. Brown

I shall give way in a moment.

We heard from the Liberal spokesman for Wales, the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), about the Liberal party's commitment to Scotland, Wales, the north, the south-west, the rural areas and just about every other part of the country. The Liberal party regrets the drift from north to south.

The commitment of the SDP to the north might be taken a bit more seriously if we had not seen so many of its leading figures desert the north for the south. The president of the SDP, Mrs. Shirley Williams, has deserted Crosby in the north to stand for Cambridge in the south. The party's vice president, Mr. Bill Rodgers, who was a stalwart at one time in Stockton-on-Tees, is now after a seat in Milton Keynes, which he hopes to win.

Mr. Malcolm Bruce (Gordon)

What about Willie Hamilton?

Mr. Brown

My hon. Friend the Member for Fife, Central (Mr. Hamilton) is putting up a valiant fight and will be given all our support, but I would have advised him to stay next door to me in Fife, Central.

One of the SDP's founding members, Mr. Mike Thomas, is making the trip from Newcastle, East down to Exeter. The man who has travelled furthest of all, Mr. John Horam, the former hon. Member for Gateshead, has moved straight from the alliance to the Conservative party and, I understand, is looking for a safe seat in the south of England with the Conservative party.

I used to think that the initials "SDP" stood for "Still Divided on Polaris", and perhaps that is true, but I am reliably informed that it now means the "Southwardly-Drifting Party", and that is how it looks to many of us in the north.

We welcome the alliance's new-found enthusiasm for addressing the problems of the region. Although we are delighted to have it as a convert to our cause, I think that I should direct the attention of the House—[Interruption.] I think that the hon. Member for Gordon (Mr. Bruce) may be silent in a minute. I think that I should draw the attention of the House to two policy statements that have been issued by the SDP and Liberal party over the last few months. The first was issued in July 1986, entitled "Partnership for Progress," and the second document was issued in January 1987, which was also called "Partnership for Progress" but with a new title that was bought from the advertising men, "The Time Has Come." The first policy document mentioned policies for the 1990s. It said: Much of what the alliance wants to achieve in the field of social reform and public provision depends critically on our success in turning the course of the British economy. We are facing two formidable challenges. The first is how to put the unemployed back to work. The second is how to improve the long-term performance of the economy. That was in July 1986.

In the meantime, we have had the publication of the Government's submission to the European regional development fund. We have had some controversy over the north-south divide. We have had the publication of the census of employment figures, and what do we find in the document "Partnership for Progress", which was published in January and is almost exactly the same document as the previous one, but with one major change? The first sentence about policies for the 1990s is the same, but instead of "facing two formidable challenges," it is now three formidable challenges. The alliance policy document says: The third challenge is to reverse the economic polarisation of our nation. Whilst I welcome the conversion of the alliance to a commitment to do something about the problems of the regions, it is tragic that such a commitment was underplayed and barely mentioned in the policy document of last July. It is typical of a party that reacts to every twitch of the electoral swingometer.

Mr. Favell

A little earlier the hon. Gentleman was bemoaning the difference in house prices between the north and south. He said that in the south-east house prices were twice as much as in the north. They are probably three or four times higher than in my constituency. However, should not the hon. Gentleman be encouraging trade unions to take advantage of the lower house prices and cost of living in the north to negotiate on a local basis so that wage rates reflect those lower house prices and cost of living and to attract investment in those areas of high unemployment?

Mr. Brown

I do not know whether the Government or the hon. Gentleman want to deal with the consequences of the Government's policy—rising house prices in one area and declining house prices or stable house prices in another—or whether he wants to deal with the causes of the problem, to which I shall come in a minute. The hon. Gentleman has a common cause with the alliance on this matter.

The Paymaster General made a fairly controversial speech a few days ago, which he followed on Friday with an explanation or elaboration of what he said a few days before.

The hon. Member for Ceredigion and Pembroke, North was reticent when I asked him about the alliance's policy on regional wage differentials. In this excellently printed alliance policy document—not excellent in what it says—we are told: We support an independent pay and review board for all the public sector which would, amongst other things, take into account conditions in local labour markets. I wonder whether that means that the alliance is committed to a policy of regional wage differentials in the public sector, or whether it wants it in the public and private sector. I am reminded that the Liberal conference, in September 1985, came to exactly the same conclusion, except that it proposed an arbitrator when dealing with regional pay differentials. The arbitrators, it says, would be free to approve higher settlements in the south of England than Scotland provided they were not inflationary and were likely to generate jobs. That alliance policy suggests that there should be regional wage differentials imposed under an incomes strategy. We know that regional wage differentials exist at the moment, and I shall come to that when I talk about the Minister's policy, but the alliance is saying that wage rates should be set under its centralised incomes strategy with a view to achieving differentials and settlements between different parts of the country. The alliance will have to tell the voters in Scotland, the north, Wales and other parts of the country precisely what the difference will be in the wages that people can expect to earn under this decentralised incomes policy.

The Paymaster General has been sent in to bridge the regional divide. Unfortunately, his only solution seems to widen the regional divide by a policy of differential wage settlements which would certainly discriminate against the north. We had from the right hon. and learned Gentleman the familiar litany of statistics about employment, unemployment, grants and public spending, but he invariably concentrates on the silver lining and ignores the dark clouds on our economic horizon.

For example, the Paymaster General told us that employment was rising everywhere, and he gave us the impression that things were booming in Yorkshire and Humberside because of an increase in the number of self-employed people. He did not tell us that the only verifiable estimates of the number of self-employed people come from the 1981 census and that he will not be able to give us another absolutely accurate figure before the 1991 census. His figures are based on a sample of less than 1 per cent. of the labour force survey. If the self-employed people to whom the Minister referred actually exist, they are so enterprising that they appear to be unknown either to the Inland Revenue or the Department of Health and Social Security which should be collecting national insurance from them. We must examine carefully and question the figures produced by the Minister.

If the Paymaster General looked at the more reliable figures for the increase in the number of employees since 1983, and even if I discounted, for the purpose of the argument, the number of people in second jobs, and the fact that there is an element of statistical projection in the figures, which allows the Minister to forecast the number of employees six and 12 months from now, and if we ignored the fact that many new jobs have been created by splitting existing jobs into two, the right hon. and learned Gentleman would find that 80 per cent. of the additional employees since the last general election are in the southeast, the south-west and East Anglia. There is a clear regional divide.

Mr. Kenneth Clarke

If we read carefully through all the qualifying phrases upon qualifying phrases that the hon. Gentleman used before coming to his amazing conclusion, we find that he left out the self-employed and is apparently denying any assertions of an increase in the number of self-employed people. That enables him to come to his ridiculous conclusion.

Does the hon. Gentleman accept that we are expecting about 300,000 people to take part in the enterprise allowance scheme and to receive advice and support in their new ventures as they go into business on their own? Does he think that they do not count? Does he join some of his hon. Friends in dismissing those people as being on a skivvy scheme? Does he accept that 300,000 people are being helped by the Government, in addition to the reliable estimates to which I referred earlier?

Mr. Brown

No one denies the existence of the enterprise allowance scheme, but I suggest that the Minister's overall figures for the number of self-employed people are based on a form of statistical projection and on a sample from the labour force survey that is so small that nobody could take it seriously.

If the Minister looks at the figures for the number of employees—the figures in the Employment Gazette—he will find that more than 80 per cent. of the additional number since June 1983 come from the three regions of the south, and that in Yorkshire and Humberside, in the north-west and in Scotland and Wales the numbers of employees have fallen since June 1983.

Mr. Kenneth Clarke

If the hon. Gentleman rejects the evidence drawn by professional, independent statisticians from the labour force survey, what evidence does he have for his assertion that there has been no increase in the number of self-employed people over the past few years? Is there any evidence to support that extraordinary proposition?

Mr. Brown

I am questioning the Minister's figures. He and Lord Young spend a great deal of time on television telling us that more than 1 million jobs have been created since June 1983. They do not give us the qualifications that ought to be made about, for example, second jobs. Many people are counted twice in the statistics, and the Minister never mentions that fact. If we were given all the qualifications, the country could see clearly whether the Government's policies are working.

If the Minister holds to his view that there is a recovery, will he look at manufacturing output and investment figures, because the fate of our industrial regions and of many of our inner cities depends on those figures?

Mr. Don Dixon (Jarrow)

Is my hon. Friend aware that between 1979, when the Government came to power, and 1984 investment in manufacturing industry in the northern region fell by 42 per cent.?

Mr. Brown

I am grateful to my hon. Friend for that intervention. I hope that the Minister will explain why no other manufacturing country has seen such a huge fall in manufacturing investment since 1979. Will he explain why in the five years after 1979 for which figures are available manufacturing investment fell by about 17 per cent. in Great Britain as a whole, but by 30 to 40 per cent. in Scotland, the north, Wales and the north-west?

If the Minister looks at the real economy instead of at the economy that he has invented for us, he will find that manufacturing output has risen in every other industrial country in Europe and in every other industrial country of a comparable size to Britain, but manufacturing output here is still below the 1979 level. Manufacturing output is down by 4 or 5 per cent. in Britain as a whole, but by 10 or 12 per cent. in some of our most important industrial regions.

Mr. Tony Marlow (Northampton, North)

On a point of order, Mr. Deputy Speaker. The debate has been running for one hour and eight minutes and we have another one hour and 14 minutes, of which I understand 25 minutes will be taken for the wind-up. Not a single Back Bencher has yet spoken. Could you use your good offices to ensure that there is adequate Back-Bench time in the debate?

Mr. Deputy Speaker (Sir Paul Dean)

I am afraid that I have no power to do that, but I appeal to the House, arid particularly to Front-Bench speakers, to remember that this is a very short debate and many hon. Members are hoping to take part.

Mr. Brown

You will find, Mr. Deputy Speaker, that while the Government and the alliance parties will seek to make two Front-Bench speeches each, the official Opposition will make only one Front Bench speech.

I want to examine the problem of infrastructure and investment in the regions and inner cities. If the Minister is right when he says that there is a recovery, why is investment so low? Why is output still below the 1979 level?

Mr. Cash

Does the hon. Gentleman accept that productivity has grown enormously recently and has grown 6 per cent. more in this country than in the other European countries to which he referred? It will continue to grow at about 6 per cent. over the next year.

Mr. Brown

I think that the hon. Gentleman misunderstands the problem that I have been outlining. When manufacturing output is declining, as it has declined throughout the past seven years, increases in productivity mean only that less is being produced by a lot fewer people. They do not mean that manufacturing output is rising or that the economy is doing a great deal better and, as we have seen from the figures, they certainly do not mean that manufacturing investment is encouraged to rise.

The Minister talked about a number of infrastructure problems in various parts of the country, but, when asked about them, he gave the impression that there were excellent roads in the north-west—as if there were no other problems to be faced. Has he looked at the Government's submission to the European regional development fund and at what was said in the name of Ministers? Does he realise that in that submission the Government said about Greater Manchester that roads, sewers, the water supply, railways and building stock were in a state of decay, resulting in a serious situation in which some aspects of the infrastructure are in a state of collapse."? The submission also mentions frequent sewer collapses and dangers from pollution. The volume for Greater Merseyside deals with infrastructure problems and says that the scale of dereliction will increase and serve to reduce yet further the potential for regeneration. With regard to the west midlands, it says that the cumulative effect of under investment in apprenticeships and in modern plant machinery will affect the ability of the region to take advantage of any increase in demand. That is the position in the regions. I could give the Minister quotations from the reports referring to the inner cities.

The hon. Member for Ceredigion and Pembroke, North mentioned the problems of the south-west. He should know that in the submission to the European regional development fund it was stated that 50,000 jobs must be created in the south-west. It also said: Vital improvements in water supply, sewerage and sewage treatment infrastructure in Devon and Cornwall are essential if new industries are to be encouraged and tourist facilities improved. The report also mentioned the lack of serviced industrial land.

The reports were written not by me, the Labour party or the parties of the alliance. If the reports are correct—we believe that they are—what are the Government doing about the problems of under-investment and infrastructure? They must be dealt with before our inner cities and industrial regions are regenerated.

If the Minister will not listen to me, will he at least listen to some of his colleagues who have made similar points and who have urged the right hon. and learned Gentleman to act? He should listen to his right hon. Friend the Member for Henley (Mr. Heseltine) whose book was published today. He clearly states: We must not allow present inaction to continue. A look around our major cities and town centres should be enough to convince us that this Government can no longer stand by on the other side. The right hon. Gentleman describes the danger of a physical and social collapse in Britain. He continues: There is no case to justify underprivileged parts of England sliding into further despair apparently supposed to fight their corner unarmed against the forces of industrial decline. If the Minister refuses to listen to the right hon. Member for Henley, perhaps he will listen to the right hon. Gentleman's arch rival the right hon. and learned Member for Richmond, Yorks (Mr. Brittan). He has made a plea similar to that made by the right hon. Member for Henley: The gulf between the different parts of the country is unjust and divisive. I believe that we can and that the Government should do more to help. The right hon. and learned Gentleman calls for a comprehensive review of regional policy and for the creation of development agencies in important areas of the country.

Perhaps the Minister will be more influenced by the Tory Reform Group. I notice that the Minister remains a patron of the group. Despite what the Minister has said this evening, in its statement on the Budget, published only a few days ago, the group states: The job census recently published by the Department of Employment demonstrates afresh how wide is the difference between the prosperous areas of the country and the rest—a deepening north-south divide with unpredictable electoral consequences. Does the Minister agree with that? If so, will he support the proposal that it put to him and to members of the Cabinet that, if they have £5 billion to spend—we know that they have— that money should be invested in housing, infrastructure, the urban programme, proper training and a decent regional policy?

We have enormous and rising unemployment in Scotland and huge unemployment problems in the rest of the country and in Wales. What sense does it make for the Government to halve regional aid and regional development grants since 1979? Indeed, they propose to halve them again.

In the past few months the Government have given us an exercise in blame shifting. The Chancellor of the Duchy of Lancaster has suggested that the problems of the north are self-inflicted. The Parliamentary Under-Secretary of State for Health and Social Security has said that the problems in the north are caused by ignorance, not poverty. That claim was made just at the time when a submission had been made to Europe stating that the Health Service in the north was grossly underfunded and that that was causing many of the health problems in the region. The Secretary of State for the Environment has suggested that the problems are due to Labour councils.

Mr. Marlow

rose—

Mr. Brown

The hon. Gentleman will get his chance, and I think that he should listen to what has been said by some of his Ministers.

Mr. Marlow

The hon. Gentleman has had 26 minutes.

Mr. Brown

The Minister spoke for as long as that. If the hon. Gentleman will bear with me, I will finish my remarks in just a few moments.

Over the past seven years the Government's solution to the north-south divide has been to allow it to widen and then to deny that it exists. When figures have been produced from a whole series of reports, the Government's response has been to blame the inhabitants. That has been illustrated clearly by the Paymaster General's attempt to blame the workers in the north for the problems of industry in that region. He has suggested that, in some way, wages must be reduced. Which employers and which companies have told him that if wages were reduced in the north they would move there?

Previous Tory Governments have at least been concerned about the regional problem. Some Conservative Prime Ministers have sought to do something about it. Until this Government, no Government have sought to deny the existence of the regional problem and to respond to that problem by cutting available aid and trying to blame the inhabitants.

The country knows that there can be no true prosperity if 4 million people are paid to produce absolutely nothing in the regions and inner cities of this country. The country is also aware that there can be no proper recovery for the entire country unless there is a recovery in traditional industrial regions and the inner cities. It is upon that issue that the Labour party will win the next election.

8.55 pm
Mr. Churchill (Davyhulme)

I must protest most vigorously at the grotesque abuse practised by the Front Benches in this short debate. They have hogged no less than 1 hour 40 minutes and have left just 40 minutes for all the Back Benchers to participate.

The hon. Member for Dunfermline, East (Mr. Brown) has been fulsome in discussing the alliance and Government policies for regional development hut, understandably, was most reticent about letting us have sight of Socialist policies. Much has been made about the north-south divide. It is a reality. It must be addressed, hut it must not be exaggerated. Speaking from experience, I must say that I have never known any Government to tackle the problems of the north-west of England with more vigour or more success than the present Government. It is easy to dwell on difficulties but I prefer to address the positive side, and there are many.

In relation to the north-west, present trends are moving firmly in the right direction. By September last year 32,000 more jobs- over and above everything that had been lost—had been created since June 1983. As my right hon. and learned Friend the Paymaster General has said, unemployment is falling faster in the north than in the south.

I have had the privilege of representing a large part of Trafford Park, which remains the greatest industrial complex in the United Kingdom, for the past 17 years. Throughout those 17 years we have never had a Government who have done so much or acted so effectively to regenerate Trafford Park and to assure its future as the one who are now in office. We do not need lectures from Socialists on regional policy. Their policies were an unmitigated disaster for the area that I have the honour to represent and for all the established industrial areas of the north. Their policies encouraged industry to move to greenfield sites and to abandon the traditional industrial areas. This represented a flagrant waste of resources and had the effect of blighting established industrial areas. It was the epitome of a counterproductive regional policy.

Under the first Wilson Government, more than 15,000 jobs were lost in Trafford Park, including 8,000 at GEC alone. Under the second Wilson Government, that trend continued. A further 5,000 jobs were lost just across the Manchester ship canal at the Irlam steelworks when that plant closed, but the then Labour Government, supported and kept in office by the Liberal party, pursued a policy of unremitting hostility towards Trafford Park and Manchester. This was carried out with the ruthless gerrymandering of industrial development certificates by Ministers.

I shall cite only one instance. Kelloggg, in my constituency, wanted to expand its production facilities in Trafford Park. It was told by the Socialist Government that it could not do so in Trafford Park, even though there were vast areas that were devastated in which jobs had been lost on a colossal scale. Kellog asked "Where should we go?" The Government replied, "Why don't you go to a place called Huyton?" I wonder whose constituency that was.

The Socialist Government, and the Liberals who propped them up in office, have done nowt for Trafford Park or the people of Manchester over any of the years that I have been in this place. On the other hand, the present Government have granted the area assisted area status. Secondly, they have established an enterprise zone, which has attracted many hundreds of jobs into the area. Thirdly, they have designated Trafford Park, the Salford docks and Irlam to be an urban development corporation, an area of about 3,000 acres. It is estimated that the£160 million that the Government are earmarking for the regeneration of the area could lead to the creation of 15,000 new jobs. I should like to thank my right hon. and hon. Friends and the Government as a whole for what they are doing to regenerate a crucial part of Britain's industrial heartland.

It is not only Trafford Park that has benefited. Whereas Socialists operated a restrictive policy towards Manchester International airport, the Conservative Government have been liberal. They have encouraged the expansion of the airport, which is now the fastest-growing major airport anywhere in Western Europe. Last year it handled 7.6 million passengers, an increase over the previous year of no less than 24 per cent. Manchester is now served by scheduled airlines to twice as many destinations as two years ago, since when El Al now flies to Tel-Aviv, Singapore Airlines to the far east, American Airlines to Chicago, Air Canada to Toronto and British Airways to Hong Kong and a host of European destinations. No fewer than 20 new scheduled destinations were added last year alone.

There is a need to sustain the momentum of expansion and we need Government assistance to do so. My right hon. and learned Friend the Paymaster General can relax because what I am about to ask for does not require any additional money. Under the Bermuda II agreement, which was negotiated by the Lib-Lab Government in 1977, Manchester was excluded as a United Kingdom gateway airport while Heathrow, Gatwick and Prestwick were so designated. Thus a United States airline wishing to route through Manchester is discouraged by the United States authorities from even applying for the route because they have been led to believe that the British Department of Transport will demand reciprocity of concession from the United States. I understand that two major airlines—Pan American and North-west Orient—have expressed firm intent to come to Manchester, but unless the Government take a positive arid enlightened attitude, as they have in previous months, towards the expansion of Manchester International airport in line with the Government's 1985 airports policy White Paper, the discussions will come to nothing and an important opportunity will be lost. I recognise that it might not be the responsibility of my right hon. and learned Friend, but I hope that he will convey the message to my right hon. Friend the Secretary of State for Transport.

The success of Manchester International airport is a key factor in the success of the north-west generally. The development areas of Barrow, Runcorn, Warrington and Trafford Park—all points of expansion in the northwest—make great play in their publicity material in attracting overseas developers by drawing attention to the excellent air services that are provided by the airport. I have no doubt that those services represent a key factor in the situation whereby at present no fewer than seven major new hotels are being built or are in the pipeline in Manchester.

British Aerospace at Woodford only last week secured important new orders for the 146 airliner, safeguarding 3,000 jobs at Woodford, a further 3,000 at Chadderton and creating 200 new jobs at the Woodford facility.

All is not gloom and doom in the north-west and those who suggest that it is do no service to the region they represent. Today in the north-west we are seeing tangible signs of progress towards a brighter future.

9.5 pm

Mr. Richard Wainwright (Colne Valley)

To assess the full damage that the Government have done and continue to do to our country it is necessary for the House to consider each of the two nations that the Government have deliberately created and that are persisting. The first of the two nations is suffering from desperate congestion, appalling pressure on its public services, vast waiting lists for urgent hospital treatment, bad transport services due to the congestion, and all the other symptoms of overheating. The other nation is suffering, as the House knows so well, from unemployment, which is not falling by anything like the extent the Government claim and which last month increased. It is also suffering from deprivation, low earnings and all the symptoms of a decadent economy.

The result of those two nations is to present those who are trying to preside over the economy of the country with an appalling problem, which is simply a recurrence of the problem that Labour Governments equally failed to face, namely, measures that would revive and expand industry in the deprived areas seriously overheat parts of the southeast of England and those areas where there is virtually full employment.

We have heard nothing from the Government tonight, in spite of the invitation we gave them in our motion, to suggest how they are to deal with the intractable problem of two separate nations drifting further and further apart. The problem is not tackled at all by the Paymaster General, the number two Minister at the Department of Employment, coming to the House to flagellate himself for his juvenile indiscretions and to talk about the errors of previous Governments in their absurd broad-brush treatment, as if the alliance had been in government recently. Some of us have been condemning broad-brush treatment of the regions since first coming to the House. The reason why we insist that the regions and the local areas must have more say in measures to regenerate themselves is the poor record under both Governments of the twin parties of centralist power.

In Labour's case one shocking waste of resources was the appalling white elephant, the Humber bridge, which goes from nowhere to nowhere. It is our contention that if the project had been debated in a Yorkshire and Humberside assembly, the sensible people of that region would have said, "No Humber bridge at this stage. Let us have instead a dozen new hospitals or 50 new schools." The Tories were the begetters of another of northern England's greatest white elephants, the Kielder dam. It was constructed at enormous public expense and the devastation of beautiful countryside, and what is it worth now? The water is not needed for any part of this country and the latest ploy to try to make some use of that Tory white elephant is to start selling water to Hamburg. That is a manifest symbol of an economy which is mismanaged and which is, in some respects, out of control.

The Paymaster General performed as an identikit Minister. No one would have known which of the twin parties he belongs to. He stood there trying to justify the whole thing by explaining at great length how much money the Government are throwing at the problems of deprivation, as if the mere spending of money is any advance in dealing with the problems. He had the cheek to do that although the Audit Commission has just condemned the profligate way in which the Manpower Services Commission has been spending some of the taxpayers' money, in the great propaganda exercise of merely throwing millions of pounds at problems without solving them.

The hon. Member for Dunfermline, East (Mr. Brown) was careful to say virtually nothing about the Labour party's approach to these problems. The alliance is bitterly disappointed at Labour's approach to the problem of mass unemployment, especially long-term unemployment, which is manifest. An all-party Select Committee, in two reports, unanimously said that to deal with long-term unemployment it is essential that the measures should be specifically targeted on the long-term unemployed. The Labour party shrinks from doing that. We can only speculate about the reasons for that—the pressures on it from outside the House. But it is a fact that when a draft Bill was carefully prepared to give effect to the recommendation of the Select Committee on Employment that measures should be specifically targeted on the longterm unemployed to give each a guarantee of 12 months' work, the Labour Front Bench attitude was distinctly cool and negative.

The alliance wholly supports, and has done in the House over recent months, the suggestion by the all-party Select Committee on Employment that every person who has been unemployed continuously for a long time should be offered a guarantee of a 12-month job or a serious training place. We regard with contempt the fact that the Paymaster General and his master the Secretary of State in the other place provide only one in five of the long-term unemployed with a place on all their highly expensive special schemes. How can that be justified when we have this appalling army of so many hundreds of thousands of people who have been continuously out of work, losing morale, skill, health and often hope?

Mr. Kenneth Clarke

The hon. Gentleman keeps pouring scorn on the expense of our programme. How can he equate that with the proposals that will be presented tomorrow by the alliance, that We will make sure that public spending creates jobs through exports and investment"? That is not the method that the hon. Gentleman described. The alliance proposes that In the first year gross public spending would be increased by £4.9 billion". What is that but throwing money at the problem?

Mr. Wainwright

Not at all. We are careful to point out that the net cost of our proposals would be relatively small because we would put people back into genuine jobs, where they would earn full wages. They would pay income tax and more VAT because their households would be able to purchase more, so they would begin to make a contribution to the economy.

I should like the Paymaster General to face up to the example of Sweden, where long-term unemployment virtually ceases to exist because anybody who is continuously out of work for more than 300 days is immediately offered either a job or a serious place on a long-term training scheme. I cannot for the life of me discover why the Government neglect to learn from countries that have found a better solution to the problems than they have.

One of the consequences of the two-nation approach is that there are neglected opportunities in the regions where unemployment is so high. As a contrast, let us consider people waiting for urgent hospital treatment—I stress urgent treatment; not elective surgery, but a condition in which the GP has said that the patient must have treatment as a matter of urgency. The congestion that the Government have created in the south-east is such that health authorities such as West Surrey and North-East Hampshire, Riverside in the North West Thames area, and West Lambeth all have a very high percentage of people needing urgent treatment who have been kept waiting more than one month. Indeed, nearly 90 per cent of those waiting for urgent treatment in those areas have been waiting for more than one month. However, in the areas of neglected opportunities, the areas in which the Government do so very little, beds are standing empty and there are easy opportunities for receiving immediate treatment. Early treatment for an urgent condition can be found in such places as Scarborough, the Wirral, Durham and Bolton.

If I may switch from health to transport, the Paymaster General was eloquent about the superb installation of motorways spurring off the M62. That is fine, but there are so few goods vehicles using those motorways. [Interruption.] I can assure the House that I am a frequent user of those motorways and I deplore the fact that they run through a desert at the moment, due to the recession.

It is the alliance plea that the splendid infrastructure which was provided by wiser Governments than this should be put to use, and proper use should be made of what the taxpayer has provided in the past.

I want briefly to consider the effect on earnings. Nowhere is the problem of the two nations more clearly demonstrated than in the stark contrast between the level of earnings in some parts of London, especially the City, and the depressed earnings only a mile or two away in what the London chamber of commerce has aptly described as the "huge crescent of deprivation" in parts of north, east and south London.

We cannot expect to have a united country if such disparities in income persist and grow worse by the week within a very few miles of each other. That is a recipe for dividing the country which would make wiser past leaders of the Conservative party pale with horror at seeing the country which they had worked so hard to unite being deliberately divided by misguided economic policies.

I believe that the alliance motion tonight is more than fully justified. I am sorry that it has been treated so flippantly by the Paymaster General. I hope at least that the Minister of State, Department of Trade and Industry will have some constructive comments to make on our proposals when he replies.

9.17 pm
Mr. Tony Favell (Stockport)

We have heard a great deal about the divided nation, in particular the north-south divide, this evening and for many months. For someone like me, who before 1983 rarely ventured south of Derby, there are clearly divisions. In much of the south there is a bustle that is sadly missing from parts of the north—although not all of the north. There is a gap which must be closed. The question is how.

The Labour party has suggested that that gap can be closed through more Government spending, more town hall spending, more council houses, more strategic planning—in fact, a great deal more interference and a lot more Socialism. The alliance suggests more Government spending, more town hall spending. more infrastructure—the alliance does not like to talk about council houses any more—more regional planning as opposed to strategic planning; in fact a great deal more interference and, it would appear to Conservative Members, a great deal more Socialism as well.

Let us consider what made the north great in the first place; how northern Britain became the industrial workshop of the world. That was not planned from Westminster and we did not rely on Brighton, Bournemouth or Bristol.

Liverpool achieved greatness through the entrepreneurial spirit of the Liverpudlians; Manchester achieved greatness through the business acumen of the Mancunians; and Glasgow achieved it through the industry of Glaswegians. That greatness certainly did not come from municipal socialism—that had not been heard of in those days—and it did not occur through state charity. Throwing money at that problem is not the answer. Surely we have learnt the lesson of Liverpool, where more aid has been spent per head of population than anywhere else in the country. State charity is not the answer.

The north needs a return to the industrial ethos upon which its greatness was founded. First, we must ban all talk of the post-industrial society. Those words should be forgotten. No matter how smart the City of London is or how great the attractions of Britain are to the overseas tourist, we shall always depend on industry to pay for the things that we want and need. The Opposition, who glory in gloom, would have the world believe that the north is industrial dereliction. Far from it. Of course, areas which put all their eggs in one basket, such as shipbuilding, need Government support to set out their stall to attract new enterprise. But many areas have diversified and look forward to the future with confidence.

Stockport is a northern industrial town where unemployment is not just less than the regional average; it is less than the national average. We have many successful industrial firms. We have Ferranti Computers, supplying fine computers and radar systems, which was recently awarded a large contract by the Ministry of Defence. Williams Fairey Engineering does important work for the nuclear power industry and, incidentally, was this year's national brass band champions. United Biscuits is a large employer exporting favourites such as digestive biscuits, Penguins and jaffa cakes not only throughout Europe but the world. Simon is an engineering group employing 16,000 people worldwide whose shareholders recently followed the example of the shareholders of Pilkington and rejected an unwelcome takeover bid from a City consortium. As my hon. Friend the Member for Davyhulme (Mr. Churchill) said earlier, at British Aerospace in Woodford—also in Stockport—200 jobs have been created to produce the HS146. I remind the House that that company delivered the Nimrod AEW airframes on time. The failure of the south-east led to the cancellation of the Nimrod programme.

Let us have no more talk of the northern industrial spirit being extinguished.

Mr. Piers Merchant (Newcastle upon Tyne, Central)

Is my hon. Friend aware of a report, published today, entitled, "It is not really like that", commissioned—perhaps surprisingly—by the BBC and written by a quasi-academic called Fred Robinson, which contrasts with the worthy remarks that my hon. Friend has just made and is a diatribe in despair and an exercise in uncontrollable pessimism without a single constructive suggestion? Does he agree that such a catalogue of gloom is exactly what we do not need if we are to attract investment, industry and jobs to the north and the other deprived regions? Instead, we should sell all the good points of those regions.

Mr. Favell

I can only think that this man is a Socialist. The Socialists of the north have done nothing but whinge and whine for the past 10 years and have repeatedly sold the north short.

We need a few things from the Government, and here is my shopping list. First, we need cheap energy. The Government have done much for coal, but they must not flinch from ensuring that we have our share of nuclear energy. Apart from anything else, British Nuclear Fuels Ltd. employs 16,000 people in the north, and last year the nuclear industry placed contracts worth £300 million with companies in the north-west.

Secondly, people must be made aware that if—God forbid—we had another Labour Government, trade union militancy would reawaken. Thanks to the Prime Minister, much has been done to restore industrial peace, but it could easily be lost. We have all seen what the militant trade unions did to the Liverpool docks, but things are much better now, even in Liverpool. Recently, I visited Ford's Halewood plant in Liverpool with the Stockport chamber of commerce. The plant manager told us that, five years ago, we would have had a hostile reception from the labour force, but now the reverse is the case. People came up to us and told us how much better industrial relations were and how proud they were of their product and of what was being achieved. At Halewood the workers are making a fine product at a keen price with a reputation for reliability. No wonder Ford is now our largest home car producer.

While we are on the subject of trade unions, could my right hon. and learned Friend please sort out the Civil Service unions? They are hogging the secretarial and clerical work in the south. Where is the justice, let alone the sense, in paying more for poorly-qualified typists in London when there are lots of lasses in the north who could do the job twice as well at greatly reduced cost? What has happened to the programme that was introduced in the 1970s to disperse the Civil Service to the regions? By now we should have 16,000 Civil Service jobs relocated to the regions but so far I think that we have no more than 6,000 dispersed.

Will the Government continue to put down the argument that there is something demeaning in training or retraining? To persuade an unskilled youngster to go on the dole rather than to train is irresponsible, if not wicked. Two years on, what chance has that young person at an interview if he is up against another youngster who has completed a two-year YTS?

Finally, and most important of all, will the Government take an axe to the crackpot councils of the Left? We cannot afford to leave it to chance or, for that matter, to the Leader of the Opposition. Nothing does more harm to the north than such councils in those Victorian town halls which were once monuments to hard work and success but are now citadels of Socialism and despair. That axe is the master key to the north-south divide.

Mr. Robert Maclennan (Caithness and Sutherland)

Does the hon. Gentleman accept that the speediest way to resolve the problem to which he has rightly drawn attention is to introduce proportional representation in local government? That would ensure that extremism of the type that he mentions is wiped from the face of the map.

Mr. Favell

I shall give the answer in a moment, but it is certainly not proportional representation. Local government in these northern strongholds is no longer under the control of those who pay for it. That is the problem. Over half the house owners in Manchester receive housing benefit. What interest do they have in controlling town hall spending? Making people pay at least 20 per cent. of their rates will help, but that is not enough. We need people to pay 100 per cent. of their rates, and then we must adjust welfare benefits to reflect the national average of the cost of local government.

There is no point in local government knowing that its voters will be reimbursed for the whole of local government overspending. It would bring the Militant chickens home to roost if they were answerable to the whole of their electorate and not just to a part of it. Some local authorities would not then spend money on equal opportunity officers for lesbians, guides for children on how to deal with the police, and the setting up of nuclear-free zones, as is happening in Manchester. What sort of image of that once proud city does that present to the world? Who will rush to invest in a place that indulges in nonsense like that?

The good, sound sense of the northerners has not deserted them, but they need help to rid themselves of Left-wing extremists who, with their high-rating policy, have done so much to knock the stuffing out of industry, and who paint such a poor picture of what for me is the best place in the world. My constituency is the neighbour of Manchester but is free of Marxist domination. In my constituency young couples can buy a two-bedroom terrace house in a nice district for £17,000 or £18,000, yet their rates are two thirds of the rates charged in neighbouring Manchester, where it takes twice as many people to empty the dustbins.

Mr. Gordon Brown

Before the hon. Gentleman finishes his speech, will he comment on the speech made by the president of Manchester chamber of commerce who said about local government, "We in the business community are making a far better job of partnership with local government than Westminster seems to be able to do"?

Mr. Favell

The president of Manchester chamber of commerce should be ashamed of himself. I agree entirely with the Chancellor of the Duchy of Lancaster and the Prime Minister who gave the president of that chamber a real trouncing following that speech—which was what he deserved.

Every Friday I cannot wait to get back to the north, with its friendly people, its humour, its sport, its open countryside, its great musical tradition and, of course, its beer. With a little help to rid ourselves of the Marxists, the militants and the Trotskyists, once again we will be the envy of the overcrowded, overwrought, over-priced south.

9.30 pm
Mr. Tony Marlow (Northampton, North)

I am pleased to follow my hon. Friend the Member for Stockport (Mr. Favell).

Traditionally, this debate is about the north-south divide. I wonder how many people realise that the gross domestic product for a person in Cheshire is higher than it is for someone in Kent or Hampshire; that unemployment in our northernmost English constituency—Berwick—is lower than the national average; that it is lower in Halifax than it is in Hastings; that in northern industrial Barrow-in-Furness it is lower than in soft and privileged Brighton; and that in Northampton itself, unemployment is lower than it is in Southampton. More sophisticated attenders to this debate say that it is now an east-west divide, but if they look across at the growing prosperity in south Wales they will feel that that is wrong also.

On closer analysis, the problems of poverty, the material, economic and social problems in this country, are worse where Socialism is strongest. The paradox is that, where there are Socialist councils, there are higher levels of local expenditure and that where there are higher levels of local expenditure there are higher levels of unemployment and higher levels of crime.

There is a simple connection between Socialism and deprivation. Where Socialism is rampant, business confidence is low. I understand that the Leader of the Opposition is trying to do something about the loony Left. Why does he not do something about it where his own home is and there the council intends to raise his rates by £21 a week? In those three London boroughs that changed hands at the last local elections, business ratepayers face an increase in business rates of about 60 per cent. How are they supposed to provide jobs in those circumstances? Behind this motion are implications that we should have a regional policy, more regional expenditure. The implications are that the problems are in the distant provinces—but that is not the case at all. We need analysis before we can come to a solution.

The major economic problems are in London, in our capital city. Six of the 14 constituencies with the highest levels of unemployment arc in London-Bethnal Green, Hackney, South and North, Peckham, Bermondsey and Vauxhall. The average in those constituencies is that a third of the men are unemployed and drawing benefit. [AN HON. MEMBER: "Scandalous -] Yes, and I will tell the hon. Gentleman why it is scandalous. I draw his attention to the definitive Audit Commission report on London and the problems of Socialism. It sets out eight rotten boroughs in London controlled by the new Left, the shock troops of Socialism, the pioneers of perverted politics, run by the clones of those who, after the next election, will form the majority of the parliamentary Labour party, small though it may be in this House.

That report compares those eight rotten boroughs with eight similar boroughs controlled by less lunatic Socialists and leavened with three Conservative councils with similar profiles and problems. Within London, compared with the control boroughs, those rotten boroughs spend 50 per cent. more per head of the population—£7 per week per household. They employ 35 per cent. more staff. Between 1980 and 1986, their central staff increased by 18 per cent., while others went down by 14 per cent. Staff vacancies—a measure of an efficient, well-run organization—are three times as great in the rotten boroughs. All this and inferior services—Socialism in action.

Comparing the rotten boroughs with the metropolitan authorities, the cost per child in care is over twice as great. The cost of local authority services is three times as great. The management cost per dwelling is twice as great. The arrears of rent are three times as great. One in five rents are not paid in those inner London areas. They are concerned about homelessness, yet it takes them twice as long to relet their houses as it takes anybody else. Those are shocking statistics.

In Brent in the last three years, over three quarters of the senior staff have left their posts. Eight pounds in every £100 of inner London rates is uncollected. While the real costs of local government over the last three years have decreased, in the rotten boroughs they have risen by 20 per cent. London is prosperous, yet in these Socialist areas there are massive problems.

As for unemployment, after massive expenditure on education, ILEA spends almost twice the national average, yet side by side with wealth and job opportunities. Why? In some part, the devastation is caused by the effects of Socialism on business and commerce, but that is not the whole story. If one sows the seeds of Socialism, if one heavily fertilises the ground with public money. if one waters it with publicly financed propaganda, a crop will grow—a crop of grudge and dependence.

If we set up a race relations industry and make people feel that they are discriminated against, they will feel racially discriminated against. If we set up anti-police committees to tell people that the police are against them, they will be anti-police and crime will rise. If people are told that they are entitled to certain standards whatever their own efforts, endeavours and abilities, we will bring dissatisfaction and grudge.

We all recognise in our constituencies the neighbouring households as we go canvassing. One is spruce and immaculate and another dingy and in disrepair. The one is welcoming and the other disgruntled. As often as not, the second household has been infected by Socialism.

There is a musical in London called "Les Miserables", a line of which runs: At the end of the day you get nothing for nothing. The tragedy is that Socialism preaches that one can have paradise without effort and that if one is not provided for, it is someone else's fault. Socialism breeds dependence. It tells people to sit on their backsides and complain. The tragedy is that we do not have a north-south divide. Many of our people's lives are destroyed because, in this Conservative country, they are living under the yoke of Socialism. I tell my hon. Friends, with the local elections coming up, they should get that message across loud and clear because our people depend on us.

9.36 pm
Mr. Malcolm Bruce (Gordon)

The speech of the hon. Member for Northampton, North (Mr. Marlow) was another rendition of Marlow's theorem of the correlation between Socialism and deprivation, but I suggest that Conservatism and neglect also go hand in hand. The hon. Gentleman has not contributed to the debate.

No Conservative Member has said what should be done about the problem. The Paymaster General, probably wisely, did not refer to the Government amendment. He probably felt embarrassed reading out that the United Kingdom has benefited from six years of uninterrupted growth as his introduction to a debate on deprivation. He would not want us to draw attention to the fact that manufacturing output is 4 per cent. below what it was when the Government came to power.

We hear from Conservative Members a repetition of selective statistics which ignore the problem. The Paymaster General, I suspect deliberately, misunderstood the alliance stance. He suggested that we want to return to old-style regional policy. We want nothing of the kind. We believe that there is a need to recognise the problems. That is our first obstacle with the Government—they refuse to acknowledge the seriousness of the problem.

I shall not quote the unemployment figures, as we all know them, but I should like to pick out a few other statistics which demonstrate the scale of the problem. In the south-east, there have been 20 manufacturing job redundancies per thousand. The equivalent figures for the north and Scotland are 69 and 58 respectively. For all sectors, there have been eight jobs per thousand lost in the south-east, 28 in the north and 21 in Scotland. That is a serious discrepancy.

My hon. Friends the Members for Colne Valley (Mr. Wainwright) and for Ceredigion and Pembroke, North (Mr. Howells) mentioned house prices. The average house price in Yorkshire and Humberside, at £25,989, should be compared with the average in Greater London of £57,816. That too shows a serious discrepancy.

Since 1976, defaults and arrears among private home buyers have increased eight times and the number of homeless people has gone up to more than 100,000. That is an indictment of the Government, but they do not acknowledge the deprivation.

The Cambridge university department of land economy has estimated that, out of the 900,000 jobs that are likely to be created in the private sector during the next 10 years, at least 420,000 will be in the south-east of England. The hon. Member for Dunfermline, East (Mr. Brown) referred to the fact that the forecast population in Scotland will drop below 5 million by the end of the century, while the population of the southern half of England will increase by 1.5 million.

The Government's remedy, as articulated by the Paymaster General, is that people should move out and accept lower pay. The first problem with that is that the Paymaster General is talking nonsense about the disparity in wage rates. Anybody who considers the figures knows that the reality is that average earnings in the regions and provinces are lower than in the south-east. In Greater London, for example, average earnings for men are £255 a week, compared with £191 in the east midlands and £193 in the south-west.

The differences in house prices, land costs and wages exist, but all that has happened is that London is still sucking in the talent, while the regions are failing to cope with the problem. The selective statistics given by various hon. Members representing constituencies in the north of England do not disprove that point.

We also acknowledge that, within the broad division between London and the south-east and the rest of the country, there are divisions within each region. We can all list areas of low unemployment in the north and of high unemployment in the south. In London there is a clearly identified crescent of deprivation. Within walking distance of the Bank of England, for example, are the boroughs of Tower Hamlets, Islington and Southwark, including Bermondsey, which have between 25 and 30 per cent. unemployment.

The analysis of those real problems shows that London and the south-east are creating jobs and sucking the brightest and best talents out of Scotland, Wales and the regions, but that they are failing to provide the jobs that the local people of London need. The Government are totally failing and refusing to address that problem.

The United Kingdom needs to get away from its one-centre economy and the black hole down which the city of London sucks everything, because of which other parts of the country simply cannot get the backing and the resources that they need to focus on their own enterprise.

Why can companies such as NCR, formerly National Cash Register, operate its worldwide headquarters from Dayton, Ohio, Wang computers from Lowell, Massachusetts, and cities such as Houston and Dallas, and Alburquerque in New Mexico experience the growth of corporate headquarters, whereas in this country the idea of establishing corporate headquarters in Aberdeen, Newcastle, Cardiff or Manchester is regarded as being off the map and out of touch? That is the sort of attitude that we must get away from. The attitude of our American competitors is the one that we need.

The Government simply sit back and say that they are prepared to let the market operate in the way in which it does and that if they were re-elected and continued their policies, the problem would somehow resolve itself. The answer is that it most certainly will not. The Paymaster General and, to the extent that he spoke about policy, the hon. Member for Dunfermline, East seemed to imply that central direction was the right answer. The Paymaster General stated that central Government would decide what was good for people in the regions and for investment outside, or indeed inside, London. The excuse given by Conservative Members was a catalogue of attack on Left-wing Socialist authorities. I agree with Conservative Members that Left-wing Socialist local authorities drive out enterprise and cannot face up to the problems. However, we in the alliance are prepared to do something about it and to reform the system so that those people cannot get control.

Mr. Favell

rose—

Mr. Bruce

No, I shall not give way. I do not have the time.

The Paymaster General and the Government are not prepared to introduce the necessary reforms—[Interruption.]

Mr. Speaker

Order.

Mr. Bruce

I am sorry that I cannot give way to the hon. Member for Stockport (Mr. Favell), but I have very little time.

We in the alliance are prepared to face up to those problems because we believe in the people of this country; we believe that the people of Newcastle, Manchester and Bristol, as well as of the rural areas, are capable of making their own decisions and that they better know what they can do in their own areas, if they are given the backing, resources and freedom to make their own decisions. That is something that the big brothers in the Labour and Conservative parties will not allow them to do.

We propose the establishment of regional development agencies to make the decisions that are at present being made by central Government. [AN HON. MEMBER: "In the south-east?"] Certainly in the south-east. All regions should have an opportunity to focus their enterprise and to back their decisions, rather than have Whitehall telling them what is good for them. I find it extraordinary that Conservative Members say that the system is unworkable. It has helped other countries to be more successful. We are not talking simply about moving jobs and wealth, but saying that if we adopt this system, we shall help to stimulate more growth, enterprise and jobs—the sum total will be greater for the whole of the United Kingdom. There is plenty of evidence to show that that can be the case.

Recently, the Financial Times carried a review of regional development and venture capital. It pointed out that, too often, enterprises in the regions did not receive backing because no one in the City has enough local knowledge to give them backing. If we had people on the ground with that knowledge who could draw the funds and back the enterprises, we could get a great deal more for the United Kingdom. There is evidence to support that in the operation of enterprise agencies and regional development corporations. More should be done to back such enterprises and to ensure the development of new opportunities in the regions.

We agree with the Government that small businesses and the self-employed have been an important source of new employment; although the figures are not clear, we believe that they will be important in future. However, we question whether the enterprise allowance scheme is the best way of ensuring that. There is no check on how many schemes survive and on the extent to which they draw from others. We need agencies to follow those matters through. We notice that the lion's share of the BES is going to the south-east. Clearly, regions do not receive their share of the finance available.

When the Government choose to attack the alliance, they would do well to consider that, after seven years, the Government have reached a plateau of 3 million unemployed plus 1 million people on the type of schemes that they greatly disparaged at the start of their period in office. There is no sign that they have any strategy for reducing that total figure or for ensuring that deprived areas have resources and backing to deal with their problems.

Tonight we heard precious little from the Labour party, despite the 28-minute speech from the hon. Member for Dunfermline, East. One and a half minutes of that one speech from the Labour party related to Labour's policy, but that was probably one and a half minutes too long. Neither of the hon. Members who are apparently coordinating the policy has yet managed to agree on what it is and we are not sure whether there will be a strategy. Clearly, the argument within the Labour party Is about which state sector should provide the jobs.

We in the alliance are prepared to back enterprise and we recognise that development corporations and enterprise agencies have a significant role to play. However, we are also prepared to recognise the discrepancy that exists, not just between different regions and nations, but within them. That is why we propose, first, to give a job guarantee to the long-term unemployed; and, secondly, to provide a selective cut in employers' national insurance charge for unemployment black spots and travel-to-work areas and to provide in those same areas incentives for recruitment of the long-term unemployed. Those specific measures would help to tackle the imbalance and we commend them to the Government.

The Government will live to rue the day when they decided not to trust people on the ground in their communities to make decisions which affect their enterprise. The Government have chosen to pull power to the centre and to set up central Government agencies to determine centrally who should get what.

I should have thought that the right hon. Member for Henley (Mr. Heseltine) might have been present. In our last debate on this issue, he made an extraordinary proposal, which boiled down to the establishment of a series of regional district commissioners on the old Indian imperial model, who were to be appointed by central Government. Though his book sales may be great, he is not prepared to get to grips with the problem, any more than any other member of the Conservative party.

I commend the alliance motion to the House. The other two parties have shown themselves shamefully out of touch with the problems of the regions in terms not only of their analysis but of their solution. The people know that they have to look elsewhere for a solution. They cannot trust the Labour party, and the Government have said that they have no policy.

9.50 pm
The Minister of State, Department of Trade and Industry (Mr. Giles Shaw)

I hope that the alliance has enjoyed the second of the two debates that it has elected to have today. It is appropriate that it should be discussing an issue which, as we have seen it unfold over the past couple of hours, has shown the great fragmentation in the alliance. It is appropriate for a fissiparous group such as the alliance that it should have selected this debate. No discussion about regional policy is free from the claims for special attention for this or that region or problem, for this or that reason. In most speeches there was an understandable special pleading.

The hon. Member for Ceredigion and Pembroke, North (Mr. Howells) drew attention to the important disparities between affluence and unemployment, between major cities and decline, and so on. His proposals and the motion show that the alliance would like to see development agencies set up in each of the regions. The hon. Member for Gordon (Mr. Bruce) also referred to that. Development agencies are one of the points that have been widely debated.

Hon. Members on both sides of the House would be wise to contemplate what a development agency is. It is not, as suggested by the hon. Member for Gordon, a coming together of individuals in the region concerned to try to preside over a development policy of their own. A development agency is set up under an Act and has central Government power, taking away much of the development arrangements in the regions. It meets entirely on its own, without any particular regional element. It is an agent of Government and operates in that way in the Scottish Office under the aegis of my right hon. and learned Friend the Secretary of State for Scotland, and in the Welsh Office under the aegis of my right hon. Friend the Secretary of State for Wales. That is what gives development agencies their power and prestige abroad. To suggest that all 334 travel-to-work areas or other regions should operate on a statutorily based system is a recipe for chaos and confusion, and the alliance must recongise that before it does anything else.

The hon. Member for Dunfermline, East (Mr. Brown), in his substantial address to relatively few shareholders, spoke about what the Labour party would like to do. Clearly, he was convinced that the main problem was dealing with manufacturing investment. He made special reference to the ERDF proposals in Brussels, in which he is well versed. He has read the 17 volumes and knows all about them. He will recognise that, with his remarks about Merseyside and Manchester, he was quoting the words of the Labour councillors for Manchester and the Labour, or not-so-Labour, councillors of Liverpool. That provides him with a reasonable opportunity to say that the Government are talking with forked tongue. He knows that the Government have to assemble, collate and present, or none of the proposals would be allowed to get ERDF funds.

Mr. Gordon Brown

rose—

Mr. Shaw

I shall not give way. The hon. Gentleman spoke for 28 minutes.

The important feature of our debate since then was the eloquent testimony of my hon. Friend the Member for Davyhulme (Mr. Churchill), who rightly showed what can be done when a region gets assistance through urban development corporations and structures to enable the regeneration of industrial activity. My hon. Friend the Member for Stockport (Mr. Favell), in his brief speech, rightly called for something positive, such as cheap energy supply, and he will no doubt be delighted with the CEGB's recent reduction by 6 per cent. of its tariff to bulk users. My hon. Friend the Member for Northampton, North (Mr. Marlow) correctly put the whole problem into perspective. Where Socialism has been rampant, one will not find much chance of industrial energy and development or enterprise. [Interruption.] If that is the case, the hon. Gentleman probably has a cure for the ills of regional disparity.

The hon. Member for Colne Valley (Mr. Wainwright) surprised me. He was clearly confused about the values of infrastructure. On the one hand, he took to task the Humber bridge. I can understand that, because I well remember Mrs. Barbara Castle making a rash promise in the midst of a by-election at Kingston upon Hull, North, and the Humber bridge duly appeared. The hon. Gentleman took to task the Kielder dam which, as he should have known, was primarily developed to secure opportunities for industrial development in Teesside and Tyneside, admittedly at a time when the oil price had not collapsed and when the plastics and chemical industries were at a high degree of employment. The concept was right—to serve the regional dependence on high water? using industry.

The hon. Member for Colne Valley was worried about motorways. Clearly he has not been on the M62 recently. Perhaps, since he is retiring at the next election, he does not use the M62 very much, and need not worry about the lorries. However, those of us who do are a bit choked up by what we find on the M62.

The central issue, turning back to manufacturing investment—which the hon. Member for Dunfermline, East raised—is the economic activity of the country. If the Government pursue policies which create economic activity and which believe in growth and enterprise, the consequences will steadily improve. Following the traumatic years of decline, after 1973 we had structural decline and rampant inflation. The lack of competitiveness of British industry and its products was pricing them out of markets worldwide and there was a substantial area of structural decline.

That has changed since 1983. Manufacturing investment has risen in real terms on average by more than 20 per cent. In the regions manufacturing investment has risen by 28 per cent. in the north—that includes the north-east, north-west, Yorkshire and Humberside—in Wales by 28 per cent., the west midlands by 35 per cent., the east midlands by 18 per cent. and by 22 per cent in Scotland. Since 1983, we have seen a substantial increase in manufacturing investment. That has happened as a result of the Government's determination to ensure that the economy is receptive to industrial growth and development. Manufacturers and investors are looking for a stable economic policy and a Conservative Government who will provide policies that are conducive to industrial development and growth, and to see that the policies of previous Labour Governments have been swept away with all the central intervention, controls, restraints on capital and, above all, diktat by trade unions, which determined, more or less, what wage rates would be in the light of the threat of major industrial disruption.

The investment climate today is infinitely better for regions to benefit from the economy. I accept that it is slow and that there has not been a sufficient replacement of structural industries-shipbuilding, steel, coal or many of the other aspects of heavy engineering which have been centred in some of our regions. The Government are determined to speed up that process. It is because we have restricted development areas and assisted areas of the regions in the greatest need, and because the percentage of the work force being covered in the north is now 70 per cent, of people who live in assisted areas, that regional policy is beginning to work.

We have, by changing the policy from capital-based to job-based, made a significant difference to its effectiveness. That is the way in which we must ensure that regional policy develops. It will be slow, but it will be steady. Ultimately, that depends on having an economy which responds to the needs of industry and provides a stable context in which there can be growth without inflation, encouragement to develop, wages which are determined by market rates and consumer satisfaction based on the quality and competitiveness of British products.

If we are able to achieve that—we shall do that by a third term in government—we will have demonstrated beyond doubt that the only thing that stands between regional disadvantage and the nation is a Conservative Government who are dedicated to making Britain great again.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 33, Noes 176.

Division No. 113] [10 pm
AYES
Barnes, Mrs Rosemary Kennedy, Charles
Beith, A. J. Kirkwood, Archy
Bruce, Malcolm Lamond, James
Buchan, Norman McKay, Allen (Penistone)
Callaghan, Jim (Heyw'd & M) Maclennan, Robert
Carlile, Alexander (Montg'y) Meadowcroft, Michael
Clarke, Thomas Owen, Rt Hon Dr David
Dixon, Donald Pike, Peter
Dunwoody, Hon Mrs G. Powell, Raymond (Ogmore)
Eastham, Ken Ross, Stephen (Isle of Wight)
Fisher, Mark Skinner, Dennis
Freud, Clement Steel, Rt Hon David
Godman, Dr Norman Stewart, Rt Hon D. (W Isles)
Haynes, Frank Wainwright, R.
Howarlh, George (Knowsley,N)
Howells, Geraint Tellers for the Ayes:
Hughes, Simon (Southwark) Mr. James Wallace and
Jenkins, Rt Hon Roy (Hillh'd) Mr. John Cartwright.
Johnston, Sir Russell
NOES
Aitken, Jonathan Cash, William
Amess, David Chalker, Mrs Lynda
Ancram, Michael Chapman, Sydney
Arnold, Tom Chope, Christopher
Ashby, David Churchill, W. S.
Atkinson, David (B'm'th E) Clark, Hon A. (Plym'th S'n)
Baker, Nicholas (Dorset N) Clark, Dr Michael (Rochford)
Baldry, Tony Clark, Sir W. (Croydon S)
Beaumont-Dark, Anthony Clarke, Rt Hon K. (Rushcliffe)
Benyon, William Cockeram, Eric
Best, Keith Coombs, Simon
Biffen, Rt Hon John Cope, John
Biggs-Davison, Sir John Cormack, Patrick
Blackburn, John Couchman, James
Boscawen, Hon Robert Cranborne, Viscount
Bottomley, Peter Crouch, David
Bottomley, Mrs Virginia Currie, Mrs Edwina
Bowden, Gerald (Dulwich) Dorrell, Stephen
Brandon-Bravo, Martin Douglas-Hamilton, Lord J.
Brinton, Tim Dunn, Robert
Brown, M. (Brigg & Cl'thpes) Durant, Tony
Bruinvels, Peter Evennett, David
Buck, Sir Antony Eyre, Sir Reginald
Burt, Alistair Fallon, Michael
Butcher, John Favell, Anthony
Butterfill, John Fenner, Dame Peggy
Carlisle, Kenneth (Lincoln) Finsberg, Sir Geoffrey
Carlisle, Rt Hon M. (W'ton S) Fletcher, Sir Alexander
Carttiss, Michael Fookes, Miss Janet
Forman, Nigel Maclean, David John
Forsyth, Michael (Stirling) McLoughlin, Patrick
Forth, Eric McNair-Wilson, M. (N'bury)
Franks, Cecil McQuarrie, Albert
Fraser, Peter (Angus East) Major, John
Galley, Roy Malins, Humfrey
Garel-Jones, Tristan Malone, Gerald
Gilmour, Rt Hon Sir Ian Marland, Paul
Goodhart, Sir Philip Marlow, Antony
Gorst, John Mates, Michael
Gow, Ian Mather, Sir Carol
Gower, Sir Raymond Maude, Hon Francis
Gregory, Conal Maxwell-Hyslop, Robin
Griffiths, Peter (Portsm'th N) Mayhew, Sir Patrick
Ground, Patrick Merchant, Piers
Gummer, Rt Hon John S Meyer, Sir Anthony
Hamilton, Hon A. (Epsom) Mills, Iain (Meriden)
Hampson, Dr Keith Montgomery, Sir Fergus
Hanley, Jeremy Morrison, Hon C. (Devizes)
Hargreaves, Kenneth Mudd, David
Harvey, Robert Murphy, Christopher
Hawkins, Sir Paul (N'folk SW) Neubert, Michael
Hawksley, Warren Nicholls, Patrick
Hayward, Robert Norris, Steven
Heathcoat-Amory, David Onslow, Cranley
Hickmet, Richard Osborn, Sir John
Hind, Kenneth Ottaway, Richard
Hirst, Michael Page, Sir John (Harrow W)
Hogg, Hon Douglas (Gr'th'm) Page, Richard (Herts SW)
Holland, Sir Philip (Gedling) Pawsey, James
Holt, Richard Pollock, Alexander
Howarth, Alan (Stratf'd-on-A) Portillo, Michael
Howarth, Gerald (Cannock) Powell, William (Corby)
Hubbard-Miles, Peter Powley, John
Hunt, David (Wirral W) Raffan, Keith
Jackson, Robert Rathbone, Tim
Jenkin, Rt Hon Patrick Renton, Tim
Jessel, Toby Rhodes James, Robert
Jones, Gwilym (Cardiff N) Rhys Williams, Sir Brandon
Jones, Robert (Herts W) Roe, Mrs Marion
Jopling, Rt Hon Michael Ryder, Richard
Kellett-Bowman, Mrs Elaine Sainsbury, Hon Timothy
Key, Robert Shaw, Giles (Pudsey)
King, Roger (B'ham N'field) Shersby, Michael
Knight, Dame Jill (Edgbaston) Stanbrook, Ivor
Knowles, Michael Stern, Michael
Knox, David Stewart, Andrew (Sherwood)
Latham, Michael Thompson, Donald (Calder V)
Lawler, Geoffrey Thorne, Neil (Ilford S)
Lawrence, Ivan Townsend, Cyril D. (B'heath)
Lee, John (Pendle) Twinn, Dr Ian
Leigh, Edward (Gainsbor'gh) Warren, Kenneth
Lester, Jim Wheeler, John
Lilley, Peter Whitfield, John
Lloyd, Sir Ian (Havant) Wiggin, Jerry
Lloyd, Peter (Fareham) Wood, Timothy
Lord, Michael Young, Sir George (Acton)
Luce, Rt Hon Richard
Lyell, Nicholas Tellers for the Noes:
MacGregor, Rt Hon John Mr. Mark Lennox-Boyd, and
MacKay, Andrew (Berkshire) Mr. David Lightbown.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Question on amendments), and agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House notes that the United Kingdom has benefited from six years of uninterrupted growth; that over the last six months United Kingdom unemployment has fallen by 100,000; that employment ha s increased substantially since 1983; and that vacancies are at their highest level this decade; commends the efforts of the Government to develop a modern economy which is offering new types of opportunity; recognises in particular its work in launching the most extensive training programme in the country's history, and welcomes its commitment to the regions, underlined by carefully targeted investment and assistance; and further calls on the Government to continue with its present policy of seeking to spread throughout the country the economic conditions that bring prosperity and jobs.