Regional Aid (Hansard, 27 January 1988)

1. Mr. O'Neill
To ask the Secretary of State for Scotland when he will next be meeting the Scottish Trades Union Congress to discuss regional aid.

§ The Secretary of State for Scotland (Mr. Malcolm Rifkind)
I have not received any request from the Scottish Trades Union Congress for a meeting to discuss regional assistance.

Mr. O'Neill
When the Secretary of State next meets the STUC to discuss regional aid, what assurances will he be able to give, as it is likely that the amount of aid for 1986, £240 million, will have fallen by about a third by the end of the decade? How many of the 3,000 applicants who last year were successful in securing regional aid will be able to obtain it under the new regime that he outlined last week?

§ Mr. Rifkind
It should be fairly easy to reassure the STUC. The switch from automatic to selective assistance is in line with the recommendation of the Scottish Council (Development and Industry). In formulating its views on these matters the council consulted all its members, including its trade union members.

§ Mr. Buchanan-Smith
When my right hon. and learned Friend meets the STUC, will he point out that for regions, such as Grampian, there will be less advantage in these changes?

§ Mr. Rifkind
My hon. Friend is correct. We are considering not only the selective forms of assistance, as described in the regional selective assistance proposals, but 292 the new business advisory and consultancy services. They will have an enormous impact on the growth of small businesses in Scotland. I am sure that all hon. Members will support that objective.

§ Mr. Kirkwood
When the Secretary of State meets the STUC to discuss regional aid, will he consider the important question of the impact of EEC aid? He will know that the EEC attaches great importance to complementing the national regional strategies that are being employed by the Government. However, is he aware that it does not recognise that we have a proper rural regional development strategy? Will he pay attention to that important missing element in the regional aid package?

§ Mr. Rifkind
It is not missing. The Government consider the development of rural areas of major importance. The Scottish Development Agency estimates that 25 per cent. of its expenditure goes to rural areas to develop the economic infrastructure and to help businesses in those areas. Increasingly, that is being recognised.

§ Mr. Maxton
As the latest report of the Manpower Services Commission shows that the Scottish economy is doing worse than the economy of the rest of the United Kingdom, will the Secretary of State admit that there is a need for a massive increase in regional aid, rather than a cut, which is what he is proposing over the next few years? How can selective assistance possibly replace mandatory regional development grants? If he can, will he give a guarantee that all the money available for selective assistance will be used in Scotland for investment in Scottish industry?

§ Mr. Rifkind
The hon. Gentleman might like to read more carefully the survey of the Fraser of Allander Institute, published last week, which reported great optimism for the future of the economy. The Scottish CBI survey, which was published yesterday, showed that, for the first time for some considerable period, the prospects for businesses in Scotland are more attractive and beneficial to the prospects of employment and growth than elsewhere in the United Kingdom. I am sure that the hon. Gentleman will take as much pleasure from that as I do.