HC Deb 01 November 1995 vol 265 cc283-5
1. Sir Roger Moate

To ask the President of the Board of Trade what is the timetable for the next re-examination of the assisted area status map. [38649]

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang)

When the present map of the assisted areas was introduced in July 1993, the Government made clear that it would remain in place for at least three years. Areas need time to take full advantage of assisted area status, and frequent changes to the map could create uncertainties for potential investors. The Government have no plans to review the map during this Parliament.

Sir Roger Moate

I thank my right hon. Friend for that reassuring reply. In my constituency, in the travel-to-work area of Sittingbourne and Sheerness, assisted area status is much appreciated and has already produced several hundred jobs. However, the unemployment level is still 10.8 per cent, and it must be clear that areas such as mine and many others take longer than three years to gain the full benefit of such status.

Can my right hon. Friend give some assurance that the general tendency would be to favour renewal of the three-year periods where unemployment remains high, and furthermore that there will be no automatic cut-off at the end of the three years, and that cut-offs, if they are to occur at all, will do so only when the House has reviewed the orders and passed new ones?

Mr. Lang

I am happy to assure my hon. Friend that there is no question of a cut-off. The map will remain in place until it is changed. The previous map remained in place for nine years. I am glad that assisted area status is helping my hon. Friend's constituency. I understand that 34 offers of assistance have been made in the Sittingbourne and Sheerness travel-to-work area, worth £2.4 million, and associated with more than 650 jobs.

Mr. Campbell-Savours

Why can there not be an urgent review of the assisted areas map, especially in the light of the decision of Campbell's Soups of America to close its Homepride plant in my constituency? That was a profitable operation that made £3.9 million last year, and it has one of the most modern canning plants in western Europe. Is it not an outrage that a foreign predator can move into a small town such as Maryport, destroy jobs and create such anguish and concern in that small community?

Mr. Lang

I recognise the hon. Gentleman's protectionist instincts, but the assisted area map can operate effectively only on a long-term basis. If changed periodically at a whim, in the light of temporary economic circumstances, it would not have the intended impact of enabling mobile investment projects to be decided upon in the context of a secure and stable economic background.

Mr. Nicholls

While assisted area status may be helping the constituency of my hon. Friend the Member for Faversham (Sir R. Moate), it is not helping my constituency of Teignbridge. Will my right hon. Friend ensure that there are proper safeguards to ensure that, when a business locates in an assisted area, the jobs created there are real and have not been pinched from elsewhere?

Mr. Lang

I am happy to reassure my hon. Friend that the effect of the assisted area status map and regional selective assistance is primarily to create new jobs. The attraction of inward investment to the United Kingdom is a result of a number of factors, but the assisted area map certainly helps in that direction.

Mr. Wigley

Will the President of the Board of Trade give urgent attention to west Gwynedd, north Meirionnydd, Dwyfor and Arfon and give them full development status? When the assisted area map was last drawn up, the Transfynydd nuclear power station was open, but it has subsequently closed and employment in the area has fallen. The Government's plans to provide an enterprise zone in the area have now been abandoned. In the light of that, unemployment is now at an unacceptably high level, and the area desperately needs help to attract new industry.

Mr. Lang

The hon. Gentleman knows that the Government are keen to help attract investment to areas of high unemployment, and that and there is a range of ways in which that can be done. Regional selective assistance, through the assisted area map, is only one method but, as I said, the map does not benefit from frequent changes. It benefits only from stability, which allows decisions to be taken on a proper long-term basis. I cannot give the hon. Gentleman any encouragement that a review will take place in the near future.

Mr. Michael Brown

Will my right hon. Friend reassure my hon. Friend the Member for Faversham (Sir R. Moate) on the basis of what happened in my constituency after the Government decided—correctly—that we no longer needed assisted area status? Will he assure my hon. Friend that there is more inward investment and that more jobs are being created now, without assisted area status, than before?

Mr. Lang

My hon. Friend makes a good point. It is also the case that the financial assistance offered under the arrangement is substantially less than that offered in many other countries. We are able to win inward investment because of the other qualities that Britain has to offer. Among the major inward investment projects which have come to this country without assistance are Nissan, Toyota and Samsung Heavy Industries.

Mr. Bell

The President will know that those inward investment projects were assisted by Labour-controlled local authorities throughout the country.

The hon. Member for Faversham (Sir R. Moate) reminded the House that the assisted area scheme has been extended to areas that have known prosperity and then known mass unemployment. Even the Deputy Prime Minister admitted at lunchtime that the UK is 21st in the international league table of investment per capita, and 18th in the league table of national income. In a moment of honesty, the right hon. Gentleman might also admit that Britain has halved its level of investment since 1979.

The House will welcome the assurance from the President of the Board of Trade that the assisted areas map will not be rewritten in the short term. That will obviate the suspicion that existed last time—when the map was redrawn by the right hon. Member for Hove (Sir T. Sainsbury)—that it was written in blue pencil to help the Tory party, and not the country.

Mr. Lang

I must point out to the hon. Gentleman that the figures used in the Labour party's advertisement in The Times today were taken from the Organisation for Economic Co-operation and Development, which recently described Britain's performance as "impressive", and added: The United Kingdom's sweeping structural reforms are yielding dividends in a more flexible, competitive and less inflation-prone economy". The OECD endorsed our approach to deregulation and a flexible labour market and adopted all of the policies that we are supporting in the face of fierce opposition from Labour.