REGIONAL EMPLOYMENT PRE MIUM (CONTINUATION OF PAY MENT) ORDER 1972 (Hansard, 27 April 1972)

§ LORD DRUMALBYN
My Lords, I beg to move that the Draft Regional Employment Premium (Continuation of Payment) Order 1972, laid before the House on March 22, be approved. The object of this Order is to provide that firms already established in the Winsford Urban District who are entitled to receive Regional Employment Premium should continue to receive it. But for the Order, payments would cease when Winsford becomes part of the North-West Intermediate Area on May 2. The Government considered that it would be unreasonable for firms which had gone to Winsford in the expectation of receiving Regional Employment Premium benefits to lose them because of the decision to cease to treat Winsford as a development area and to include it in the North-West Intermediate Area. Winsford is not at present in the North-West Intermediate Area but will be as from May 2 by virtue of the Intermediate Areas Derelict Land Clearance Areas (Amendment) Order 1972. I hope that your Lordships will agree that firms at present receiving Regional Employment Premium in the Winsford Urban District shall continue to do so.

§ LORD DIAMOND
My Lords, I am grateful to the noble Lord for having 474 explained this matter with clarity and brevity, but I do not know whether he has explained sufficiently why the Government have made this decision only in relation to those firms which were already established. May I say first of all that I do not suppose any of your Lordships will dispute that that is a wise decision. The question that arises is: what about other firms which might be attracted to this area if they knew that they were going to receive R.E.P.?—which, for the benefit of those noble Lords who might confuse R.E.P. with R.I.P., I should explain stands for "Regional Employment Premium". Why is it thought that it would be unwise to continue what has hitherto been the practice, presumably merely because of the rearrangement of boundaries? The rearrangement of boundaries does not affect the needs of the people nor the economic situation in a particular area; and if the Government recognise that the economic situation justifies a continuation of the Regional Employment Premium payment to those firms who are already receiving it, would it not be logical to extend the argument and to pay it to those who might come along, as presumably was the original intention and as presumably would have continued to be the case had not the somewhat technical rearrangement of boundaries taken place? I say "technical" because it is technical in relation to economic need. I shall be most grateful to the noble Lord if he will direct his mind to that point.

§ LORD DRUMALBYN
My Lords, I willingly respond to what the noble Lord has said. The main reason is that the object of continuing R.E.P. is to avoid frustrating the expectations of those who have already gone to the area. But the noble Lord's question is not susceptible of a very short answer and perhaps I should explain the circumstances behind the Government's decision. The Industrial Development Act 1966 made it possible for a locality outside a development area, as Winsford was, to be treated as if it were included in a development area, on certain conditions. The Secretary of State is empowered to designate such a locality and to give notice of designation "in such manner as appears to him appropriate". The conditions now contained in the consolidated Local Employment Act 1972, Section 1(5) are, first, 475 that its population will be or is being increased by migration from one or more specific places in the development area; and, secondly, that the increase will be substantial in relation to the original population of the locality.
In 1966 the Government of the day made it clear in correspondence how the conditions would apply in the case of Winsford. Winsford had at that time been receiving incomers from Manchester and elsewhere, as well as Merseyside, and the proportion of incomers from Merseyside was about 40 per cent. But the purpose of treating Winsford as if it were in the Merseyside Development Area was to help Merseyside, and it was therefore made a condition that virtually all the new population should thereafter be drawn from that Development Area. Moreover, as the noble Lord, Lord Hughes, made clear in the debate on the Second Reading of the Industrial Development Bill, the Government would not expect to treat or continue to treat a locality as if it were in the Development Area unless something like two-thirds of the final population was likely to have originated in the Development Area. As the original population of Winsford was 12,000, and as some 3,000 incomers already had come in from outside the Development Area, it plainly had to be a condition of development area status that the final population should be at least 60,000. Since then Winsford has itself decided that the final population to be aimed at by 1986 should be not 60,000 but 45,000. Since at the present time some 6,000 of the incomers have originated from outside Merseyside, it is now plain that the proportion of Merseyside incomers could not amount to two-thirds of a final population of 45,000, even if all the incomers from now on came from Merseyside. It could not exceed 60 per cent. At the present time, the proportion of new population arriving each year has not yet reached 75 per cent., so it is quite clear that the conditions on which development status was granted to Winsford in the first place will not be fulfilled. Technically, of course, the second reason is that we are advised it is not possible for the Secretary of State to treat a locality as a development area if it is within an intermediate area. That, I think, is the answer 476 to the noble Lord. We feel that the conditions laid down in the 1966 Act, now the Local Employment Act 1972, must, in all fairness to other areas be maintained, and as Winsford is not able to meet these conditions, and as apart from anything else it is a very attractive area and does not suffer from the disabilities of most of the development areas, it would not be right to continue its development area status.