HL Deb 28 June 1982 vol 432 cc23-9

3.56 p.m.

Lord Trefgarne

My Lords, with your Lordships' permission, I shall now repeat a Statement being made by my right honourable friend the Secretary of State for Industry in the other place. The Statement is as follows:

"With permission, Mr. Speaker, I should like to make a Statement on regional industrial policy. Copies of the Statement are available in the Vote Office.

"When my right honourable friend the then Secretary of State made his statement on 17th July 1979 announcing the results of the Government's review of regional industrial policy, he undertook that those former special development areas and development areas which were due to become non-assisted from 1st August 1982 would be subject to a special review before the changes finally took place.

"Since then, there has been a very substantial increase in unemployment nationwide. This increase has formed the basis of a large number of representations which the Government have received in respect of many areas from honourable members, local authorities and others, seeking improvements in those areas' Assisted Area status. Therefore, as well as conducting the special review, which was confined to the areas which are due to lose assisted area status by two or more stages, we have looked carefully at a number of other areas whose circumstances seem to have deteriorated relative to the country as a whole.

"The changes announced by my right honourable friend three years ago had the effect of reducing the proportion of the population covered by assisted areas from over 40 per cent. to about 26 per cent. We believe that changes on the scale proposed then are broadly right so that the fact that unemployment has increased substantially in a particular area does not of itself qualify that area for upgrading. Any further adjustments should be concentrated on those areas whose position has deteriorated markedly relative to the rest of the country. This is necessary both to contain the cost of regional aid within acceptable limits and to provide industry with reasonable stability for their investment decisions.

"The further adjustments therefore which we now propose as the outcome of our review are relatively few. Nevertheless, I am very grateful to all those who supplied us with much valuable information and advice in support of their representations and I can assure the House that they have all been considered with great care.

"We have concluded that four of the Scottish travel-to-work-areas which would have lost assisted area status by two or more stages since 1979 should retain their assisted status. These areas are Lerwick, Kirkwall, Forres and Nairn, which will now retain the intermediate area status which they received on 1st August 1980. All have particular problems arising largely from their remoteness from economic centres and thus warrant the retention of some of the incentives to industrial investment which go with assisted area status. We are however satisfied that assisted area status for the remaining areas subject to the special review is no longer justified and the Government intend, as we announced in 1979, to withdraw that status from them after 31st July.

"After careful consideration, there are a few other changes which we think it right to propose. The travel-to-work-areas concerned are Teesside, which will become a special development area; Rochdale and Rossendale, which will be designated development areas; Llanelli and Pontypool, which are currently part development area and part intermediate area and which will become uniformly development areas; and Bolton, Leigh and North-wich, which will retain intermediate area status.

"Apart from these changes the Government intend that the decisions regarding the assisted areas announced by my right honourable friend the then Secretary of State in July 1979 will be implemented without further change. Thus, from 1st August this year, the coverage of the assisted areas will be around 27 per cent. of the working population in the areas with the most persistent problems of high unemployment. We are notifying the European Commission of these changes in accordance with our Community obligations.

"My right honourable friend the Secretary of State for Wales will be announcing separate proposals covering the remote and sparsely populated area of mid-Wales.

"The House will recall that, in 1980, following a review of derelict land clearance areas, the Goverment announced that a number of employment office areas which are due to become non-assisted areas from 1st August 1982, would be designated as derelict land clearance areas. As a result of the decision regarding the assisted areas which I have announced this afternoon, some of those areas will not now become non-assisted areas and thus will not need to be designated as derelict land clearance areas. The Government have however decided to designate additionally the Nuneaton and Bedworth employment office areas as derelict land clearance areas.

"The necessary orders to give effect to these decisions will be laid before the House shortly.

"Mr. Speaker, when my right honourable friend the then Secretary of State made his announcement three years ago, he committed the Government to a policy of reducing the unacceptable differences in economic performance between different parts of the country. In carrying this out, we must aim at getting value for money by concentrating help where the need is greatest. It made no sense then—and it would make no sense now—for regional aid to be spread thinly across nearly half the population. Nevertheless, it is right to take account of changed circumstances and, where there has been a marked relative deterioration in particular parts of the country, it is right to adjust the boundaries of the assisted areas to reflect this. I therefore commend my proposals to the House".

My Lords, that concludes the Statement.

Lord Ponsonby of Shulbrede

My Lords, I thank the noble Lord for repeating that Statement, entitled Assisted Areas Map Review. We can give one very small cheer to the Statement; the changes announced today go a very little way towards increasing the proportion of the population covered by assisted area status from 26 to 27 per cent. However, it goes only a very little way towards restoring the cuts announced in July 1979, when the proportion of the population covered was cut from 40 to 26 per cent. and £233 million was saved.

There are a number of specific questions I would put to the Minister. Can he say how much new money is involved in the Statement, or is it that the existing money is just to be spread more thinly? How many new jobs is it hoped to create by the changes? Which areas have unemployment levels higher than that which would have won them assisted area status but are now denied assisted area status because of the generally higher unemployment levels?

I was intrigued by the way in which the Minister was able to announce certain changes to Wales, while certain other changes for Wales had to be left for the Secretary of State for Wales to announce at a later date. One wondered whether he was being reduced to a Secretary of State for mid-Wales only. In general terms, we are not satisfied with the Government's measures to reduce unemployment, but we do not believe that this afternoon is the time to debate that particular issue.

Baroness Seear

My Lords, we on these Benches would also like to thank the Minister for repeating the Statement. We agree of course with the policy of concentrating resources where the need is greatest. That must be right. Is the noble Lord really satisfied that the present approach to identifying the areas where need is greatest is satisfactory in the light of the present pattern that has emerged with the growth in unemployment? I refer to the emergence of black spots which are scattered in all the regions. It is perfectly possible today to identify black spots in areas which are not in regions which attract support, and in other parts where unemployment is by no means so serious, although they are seen as being areas of high unemployment.

To give an illustration of that which is highly relevant to the fact that the noble Lord has referred the changes to the EEC: it is possible to get EEC assistance from the social fund for certain activities in Toxteth, because it is in a special area, but not for Brixton, because it is not, although the relative levels of unemployment in Toxteth and Brixton are equally acute. That is because of the way in which we identify areas of special need. That is perhaps a larger question arising out of the Statement today, but it is one of considerable importance.

While supporting the idea of giving aid where there is the greatest need, may I ask whether the Minister would agree that the greatest need now concerns the long-term unemployed, wherever they are and whatever the area or region in which they happen to find them selves? I am questioning in fact the basis on which the aid is now being given to areas.

Lord Trefgarne

My Lords, I am grateful to the noble Lord, Lord Ponsonby, for the solitary cheer he was able to give to the Statement, which was broadly reflected in the remarks of the noble Baroness, Lady Seear, for which I also thank her. As for the rationale behind the proposals, which I think was at the heart of what Lord Ponsonby was saying, as I made clear in the Statement, the assisted areas are really too large presently to be effective. Moreover, there are places outside the areas which reasonably feel they are being treated unfairly by the present arrangements, which they consider to be anomalous, which was also the point made by Lady Seear.

As for the precise criteria by which we determine these particular areas, I have included in my brief a number of percentages which might unduly detain your Lordships, but I should be happy to write to the noble Lord, Lord Ponsonby, with them. He asked me what would be the cost of the proposals. We estimate that as they stand, the cost would be in the region of £8 million to £10 million per annum, but I am not in a position to give an estimate of the number of jobs that would be created by them.

The noble Baroness, Lady Seear, also referred to the European social fund. It seems likely that in 1983, these proposals will affect our ability to benefit under the areas of intervention of the European social fund which, as she will know, has a slightly different concept from the travel to work areas we employ in these matters. Nevertheless, we hope to increase the total amount of money that the United Kingdom receives from the fund overall in 1983.

Baroness White

My Lords, to pursue the point made by my noble friend Lord Ponsonby about mid-Wales, we are aware that the Secretary of State for Wales has recently been indisposed, and I am sure we all wish him a speedy recovery, but as the Minister was able to talk about Llanelli and Pontypool, may I ask him to explain when we may be enlightened as to the fate of mid-Wales?

Lord Trefgarne

My Lords, I understand that my right honourable friend the Secretary of State for Wales intends to reply to a Question for Written Answer in this connection. I think that it is to be today, but it is certainly to be in the very near future.

Lord Renton

My Lords, it would seem that the Statement that my noble friend has repeated applies only to England and Wales. Are we to assume that the somewhat similar, and sometimes better, arrange-ments for Scotland and Northern Ireland are to remain unchanged?

Lord Trefgarne

My Lords, what I have announced today has some relevance to Scotland. To some extent there are separate arrangements for Wales, to which I have already referred, and certainly the arrangements for Northern Ireland are entirely different.

Lord Harris of Greenwich

My Lords, may I press the Minister a little following the question of the noble Baroness, Lady White? May I put it to him that it was an extraordinary reply to say that a Written Answer may be given in another place? Is the noble Lord not prepared to give us the information in the House today? I do not begin to understand how it is right to be entirely dependent on a Written Answer in another place before we can have the information which has been asked for in this House.

Lord Trefgarne

My Lords, there is no secret on the matter—or there would not be if I could find the relevant piece of paper!However, as I say, it is a fact that my right honourable friend intends to reply to a Question for Written Answer, and I can tell the noble Lord and the House that he will be describing the arrangements that are to be made for mid-Wales, which are actually made under different legislative provisions.

Lord Gibson-Watt

My Lords, will my noble friend come a little cleaner? Like the noble Baroness, Lady White, who has an interest in mid-Wales, I find his answer a little tantalising. Would it not be possible to tell the House at least the tenor of what the Secretary of State is about to announce in another place?

Lord Trefgarne

My Lords, I have in front of me what I think is a draft on the Written Answer that my right honourable friend intends to provide. If my noble friend would care to table a suitable Question for Written Answer, I should be happy to answer it today, if possible.

Lord Cledwyn of Penrhos

My Lords, is the noble Lord aware that in Wales there is considerable expectation that the right honourable gentleman the Secretary of State is about to make a reasonably favourable statement on mid-Wales, which was in fact demoted by the present Government in 1979? Is the noble Lord aware that £10 million to £12 million distributed throughout the United Kingdom will be spread very thinly indeed, to the extent that it cannot be described as very much more than a cosmetic exercise? Can he say how the money is to be allocated? Will it be channelled through the respective Scottish and Welsh development areas, and the National Enterprise Board, and how much money will each of them have additionally following the Statement by the noble Lord's right honourable friend? Is the noble Lord aware that the problems of Wales in general, and mid-Wales in particular, are at present acute, and will he tell his right honourable friend that much more money will be required before there will be any increased confidence in the Government?

Lord Trefgarne

My Lords, I am of course aware of the anxieties about mid-Wales which the noble Lord has expressed. The announcement that my right honourable friend the Secretary of State for Wales will be making will, I think, go a very long way towards allaying the anxiety.

Lord Northfield

My Lords, may I ask a question about England—Wales seems to have had a good time —and press the point raised by the noble Baroness, Lady Seear? Is it not the case that the asistance to industry is given under Section 7 of the 1972 Act, and that discretionary grants to industry are available under Section 8? Is it the case that we are to have another Statement to meet the point raised by the noble Baroness, Lady Seear, to indicate that Section 8 will be used more liberally and more decisively to assist the areas outside the assisted areas which are black spots of unemployment and which need help as much as, and in many cases considerably more than, some of the places within the assisted areas? Is there a further Statement due on that?—because it is of great importance to many areas suffering from very high levels of unemployment.

Lord Trefgarne

My Lords, I certainly agree that the spread of unemployment is not even throughout the areas. The Statement that I have repeated this afternoon related to the assisted areas in general, and not to specific areas and specific black spots. In fact, it is the case that specific black spots, to which the noble Lord referred, are very often caused by the decline of a specific industry in the area concerned. There are powers available to my right honourable friend in connection with specific industries, and indeed there are various European initiatives which have the same effect. So far as I know, no further specific Statement is foreshadowed about specific black spots or specific industries, but I shall certainly bear in mind what the noble Lord has said.