HL Deb 21 April 1988 vol 495 cc1624-37

3.30 p.m.

Read a third time.

Clause 1 [Termination of regional development grants]:

Lord Sefton of Garston moved Amendment No. 1: Page 1, line 8, leave out ("31 March") and insert ("30 September").

The noble Lord said: My Lords, first, I think I should apologise to the House for the simple fact that because of a previous commitment I was not able to attend the Committee stage, when I had hoped to move an amendment. I had arranged for an amendment to be moved, but in the event, due to a misunderstanding, that amendment was not tabled. Perhaps I may also explain why this amendment is being tabled at this stage.

After the preliminary debate at the Committee stage it would be foolish for anybody to try to change the date in the Bill. However, I attempted to put down an amendment for Report—and I should like to have this on the record so that the Leader of the House can have a look at the situation and perhaps advise me on the correct procedure—to change the date for the coming into operation of the Act. The date in the Bill is 31st March. I wanted to delete 31st March and substitute for it a certain condition with which the Government would have to comply. Once they had complied with it, the Act would then come into force. That was the purpose of the amendment. I considered it to be perfectly in order with the procedure of the House.

I was not seeking to wreck the Bill. I was not destroying any convention. I was not seeking to undermine any of the provisions of the Bill. I was seeking merely to change to a later date the coming into operation of the provision. That date would have been when the Government reported to Parliament on their proposals to decentralise and disperse government office accommodation out of London and the South-East to the provinces.

I raise that point now because, having spent half an hour in the Public Bill Office yesterday and been repeatedly told that that was not relevant to the Bill, I thought it right and proper to bring it to the Floor of the Chamber so that a decision could be made. I am still firmly of the opinion, though I have no doubt that many people will disagree with me, that the amendment was perfectly in order. I thought I would be entitled to move it either at Committee stage, if I had been present, or at Report stage.

However, the net effect of what I was told yesterday is that the Bill cannot be amended unless we take each word in its literal sense and that we cannot aim our amendments at its fundamental proposals. That is one of the points I want to make in discussing the three amendments. I should perhaps say that I am speaking to all three amendments. I want to make the point so that the Leader of the House can have a look at the situation and in his kindness advise me about the correctness of my amendments.

The Association of County Councils, which is not entirely of my political persuasion, is worried about the possible effects of the Bill becoming an Act. It was worried about the possibility of acquiring other investment from abroad in the development areas of this country. It takes the view, which I share, that the mere fact that there is no automatic grant in those development areas is a deterrent to anybody coming in the first place. As I and others mentioned during the debate on the Channel Tunnel Bill, there is a real possibility that at the other end of the tunnel automatic grants will be available. I am not sure why the noble Lord, Lord Young of Graf ham, is shaking his head. I shall give way if he thinks there is no possibility of an automatic grant in France. Surely anybody with experience of developments throughout the world will know that there is that possibility.

Under the Bill there will be no automatic grants and a long process of determining who should get grants. The investment we are talking about is the kind that would lend itself to the channelling of communications from the United Kingdom through the tunnel into Europe. It is almost certain that investors will go to France rather than face the long, searching inquiries into whether or not they will qualify for a grant in Great Britain. That is the fear I express. The fear is also expressed by the Association of County Councils and indeed by the Association of Metropolitan Authorities.

Having said that, I shall make only one other point about it. In view of the great concern shown about this matter we are entitled to ask the Secretary of State to make a statement. I could have gone further and first of all fought the issue of the amendment. However, I thought it would be more sensible, courteous and polite— an unusual step for me to take—to ask the Secretary of State to make a statement and say whether or not he thinks there is a danger of that competition. What does he intend to do? Will he reply to the fear expressed by the Association of County Councils? Will he give a firm and categoric assurance that the amount of money spent previously on development grants in the United Kingdom will not be reduced? Will that amount of money still be available?

I do not want to burden Members of the House, but there is no doubt that during the long debates that have taken place on this issue we have already had some kind of assurance. We have been told not to worry about regional development. We have been told that the Government are not scrapping it and are only changing the system. We have been told that the money will be there and in the same quantity. I believe I am perfectly entitled—indeed, I have a duty, in view of the letter I have had from the Association of County Councils—to ask the Secretary of State to make a statement answering those fears.

My final point—and it is unusual for me to be brief—concerns development area status. Merseyside, an area I proudly represented in local government, does not want development area status. Fifteen years ago Wigan received development area status. It was mentioned to me at a certain meeting, and I said, "Don't be too pleased about it. Merseyside has had some kind of development area status and assistance since 1948 and even before then. It does not seem to have done Merseyside any good".

If real assistance is needed to improve the lot of people within those areas, one should not look for development area status and put out one's hand with a begging bowl. One has to find a new kind of economic activity to replace the coal mines in Wigan and the shipping industry in Merseyside. One needs to find an area of the economy that will generate its own activity. On the back of that the whole of the area can pick up. We did not want development area status. I do not believe that giving this assistance to those areas is the answer.

So I come to my last point. It is one that I have raised over and over again since I have been in the House. I have raised it with governments over and over again ever since Harold Wilson was at the Board of Trade. For all who can remember, that is a pretty long time ago. But I have had no success. What we need in this country is not money pushed from one place to another and, in some cases, completely wasted when it gets to the other place; we need a shift of resources to provide prosperity in certain areas. One area of course—no one will deny this—is the South-East.

The point was brought home to me forcefully by a colleague of mine who had occasion some time ago to visit the Department of Employment in Tothill Street. He talked to a fairly senior employee, who used to travel quite a distance to get to the office and back again. He spent practically 12 hours every day working and travelling. He blandly told my colleague that everyone accepted that the job need not be done in the centre of London. It need not be done in Tothill Street; it could be done in Glasgow, Manchester, Birmingham or anywhere else in the United Kingdom, and probably done cheaper. That is the point.

Alongside the Department of Employment there is the DHSS, in an office that is so bad now that the powers that be at the top of the hierarchy decided to shift it all into a nice building costing £38 million which is the envy of everyone else. I understand that the DES is even now contemplating a new headquarters. I wonder where they will put that. May I suggest that it should be somewhere north of Birmingham, more central to all its activities? That is my final point.

The amendment I would have framed if I had not been ruled out of order would have said, first, that the Government should seriously examine the question of the dispersal of Government activity that need not be in the South-East. That would do two things. First, it would enliven the other areas of the country; and, secondly, it would make it much easier for the private sector, which considers that it must be in the capital, to site itself in the capital.

Only this week we have heard that one of the major television news gathering systems is proposing a new headquarters. Surprise, surprise, it will be in central London! Nowadays, that means "London Dockland". If the Department of Employment is moved out of Tothill Street a ready-made building would perhaps be provided for that purpose. If it did nothing else, it would at least mean that the Department of Employment was housed in a building which was worthy of being described as a building and not a piece of Legoland in that area that is called Dockland. That would be one advantage. The greater advantage is that by moving that Government department out and leaving room for the private sector, two things are done. Regional economies are assisted much better and much more cheaply; and the Government will save a considerable amount of money in London weighting if not in grant. That is all that I wanted to say.

I apologise if noble Lords came to the House and were suddenly presented with this large piece of paper which almost frightened the life out of me because it had my name to those three amendments. Before I decide what to do about the vote, I should like the Minister to reply, especially to my last two points.

Lord Taylor of Gryfe

My Lords, in Committee I raised the question of the date of operation of the Bill which is the subject of the amendment. I should have had more sympathy with my noble friend Lord Sefton of Garston—

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, the noble Lord is going to move his amendment, I think?

Lord Sefton of Garston

My Lords, I beg to move.

3.45 p.m.

Lord Taylor of Gryfe

My Lords, in Committee I raised the question of the date of operation of the Bill. Since then I have had some correspondence with the Leader of the House and the Minister in which precedents were quoted to me on the propriety of dating a Bill from 31st March when we are considering it on 21st April. I took independent advice on the matter, and I am satisfied that it is constitutionally in order; but while being constitutionally in order it is not a desirable practice. I hope that in future the House and its place in these matters will be respected and not anticipated in legislation that is brought before it. I received the assurance from the Minister and the Leader of the House that the procedure was in order, and I accept it.

I do not propose to follow the Second Reading debate speech made by my noble friend Lord Sefton of Garston. I might have had more sympathy with his amendment if he had made the date 30th September 1999, because I do not believe that the Bill is a good one, for the reasons that I have explained to the House. I am sorry that the Minister did not respond to the efforts we made in Committee to extract Scotland from the Bill to enable him to monitor the Bill's progress. I respect the Minister's confidence and enthusiasm, but it just could be that in making a dramatic change of this kind he might be wrong.

It is my apprehension over such a dramatic change in regional policy that makes me a little concerned. It is obvious that the Bill's impact will not be immediate. There will be a period during which the present system and the new system will coalesce. In three year's time much less money than now will be spent on regional development in this country.

In the Minister's statement I detected a feeling that we are now at the end of a positive regional policy. That is disastrous. Figures were quoted in Question Time today which showed that 25 per cent. of the population of the South-East owned shares as against 12 per cent. in Scotland. That is not a reflection of the political attitudes of people in Scotland; it is because they have a good deal less money to spend on buying shares. The North-South divide is a reality. I regret that positive measures to counter that North-South divide are being departed from in the legislation. At the same time, perhaps I may thank the Minister for all his courtesy and consideration when examining the Bill.

Lord Wilson of Langside

My Lords, not for the first time I have great sympathy with almost everything that my noble friend Lord Taylor of Gryfe said. Like him, at the outset I was concerned about the constitutional implications of the fact that in effect the Bill comes into operation before it has been finally approved by Parliament. I am most grateful to the Secretary of State for sending me a copy of the letter on that matter which he addressed to my noble friend.

I remain uneasy about this type of procedure. It reflects the extent to which Parliament's control of the Executive has been increasingly reduced. I do not intend to go on about that. I hope that the Secretary of State will appreciate that it is not a mere lawyer's quibble; much more than that lies behind the point with regard to the constitutional propriety of handling such matters in this way. I do not propose to take the matter further. I am most grateful to the Secretary of State for letting us have a note of the various precedents upon which he relies. Precedent of course is not everything in this context.

Lord Williams of Elvel

My Lords, I have very great sympathy with my noble friend Lord Sefton in the difficulty of framing amendments to this Bill. The Long Title of the Bill is very specific; the Bill itself is very specific. As the Secretary of State may have noticed, it is rather difficult for the Opposition to frame any amendments which attack the real substance of the Bill. So I am very sympathetic to the dilemma in which my noble friend found himself.

I am also sympathetic to the substance of Amendment No. 1. For the convenience of the House I shall also speak to Amendments Nos. 2 and 3. We disposed of the constitutional question raised by the noble Lord, Lord Taylor of Gryfe, earlier in our proceedings. The Secretary of State was kind enough to copy to me the letter which he had written to the noble Lord, Lord Taylor. I am satisfied that the question of constitutionality is not one which need concern your Lordships further.

There remains the question of practice. The cut-off date of 31st March which the Government introduced into the Bill, beyond which the Secretary of State has no power to grant regional development grants, seems to us—and I think that the noble Lord, Lord Sefton, was right about this—to be unduly restrictive. It is, as the noble Lord, Lord Taylor, has just said, a rather radical change in the method of making grants for regional systems available for regional policy. It is not a simple question of moving or adjusting at the margin; it is changing the whole system rather radically.

According to my information, the proposal has not been particularly well received in Scotland. It has certainly not been well received in Wales. I do not think that it has been particularly well received in the North of England and I doubt whether, when the equivalent order is produced for Northern Ireland, it will be well received in Northern Ireland. It is something which we shall have to look at when the Bill goes forward and becomes legislation.

Leaving that aside, it seems to us as a matter of fairness that the Government should at least give those firms who have in the past relied on the RDG time to put their affairs in order and make the necessary applications and not have this cut-off date which has already been passed. All that my noble friend is doing, apart from the questions which he quite legitimately asked the Secretary of State, is trying to amend the Bill to give back to the Secretary of State the power of which he has deprived himself or of which he is proposing to deprive himself so that firms can have an opportunity of taking advantage of an extra window. That is a proposition which we from these Benches would support.

Lord Young of Graffham

My Lords, this has been an interesting discussion because we have ranged far wider perhaps than the terms of the amendment appeared to justify. I am grateful to the noble Lord, Lord Taylor and the noble and learned Lord, Lord Wilson, for accepting that constitutionally the amendment is correct. The only point on which I would disagree with the noble and learned Lord, Lord Wilson, is that it is in any way new. The precedents go back some decades and it is one of the ways in which the Government can make changes of this nature.

What is at stake is not the question of regional aid itself. I pointed out on 12th January, when I first came to your Lordships' House to announce that we were making this change; during the Second Reading debate; and later, that over the next three years the amount spent on regional aid would increase. What is at issue is whether we spend the money in the best way possible.

It is significant, I believe, that those who have been in favour of the changes are the clients. From industry I have heard nothing but welcome for the changes that we have made. But those who somehow believe that this is some symbol of the Government's commitment to industry would like the present system to continue, irrespective of whether it would be the most effective way of giving the help which we want to give to industry.

Over the next three years some £900 million will be spent in total compared with some £700 million as planned in the 1987 White Paper. The way in which that is spent will, I believe, do the greatest good to the regions in their present circumstances. What we must accept is that the world moves on. If we look at the recent decline in unemployment and the ways in which the regions themselves have been making great economic progress, we realise that the time has come when, instead of looking for measures to encourage new firms to move into the regions, we should be doing just as much to encourage the firms which are there to expand and increase their employment.

When we consider that in Liverpool itself unemployment has fallen some 2.7 percentage points in the last year, we realise that the North-West is leading the country in the reduction of unemployment. When we look at the new companies coming into the area we see that they will be coming in because as a government we shall be using grants selectively. The regional selective grant is a method of helping the regions which has been in existence since the early 1970s. It has proved itself and shows that we get good value for money.

I suspect that more than for any other reason the noble Lord, Lord Sefton, raised his amendment once again to make the point that the Government should move civil servants to the regions. The noble Lord will recall from the many other times when this matter has been raised that I agree with him wholeheartedly. Where there are jobs that do not have to be done in London they could be done as well, and indeed better, in the regions. Nearly half my own department is located outside London. In my previous department, the Department of Employment, the vast majority of the civil servants were located out of London. The large offices tended to be in the North-West or the North itself. But of course there are a number of jobs which can only be done close to the location of your Lordships' House. That is why we have so many civil servants who are located in London.

Perhaps I may for a moment deal with the amendments that never were. The noble Lord, Lord Sefton, raised the issue of the Public Bill Office declining to accept the amendments which he raised. I believe that it is the practice of this House that amendments should be relevant to the Bill in question. The advice of the clerk was taken but of course I shall draw the attention of the Leader of the House to what the noble Lord, Lord Sefton, says and no doubt he will take up the matter.

We have decided to end the regional development grants scheme. I believe that the amount of notice we gave was sufficient. I can prove that it was sufficient for in those weeks from 12th January until the end of March my department received no less than a normal year's supply of applications. We received as many in those 10 weeks as we would normally receive in a year.

My right honourable friend the Secretary of State for Wales has recently paid tribute to the amount of new investment which has come into the Principality through those companies that will receive the money which will be spent over the next two or three years. I have little doubt that a similar amount of money has been spent in Scotland.

However, the scheme is now at an end. Assuming that all in your Lordships' House agree with us on this amendment, I should like to look forward to a time in which regional development grants will be no more than a memory and we shall see not the end of government regional policy but the Government's policy as regards the regions accelerating the process by which the regions employ more and more people until they become similar to the rest of the country.

I believe that there is no question that we are still and will continue to be the most attractive location within Europe for overseas investment. The facts bear me out. Through the use of regional selective assistance, I believe that we shall continue to attract those people who need further assistance in order to decide to come to the United Kingdom.

I should perhaps for the last time remind your Lordships' House that on my visit to Japan I met Japanese employers who had invested in this country without any Government assistance whatever. They said that the reason they did so was the economic climate and the benefits they saw in investing in this country. In those circumstances we really cannot see any justification at all for extending the closure date as the noble Lord has asked.

4 p.m.

Lord Sefton of Garston

My Lords, I do not know whether what I propose to do is in order but I think that I should speak to all three amendments. The noble Lord raised the question of Liverpool's position and drew attention to a favourable aspect of it. That again in my opinion fails to appreciate the real problems about a place like Liverpool. The people of Liverpool feel alienated because there is a tremendous disparity between their prosperity and the prosperity of other regions.

It is not right to mention the small point of how much the unemployment position in Liverpool has improved. It would have been more telling if a comparison had been made between Liverpool's unemployment and the prosperity in the South-East. But of course the noble Lord dare not mention that because the disparity is so great that even he would then be confirming in the minds of the people of Liverpool how bad the situation was there compared to other parts of the country.

As regards Japanese investment I can speak with some authority. Some of us have been in this game for a long time. I was a member of the Runcorn Development Corporation when the first Japanese investment took place in Great Britain. I know that it would never have taken place in Runcorn if the automatic grant had not been available. Having said that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 2 and 3 not moved.]

Lord Young of Graffham

My Lords, I beg to move, That the Bill do now pass.

Moved, that the Bill do now pass.—(Lord Young of Graffham.)

Lord Dormand of Easington

My Lords, I point out to the Secretary of State that he has partly replied to the theme of the short contribution which I now intend to make. I thought that it would be more in order to make my remarks at this stage having heard the Motion, That the Bill do now pass.

The main case in favour of regional development grants is their certainty and the stability which they have provided for the regions. It is those facts which give rise to the remarks which I make today.

The Government argue that the state can provide incentives to persuade companies to move to the hard-pressed regions but that—and we frequently hear this from the Secretary of State—at the end of the day it is up to the companies themselves to decide whether to move. I think that my noble friends and I would in general terms accept that proposition, although I have to say in passing that in spite of what the Secretary of State said a few moments ago the changes in regional policies since 1979 have considerably reduced those incentives.

But we hear little or nothing about one measure which is entirely in the hands of the Government. In this connection I support some at any rate of the remarks made by my noble friend who has just spoken. I refer to the relocation of government departments. I wonder how much dust has settled on the Hardman Report which is now no doubt tucked away on some inaccessible government shelf. That report, which the Secretary of State will know well and which was produced in the late 1970s, dealt specifically with the dispersal of government departments. In my view there has been no study either before or since which has dealt so effectively with the subject.

That report has been deliberately ignored by this Government. I well remember that one of its recommendations was to move the Property Services Agency to Middlesbrough in the hard-pressed North-East. That would have meant at least 1,000 jobs going to that region. The council there retained for a long time a site which was called the biggest car park in Europe. The council hung on to that site for a very long time but when the new government came into power in 1979 they immediately—and I mean immediately because they took action within a week or two—dismissed that site and other recommendations for the relocation of government departments to the regions.

The Labour Government of the 1960s did take action. I give only one example from my own part of the country. They brought the savings certificates department to Durham City. That provides some 700 jobs in the area. As I know from living there, the area would do very badly without those jobs.

Of course there is a hoary argument that Government departments must be situated in London because of the difficulty of communication if they were located in the regions. That view could never be sustained but in these days of super computers, fast travel and the like it would be an insult to use it as an argument.

I concede only one point in this matter. The transfer of civil servants to the regions can raise problems but they are certainly not insuperable and there is now considerable evidence to show how that can be facilitated. I remind your Lordships that financial and other incentives are effective in this regard. The Government have not hesitated to use those incentives in the closure of dozens of pits in this I country.

Perhaps my noble friend will agree with me when I say that once families have moved out of London they prefer to live in their new locations. Again I mention my own area because I know it so well. At least two research projects were carried out whereby families who had been transferred were asked if they wished to return to London or the South-East. They said overwhelmingly that they preferred to stay in the North-East. Perhaps I should declare an interest here in that I am vice president of the Northumbrian Tourist Board. Everybody is welcome to come and see the beauty of that region. But seriously, it is a fact that those two research projects came up with those answers. I have no doubt that the situation would apply to other parts of the country.

The Guardian newspaper of 21st December 1987 reported: The Government is considering the dispersal of two ministries and six departments from the capital. … The ministries involved—the Departments of Health and Social Security and of Trade and Industry—are two of Whitehall's largest. I need hardly remind the House that those are two of the biggest Ministries. Their relocation would indeed be proof that the Government meant business if they decided to move them. However, as my noble friend has already said, the fact that so many of the senior staff of the DHSS have recently moved to the new £35 million headquarters in Richmond Terrace, Whitehall—

Lord Sefton of Garston

My Lords, it is £38 million.

Lord Dormand of Easington

My Lords, my noble friend says £38 million, so perhaps he is right and I am wrong, but that is the price give or take a million or two. That move seems to suggest that once again the Government are merely flying kites and are not taking the matter of relocation seriously. We should not be surprised at that.

Nevertheless, in view of such a report from a serious newspaper I ask the Secretary of State to comment on it when he replies. Perhaps I should also say that one of the last things that I did when I was in another place was to ask about the relocation of government departments. I received a reply from a Defence Minister to say that the Government were seriously considering transferring some of that Ministry's departments or some of its civil servants to my part of the country. However, it looks as if that idea has also gone out of the window. A Minister recently told my noble friend Lord Sefton of Garston that 52 per cent. of all civil servants are placed in the South-East. Even those of us who have argued for the relocation of Government departments for many years found that answer quite breathtaking.

There may have been some justification years ago for such a figure but in these days of the so-called communication age it is deplorable that such a situation should be allowed to continue and indeed to become even worse. Those of us who support the dispersal of government departments do not for a moment suggest that the transfer of Civil Service jobs will solve the employment problems of the regions. But we do say that it will make a much needed contribution to the problem and equally importantly it will let the people of the North, the North-West and the other regions know that the Government have not forgotten them.

I make those remarks now for an additional reason, which I suspect will be of particular interest to the Secretary of State. There are clear signs that the economic boom is coming to an end. There is the growing balance of payments deficit. There is industry's continuing failure to invest sufficiently. The Governor of the Bank of England tells the Government frequently that the economy must be damped down. Perhaps most importantly, the Government are predicting a slow-down in growth. The economic history of at least the last 40 years demonstrates clearly that the areas which will be hit first and hardest are those regions which I have named.

I conclude by saying—I repeat it for the sake of emphasis— that in at least one respect the Government have in their own hands the means to make a direct contribution to the solution of regional problems. My noble friends and I feel strongly about the matter. However, we have chosen not to put down an amendment in those terms because we feel that the matter should be considered in the wider context of regional development, whatever the aspect of regional policy may be. There is a strong case for it and I urge the Secretary of State to bear that in mind when regional problems of any kind come before your Lordships' House.

Lord Peston

My Lords, perhaps I may intervene briefly. First, I hope that the noble Lord remembers that I took part in the Committee stage of the Bill, but I did not get a copy of the letter to the noble Lord, Lord Taylor of Gryfe. I am grievously disappointed.

More seriously, there is one aspect of the regional problem which is worth mentioning. There has been a great deal of research—mostly American—which refers to the so-called headquarters effect. There seems to be a considerable correlation between where headquarters are located and where economic performance occurs. Although one agrees that it is a good thing that civil servants generally are moved, it seems to me that it would be more significant to find a way of moving some of the centres of power and decision-making away from the immediate vicinity of your Lordships' House.

I am well aware of all the pressures to centralise decision-making here. However, I hope that whoever is concerned with regional policy—and not merely from the point of view of the dispersal of the public sector; it applies at least as strongly to the private sector—will take that aspect of the matter into account.

I am afraid that I have no obvious contribution to make on how that can be done. However, to take an extreme case which interests me, I can see no reason why the Department of Education and Science is centred in Elizabeth House. It could operate just as well somewhere north of Birmingham. I do not say that because I have any romantic view of the provinces. It seems to me to be a move in the direction of efficient operation which should appeal to the Minister.

4.15 p.m.

Lord Williams of Elvel

My Lords, in speaking to the Motion that the Bill do now pass, I have first to thank the Secretary of State for his patience and good humour in listening to the various arguments put forward by my noble friends and noble Lords to my right. It is a short Bill, as I said on Second Reading. However, it is a very important Bill. We have had fair and good discussions and I hope that the Minister understands that there are strong feelings on the matter on this side of the House.

We shall have to wait to see what the effect of the abolition of regional development grants really is. It is too early to make a forecast. We note that the criteria for regional selective assistance, which will be the main weapon in the Government's regional policy, are still too vague for our liking. No doubt they will be better crystallised as time goes on. We are still worried about the accounting and tax treatment of selective assistance. We believe that it should be treated as a grant rather than going through the profit and loss account of the company which is in receipt of assistance.

Above all, we remain concerned about the scope, extent and commitment of the Government to regional policy. The existing problems that we have to deal with in this country are bad enough. We must recognise that the problems of Scotland, Wales and the North and some of the problems to which my noble friends have referred are still with us and will be with us for a considerable period of time.

Those problems are bad enough. However, the future problems which we shall meet when the single internal market is realised and the Channel Tunnel is opened seem to me to be of even greater importance. As my noble friend Lord Peston remarked, it is vital for the economy and for society that we do not have branch economies in the regions simply servicing head offices which may be in London or even head offices which may be nearer the Channel Tunnel. At that time, there will be a strong magnetic pull towards the South-East and the Channel Tunnel. Strong government action is required to redress it. We shall be looking to the Government and pressing them to make sure that that is done.

We shall be watching carefully how regional selective assistance will work. We note in passing that it is a rather interventionist mechanism and perhaps not wholly in accordance with the philosophy of the Government. However, we must be grateful for small mercies and small chinks of wisdom when they appear in the mind of the Government.

My main problem with the Bill, as I said at Second Reading, is with the commitment that the Government have to regional policy. Our task as the Opposition will be to seek to persuade the Government on every occasion that we can that regional policy is necessary and will continue to be necessary as far as the eye can see. We cannot see any resolution to the slippage that is occurring and will occur towards the South-East. Far from being diminished, the policy should be strengthened. Any strengthening of the policy in financial terms will be supported from these Benches. That is what we shall work towards because that is what the country needs.

Lord Young of Graffham

My Lords, I do not propose at this stage to go into detail again on the principle of the Bill. We firmly believe that ending regional development grants and the system itself is the right decision. It is a decision which must be set against the framework of promoting individual enterprise which we have established through the enterprise initiative. It must also be looked at against the background of an improved and improving economy.

Regional development grant was a scheme of near-automatic grants which made no prior assessment of need or viability before it was given. The noble Lord, Lord Peston, referred to the headquarters effect. It was decades of automatic grant which led to that effect. It was that which led to factories being established in the regions and, all too often, head offices emigrating southward, along with all the additional employment they brought with them.

I hope that as the years go by we shall see the re-establishment of the regions, that head offices will once again be established there and that we shall see there the accountancy services, advertising agencies and all the other service sector jobs that go to add to the wealth of any region.

The noble Lord, Lord Williams, said that he would wait and see. I hope that he will see the chink of wisdom which he described opening into the greater glare of a new dawn, as he realises that this is the way to promote a regional policy. The purpose of our regional policy is to see an end to regional policy. I look forward to the day, whch may be long distant or which may be sooner than many people think, when more and more parts of our country will become indistinguishable and there will be no need for a regional policy.

I hope that the noble Lord. Lord Dormand of Easington, will brace himself for a shock. I am about to agree with him. That is not something which happens very often. The noble Lord is quite right. Those of our civil servants who have moved to the North find it extremely awkward, difficult and indeed undesirable to come back. Where I disagree with the noble Lord is in relation to the Hardman Report, which was followed through in many cases. I myself am responsible for one such case—the move of the Manpower Services Commission to Sheffield. That was done in the light of that report. Some 1,700 jobs were moved to Sheffield. As I recall, that was responsible for Sheffield house prices going up, but they have since stabilised. I can bear testimony to those of my civil servants in my last job in particular who just refused or found it difficult to come down South because the quality of their lives would have been adversely affected.

It is important that many departments which work directly with the centre of government and with your Lordships' House or the other place are in London. As an example, in my own department I have certain regulatory responsibilities. Those for companies generally—the Companies Registry—could be safely deployed to Cardiff. Indeed, there are many people now working in Cardiff and we have a very successful Companies Registry today. However, I could not disperse from London those hundreds of my civil servants whose principal responsibility is regulation of the City of London, because the City of London can only be regulated from London.

I am looking—and I am sure that many of my colleagues are doing likewise—at those jobs in my department which have to be in London and have to be near government and Ministers, if only to provide all the details for the many Questions which have to be answered each day in your Lordships' House. They have to be close at hand.

There are obvious advantages in being out of London, but at the end of the day what we want to see in the regions is not employment of civil servants but employment of people in private sector companies which help to create wealth in those areas. I should even go so far as to say that I should be perfectly happy to see both. However, we wish to see a wealth creating economy in the regions.

I believe that the effect of the single European market which is due to arrive in 1992 will be a tremendous boost for the regions. It is estimated in Brussels that it could lead to the creation of upwards of 5 million new jobs throughout the whole of Europe. If we have a competitive economy I believe that we shall get more than our fair share of the new jobs and the wealth which must come with the single market.

I should like to assure all in your Lordships' House that we shall continue to welcome and secure inward investment into the regions, and the new system which my department is now advocating will be as effective as any in the past.

Lord Sefton of Garston

My Lords, before the noble Lord sits down, perhaps I may first of all thank him for giving details about the people in his department who would have to stay in London because of their work. I should like to ask him whether he will use his good offices to ensure that the Government issue a report in regard to all government head office activities giving the same kind of detail and saying in particular which could operate outside London.

Lord Young of Graffham

My Lords, I hear what the noble Lord says and I shall discuss the matter with my colleagues.

On Question, Bill passed.