DTI: Future Role

HL Deb 12 January 1988 vol 491 cc1075-88

2.59 p.m.

The Secretary of State for Trade and Industry (Lord Young of Graffham)

My Lords, with the leave of the House, I shall make a statement about major changes in the role of the DTI and its policies.

We have been engaged in a major review of the main activities and organisation of the DTI. Our decisions are set out in the White Paper entitled DTI—the Department for Enterprise which will be laid before the House later today. We conducted this review building on the new objectives for the DTI which we published on 13th October last year. In our opinion, considerable changes in the Government's support to industry will be required to face the challenges of 1992 and to succeed against ever-increasing international competition.

In an economy with a GDP of some £400 billion the main role of the DTI with its budget of £1 billion must be, in conjunction with other departments, to influence attitudes and to encourage open markets in order to promote enterprise and prosperity.

We shall start by helping young people to learn about business and enterprise. We shall work with employers with the aim of giving one teacher in 10 each year some personal experience of the world of business. We shall further aim to ensure that every young person will have at least two weeks' work experience before leaving school as part of his or her preparation for employment. We shall help young people to become more knowledgeable about new technology. We shall increase our support for computer aided design and other advanced technologies in schools, further education and teacher training colleges. We shall work in partnership with commerce and industry to improve management education and development and spread awareness of best practices in new technologies. Those are essential to the competitiveness of British industry and commerce.

We shall help small and medium-sized firms to improve their performance in marketing, design, quality and advanced manufacturing methods. We are putting in hand forthwith a major new initiative to encourage firms with fewer than 500 employees to take expert consultancy advice in those key management functions. We shall extend the programmes in April to cover business planning and financial and information systems. We shall provide more than £50 million in the next financial year and some £250 million in total in the three years to 1991 to encourage firms to take advantage of this initiative.

In 1992 the single European market will be completed, ending most barriers to trade within the European Community. The opening of the Channel Tunnel in 1993 will make us physically a part of this much bigger market for all our goods and services. We shall therefore make it a priority to help business prepare for, and benefit from, this great extension of the market within which we must compete.

The need to open up competitive markets is an essential strand in DTI's policies. Competition policy is the key element in that process. As a result of the review which was announced in another place in June 1986, we propose a fundamental overhaul of the Restrictive Trade Practices Act. It has been proved increasingly ineffective in controlling damaging illegal cartels. The new legislation which we are considering would prohibit agreements with anti-competitive effects. It will be backed by stronger investigative powers and effective penalties. A detailed Green Paper on that matter will be issued shortly.

The review also covered mergers. The main but not exclusive consideration in mergers policy will continue to be the need to maintain competitive market conditions. We are proposing two principal changes to speed up the decisions on whether individual mergers can go ahead. The first would be a new formal but voluntary procedure for giving advance notice of prospective mergers. That would give automatic clearance for simple cases within four weeks. The second proposal would give more flexibility in dealing with possible competition problems; the Director General of the Office of Fair Trading would have the power to obtain legally binding undertakings from the parties to a merger over such issues as agreed divestment as an alternative to a reference to the MMC.

We are particularly concerned to encourage enterprise in the less prosperous areas of the country and in the inner cities. We shall therefore be increasing and strengthening the DTI's regional office network and expanding their role. The new consultancy initiatives which I have just announced will offer higher levels of grant both in the assisted areas and in urban programme areas outside the assisted areas. Consultancy projects will receive support of two-thirds of the cost in those areas compared with 50 per cent. in the rest of the country.

New incentives will be introduced from April this year to encourage the growth and development of small firms in development areas. Their growth will help the full revival of regional economies which is the aim of our policy. Firms with fewer than 25 employees will he able to apply for investment grants of 15 per cent. towards the cost of fixed assets and innovation grants of 50 per cent. for product and process development. We shall be targeting our help on those firms at a critical stage of their development—those which may not yet have developed the key management skills needed to survive and compete. Our policies are designed to encourage self-generated business development in the regions, both in manufacturing and services, so that there is a broader, lasting base for economic growth.

Regional selective assistance will remain available in the development and intermediate areas. Unlike RDG, regional selective assistance requires companies to show that they genuinely need public money in order to proceed and that their projects are viable and will produce identifiable and significant benefits. Internationally mobile projects will therefore be able to benefit from regional selective assistance as before.

We have concluded that this approach to business development will do more to strengthen regional economies than an automatic subsidy to all capital investment. A Bill will therefore be introduced in another place today to end the RDG scheme. No new applications for grant will be accepted after 31st March this year. The Bill will provide for transitional arrangements. Those changes will apply in Scotland and Wales as well as in England. Regional policy will remain based on the existing regional map. Let me make it clear that we are not proposing any reduction in the Government's total regional spend. But we believe that existing resources can be spent more effectively.

Inner cities will benefit from the higher level of grant for the consultancy initiatives. The Government will be publishing a review of their policies for the inner cities and will be taking steps to encourage more private sector involvement in urban regeneration.

We have also reviewed our department's policy on civil research and development. In future, we shall concentrate our help on collaborative research projects and the transfer of technology which would otherwise not take place. The White Paper announces our support for new collaborative programmes in both information technology and superconductivity. Research and development, which is at the stage of commercial exploitation, should be the responsibility of the private sector. The general schemes of single company support for innovation are therefore being ended today. We believe that our spending on research and development will be more effectively used in collaborative research bringing different companies and the academic world much closer together.

DTI will be a catalyst for enterprise, innovation and change. But enterprising attitudes will only develop in open markets. We shall therefore continue our efforts to cut red tape so that business can concentrate on its primary task of creating the wealth on which society depends. The proposed changes in policies which I have announced will result in an increase in spending by DTI over the provision that was planned for last year. Our proposed expenditure on regional programmes in Great Britain represents an increase over earlier plans. We shall also increase previously planned expenditure and support for collaborative research, technology transfer and small business innovation.

The White Paper also announces changes in the organisation of DTI which will enable it to be more effective in the delivery of its services. The Enterprise Initiative will be marketed clearly and strongly so that business is aware of the potential for action through self-help. And the expansion of our regional network will enable us to get closer to our customers where they live and work. Furthermore, industry divisions in the DTI, which up to now have been seen as sponsoring specific industries, will be replaced by market divisions which focus on the markets for a range of goods and services rather than specific supplier industries. Emphasis will be given to issues which span all industry and commerce, especially in technology.

The changes which are announced in the White Paper reflect the objectives which we set for the DTI last year. Real change, to give Britain a lasting basis for prosperity, requires individuals to alter the way in which they manage their businesses and approach their work. The best way to accomplish that is to influence people's attitudes, to help them acquire the skills and information which they need to compete effectively and to give them the scope and opportunity in open markets to compete. The White Paper policies which I have outlined today represent a consistent and co-ordinated strategy for enterprise. The DTI—the department for enterprise—will now carry that enterprise strategy forward.

My Lords, that concludes the Statement.

Lord Williams of Elvel

My Lords, the House will be grateful to the noble Lord the Secretary of State for making this important Statement. We clearly have to wait for a careful reading of the White Paper before giving a considered response. I hope that the noble Lord will accept that any remarks and questions that I may make or put are of a preliminary nature. No doubt in the course of time we shall have an opportunity to debate these matters as they deserve to be debated, because as he rightly says these are major changes in the role of the DTI and its policies.

We welcome any measure or statement of intention that will raise morale in the Civil Service. The Civil Service has in our view taken a lot of stick and has had difficulties over the past few years. In the DTI particularly, before the noble Lord became Secretary of State, morale undoubtedly suffered. Any measures that the noble Lord may introduce to improve that morale will be supported from this side.

Furthermore, clearly we must accept the noble Lord's remarks in the Statement about helping young people to learn about business and trying to marry our education system with the real world in the sense of the industrial and service economy. Whether or not it is the right way to proceed, I shall postpone comment until I have read the White Paper. I think the noble Lord and I see relatively eye to eye on these matters, but when we come down to the details of the Statement we have a certain number of reservations.

Is it the case that in competition policy we shall have a Green Paper on mergers and monopolies policy to accompany the Green Paper which the noble Lord announced on restrictive trade practices? He will recall that in 1978 and 1979 there were two Green Papers: one on mergers and monopolies and the other on restrictive trade practices. We very much hope that the Government will repeat that precedent and produce the evidence for their changes in competition policy, such as they are.

We welcome generally the proposed overhaul of the Restrictive Trade Practices Act. For a long time we have believed that outlawing restrictive trade practices was the right way to go. Indeed, the Director General of Fair Trading said that in very clear terms and we are glad that the Government have finally adopted that line.

Also on competition and merger policy, we shall support the prenotification principle because that was something that we recommended on the lines of the Hart-Scott-Rodino legislation in the United States. We should have liked to make it compulsory but we understand that there may be reasons under present UK practice where a voluntary practice, which is effectively compulsory, is right.

We also support with some qualification the ability of the Director General of Fair Trading to secure legally binding undertakings from parties to a merger. The qualification I would make is that I am not entirely certain—indeed, I am uncertain—that the Director General of Fair Trading has an office that is adequately staffed to carry the burden being laid on him at the moment and the increased burden that would be placed on him as a result of the White Paper.

On the general question of competition policy, I note the noble Lord's statement that mergers policy will continue to be based on the need to maintain competitive market conditions. I am not entirely certain what that means and therefore I have to wait to see what the White Paper says in spelling it out. However, I hope he recognises that a major concern of noble Lords on all sides of the House is that the public interest should be properly defined in competition policy. The public interest is defined in different manners in different pieces of legislation. The Monopolies and Mergers Commission has to be guided by what constitutes the public interest in the case of the Airports Act, which is one definition; the public interest in the case of industrial mergers and the Fair Trading Act, which is another definition; and the public interest as regards British Telecom and the telecom Act, which is another definition.

We were hoping very much that the competition policy review would clear these matters up once and for all. I hope the noble Lord will be able to assure me that there will be a Green Paper or at least some document which will set out the reasoning behind the Government's view that he has put forward in the Statement.

So far as concerns research and development. I wonder whether the noble Lord has really taken into account the low base from which we start. Again, we have to see whether the cessation of general schemes of single-company support for innovation would diminish our civil research and development. I have no doubt that the noble Lord, Lord Sherfield, who chaired your Lordships' committee on this subject. will have his word to say on that. For the moment we shall have to examine the implications.

It is when we come to regional policy that I think the distance between the two sides of this House is probably greatest. Why, in the Statement, does the noble Lord say that there is no reduction in the amount of money to be spent on regional policy? Is this another way of saying that there will be no increase in the amount of money to be spent on regional policy? Why is there no mention of the disadvantages of selective assistance as against RDGs? Selective assistance is unpredictable; the need has to be proved. Selective assistance is a subsidy to the profit and loss account rather than to capital. It therefore works straight through to the profit on the bottom line as opposed to reducing the cost of capital, and it is impossible for companies to budget because they simply do not know under the present system whether or not they will get such a discretionary allowance. If the noble Lord could help us on that it would be extremely useful.

Are the grants that are proposed in the Statement for smaller companies automatic? In other words, do they follow the principle of RDGs for companies with fewer than the number of employees the Minister specified? Are they automatic, because the automaticity of grants is something which industry, rightly or wrongly, has believed to be very valuable? Why are RDGs not good value for money? If the noble Lord had had time to attend our debate on regional policy before Christmas he would have heard a number of speakers from all sides of the House saying that the automaticity of these grants, which allowed industry to plan on that basis, was valued and that the RDG system was a valuable job creator.

What consultation have the Government had with industry over the abolition of regional development grants, and what reply have the Government made to Mr. John Banham, the Director General of the CBI, who is reported as saying at the annual dinner of the Welsh CBI that he believed it was extremely unwise to change a situation which was apparently working so well?

We shall look carefully at the White Paper. We are glad that the Government have come forward with it because anything which can improve the direction of the Department of Trade and Industry and give heart to the officials who work in the department will be welcomed. As for the effects, and our final view on this matter, the jury is still out.

Lord Taylor of Gryfe

My Lords, I too should like to express appreciation to the Secretary of State for his review this afternoon of his department's activities as contained in his Statement. I should also like to congratulate him on the incisiveness and enthusiasm with which he has tackled very serious problems in his department. From these Benches we welcome the approach of the Secretary of State in bringing the academic studies closer to the requirement of industry. We hope that that will be successful.

In addition, we very much welcome the Statement of the Secretary of State in relation to mergers policy. Anyone who has been engaged in mergers recently will recognise that long arguments and delays in decision making by the Monopolies and Mergers Commission can have an upsetting effect on industry in general, as well as creating uncertainties in the stock market.

I very much welcome the Minister's conversion to the importance of securing adequate competition. This does not quite coincide with the current policy of the Government in the creation of private monopolies. It would be interesting to hear from the Secretary of State how his enthusiasm for competition can be applied to the situation of the private monopolies of British Telecom, the forthcoming British Electricity, and other nationalised industries that are to be converted into private monopolies.

I welcome the desire to strengthen the Office of Fair Trading to ensure adequate competition rules. I would subscribe to the plea of the noble Lord, Lord Williams, that there should be a clearer definition of the public interest in judging mergers and changes in the structure of industry.That is a very uncertain area and leads to all kinds of difficulties—lobbying by private interests, lobbying of regional interests, and so on. I am sure that it would be helpful to the authorities concerned if there were a clearer definition in that rather difficult area. I am sure that the strengthening of the Office of Fair Trading will be welcomed. I am sure that Sir Gordon Borrie has earned the respect of industry and the country in general for the way that he has discharged his responsibilities. I suspect that the additional powers that he will have under the new arrangements will be very much welcomed and will be very sensibly exercised.

I turn now to a matter of deep concern to me personally, living as I do in the regions. That is the change in the regional policy The House will recall that the new regional policy—which was proposed to make some impact on the North-South divide—was introduced as late as November 1984. Three and half years is not a very long time to see the full implications of a new regional policy. Companies have to make decisions with regard to investment based on a regional policy that has some assumptions of continuity. Here we are, within three and a half years, having a new regional policy and the abolition of the regional development grants as they presently stand.

There is an assurance in the Statement that the amount of money to be dispensed in the regions will not be cut. We should keep in mind that the amount was £700 million in 1986–87, and was cut to £500 million in 1987–88. Scotland received a 50 per cent. cut in that period of the total regional allocation. We are therefore talking about maintaining what is at present a small. inadequate base. Like the noble Lord, Lord Williams of Elvel, perhaps I may simply state that while the Statement we have heard today was widely leaked at the weekend, we are not in a position to give the kind of detailed analysis that is important to those radical changes.

I should like to commend to the Minister a study that was made I believe by his department. That indicated that in the period 1960 to 1981, 784,000 new jobs were created by positive regional policy. Of these, 600,000 remained. I agree that one cannot create jobs by simply throwing money at people. But it would be sensible if we made a quiet and careful assessment of the implications of the existing regional strategy before we rejected it in favour of a policy which has not so far been justified.

Lord Young of Graffham

My Lords, I am grateful to the noble Lord, Lord Williams of Elvel, for his comments. Of course I am very much aware of the importance of morale in the Civil Service. The noble Lord may possibly recall that I spent five and a half years as a sort of civil servant immediately before entering Cabinet. I am convinced above all else about the need not only to have high morale in the Civil Service but to show the appreciation for the very real work that the Civil Service does in order to discharge the obligations of government.

However, the noble Lord then raised some matters about competition policy. It is true that we shall have a Green Paper on restrictive trade practices. In that Green Paper I suspect that we shall be moving more towards European law which looks at the effects of agreements rather more than the legalism at the moment which considers wording of agreements only. We have pondered long on the merger proposals. We do not propose to have a Green Paper on the merger proposals. The noble Lord will in a few minutes' time be able to look at the White Paper. I am sure that through the usual channels he will take the opportunity of raising the matter so that we can discuss the White Paper in more detail. I accept the difficulty of relying solely upon my Statement at this moment. I hope that the Director-General of OFT will be adequately staffed for the increased activities he will be undertaking.

The noble Lord, Lord Williams, is on less secure ground when he talks about R&D. It appears from the figures that Government spending on civil R&D as a percentage of GDP is greater than the United States and Japan. Where we do not shine is in the amount of money which the private sector spends on R&D.

The main thrust of the change in programmes which the White Paper will outline is towards persuading companies to undertake steps which do not come naturally to them. It is, alas, not natural yet for companies to work with institutions—with universities and polytechnics. We shall be assisting that process. It is not natural yet for two companies to work together on collaborative research. For example, could an electronics company work with a textile company in finding new ways of producing computer-controlled textile machinery? We shall encourage that kind of venture. I believe that it is a sensible use of taxpayers' money to encourage research collaboration between British companies and French, German, Dutch or any of our European partners.

On regional spend, I wonder whether the noble Lord is correct in saying that industry values the automaticity of regional development grants so very highly. I suspect that we need to leave this issue in abeyance for a little while in order to see what industry has to say about it. My information is that industry did not say that its behaviour was moderated by regional development grant; it was quite happy to accept money that was offered by government. But if industry looks towards areas that could be improved it would be looking at those elements of non-price competitiveness. If this country went wrong in its manufacturing industries in the 1970s I suspect that it went wrong because it concentrated on price competitiveness to the exclusion of other factors, whereas countries such as Japan and others concentrated very heavily on non-price competitive items such as delivery, quality, after-sales service and design. Those are the areas where I believe that British industry could well be improved. I have been told by many large companies that an improvement in the quality of their component suppliers would be the best step forward to help them. That I believe is the way in which the new programmes of my department will go.

I am grateful to the noble Lord, Lord Taylor of Gryfe, for the welcome he gave to the thrust of my Statement, if not my White Paper, on the way in which we shall be working together with institutions and the recognition of the strengthening of the position of the Director General of Fair Trading in merger control. If noble Lords read the White Paper I hope they will be satisfied with the changes we are proposing, which go further than my Statement.

The noble Lord, alas, does not welcome my attitude towards monopolies. He referred to BT. I should much rather be judged on the future than on the past. Let him see how the privatisation of electricity is structured and perhaps then he will see that I still have a belief in competition.

There is much to be questioned. The noble Lord is right to question regional policy. But there are many who say—I do not disagree with them—that the effect of the policy for the regions of all governments over some decades has been to establish a branch economy in many of them. What I hope the main change of our policies will achieve is to produce in the regions an industrial profile and structure that is similar around the country.

I had the great pleasure of going to Consett not many weeks ago. I had last been at Consett in 1981 shortly after the steel plant closed. When one employer went 3,500 jobs were lost. I went there just before Christmas and over 100 new employers and 3,500 new jobs have come into being in a great variety of different activities. The thrust of my department's policies is to ensure that existing businesses in the regions grow and multiply, that employment increases and that we see the establishment not of a branch economy but of a prosperous economy in all our regions.

3.30 p.m.

Lord Thorneycroft

My Lords, does the noble Lord appreciate the welcome that will come from many quarters for such a positive, constructive and undogmatic statement of strategy in relation to the co-operation and intervention of government in the affairs of industry and the hope that it may help to set the pattern for what clearly will be a market-led economy for many years to come?

Lord Young of Graffham

My Lords, I am very grateful indeed for the welcome given by my noble friend to the Statement.

Lord Glenamara

My Lords, is the noble Lord aware that to me, and I imagine to many other people throughout the country, his Statement consists of a great many platitudes, a great deal of packing and a catalogue of things which are being done at present, all wrapping up the central, stark fact that regional development grants are being abolished—regional development grants which have brought tens of thousands of jobs to the regions of Britain? I am appalled and dismayed. It is a further demolition by the Government of the mechanism which has operated under successive governments to iron out the inequalities among the regions of this country. I am shocked at the Government.

Lord Young of Graffham

My Lords, I suspect that the noble Lord would be calmed if he read the White Paper or indeed a copy of my Statement. It consists of a great many matters other than regional policy. It is concerned with the growth of the economy of this country, for without the prosperity that a growing economy brings we cannot have the caring society which we should all like to have. I hope the noble Lord will recover from his shock when he reads the White Paper.

Lord Boyd-Carpenter

My Lords, in view of the immense importance and almost equal complexity of the Statement, will my noble friend arrange for an early debate in your Lordships' House upon it, it being particularly a matter on which so many noble Lords have valuable views and information to contribute? My noble friend is hesitating to give an answer, so I invite his attention to the convenient adjacency to him of the Leader of the House.

Lord Young of Gratfham

My Lords, I shall use whatever influence I still have with the Leader of the House to ensure that we have an early debate. It will of course be dealt with through the usual channels.

Lord Cledwyn of Penrhos

My Lords, notwithstanding what the noble Lord has said, is he aware that we are bound to feel very apprehensive about the effect of his policy on the regions and particularly upon Wales and Scotland? Will he say, for example, what is the future of the Welsh Development Agency and the Welsh Rural Development Board, which have played a major role in the Principality in easing the serious unemployment problem which has existed there for several years? Secondly, can he tell us at this stage about the transitional arrangements? For example, can he confirm that applications for schemes which are presently before his department will be treated under the existing rules? Will people be given an adequate moratorium to make their applications? Otherwise it will be extremely unfair.

Lord Young of Graffham

Yes, my Lords. I assure all noble Lords that the Bill which is being introduced in another place today will allow applications for regional development grant to be made up to and including 31st March this year so that plans may proceed. However, the payment out for that may be some years ahead, but applications may go in until 31st March this year, which should give adequate notice to all those contemplating investment under the old system.

The noble Lord will recognise that Wales has led the field in the reduction of unemployment over the last 17 or 18 months. I do not anticipate that there will be any reduction in the role of the Welsh Development Agency or the other agencies.

We are not reducing the amount we spend, but seeing whether we can spend it better, something which I am sure all in your Lordships' House will welcome. I believe that there is a case for the Government to determine to spend the money better before they go to the taxpayer to ask for more. What we are endeavouring to do is to improve the quality of our spend and the results of what we get for the money. That is what I believe my White Paper will do.

Lord Harmar-Nicholls

My Lords, is my noble friend aware that it will be necessary for us to read his White Paper before we can have a deep knowledge of what is likely to flow from it? Can he assure me that the legislation and the regulations which will follow will conform with the Treaty of Rome, or is it likely that some of his good ideas, which are the logical next step from what has been done so far, may be sabotaged by the Treaty of Rome; for example, the regional grant? is the movement away from that because it is considered right in the future development of this country's economy, or is it because in some way it is not acceptable under the terms of the treaty? I ask these questions because so many matters in the interests of this country—even the announcement yesterday to do with furnishings—somehow or other so often later appear to cut across a treaty which gives power of final decision to people outside this country?

Lord Young of Graffham

My Lords, the White Paper is based upon our assessment of what is required in the interests of the economy of the United Kingdom. Nevertheless we have taken steps to ensure that it does not conflict with the Treaty of Rome.

Lord Mason of Barnsley

My Lords, will the noble Lord explain to the House how he sees the regional policy changes effecting a quicker reduction in male unemployment levels in Yorkshire and the northern regions? Secondly, how does he answer the charge from large British companies that his regional policy is enabling foreign companies to come into this country aided by government grant, that British companies are unfairly in competition with them and that that will deter investment in the northern regions where it is required most? How does he answer that?

Lord Young of Graffham

My Lords, the noble Lord cannot possibly have it both ways. He cannot ask me how my policies will reduce male unemployment in the North and at the same time complain bitterly that regional selective assistance is allowing firms such as Nissan to come into the North-East to compete with other British manufacturers but at the same time giving jobs to male employees in the North.

What we need is a sense of balance. We alone cannot give up regional selective assistance. We alone cannot stand by and see these internationally mobile opportunities go to France, Holland, Belgium or Italy. My job is to ensure that we have fair competition, that we equal, no more, what other countries will do and that many of the new manufacturers who come into this country to bring welcome jobs do so on terms which are fair to the rest of British industry yet are attractive enough to bring them here and not overseas. I shall never win. We shall never satisfy all people. The moment we satisfy incoming new manufacturers, we upset our existing manufacturers. It is a difficult path but one that we shall try to accomplish.

On the issue whether our policies will reduce unemployment in Yorkshire and the North, I am well aware of the enormous change in the pattern of industry that has occurred over the last decade. It is no good regretting it. We shall never again have a steel industry and a coal industry that supports as many jobs as they supported 25 years ago.

I take great comfort from the Consetts of this world that show that the sense of enterprise, drive and determination continues to exist in the northern region and in Yorkshire, as soon as other oportunities arise. We must make sure that they have these other opportunities.

Lord Mackie of Benshie

My Lords, following the question asked by the noble Lord, Lord Cledwyn of Penrhos, about regional agencies, it appears to me that the DTI will do many of the things which have been done for many years by the Highlands and Islands Development Board and the Scottish Development Agency. They will still assist and educate firms; they will assist them with marketing. I trust and hope that the noble Lord will be able to give us an assurance that the SDA and the HIDB will continue to use their expertise and put the new policies into effect in their area, instead of it being done by a centralised body, because they have been extremely successful in reducing the appalling conditions of unemployment in various areas of Scotland.

Lord Young of Graffham

My Lords, I always thought that the SDA was itself a centralised body in Scotland. I think that I have a certain degree of bravery but I am not brave enough to take on the combined lobby of the SDA and the HI DB. I confirm to the noble Lords opposite that those agencies will of course continue.

These consultancy programmes will be delivered by the private sector. We shall not have the spectacle of civil servants telling employers or businessmen and women how to run their businesses. We shall act as a facilitator to spread best practices, to ensure the best of design, marketing and exporting. One element that my Statement perhaps did not cover is that we shall be launching a consultancy initiative designed to help people get into exporting at home before they think of going overseas. I recall all too vividly how very much at sea I was in the middle 1960s when I first started to export and come across terms like bills of lading. I hope that we can provide that sort of information to potential exporters all over the country. This will not take away from the agencies which are so beloved in the regions. I hope that it will greatly strengthen and make more prosperous business throughout the country.

Lord Gladwyn

My Lords—

Lord Taylor of Blackburn

My Lords, I have been trying to speak; I do not want to interrupt Prayers tomorrow. This is not the time and the place to go into detail this afternoon because many things require a lot of consideration. However, I welcome the comment in the Statement about work opportunities for young people. This of course is not new. It went on years ago in Lancashire, but I am glad that the Secretary of State is looking at this again and giving young people an opportunity to gain some job experience while they are still at school. I think that this will be a great help to many young people.

When the Secretary of State is looking at this in more detail, will he discuss with his right honourable friend the Secretary of State for Education and Science the role of the careers master and mistress in schools in advising young people? I think that this is important. Again, when the Secretary of State refers to schools is he referring to all schools or is he just referring to the maintained schools sector?

Lord Young of Graffham

My Lords, I am very grateful to the noble Lord, Lord Taylor, for his unqualified undertaking not to interrupt Prayers tomorrow. I also happily agree with him that I follow Lancashire in everything except cricket. We shall work out these programmes to ensure that they apply as widely as possible within the school sector. I have had preliminary discussions with my right honourable friend the Secretary of State for Education and Science, and we shall be working out the details of this. Of course it follows a long period, starting with the TVEI programme and other programmes which are designed to give young people more experience and a taste for the world of work. We shall be looking at those young people who are not caught by TVEI, who do not have present work experience, and who are not covered. It may well be that this programme will be offered outside Lancashire, but I am sure no-one in Lancashire will object.

Lord Gladwyn

My Lords, referring to the intervention of the noble Lord, Lord Harmar-Nicholls, is it not a fact that industrial development in the regions of this country is often materially assisted by substantial grants from the European Commission acting under the general authority of the Treaty of Rome?

Lord Young of Graffham

My Lords, not only does industry and commerce in the regions benefit from grants from the European Community, but we have assured your Lordships' House today that regional spend will not be reduced. I hope that all noble Lords take fully into account that at the end of this decade regional businesses will benefit by some £700 million per annum as a result of the unified business rate.

Lord Sefton of Garston

My Lords, may I ask the Secretary of State whether the remaining part of the regional policy of the Government still contains the assurance that part of the policy will be to move jobs from the more affluent areas to the less affluent areas, as has so often been stated by the government Benches? I take it from that that it will still remain the policy of the Government. What consideration have the Government given to the situation where the congestion and high costs in the South of England lead to a loss of competitiveness in the private sector? Will the Secretary of State give some really serious consideration to moving out of the South-East and so reduce the exorbitant costs of our civil service and move them to a less affluent area?

Lord Young of Graffham

My Lords, I am fully aware of what the noble Lord says. I was of course responsible for the Manpower Services Commission when it moved all its head office functions out of London towards Sheffield. Indeed, my White Paper today announces the moving of people from Victoria Street more towards the regions. The rules under which regional selective assistance is being administered have not changed since 1984. They take into account not only movement of jobs but also saving of jobs. That will not change. I believe we are seeing a welcome return of confidence in the regions as the South-East becomes so congested and so expensive that we are beginning to see many companies going further and further north in an effort to achieve better conditions. This is not the time for a full debate on this subject, which will go on very much longer.

Lord Sefton of Garston

My Lords—

The Lord Privy Seal (Lord Belstead)

My Lords, we have been asked for a debate. The Secretary of State has said that he will use his influence through the usual channels to see whether we can have a debate. May we just take the supplementary question from the noble Lord, Lord Sefton, and perhaps call it a day?

Lord Sefton of Garston

My Lords, it is a simple supplementary. If we can transfer some of the government departments—not a few civil servants but whole government departments—to the north of this country, there may well be no need for regional aid.

Lord Young of Graffham

My Lords, I am not averse in the slightest to government departments or indeed your Lordships' House being transferred to the north of England; but I am also concerned that productive industry and commerce should be in the north of England as well.