Advance Factories: Northern Region (Hansard, 6 June 1989)

§ The Secretary of State for Trade and Industry (Lord Young of Graffham)
My Lords, in the last financial year English Estates spent over £16 million in the northern region on the provision of industrial premises. A further substantial programme is planned for this year. But the Government cannot be the only provider of industrial premises. The strong demand for industrial space at rising rental levels should also encourage renewed private sector provision wherever possible in the assisted areas, thereby promoting the creation of a properly functioning property market.

§ Lord Dormand of Easington
My Lords, will the Secretary of State comment on the fact that when he answers the questions I ask—as I do quite frequently, as he is aware—on the northern region the information he provides is invariably different from that which is provided from the region itself? Is he aware that the Question I asked today is based on information I have received from the Northern Development Company and the Northern Regional Councils Association, organisations I know he holds in high regard? They are saying that there is a great 720 need for further provision of advance factories. Will he bear in mind that the northern region still has by far the highest unemployment rate of mainland Britain?

§ Lord Young of Graffham
No, my Lords. The noble Lord, Lord Dormand of Easington, and I are discussing two sides of the same coin. I welcome the fact that there is increased demand for industrial accommodation in the North-East of England. It is a sign that industrial recovery is accelerating there, but if the Government were to be the only provider of industrial accommodation in the North-East the pace of that expansion would be dictated by the rate at which English Estates could build new industrial premises.
We have followed a policy over the last two years, as the industrial recovery has proceeded, for English Estates to retreat from those areas where demand is such that the private sector will come back to fill that demand. This year alone, 1988–89, we are seeing a substantial increase of some £16.2 million being spent by English Estates in the northern region, and this coming year the amount will be £19.3 million. I suspect that the demand for industrial accommodation is for tens of millions of pounds above that. That is something that the private sector should and will provide.

§ Lord Williams of Elvel
My Lords, is the noble Lord aware that the Centre for Local Economic Strategies in Manchester complains that the responsibility for providing factory space for incoming investors in the North is diffused among a number of bodies? What is the role of the DTI in co-ordinating that?

§ Lord Young of Graffham
My Lords, the DTI has no responsibility for co-ordinating the provision of factory accommodation in the private sector. I welcome the fact that a number of bodies provide industrial accommodation. The longer we see government as being the only provider of industrial accommodation the more we shall retard the development of the North-East or the northern region itself.

§ Lord Dormand of Easington
My Lords, is the Secretary of State aware that some of us find it very interesting that when there is credit to be claimed, the Government claim the credit for the northern region, but if anything is not quite right the Minister places the onus on something else, in this case the private sector? How much importance does the Secretary of State place on the quality of such buildings? Is he aware that the latest report on this matter, when locational and environmental factors are taken into account, shows that only 30 out of 239 individual premises are not felt to be of high quality?

§ Lord Young of Graffham
My Lords, I am always suspicious of such surveys because they invariably contain subjective definitions of high quality. Over the last 33 months I have seen the overall fall in unemployment being led by the fall in unemployment in the northern region. I am fully 721 aware that general unemployment still remains high, but it is a vastly different picture today. What we have seen in parts of the North-East is a recovery making it more like the rest of the country. English Estates will continue to provide more factories in areas where the private sector will not normally go. That seems to the Government to be its proper function.

§ The Earl of Onslow
My Lords, with the choking up of the availability of employment, labour and factory space and the very high costs in the South of England, is not this the greatest opportunity for the North, where sites will be cheaper and labour more available to solve its obviously serious problems?

§ Lord Young of Graffham
My Lords, as we have seen over the last two or three years, property values rise in the southern part of our country. We have seen employment rise and costs escalate to a level at which employment has been moving steadily northwards. That is evidence of the market at work. Now as one travels north in our country one finds that the employment divisions which used to exist between the North and the South are steadily eroding. That is something that all in your Lordships' House should welcome.