Regional Policy (Hansard, 31 October 1989)

§ Lord Trefgarne
My Lords, changes in the focus of the DTI's policies, including regional policy, were made early last year. Regional policy now operates within a framework of measures designed to promote enterprise and business development throughout the country. There are no plans for further changes.

§ Lord Dormand of Easington
My Lords, is the Minister aware that there has been a cut in the regional aid budget of no less than 72 per cent. in real terms since this Government came to power in 1979? Is he further aware that the economic growth rate in the South over that period has been 35.6 per cent. compared with the North, where it has been 16.6 per cent.? As the Government's present policy is to slow down growth, what special measures—I emphasise the word "special"—are the Government prepared to take to see that the northern regions do not suffer in order to make up the leeway which they have lost over that 10-year period?

§ Lord Trefgarne
My Lords, I do not agree with the noble Lord about the decline in the amount of regional aid generally to which he referred. However, I make no apology for the fact that our regional assistance arrangements are now much more selectively focused than they once were and are not provided in the rather general way that used to be the case. Regional selective assistance is now very much in place. There are the regional enterprise grants, the activities of the English Industrial Estates Corporation and, more recently, the consultancy grants too. It is true that the regional development grants, as they used to be called, are being phased out. However, they were very unselective and the money that was spent on them was not always directed in the right way.

§ Lord Elliott of Morpeth
My Lords, is my noble friend aware that the September figure for unemployment in the northern region showed yet a further very satisfactory fall? Is he further aware that in the past six years unemployment in the northern region has halved? Does he agree that this suggests that regional policy is working rather well?

§ Lord Trefgarne
My Lords, I entirely agree with my noble friend. Unemployment is coming down nationwide, but especially so in those areas where it was a particular problem in times past. I believe this is the result of the more selective targeting of our regional policy that we have introduced recently.

§ Lord Taylor of Gryfe
My Lords, is the Minister aware that the total amount of regional assistance in Scotland last year was £115 million, and that two-thirds of that sum was accounted for by the regional development grants which are now being phased out under the new scheme? Will the Minister tell us exactly how that will be replaced and whether the total target of regional aid of £120 million which the Government have in mind for Scotland will be maintained? Finally, is the Minister aware that the total amount spent on the Enterprise Initiative is only £1 million?

§ Lord Trefgarne
My Lords, the way it will not be spent, if the noble Lord will allow me to say so, is on indiscriminate support for projects of less than satisfactory viability. That does not represent proper value for money for the taxpayer, nor does it provide the kind of support that people are entitled to in the regions to which the noble Lord has referred, most especially Scotland. We shall target the support we can give in those areas, as elsewhere, to viable programmes when they are brought forward for our consideration and our support. When they are, they will certainly receive every encouragement.

§ Lord Williams of Elvel
My Lords, is the noble Lord aware that nothing that has happened since the abolition of regional development grants gives us any encouragement at all that the Government understand the problem? Is he not aware that regional development grants, being automatic, could be taken into account in investment calculations by firms, whereas regional assistance, being discretionary, cannot? That impedes investment in the regions, in Wales and in Scotland. Do the Government realise, as it is staring them in the face, that differentials between regions are widening and will continue to widen as we go into 1992 and the opening of the Channel Tunnel, unless they take some form of positive action? Will the noble Lord tell us what that action is?

§ Lord Trefgarne
My Lords, the regional policy that we now have in place is not designed to encourage noble Lords opposite. It is designed to encourage the new enterprises emerging in the regions, like those to which my noble friend Lord Elliott referred. In those regions industrial and commercial activity is improving and unemployment is coming down. That is the purpose of our policy.

§ Lord Dormand of Easington
My Lords, the Minister questioned my figures. Perhaps he should know that I took my figures from the public expenditure White Papers of 1985 and 1988. Will he check the figures? He will find that the statement that he made to me is incorrect.
Is the Minister aware that, despite what the noble Lord, Lord Elliott of Morpeth, said, since 1979 the reduction in unemployment in the four northern regions has been 1.7 per cent? Is that part of the Government's economic miracle?

§ Lord Trefgarne
My Lords, I do not claim that unemployment has declined uniformly in all areas of the United Kingdom. However, it has certainly come down very satisfactorily in a number of areas. We are determined to ensure that in the areas where unemployment remains a problem the support that we are able to give is targeted so that unemployment comes down even faster. I believe that the policy that we have in place will achieve that, and I hope that on reflection the noble Lord will agree with me.

§ Lord Sefton of Garston
My Lords, will the Minister tell the House whether the figures for regional aid include moneys paid to the Merseyside Dockland Development Corporation? If so, will he say what the amount was, how much each job has cost the Government and why the Government have not yet responded to the auditors' report that they received more than two years ago regarding that corporation?

§ Lord Trefgarne
My Lords, the figures that I have before me do not include the amounts to which the noble Lord referred. I shall certainly see whether I can find those figures and write to the noble Lord.

§ Lord Glenamara
My Lords, does the noble Lord agree that the Government's reliance on interest rates as the major economic regulator does untold harm to the regions? Does he not agree that overheating of the economy is a problem of the South-East and the South, not of the North, Wales or industrial Scotland? One region has influenza and we all have to take the medicine. Can the Government not be more selective in finding another economic regulator?

§ Lord Trefgarne
My Lords, I am afraid that inflation, the evil to which interest rates are addressed, affects all parts of the economy, not just the South-East. It is of paramount importance to ensure that inflation is kept under control and reduced. That is the purpose of the interest rate policy to which the noble Lord referred. I do not agree that interest rate policy can be applied selectively in different parts of the country.